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0000320193
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10-Q
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The Company is considering further review of the decision.
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Other Legal Proceedings The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business.
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The Company settled certain matters during the second quarter of 2023 that did not individually or in the aggregate have a material impact on the Company’s financial condition or operating results.
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The outcome of litigation is inherently uncertain.
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If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
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Item 1A.
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Risk Factors The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2022 Form 10-K under the heading “Risk Factors.” When any one or more of these risks...
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There have been no material changes to the Company’s risk factors since the 2022 Form 10-K.
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended April 1, 2023 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts): (1)On A...
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As of April 1, 2023, total utilization under the April 2022 authorization was $67.4 billion.
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On May 4, 2023, the Company announced the Board of Directors had authorized an additional program to repurchase up to $90 billion of the Company’s common stock.
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The programs do not obligate the Company to acquire a minimum amount of shares.
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Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
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Apple Inc. | Q2 2023 Form 10-Q | 20 Item 3.
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Defaults Upon Senior Securities None.
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Item 4.
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Mine Safety Disclosures Not applicable.
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Item 5.
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Other Information Rule 10b5-1 Trading Plans During the three months ended April 1, 2023, Katherine L. Adams, Timothy D. Cook, Luca Maestri, Deirdre O’Brien and Jeffrey Williams, each an officer for purposes of Section 16 of the Exchange Act, had equity trading plans in place in accordance with Rule 10b5-1(c)(1) under t...
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An equity trading plan is a written document that preestablishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including sales of shares acquired under the Company’s employee and director equity plans.
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Item 6.
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Exhibits Incorporated by Reference Exhibit Number Exhibit Description Form Exhibit Filing Date/ Period End Date 31.1* Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
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31.2* Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
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32.1** Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
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101* Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
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104* Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.
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* Filed herewith.
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** Furnished herewith.
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Apple Inc. | Q2 2023 Form 10-Q | 21 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 thereunto duly authorized.
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Date: May 4, 2023 Apple Inc. By: /s/ Luca Maestri Luca Maestri Senior Vice President, Chief Financial Officer Apple Inc. | Q2 2023 Form 10-Q | 22
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10-Q d10q.htm FORM 10-Q Form 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 29, 2007 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)...
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Commission file number: 000-10030 Apple Inc. (Exact name of Registrant as specified in its charter) California (State or other jurisdiction of incorporation or organization) (I.R.S.
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Employer Identification No.)
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1 Infinite Loop Cupertino, California (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (408) 996-1010 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during t...
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Yes x No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
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See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes ¨ No x 878,875,671 shares of common stock issued and outstanding as of January 18, 2008 PART I.
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FINANCIAL INFORMATION Item 1.
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Financial Statements APPLE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in millions, except share and per share amounts) See accompanying Notes to Condensed Consolidated Financial Statements.
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APPLE INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except share amounts) See accompanying Notes to Condensed Consolidated Financial Statements.
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APPLE INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) See accompanying Notes to Condensed Consolidated Financial Statements.
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Apple Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1 - Summary of Significant Accounting Policies Apple Inc. and its wholly-owned subsidiaries (collectively “Apple” or the “Company”) design, manufacture, and market personal computers, portable digital music players, and mobile communicatio...
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The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers.
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In addition, the Company sells a variety of third-party Mac, iPod and iPhone compatible products including application software, printers, storage devices, speakers, headphones, and various other accessories and supplies through its online and retail stores.
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The Company sells to education, consumer, creative professional, business, and government customers.
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Basis of Presentation and Preparation The accompanying Condensed Consolidated Financial Statements include the accounts of the Company.
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Intercompany accounts and transactions have been eliminated.
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The preparation of these Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements and accompanying notes.
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Actual results could differ materially from those estimates.
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Certain prior year amounts in the Condensed Consolidated Financial Statements and notes thereto have been reclassified to conform to the current year presentation.
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These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with the Company’s annual Consolidated Financial Statements and the notes thereto for the fiscal year ended September 29, 2007, included in its Annual Report on Form 10-K (the “2007 Form 10-K”).
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Unless otherwise stated, references to particular years or quarters refer to the Company’s fiscal years ended in September and the associated quarters of those fiscal years.
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Earnings Per Common Share Basic earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.
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Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive secur...
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Potentially dilutive securities include outstanding options, shares to be purchased under the employee stock purchase plan, and unvested restricted stock units (“RSUs”).
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The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method.
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Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.
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The following table sets forth the computation of basic and diluted earnings per share (in thousands, except net income and per share amounts): Potentially dilutive securities representing approximately 7.6 million and 13.9 million shares of common stock for the quarter ended December 29, 2007 and December 30, 2006, re...
