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0000320193
20221028
10-K
400
Additionally, strengthening of foreign currencies may increase the Company’s cost of product components denominated in those currencies, thus adversely affecting gross margins.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
401
The Company uses derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
402
The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
403
The Company is exposed to credit risk and fluctuations in the values of its investment portfolio.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
404
The Company’s investments can be negatively affected by changes in liquidity, credit deterioration, financial results, market and economic conditions, political risk, sovereign risk, interest rate fluctuations or other factors.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
405
As a result, the value and liquidity of the Company’s cash, cash equivalents, and marketable and non-marketable securities may fluctuate substantially.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
406
Therefore, although the Company has not realized any significant losses on its cash, cash equivalents, and marketable and non-marketable securities, future fluctuations in their value could result in significant losses and could have a material adverse impact on the Company’s results of operations and financial conditi...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
407
The Company is exposed to credit risk on its trade accounts receivable, vendor non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
408
The Company distributes its products and certain of its services through third-party cellular network carriers, wholesalers, retailers and resellers.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
409
The Company also sells its products and services directly to small and mid-sized businesses and education, enterprise and government customers.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
410
A substantial majority of the Company’s outstanding trade receivables are not covered by collateral, third-party bank support or financing arrangements, or credit insurance, and a significant portion of the Company’s trade receivables can be concentrated within cellular network carriers or other resellers.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
411
The Company’s exposure to credit and collectibility risk on its trade receivables is higher in certain international markets and its ability to mitigate such risks may be limited.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
412
The Company also has unsecured vendor non-trade receivables resulting from purchases of components by outsourcing partners and other vendors that manufacture subassemblies or assemble final products for the Company.
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0000320193
20221028
10-K
413
In addition, the Company has made prepayments associated with long-term supply agreements to secure supply of inventory components.
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0000320193
20221028
10-K
414
As of September 24, 2022, the Company’s vendor non-trade receivables and prepayments related to long-term supply agreements were concentrated among a few individual vendors located primarily in Asia.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
415
While the Company has procedures to monitor and limit exposure to credit risk on its trade and vendor non-trade receivables, as well as long-term prepayments, there can be no assurance such procedures will effectively limit its credit risk and avoid losses.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
416
The Company is subject to changes in tax rates, the adoption of new U.S. or international tax legislation and exposure to additional tax liabilities.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
417
The Company is subject to taxes in the U.S. and numerous foreign jurisdictions, including Ireland, where a number of the Company’s subsidiaries are organized.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
418
Due to economic and political conditions, tax laws and tax rates for income taxes and other non-income taxes in various jurisdictions may be subject to significant change.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
419
The Company’s effective tax rates are affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, or changes in tax laws or their interpretation, including in the U.S. and Ireland.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
420
The application of tax laws may be uncertain, require significant judgment and be subject to differing interpretations.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
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Apple Inc. | 2022 Form 10-K | 16 The Company is also subject to the examination of its tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and governmental bodies.
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0000320193
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10-K
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The Company regularly assesses the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its provision for taxes.
0000320193-22-000108/full-submission.txt
0000320193
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10-K
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There can be no assurance as to the outcome of these examinations.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
424
If the Company’s effective tax rates were to increase, particularly in the U.S. or Ireland, or if the ultimate determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s business, results of operations and financial condition could be materially adversely affected.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
425
General Risks The price of the Company’s stock is subject to volatility.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
426
The Company’s stock has experienced substantial price volatility in the past and may continue to do so in the future.
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0000320193
20221028
10-K
427
Additionally, the Company, the technology industry and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to these companies’ operating performance.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
428
Price volatility may cause the average price at which the Company repurchases its stock in a given period to exceed the stock’s price at a given point in time.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
429
The Company believes the price of its stock should reflect expectations of future growth and profitability.
0000320193-22-000108/full-submission.txt
0000320193
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10-K
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The Company also believes the price of its stock should reflect expectations that its cash dividend will continue at current levels or grow, and that its current share repurchase program will be fully consummated.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
431
Future dividends are subject to declaration by the Company’s Board of Directors, and the Company’s share repurchase program does not obligate it to acquire any specific number of shares.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
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If the Company fails to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, the price of the Company’s stock may decline significantly, which could have a material adverse impact on investor confidence and employee retention.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
433
Item 1B.
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0000320193
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Unresolved Staff Comments None.
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0000320193
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10-K
435
Item 2.
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0000320193
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Properties The Company’s headquarters are located in Cupertino, California.
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0000320193
20221028
10-K
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As of September 24, 2022, the Company owned or leased facilities and land for corporate functions, R&D, data centers, retail and other purposes at locations throughout the U.S. and in various places outside the U.S.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
438
The Company believes its existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conduct of its business.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
439
Item 3.
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0000320193
20221028
10-K
440
Legal Proceedings Epic Games Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “Northern California District Court”) against the Company alleging violations of federal and state antitrust laws and California’s unfair competition law based upon the Company’...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
441
The Company filed a counterclaim for breach of contract.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
442
On September 10, 2021, the Northern California District Court ruled in favor of the Company with respect to nine out of the ten counts included in Epic’s claim, and in favor of the Company with respect to the Company’s claims for breach of contract.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
443
The Northern California District Court found that certain provisions of the Company’s App Store Review Guidelines violate California’s unfair competition law and issued an injunction.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
444
Epic appealed the decision.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
445
The Company filed a cross-appeal and has been granted a stay pending the appeal.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
446
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.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
447
The Company settled certain matters during the fourth quarter of 2022 that did not individually or in the aggregate have a material impact on the Company’s financial condition or operating results.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
448
The outcome of litigation is inherently uncertain.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
449
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.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
450
Item 4.
