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0000320193
20181105
10-K
471
Unresolved Staff Comments None.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
472
Apple Inc. | 2018 Form 10-K | 17 Item 2.
0000320193-18-000145/full-submission.txt
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10-K
473
Properties The Company’s headquarters are located in Cupertino, California.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
474
As of September 29, 2018, the Company owned 16.5 million square feet and leased 24.3 million square feet of building space, primarily in the U.S. Additionally, the Company owned a total of 7,376 acres of land, primarily in the U.S. As of September 29, 2018, the Company owned facilities and land for corporate functions,...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
475
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.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
476
The Company has invested in internal capacity and strategic relationships with outside manufacturing vendors and continues to make investments in capital equipment as needed to meet anticipated demand for its products and services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
477
Item 3.
0000320193-18-000145/full-submission.txt
0000320193
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478
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.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
479
Except as described in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 9, “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, or a mater...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
480
The outcome of litigation is inherently uncertain.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
481
If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
482
Refer to the risk factor “The Company could be impacted by unfavorable results of legal proceedings, such as being found to have infringed on intellectual property rights” in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” The Company settled certain matters during the fourth quarter of 2018 that di...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
483
Item 4.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
484
Mine Safety Disclosures Not applicable.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
485
Apple Inc. | 2018 Form 10-K | 18 PART II Item 5.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
486
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 (“Nasdaq”) under the symbol AAPL.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
487
Holders As of October 26, 2018, there were 23,712 shareholders of record.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
488
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended September 29, 2018 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts): (1) On May 1, 2018, the Company announced the Board of Directo...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
489
The remaining $71.0 billion in the table represents the amount available to repurchase shares under the authorized repurchase program as of September 29, 2018.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
490
The Company’s share repurchase program does not obligate it to acquire any specific number of shares.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
491
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.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
492
Apple Inc. | 2018 Form 10-K | 19 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...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
493
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 27, 2013.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
494
Note that historic stock price performance is not necessarily indicative of future stock price performance.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
495
* $100 invested on September 27, 2013 in stock or index, including reinvestment of dividends.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
496
Data points are the last day of each fiscal year for the Company’s common stock and September 30th for indexes.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
497
Copyright© 2018 Standard & Poor’s, a division of S&P Global.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
498
All rights reserved.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
499
Copyright© 2018 S&P Dow Jones Indices LLC, a division of S&P Global.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
500
All rights reserved.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
501
Apple Inc. | 2018 Form 10-K | 20 Item 6.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
502
Selected Financial Data The information set forth below for the five years ended September 29, 2018, is not necessarily indicative of results of future operations, and should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the cons...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
503
Apple Inc. | 2018 Form 10-K | 21 Item 7.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
504
Management’s Discussion and Analysis of Financial Condition and Results of Operations This section and other parts of this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
505
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
506
Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
507
Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
508
Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors,” which are incorporated herein by reference.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
509
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Part II, Item 8 of this Form 10-K. All information presented herein is based on the Company’s fiscal calendar.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
510
Unless otherwise stated, references to particular years, quarters, months or periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
511
Each of the terms the “Company” and “Apple” as used herein refers collectively to Apple Inc. and its wholly-owned subsidiaries, unless otherwise stated.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
512
The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
513
Overview and Highlights The Company designs, manufactures and markets mobile communication and media devices and personal computers, and sells a variety of related software, services, accessories and third-party digital content and applications.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
514
The Company’s products and services include iPhone, iPad, Mac, Apple Watch, AirPods, Apple TV, HomePod, a portfolio of consumer and professional software applications, iOS, macOS, watchOS and tvOS operating systems, iCloud, Apple Pay and a variety of other accessory, service and support offerings.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
515
The Company sells and delivers digital content and applications through the iTunes Store, App Store, Mac App Store, TV App Store, Book Store and Apple Music (collectively “Digital Content and Services”).
