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0000320193
20200129
10-Q
332
Provision for Income Taxes Provision for income taxes, effective tax rate and statutory federal income tax rate for the three months ended December 28, 2019 and December 29, 2018 were as follows (dollars in millions): The Company’s effective tax rate for the first quarter of 2020 was lower than the statutory federal in...
0000320193-20-000010/full-submission.txt
0000320193
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10-Q
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The Company’s effective tax rate for the first quarter of 2020 was lower compared to the same quarter in 2019 due to a one-time adjustment of U.S. foreign tax credits.
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10-Q
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Recent Accounting Pronouncements Financial Instruments In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update No.
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2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments.
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10-Q
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The Company will adopt ASU 2016-13 in its first quarter of 2021 utilizing the modified retrospective transition method.
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Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements.
0000320193-20-000010/full-submission.txt
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10-Q
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Apple Inc. | Q1 2020 Form 10-Q | 28 Liquidity and Capital Resources The following tables present selected financial information and statistics as of December 28, 2019 and September 28, 2019 and for the first three months of 2020 and 2019 (in millions): (1) As of December 28, 2019 and September 28, 2019, total marketabl...
0000320193-20-000010/full-submission.txt
0000320193
20200129
10-Q
339
The Company believes its existing balances of cash, cash equivalents and marketable securities, along with commercial paper and other short-term liquidity arrangements, will be sufficient to satisfy its working capital needs, capital asset purchases, dividends, share repurchases, debt repayments and other liquidity req...
0000320193-20-000010/full-submission.txt
0000320193
20200129
10-Q
340
In connection with the State Aid Decision, as of December 28, 2019, the adjusted recovery amount of €12.9 billion plus interest of €1.2 billion was funded into escrow, where it will remain restricted from general use pending the conclusion of all appeals.
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10-Q
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The Company’s marketable securities investment portfolio is primarily invested in highly rated securities, with the primary objective of minimizing the potential risk of principal loss.
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10-Q
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The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.
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10-Q
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During the three months ended December 28, 2019, cash generated by operating activities of $30.5 billion was a result of $22.2 billion of net income, non-cash adjustments to net income of $4.0 billion and an increase in the net change in operating assets and liabilities of $4.2 billion.
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Cash used in investing activities of $13.7 billion during the three months ended December 28, 2019 consisted primarily of cash used for purchases of marketable securities, net of sales and maturities, of $10.4 billion and cash used to acquire property, plant and equipment of $2.1 billion.
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10-Q
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Cash used in financing activities of $25.4 billion during the three months ended December 28, 2019 consisted primarily of cash used to repurchase common stock of $20.7 billion, cash used to pay dividends and dividend equivalents of $3.5 billion and cash used to repay term debt of $1.0 billion, partially offset by net p...
0000320193-20-000010/full-submission.txt
0000320193
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10-Q
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During the three months ended December 29, 2018, cash generated by operating activities of $26.7 billion was a result of $20.0 billion of net income, non-cash adjustments to net income of $5.0 billion and an increase in the net change in operating assets and liabilities of $1.8 billion.
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10-Q
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Cash generated by investing activities of $5.8 billion during the three months ended December 29, 2018 consisted primarily of proceeds from maturities and sales of marketable securities, net of purchases, of $9.8 billion, partially offset by cash used to acquire property, plant and equipment of $3.4 billion.
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Cash used in financing activities of $13.7 billion during the three months ended December 29, 2018 consisted primarily of cash used to repurchase common stock of $8.8 billion and cash used to pay dividends and dividend equivalents of $3.6 billion.
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Debt The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program.
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The Company uses the net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases.
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As of December 28, 2019, the Company had $5.0 billion of Commercial Paper outstanding, with a weighted-average interest rate of 1.88% and maturities generally less than nine months.
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Apple Inc. | Q1 2020 Form 10-Q | 29 As of December 28, 2019, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $103.1 billion (collectively the “Notes”).
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During the first three months of 2020, the Company issued $2.2 billion and repaid $1.0 billion of Notes.
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The Company has entered, and in the future may enter, into interest rate swaps to manage interest rate risk on the Notes.
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In addition, the Company has entered, and in the future may enter, into foreign currency swaps to manage foreign currency risk on the Notes.
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Further information regarding the Company’s debt issuances and related hedging activity can be found in Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 3, “Financial Instruments” and Note 6, “Debt.” Capital Return Program On April 30, 2019, the Company announced the ...
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During the three months ended December 28, 2019, the Company repurchased 70.4 million shares of its common stock for $20.0 billion, including 30.4 million shares initially delivered under a $10.0 billion accelerated share repurchase arrangement (“ASR”) dated November 2019.
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The Company’s share repurchase program does not obligate it to acquire any specific number of shares.
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Under this program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
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On April 30, 2019, the Company also announced the Board of Directors raised the Company’s quarterly cash dividend from $0.73 to $0.77 per share, beginning with the dividend paid during the third quarter of 2019.
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10-Q
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The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
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Contractual Obligations Leases As of December 28, 2019, the Company’s total fixed lease payment obligations were $12.2 billion, of which $7.2 billion was included in other non-current liabilities in the Company’s Condensed Consolidated Balance Sheet.
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The Company’s leases typically have original terms not exceeding 10 years and generally contain multi-year renewal options.
