Apple
APPLE INC (Form: 8-K, Received: 11/02/2017 16:32:11)


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
November 2, 2017
Date of Report (Date of earliest event reported)
 
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Apple Inc.
(Exact name of Registrant as specified in its charter)

California
 
001-36743
 
94-2404110
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS. Employer
Identification No.)
1 Infinite Loop
Cupertino, California 95014
(Address of principal executive offices) (Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 





Item 2.02
Results of Operations and Financial Condition.
On November 2, 2017 , Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its fourth fiscal quarter ended September 30, 2017 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.
The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:
November 2, 2017
 
Apple Inc.
 
 
 
 
 
 
 
 
 
By:
 
/s/ Luca Maestri
 
 
 
 
 
Luca Maestri
Senior Vice President,
Chief Financial Officer




Exhibit 99.1


Apple Reports Fourth Quarter Results

Revenue Up 12 Percent and EPS Up 24 Percent to New September Quarter Records

Services Revenue Reaches All-Time High

CUPERTINO, California — November 2, 2017 — Apple ® today announced financial results for its fiscal 2017 fourth quarter ended September 30, 2017. The Company posted quarterly revenue of $52.6 billion, an increase of 12 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.07, up 24 percent. International sales accounted for 62 percent of the quarter’s revenue.

“We’re happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services,” said Tim Cook, Apple’s CEO. “With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”

“Apple’s year-over-year revenue growth rate accelerated for the fourth consecutive quarter and drove EPS growth of 24 percent in the September quarter,” said Luca Maestri, Apple’s CFO. “We also generated strong operating cash flow of $15.7 billion and returned $11 billion to investors through our capital return program.”

Apple is providing the following guidance for its fiscal 2018 first quarter:

revenue between $84 billion and $87 billion
gross margin between 38 percent and 38.5 percent
operating expenses between $7.65 billion and $7.75 billion
other income/(expense) of $600 million
tax rate of 25.5 percent

Apple’s board of directors has declared a cash dividend of $0.63 per share of the Company’s common stock. The dividend is payable on November 16, 2017 to shareholders of record as of the close of business on November 13, 2017.

Apple will provide live streaming of its Q4 2017 financial results conference call beginning at 2:00 p.m. PDT on November 2, 2017 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.





This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), tax rate, and plans for return of capital. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation: the effect of global and regional economic conditions on the Company's business, including effects on purchasing decisions by consumers and businesses; the ability of the Company to compete in markets that are highly competitive and subject to rapid technological change; the ability of the Company to manage frequent product introductions and transitions, including delivering to the marketplace, and stimulating customer demand for, new products, services and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing and product mix, and increases in component and other costs could have on the Company’s gross margin; the dependency of the Company on the performance of distributors of the Company's products, including cellular network carriers and other resellers; the inventory and other asset risks associated with the Company’s need to order, or commit to order, product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components, services and new technologies essential to the Company's business, including components and technologies that may only be available from sole or limited sources; the dependency of the Company on manufacturing and logistics services provided by third parties, many of which are located outside of the U.S. and which may affect the quality, quantity or cost of products manufactured or services rendered to the Company; the effect of product and service quality problems on the Company’s financial performance and reputation; the dependency of the Company on third-party intellectual property and digital content, which may not be available to the Company on commercially reasonable terms or at all; the dependency of the Company on support from third-party software developers to develop and maintain software applications and services for the Company’s products; the impact of unfavorable legal proceedings, such as a potential finding that the Company has infringed on the intellectual property rights of others; the impact of changes to laws and regulations that affect the Company’s activities, including the Company’s ability to offer products or services to customers in different regions; the ability of the Company to manage risks associated with its international activities, including complying with laws and regulations affecting the Company’s international operations; the ability of the Company to manage risks associated with the Company’s retail stores; the ability of the Company to manage risks associated with the Company’s investments in new business strategies and acquisitions; the impact on the Company's business and reputation from information technology system failures, network disruptions or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products; financial risks, including risks relating to currency fluctuations, credit risks and fluctuations in the market value of the Company’s investment portfolio; and changes in tax rates and exposure to additional tax liabilities. More information on these risks and other potential factors that could affect the Company’s financial results is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, macOS, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

Press Contact:
Kristin Huguet
Apple
khuguet@apple.com
(408) 974-2414

Investor Relations Contacts:
Nancy Paxton
Apple
paxton1@apple.com
(408) 974-5420

Joan Hoover
Apple
hoover1@apple.com
(408) 974-4570

NOTE TO EDITORS: For additional information visit the Apple Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline at (408) 974-2042.

