Apple Reports Fourth Quarter Results

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Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

   
Three Months Ended

Twelve Months Ended

September 27,
2014

 

September 28,
2013

September 27,
2014

 

September 28,
2013

 
Net sales $ 42,123 $ 37,472 $ 182,795 $ 170,910
Cost of sales (1)   26,114   23,601   112,258   106,606
Gross margin   16,009   13,871   70,537   64,304
 
Operating expenses:
Research and development (1) 1,686 1,168 6,041 4,475
Selling, general and administrative (1)   3,158   2,673   11,993   10,830
Total operating expenses   4,844   3,841   18,034   15,305
 
Operating income 11,165 10,030 52,503 48,999
Other income/(expense), net   307   113   980   1,156
Income before provision for income taxes 11,472 10,143 53,483 50,155
Provision for income taxes   3,005   2,631   13,973   13,118
Net income $ 8,467 $ 7,512 $ 39,510 $ 37,037
 
Earnings per share:
Basic $ 1.43 $ 1.19 $ 6.49 $ 5.72
Diluted $ 1.42 $ 1.18 $ 6.45 $ 5.68
 
Shares used in computing earnings per share:
Basic 5,933,845 6,329,139 6,085,572 6,477,320
Diluted 5,972,082 6,363,919 6,122,663 6,521,634
 
Cash dividends declared per common share $ 0.47 $ 0.44 $ 1.82 $ 1.64
 
(1) Includes share-based compensation expense as follows:
Cost of sales $ 116 $ 88 $ 450 $ 350
Research and development $ 314 $ 209 $ 1,216 $ 917
Selling, general and administrative $ 332 $ 258 $ 1,197 $ 986
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands and par value)

   

September 27,
2014

September 28,
2013

 
ASSETS:
 
Current assets:
Cash and cash equivalents $ 13,844 $ 14,259
Short-term marketable securities 11,233 26,287
Accounts receivable, less allowances of $86 and $99, respectively 17,460 13,102
Inventories 2,111 1,764
Deferred tax assets 4,318 3,453
Vendor non-trade receivables 9,759 7,539
Other current assets   9,806   6,882
Total current assets 68,531 73,286
 
Long-term marketable securities 130,162 106,215
Property, plant and equipment, net 20,624 16,597
Goodwill 4,616 1,577
Acquired intangible assets, net 4,142 4,179
Other assets   3,764   5,146
Total assets $ 231,839 $ 207,000
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
 
Current liabilities:
Accounts payable $ 30,196 $ 22,367
Accrued expenses 18,453 13,856
Deferred revenue 8,491 7,435
Commercial paper   6,308   0
Total current liabilities 63,448 43,658
 
Deferred revenue – non-current 3,031 2,625
Long-term debt 28,987 16,960
Other non-current liabilities   24,826   20,208
Total liabilities   120,292   83,451
 
Commitments and contingencies
 
Shareholders' equity:
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,866,161 and 6,294,494 shares issued and outstanding, respectively 23,313 19,764
Retained earnings 87,152 104,256
Accumulated other comprehensive income/(loss)   1,082   (471)
Total shareholders' equity   111,547   123,549
Total liabilities and shareholders' equity $ 231,839 $ 207,000
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 
Twelve Months Ended
September 27, 2014   September 28, 2013
 
Cash and cash equivalents, beginning of the year $ 14,259 $ 10,746
 
Operating activities:
Net income 39,510 37,037
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization 7,946 6,757
Share-based compensation expense 2,863 2,253
Deferred income tax expense 2,347 1,141
Changes in operating assets and liabilities:
Accounts receivable, net (4,232) (2,172)
Inventories (76) (973)
Vendor non-trade receivables (2,220) 223
Other current and non-current assets 167 1,080
Accounts payable 5,938 2,340
Deferred revenue 1,460 1,459
Other current and non-current liabilities 6,010   4,521
Cash generated by operating activities 59,713   53,666
 
Investing activities:
Purchases of marketable securities (217,128) (148,489)
Proceeds from maturities of marketable securities 18,810 20,317
Proceeds from sales of marketable securities 189,301 104,130
Payments made in connection with business acquisitions, net (3,765) (496)
Payments for acquisition of property, plant and equipment (9,571) (8,165)
Payments for acquisition of intangible assets (242) (911)
Other 16   (160)
Cash used in investing activities (22,579)   (33,774)
 
Financing activities:
Proceeds from issuance of common stock 730 530
Excess tax benefits from equity awards 739 701

Taxes paid related to net share settlement of equity awards

(1,158) (1,082)
Dividends and dividend equivalents paid (11,126) (10,564)
Repurchase of common stock (45,000) (22,860)
Proceeds from issuance of long-term debt, net 11,960 16,896
Proceeds from issuance of commercial paper, net 6,306   0
Cash used in financing activities (37,549)   (16,379)
 
Increase/(decrease) in cash and cash equivalents (415)   3,513
Cash and cash equivalents, end of the year $ 13,844 $ 14,259
 
Supplemental cash flow disclosure:
Cash paid for income taxes, net $ 10,026 $ 9,128
Cash paid for interest $ 339 $ 0
 
Apple Inc.
Q4 2014 Unaudited Summary Data
(Units in thousands, Revenue in millions)
                         
     
Q4'14 Q3'14 Q4'13 Sequential Change Year/Year Change
 
Operating Segments Revenue Revenue Revenue Revenue Revenue
Americas $16,247 $14,577 $13,941 11% 17%
Europe 9,535 8,091 8,005 18% 19%
Greater China 5,778 5,935 5,733 - 3% 1%
Japan 3,507 2,564 3,341 37% 5%
Rest of Asia Pacific 1,923 2,161 1,980 - 11% - 3%
Retail 5,133 4,104 4,472 25% 15%
Total Apple     $42,123 $37,432 $37,472 13% 12%
 
     
Q4'14 Q3'14 Q4'13 Sequential Change Year/Year Change
 
Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue
iPhone (1) 39,272 $23,678 35,203 $19,751 33,797 $19,510 12% 20% 16% 21%
iPad (1) 12,316 5,316 13,276 5,889 14,079 6,186 - 7% - 10% - 13% - 14%
Mac (1) 5,520 6,625 4,413 5,540 4,574 5,624 25% 20% 21% 18%
iPod (1) 2,641 410 2,926 442 3,498 573 - 10% - 7% - 24% - 28%
iTunes/Software/Services (2) 4,608 4,485 4,260 3% 8%
Accessories (3) 1,486 1,325 1,319 12% 13%
Total Apple     $42,123 $37,432 $37,472 13% 12%
 

(1)

 

Includes deferrals and amortization of related non-software services and software upgrade rights.

(2)

Includes revenue from the iTunes Store, the App Store, the Mac App Store, the iBooks Store, AppleCare, licensing and other services.

(3)

Includes sales of Apple-branded and third-party accessories for iPhone, iPad, Mac and iPod.





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