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Manufacturing Purchase Obligations The Company utilizes several outsourcing partners to manufacture sub-assemblies for the Company’s products and to perform final assembly and testing of finished products.
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These outsourcing partners acquire components and build product based on demand information supplied by the Company, which typically covers periods up to 150 days.
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10-Q
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The Company also obtains individual components for its products from a wide variety of individual suppliers.
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10-Q
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As of December 28, 2019, the Company expects to pay $30.2 billion under manufacturing-related supplier arrangements, which are primarily noncancelable.
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Other Purchase Obligations The Company’s other purchase obligations consist of noncancelable obligations to acquire capital assets, including product tooling and manufacturing process equipment, and noncancelable obligations related to advertising, licensing, R&D, Internet and telecommunications services, content creat...
0000320193-20-000010/full-submission.txt
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As of December 28, 2019, the Company had other purchase obligations of $9.0 billion.
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Deemed Repatriation Tax Payable As of December 28, 2019, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act (the “Act”) was $28.2 billion, and was included in other non-current liabilities in the Company’s Condensed Consolidated Balance Sheet.
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The Company plans to pay the deemed repatriation tax payable in installments in accordance with the Act.
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Other Non-Current Liabilities The Company’s remaining other non-current liabilities primarily consist of items for which the Company is unable to make a reasonably reliable estimate of the timing or amount of payments.
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Apple Inc. | Q1 2020 Form 10-Q | 30 Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s...
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Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
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10-Q
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Actual results may differ from these estimates, and such differences may be material.
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10-Q
376
Note 1, “Summary of Significant Accounting Policies” in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2019 Form 10-K, and “Critical Accounting Policies and Estimates” in Part II, Item 7 of the 2019 Form 10-K describe the significant accounting policies ...
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10-Q
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There have been no material changes to the Company’s critical accounting policies and estimates since the 2019 Form 10-K.
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk There have been no material changes to the Company’s market risk during the first three months of 2020.
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For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2019 Form 10-K.
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Item 4.
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Controls and Procedures Evaluation of Disclosure Controls and Procedures Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as ...
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10-Q
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Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting during the first quarter of 2020, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have ...
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10-Q
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Apple Inc. | Q1 2020 Form 10-Q | 31 PART II - OTHER INFORMATION Item 1.
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Legal Proceedings The Company is subject to legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business.
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Except as described in Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 10, “Commitments and Contingencies” under the heading “Contingencies,” in the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, ...
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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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10-Q
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The Company settled certain matters during the first quarter of 2020 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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Item 1A.
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Risk Factors The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the 2019 Form 10-K under the heading “Risk Factors,” any one or more of which could, directly...
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Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
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There have been no material changes to the Company’s risk factors since the 2019 Form 10-K. Apple Inc. | Q1 2020 Form 10-Q | 32 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 December 28, 2019 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts): (1)...
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The remaining $58.9 billion in the table represents the amount available to repurchase shares under the authorized repurchase program as of December 28, 2019.
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The Company’s share repurchase program does not obligate it to acquire any specific number of shares.
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397
Under this program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
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(2) In November 2019, the Company entered into a new ASR to purchase up to $10.0 billion of the Company’s common stock.
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In exchange for up-front payments totaling $10.0 billion, the financial institutions that are party to the arrangement committed to deliver shares to the Company during the ASR’s purchase period, which will end in or before May 2020.
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The total number of shares ultimately delivered, and therefore the average price paid per share, will be determined at the end of the applicable purchase period based on the volume-weighted average price of the Company’s common stock during that period.
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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 None.
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Apple Inc. | Q1 2020 Form 10-Q | 33 Item 6.
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Exhibits Incorporated by Reference Exhibit Number Exhibit Description Form Exhibit Filing Date/ Period End Date 4.1 Officer’s Certificate of the Registrant, dated as of November 15, 2019, including forms of global notes representing the 0.000% Notes due 2025 and 0.500% Notes due 2031.
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8-K 4.1 11/15/19 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. | Q1 2020 Form 10-Q | 34 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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January 28, 2020 Apple Inc. By: /s/ Luca Maestri Luca Maestri Senior Vice President, Chief Financial Officer Apple Inc. | Q1 2020 Form 10-Q | 35
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10-Q
0
10-Q a10-qq320166252016.htm 10-Q Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 25, 2016 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 1...
0001628280-16-017809/full-submission.txt
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Commission File Number: 001-36743 Apple Inc. (Exact name of Registrant as specified in its charter) California 94-2404110 (State or other jurisdiction of incorporation or organization) (I.R.S.
0001628280-16-017809/full-submission.txt
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Employer Identification No.)
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1 Infinite Loop Cupertino, California (Address of principal executive offices) (Zip Code) (408) 996-1010 (Registrant’s telephone number, including area code) 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 ...
0001628280-16-017809/full-submission.txt
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Yes ý No ¨ Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period...
0001628280-16-017809/full-submission.txt
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Yes ý No ¨ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨ 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 ý 5,388,443,000 shares of common stock, par value $0.00001 per share, issued and outstanding as of July 15, 2016 Apple Inc. Form 10-Q For the Fiscal Quarter Ended June 25, 2016 Page Part I Item 1.
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Financial Statements Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 3.
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Quantitative and Qualitative Disclosures About Market Risk Item 4.
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Controls and Procedures Part II Item 1.
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Legal Proceedings Item 1A.
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