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Income Taxes In July 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No.
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(“FIN”) 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
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109.
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FIN 48 changes the accounting for uncertainty in income taxes by creating a new framework for how companies should recognize, measure, present, and disclose uncertain tax positions in their financial statements.
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Under FIN 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
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The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
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FIN 48 also provides guidance on the reversal of previously recognized tax positions, balance sheet classification, accounting for interest and penalties associated with tax positions, and income tax disclosures.
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See Note 4, “Income Taxes” of this Form 10-Q for additional information, including the effects of adoption on the Company’s Condensed Consolidated Financial Statements.
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Note 2 - Financial Instruments Cash, Cash Equivalents and Short-Term Investments The following table summarizes the fair value of the Company’s cash and available-for-sale securities held in its short-term investment portfolio, recorded as cash and cash equivalents or short-term investments (in millions): The Company’s...
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Foreign securities consist primarily of foreign commercial paper issued by foreign companies and certificates of deposit and time deposits with foreign institutions, most of which are denominated in U.S. dollars.
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As of December 29, 2007 and September 29, 2007, approximately $1.9 billion of the Company’s short-term investments had underlying maturities ranging from one to five years.
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The remaining short-term investments had maturities less than 12 months.
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The Company may sell its investments prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management.
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The Company recognized no material net gains or losses during the first quarter of 2008 or 2007 related to such sales.
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The gross unrealized losses on the Company’s investment portfolio were $18 million and $13 million as of December 29, 2007 and September 29, 2007, respectively.
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The Company considers the declines in market value of its investment portfolio to be temporary in nature.
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The unrealized losses on the Company’s investments in U.S. Treasury and Agency securities, U.S. corporate securities, and foreign securities were caused primarily by changes in interest rates, specifically, widening credit spreads.
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The Company typically invests in highly-rated securities and its policy generally limits the amount of credit exposure to any one issuer.
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The Company’s investment policy requires investments to be rated single-A or better with the objective of minimizing the potential risk of principal loss.
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Fair values were determined for each individual security in the investment portfolio.
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When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, and the Company’s ability and intent to hold the investment for a period of time, which may be suff...
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During the three-month periods ended December 29, 2007 and December 30, 2006, the Company did not recognize any material impairment charges on outstanding securities.
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Derivative Financial Instruments The Company uses derivatives to partially offset its business exposure to foreign exchange risk.
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Foreign currency forward and option contracts are used to offset the foreign exchange risk on certain existing assets and liabilities and to hedge the foreign exchange risk on expected future cash flows on certain forecasted revenue and cost of sales.
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Generally, the Company’s practice is to hedge a majority of its existing material foreign exchange transaction exposures.
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However, the Company may not hedge certain foreign exchange transaction exposures due to immateriality, prohibitive economic cost of hedging particular exposures, or limited availability of appropriate hedging instruments.
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The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments.
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The Company records all derivatives on the balance sheet at fair value.
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Derivatives that are not designated as hedges and the ineffective portions of cash flow hedges are adjusted to fair value through earnings.
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The effective portions of cash flow hedges are recorded in other comprehensive income until the hedged item is recognized in earnings.
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Changes in value of fair value hedges are offset against the changes in fair value of the hedged assets, liabilities, or firm commitments through earnings.
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As of December 29, 2007, the Company had a net deferred gain associated with cash flow hedges of approximately $4 million, net of taxes, all of which is expected to be reclassified to earnings by the end of the third quarter of 2008.
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As of the end of the first quarter of 2008, the general nature of the Company’s risk management activities and the general nature and mix of the Company’s derivative financial instruments have not changed materially from the end of 2007.
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Note 3 - Condensed Consolidated Financial Statement Details (in millions) Other Current Assets Property, Plant, and Equipment Other Assets Accrued Expenses Non-Current Liabilities Note 4 - Income Taxes In the first quarter of 2008, the Company adopted the provisions of FIN 48.
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Upon adoption of FIN 48, the Company’s cumulative effect of a change in accounting principle resulted in an increase to retained earnings of $11 million.
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The Company had historically classified interest and penalties and unrecognized tax benefits as current liabilities.
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Beginning with the adoption of FIN 48 the Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as non-current liabilities within the Condensed Consolidated Balance Sheet.
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The total amount of gross unrecognized tax benefits as of the date of adoption of FIN 48 was $475 million, of which $209 million, if recognized, would affect the Company’s effective tax rate.
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As of December 29, 2007, the total amount of gross unrecognized tax benefits was $447 million, of which $192 million, if recognized, would affect the Company’s effective tax rate.
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The Company’s total gross unrecognized tax benefits was classified as non-current liabilities in the Condensed Consolidated Balance Sheet.
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