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0000320193
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10-K
451
Mine Safety Disclosures Not applicable.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
452
Apple Inc. | 2022 Form 10-K | 17 PART II Item 5.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
453
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on The Nasdaq Stock Market LLC under the symbol AAPL.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
454
Holders As of October 14, 2022, there were 23,838 shareholders of record.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
455
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended September 24, 2022 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts): (1)As of September 24, 2022, the Company was authorized by the...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
456
The Program does not obligate the Company to acquire a minimum amount of shares.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
457
Under the 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.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
458
Apple Inc. | 2022 Form 10-K | 18 Company Stock Performance The following graph shows a comparison of cumulative total shareholder return, calculated on a dividend-reinvested basis, for the Company, the S&P 500 Index, the S&P Information Technology Index and the Dow Jones U.S. Technology Supersector Index for the five y...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
459
The graph assumes $100 was invested in each of the Company’s common stock, the S&P 500 Index, the S&P Information Technology Index and the Dow Jones U.S. Technology Supersector Index as of the market close on September 29, 2017.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
460
Past stock price performance is not necessarily indicative of future stock price performance.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
461
*$100 invested on September 29, 2017 in stock or index, including reinvestment of dividends.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
462
Data points are the last day of each fiscal year for the Company’s common stock and September 30th for indexes.
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0000320193
20221028
10-K
463
Copyright© 2022 Standard & Poor’s, a division of S&P Global.
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0000320193
20221028
10-K
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All rights reserved.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
465
Copyright© 2022 S&P Dow Jones Indices LLC, a division of S&P Global.
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0000320193
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10-K
466
All rights reserved.
0000320193-22-000108/full-submission.txt
0000320193
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10-K
467
Item 6.
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[Reserved] Apple Inc. | 2022 Form 10-K | 19 Item 7.
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0000320193
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10-K
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Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
470
This section of this Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
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0000320193
20221028
10-K
471
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September ...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
472
Fiscal Year Highlights Fiscal 2022 Highlights Total net sales increased 8% or $28.5 billion during 2022 compared to 2021, driven primarily by higher net sales of iPhone, Services and Mac.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
473
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on all Products and Services net sales during 2022.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
474
The Company announces new product, service and software offerings at various times during the year.
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0000320193
20221028
10-K
475
Significant announcements during fiscal 2022 included the following: First Quarter 2022: •Updated MacBook Pro 14” and MacBook Pro 16”, powered by the Apple M1 Pro or M1 Max chip; and •Third generation of AirPods.
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20221028
10-K
476
Second Quarter 2022: •Updated iPhone SE with 5G technology; •All-new Mac Studio, powered by the Apple M1 Max or M1 Ultra chip; •All-new Studio Display™; and •Updated iPad Air with 5G technology, powered by the Apple M1 chip.
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0000320193
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10-K
477
Third Quarter 2022: •Updated MacBook Air and MacBook Pro 13”, both powered by the Apple M2 chip; •iOS 16, macOS Ventura, iPadOS 16 and watchOS 9, updates to the Company’s operating systems; and •Apple Pay Later, a buy now, pay later service.
0000320193-22-000108/full-submission.txt
0000320193
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10-K
478
Fourth Quarter 2022: •iPhone 14, iPhone 14 Plus, iPhone 14 Pro and iPhone 14 Pro Max; •Second generation of AirPods Pro; and •Apple Watch Series 8, updated Apple Watch SE and all-new Apple Watch Ultra.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
479
In April 2022, the Company announced an increase to its Program authorization from $315 billion to $405 billion and raised its quarterly dividend from $0.22 to $0.23 per share beginning in May 2022.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
480
During 2022, the Company repurchased $90.2 billion of its common stock and paid dividends and dividend equivalents of $14.8 billion.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
481
COVID-19 The COVID-19 pandemic has had, and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures, such as restrictions on travel and business operations, temporary closures of businesses, and quarantine and shelter-in-place orders.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
482
The COVID-19 pandemic has at times significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
483
The COVID-19 pandemic and the measures taken by many countries in response have affected and could in the future materially impact the Company’s business, results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
484
Certain of the Company’s outsourcing partners, component suppliers and logistical service providers have experienced disruptions during the COVID-19 pandemic, resulting in supply shortages.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
485
Similar disruptions could occur in the future.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
486
Apple Inc. | 2022 Form 10-K | 20 Products and Services Performance The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions): (1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respectiv...
0000320193-22-000108/full-submission.txt
0000320193
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10-K
487
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
0000320193-22-000108/full-submission.txt
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(3)Services net sales include sales from the Company’s advertising, AppleCare, cloud, digital content, payment and other services.
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0000320193
20221028
10-K
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Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
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0000320193
20221028
10-K
490
iPhone iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company’s new iPhone models released since the beginning of the fourth quarter of 2021.
0000320193-22-000108/full-submission.txt
0000320193
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Mac Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
0000320193-22-000108/full-submission.txt
0000320193
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iPad iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
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0000320193
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Wearables, Home and Accessories Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
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Services Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
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Apple Inc. | 2022 Form 10-K | 21 Segment Operating Performance The Company manages its business primarily on a geographic basis.
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The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific.
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Americas includes both North and South America.
0000320193-22-000108/full-submission.txt
0000320193
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Europe includes European countries, as well as India, the Middle East and Africa.
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Greater China includes China mainland, Hong Kong and Taiwan.
0000320193-22-000108/full-submission.txt