© 2017 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.





Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)
 
 
Three Months Ended
 
Twelve Months Ended
 
September 30,
2017
 
September 24,
2016
 
September 30,
2017
 
September 24,
2016
Net sales
$
52,579

 
$
46,852

 
$
229,234

 
$
215,639

Cost of sales (1)
32,648

 
29,039

 
141,048

 
131,376

Gross margin
19,931

 
17,813

 
88,186

 
84,263

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Research and development (1)
2,997

 
2,570

 
11,581

 
10,045

Selling, general and administrative (1)
3,814

 
3,482

 
15,261

 
14,194

Total operating expenses
6,811

 
6,052

 
26,842

 
24,239

 
 
 
 
 
 
 
 
Operating income
13,120

 
11,761

 
61,344

 
60,024

Other income/(expense), net
797

 
427

 
2,745

 
1,348

Income before provision for income taxes
13,917

 
12,188

 
64,089

 
61,372

Provision for income taxes
3,203

 
3,174

 
15,738

 
15,685

Net income
$
10,714

 
$
9,014

 
$
48,351

 
$
45,687

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
2.08

 
$
1.68

 
$
9.27

 
$
8.35

Diluted
$
2.07

 
$
1.67

 
$
9.21

 
$
8.31

 
 
 
 
 
 
 
 
Shares used in computing earnings per share:
 
 
 
 
 
 
 
Basic
5,149,428

 
5,366,912

 
5,217,242

 
5,470,820

Diluted
5,183,585

 
5,393,333

 
5,251,692

 
5,500,281

 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.63

 
$
0.57

 
$
2.40

 
$
2.18

 
 
 
 
 
 
 
 
(1)  Includes share-based compensation expense as follows:
Cost of sales
$
215

 
$
186

 
$
877

 
$
769

Research and development
$
569

 
$
476

 
$
2,299

 
$
1,889

Selling, general and administrative
$
390

 
$
368

 
$
1,664

 
$
1,552







Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)
 
 
September 30,
2017
 
September 24,
2016
ASSETS:
Current assets:
 
 
 
Cash and cash equivalents
$
20,289

 
$
20,484

Short-term marketable securities
53,892

 
46,671

Accounts receivable, less allowances of $58 and $53, respectively
17,874

 
15,754

Inventories
4,855

 
2,132

Vendor non-trade receivables
17,799

 
13,545

Other current assets
13,936

 
8,283

Total current assets
128,645

 
106,869

 
 
 
 
Long-term marketable securities
194,714

 
170,430

Property, plant and equipment, net
33,783

 
27,010

Goodwill
5,717

 
5,414

Acquired intangible assets, net
2,298

 
3,206

Other non-current assets
10,162

 
8,757

Total assets
$
375,319

 
$
321,686

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
49,049

 
$
37,294

Accrued expenses
25,744

 
22,027

Deferred revenue
7,548

 
8,080

Commercial paper
11,977

 
8,105

Current portion of long-term debt
6,496

 
3,500

Total current liabilities
100,814

 
79,006

 
 
 
 
Deferred revenue, non-current
2,836

 
2,930

Long-term debt
97,207

 
75,427

Other non-current liabilities
40,415

 
36,074

Total liabilities
241,272

 
193,437

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,126,201 and 5,336,166 shares issued and outstanding, respectively
35,867

 
31,251

Retained earnings
98,330

 
96,364

Accumulated other comprehensive income/(loss)
(150
)
 
634

Total shareholders’ equity
134,047

 
128,249

Total liabilities and shareholders’ equity
$
375,319

 
$
321,686







Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
 
Twelve Months Ended
 
September 30,
2017
 
September 24,
2016
Cash and cash equivalents, beginning of the period
$
20,484

 
$
21,120

Operating activities:
 
 
 
Net income
48,351

 
45,687

Adjustments to reconcile net income to cash generated by operating activities:
 
 
 
Depreciation and amortization
10,157

 
10,505

Share-based compensation expense
4,840

 
4,210

Deferred income tax expense
5,966

 
4,938

Other
(166
)
 
486

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
(2,093
)
 
527

Inventories
(2,723
)
 
217

Vendor non-trade receivables
(4,254
)
 
(51
)
Other current and non-current assets
(5,318
)
 
1,055

Accounts payable
9,618

 
1,837

Deferred revenue
(626
)
 
