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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 2023 Form 10-Q | 22 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: February 2, 2023 Apple Inc. By: /s/ Luca Maestri Luca Maestri Senior Vice President, Chief Financial Officer Apple Inc. | Q1 2023 Form 10-Q | 23
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10-Q a10-qq1201712312016.htm 10-Q Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2016 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13...
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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.
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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 ...
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Yes ☒ 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...
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Yes ☒ 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 ☒ 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 ☒ 5,246,540,000 shares of common stock, par value $0.00001 per share, issued and outstanding as of January 20, 2017 Apple Inc. Form 10-Q For the Fiscal Quarter Ended December 31, 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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Risk Factors Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds Item 3.
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Defaults Upon Senior Securities Item 4.
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Mine Safety Disclosures Item 5.
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Other Information Item 6.
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Exhibits PART I - FINANCIAL INFORMATION Item 1.
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Financial Statements Apple Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In millions, except number of shares which are reflected in thousands and per share amounts) See accompanying Notes to Condensed Consolidated Financial Statements.
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Apple Inc. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In millions) See accompanying Notes to Condensed Consolidated Financial Statements.
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Apple Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions, except number of shares which are reflected in thousands and par value) 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”) designs, manufactures and markets mobile communication and media devices, personal computers and portable d...
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The Company’s products and services include iPhone®, iPad®, Mac®, iPod®, Apple Watch®, Apple TV®, a portfolio of consumer and professional software applications, iOS, macOS™, watchOS® and tvOS™ operating systems, iCloud®, Apple Pay® and a variety of accessory, service and support offerings.
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The Company sells and delivers digital content and applications through the iTunes Store®, App Store®, Mac App Store, TV App Store, iBooks Store™ and Apple Music® (collectively “Digital Content and Services”).
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The Company sells its products worldwide through its retail stores, online stores and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers and value-added resellers.
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In addition, the Company sells a variety of third-party Apple-compatible products, including application software and various accessories through its retail and online stores.
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The Company sells to consumers, small and mid-sized businesses and education, enterprise 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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In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.
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The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) 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 period amounts in the condensed consolidated financial statements have been reclassified to conform to the current period’s 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 included in its Annual Report on Form 10-K for the fiscal year ended September 24, 2016 (the “2016 Form 10-K”).
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The Company’s fiscal year is the 52 or 53-week period that ends on the last Saturday of September.
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The Company’s fiscal year 2017 will include 53 weeks and ends on September 30, 2017 and its fiscal year 2016 included 52 weeks and ended on September 24, 2016.
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A 14th week has been included in the first quarter of 2017, as is done every five or six years, to realign fiscal quarters with calendar quarters.
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Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
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Earnings Per Share Basic earnings per 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 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 securities h...
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Potentially dilutive securities include outstanding stock options, shares to be purchased by employees under the Company’s employee stock purchase plan, unvested restricted stock 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 shows the computation of basic and diluted earnings per share for the three months ended December 31, 2016 and December 26, 2015 (net income in millions and shares in thousands): Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted ea...
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Note 2 - Financial Instruments Cash, Cash Equivalents and Marketable Securities The following tables show the Company’s cash and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short-...
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(2) Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for subs...
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The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management.
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The maturities of the Company’s long-term marketable securities generally range from one to five years.
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The Company considers the declines in market value of its marketable securities investment portfolio to be temporary in nature.
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The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer.
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The policy generally requires investments to be investment grade, with the primary 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 an investment for other-than-temporary impairment the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and the Company’s intent to sell, or whet...
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As of December 31, 2016, the Company does not consider any of its investments to be other-than-temporarily impaired.
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Derivative Financial Instruments The Company may use derivatives to partially offset its business exposure to foreign currency and interest rate risk on expected future cash flows, on net investments in certain foreign subsidiaries and on certain existing assets and liabilities.
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However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.
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There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates.