(1,554
)
Other current and non-current liabilities
(154
)
 
(2,033
)
Cash generated by operating activities
63,598

 
65,824

Investing activities:
 
 
 
Purchases of marketable securities
(159,486
)
 
(142,428
)
Proceeds from maturities of marketable securities
31,775

 
21,258

Proceeds from sales of marketable securities
94,564

 
90,536

Payments made in connection with business acquisitions, net
(329
)
 
(297
)
Payments for acquisition of property, plant and equipment
(12,451
)
 
(12,734
)
Payments for acquisition of intangible assets
(344
)
 
(814
)
Payments for strategic investments, net
(395
)
 
(1,388
)
Other
220

 
(110
)
Cash used in investing activities
(46,446
)
 
(45,977
)
Financing activities:
 
 
 
Proceeds from issuance of common stock
555

 
495

Excess tax benefits from equity awards
627

 
407

Payments for taxes related to net share settlement of equity awards
(1,874
)
 
(1,570
)
Payments for dividends and dividend equivalents
(12,769
)
 
(12,150
)
Repurchases of common stock
(32,900
)
 
(29,722
)
Proceeds from issuance of term debt, net
28,662

 
24,954

Repayments of term debt
(3,500
)
 
(2,500
)
Change in commercial paper, net
3,852

 
(397
)
Cash used in financing activities
(17,347
)
 
(20,483
)
Increase/(Decrease) in cash and cash equivalents
(195
)
 
(636
)
Cash and cash equivalents, end of the period
$
20,289

 
$
20,484

Supplemental cash flow disclosure:
 
 
 
Cash paid for income taxes, net
$
11,591

 
$
10,444

Cash paid for interest
$
2,092

 
$
1,316







 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apple Inc.
Q4 2017 Unaudited Summary Data
(Units in thousands, Revenue in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4 2017
 
Q3 2017
 
Q4 2016
 
Sequential Change
 
       Year/Year Change
 
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
Operating Segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
$
23,099

 
 
 
$
20,376

 
 
 
$
20,229

 
 
 
13
 %
 
 
 
14
 %
 
Europe
 
 
13,009

 
 
 
10,675

 
 
 
10,842

 
 
 
22
 %
 
 
 
20
 %
 
Greater China
 
 
9,801

 
 
 
8,004

 
 
 
8,785

 
 
 
22
 %
 
 
 
12
 %
 
Japan
 
 
3,858

 
 
 
3,624

 
 
 
4,324

 
 
 
6
 %
 
 
 
-11
 %
 
Rest of Asia Pacific
 
 
2,812

 
 
 
2,729

 
 
 
2,672

 
 
 
3
 %
 
 
 
5
 %
Total Apple
 
 
$
52,579

 
 
 
$
45,408

 
 
 
$
46,852

 
 
 
16
 %
 
 
 
12
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4 2017
 
Q3 2017
 
Q4 2016
 
Sequential Change
 
       Year/Year Change
 
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
Product Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
iPhone (1)
46,677

 
$
28,846

 
41,026

 
$
24,846

 
45,513

 
$
28,160

 
14
 %
 
16
 %
 
3
%
 
2
 %
 
iPad (1)
10,326

 
4,831

 
11,424

 
4,969

 
9,267

 
4,255

 
-10
 %
 
-3
 %
 
11
%
 
14
 %
 
Mac (1)
5,386

 
7,170

 
4,292

 
5,592

 
4,886

 
5,739

 
25
 %
 
28
 %
 
10
%
 
25
 %
 
Services (2)
 
 
8,501

 
 
 
7,266

 
 
 
6,325

 
 
 
17
 %
 
 
 
34
 %
 
Other Products (1)(3)
 
 
3,231

 
 
 
2,735

 
 
 
2,373

 
 
 
18
 %
 
 
 
36
 %
Total Apple
 
 
$
52,579

 
 
 
$
45,408

 
 
 
$
46,852

 
 
 
16
 %
 
 
 
12
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes deferrals and amortization of related software upgrade rights and non-software services.
 
 
 
 
 
 
 
 
(2)
Includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services. Services
revenue in the fourth quarter of 2017 included a favorable one-time adjustment of $640 million due to a change
in estimate based on the availability of additional supporting information.
 
 
 
 
 
 
 
 
(3)
Includes sales of Apple TV, Apple Watch, Beats products, iPod touch and Apple-branded and third-party accessories.