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To help protect gross margins from fluctuations in foreign currency exchange rates, certain of the Company’s subsidiaries whose functional currency is the U.S. dollar may hedge a portion of forecasted foreign currency revenue, and subsidiaries whose functional currency is not the U.S. dollar and who sell in local curre...
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The Company may enter into forward contracts, option contracts or other instruments to manage this risk and may designate these instruments as cash flow hedges.
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The Company typically hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months.
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To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, the Company may enter into foreign currency forward and option contracts to offset the changes in the carrying amounts of these investments due to fluctuations in foreign currency exchange rates.
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In addition, the Company may use non-derivative financial instruments, such as its foreign currency-denominated debt, as economic hedges of its net investments in certain foreign subsidiaries.
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In both of these cases, the Company designates these instruments as net investment hedges.
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The Company may also enter into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses generated by the re-measurement of certain assets and liabilities denominated in non-functional currencies.
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The Company may enter into interest rate swaps, options, or other instruments to manage interest rate risk.
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These instruments may offset a portion of changes in income or expense, or changes in fair value of the Company’s term debt or investments.
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The Company designates these instruments as either cash flow or fair value hedges.
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The Company’s hedged interest rate transactions as of December 31, 2016 are expected to be recognized within 10 years.
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Cash Flow Hedges The effective portions of cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) until the hedged item is recognized in earnings.
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Deferred gains and losses associated with cash flow hedges of foreign currency revenue are recognized as a component of net sales in the same period as the related revenue is recognized, and deferred gains and losses related to cash flow hedges of inventory purchases are recognized as a component of cost of sales in th...
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Deferred gains and losses associated with cash flow hedges of interest income or expense are recognized in other income/(expense), net in the same period as the related income or expense is recognized.
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The ineffective portions and amounts excluded from the effectiveness testing of cash flow hedges are recognized in other income/(expense), net.
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Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period.
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Deferred gains and losses in AOCI associated with such derivative instruments are reclassified immediately into other income/(expense), net.
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Any subsequent changes in fair value of such derivative instruments are reflected in other income/(expense), net unless they are re-designated as hedges of other transactions.
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Net Investment Hedges The effective portions of net investment hedges are recorded in other comprehensive income (“OCI”) as a part of the cumulative translation adjustment.
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The ineffective portions and amounts excluded from the effectiveness testing of net investment hedges are recognized in other income/(expense), net.
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Fair Value Hedges Gains and losses related to changes in fair value hedges are recognized in earnings along with a corresponding loss or gain related to the change in value of the underlying hedged item.
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Non-Designated Derivatives Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates.
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As a result, during the three months ended December 31, 2016, the Company recognized gains in net sales, cost of sales and other income/(expense), net of $273 million, $332 million and $508 million, respectively.
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The Company records all derivatives in the Condensed Consolidated Balance Sheets at fair value.
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The Company’s accounting treatment for these derivative instruments is based on its hedge designation.
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The following tables show the Company’s derivative instruments at gross fair value as of December 31, 2016 and September 24, 2016 (in millions): (1) The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets in the Condensed Consolidated Balance Sheets.
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(2) The fair value of derivative liabilities is measured using Level 2 fair value inputs and is recorded as accrued expenses in the Condensed Consolidated Balance Sheets.
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The following table shows the pre-tax gains and losses of the Company’s derivative and non-derivative instruments designated as cash flow, net investment and fair value hedges in OCI and the Condensed Consolidated Statements of Operations for the three months ended December 31, 2016 and December 26, 2015 (in millions):...
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The credit risk amounts represent the Company’s gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract, based on then-current currency or interest rates at each respective date.
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The Company’s exposure to credit loss and market risk will vary over time as currency and interest rates change.
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Although the table above reflects the notional and credit risk amounts of the Company’s derivative instruments, it does not reflect the gains or losses associated with the exposures and transactions that the instruments are intended to hedge.
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The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.
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