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
516
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 resellers.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
517
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.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
518
The Company sells to consumers, small and mid-sized businesses and education, enterprise and government customers.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
519
Fiscal Period The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
520
The Company’s fiscal years 2018 and 2016 spanned 52 weeks each, whereas fiscal year 2017 included 53 weeks.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
521
A 14th week was included in the first quarter of 2017, as is done every five or six years, to realign the Company’s fiscal quarters with calendar quarters.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
522
Fiscal 2018 Highlights Net sales increased 16% or $36.4 billion during 2018 compared to 2017, driven by higher net sales of iPhone, Services and Other Products.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
523
Net sales increased year-over-year in each of the geographic reportable segments.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
524
In May 2018, the Company announced a new capital return program of $100 billion and raised its quarterly dividend from $0.63 to $0.73 per share beginning in May 2018.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
525
During 2018, the Company spent $73.1 billion to repurchase shares of its common stock and paid dividends and dividend equivalents of $13.7 billion.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
526
Fiscal 2017 Highlights Net sales increased 6% or $13.6 billion during 2017 compared to 2016, primarily driven by growth in Services, iPhone and Mac.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
527
The year-over-year increase in net sales reflected growth in each of the geographic reportable segments, with the exception of Greater China.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
528
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on net sales during 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
529
In May 2017, the Company announced an increase to its capital return program by raising the total size of the program from $250 billion to $300 billion.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
530
This included increasing its share repurchase authorization from $175 billion to $210 billion and raising its quarterly dividend from $0.57 to $0.63 per share beginning in May 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
531
During 2017, the Company spent $33.0 billion to repurchase shares of its common stock and paid dividends and dividend equivalents of $12.8 billion.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
532
The $210 billion share repurchase program was completed in the third quarter of 2018.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
533
The Company issued $24.0 billion of U.S. dollar-denominated term debt, €2.5 billion of euro-denominated term debt and C$2.5 billion of Canadian dollar-denominated term debt during 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
534
Apple Inc. | 2018 Form 10-K | 22 Sales Data The following table shows net sales by reportable segment and net sales and unit sales by product for 2018, 2017 and 2016 (dollars in millions and units in thousands): (1) Includes deferrals and amortization of related software upgrade rights and non-software services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
535
(2) Includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
536
Services net sales in 2018 included a favorable one-time item of $236 million in connection with the final resolution of various lawsuits.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
537
Services net sales in 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
538
(3) Includes sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and other Apple-branded and third-party accessories.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
539
Apple Inc. | 2018 Form 10-K | 23 Product Performance iPhone The following table presents iPhone net sales and unit sales information for 2018, 2017 and 2016 (dollars in millions and units in thousands): iPhone net sales increased during 2018 compared to 2017 due primarily to a different mix of iPhones resulting in high...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
540
iPhone net sales increased during 2017 compared to 2016 due to higher iPhone unit sales and a different mix of iPhones with higher average selling prices.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
541
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on iPhone net sales during 2017. iPad The following table presents iPad net sales and unit sales information for 2018, 2017 and 2016 (dollars in millions and units in thousands): iPad net sales decreased during 2018 compared to 201...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
542
The strength in foreign currencies relative to the U.S. dollar had a favorable impact on iPad net sales during 2018. iPad net sales decreased during 2017 compared to 2016 due to lower iPad unit sales and a different mix of iPads with lower average selling prices.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
543
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on iPad net sales during 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
544
Mac The following table presents Mac net sales and unit sales information for 2018, 2017 and 2016 (dollars in millions and units in thousands): Mac net sales decreased during 2018 compared to 2017 due primarily to lower Mac unit sales, partially offset by a different mix of Macs with higher average selling prices.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
545
The strength in foreign currencies relative to the U.S. dollar had a favorable impact on Mac net sales during 2018.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
546
Mac net sales increased during 2017 compared to 2016 due primarily to a different mix of Macs with higher average selling prices and higher Mac unit sales.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
547
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Mac net sales during 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
548
Apple Inc. | 2018 Form 10-K | 24 Services The following table presents Services net sales information for 2018, 2017 and 2016 (dollars in millions): The year-over-year growth in Services net sales in 2018 was due primarily to licensing, App Store and AppleCare.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
549
During 2018, the Company recognized a favorable one-time item of $236 million in connection with the final resolution of various lawsuits.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
550
The year-over-year growth in Services net sales in 2017 was due primarily to increases in App Store and licensing sales.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
551
Services net sales in 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
552
Segment Operating Performance The Company manages its business primarily on a geographic basis.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
553
The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
554
Americas includes both North and South America.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
555
Europe includes European countries, as well as India, the Middle East and Africa.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
556
Greater China includes China, Hong Kong and Taiwan.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
557
Rest of Asia Pacific includes Australia and those Asian countries not included in the Company’s other reportable segments.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
558
Although the reportable segments provide similar hardware and software products and similar services, each one is managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic region.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
559
Further information regarding the Company’s reportable segments can be found in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 10, “Segment Information and Geographic Data.” Americas The following table presents Americas net sales information for 2018, 2017 and 2016 (dollars...
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
560
Americas net sales increased during 2017 compared to 2016 due primarily to higher net sales of iPhone, Services and Mac.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
561
Europe The following table presents Europe net sales information for 2018, 2017 and 2016 (dollars in millions): Europe net sales increased during 2018 compared to 2017 due primarily to higher net sales of iPhone and Services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
562
The strength in foreign currencies relative to the U.S. dollar had a favorable impact on Europe net sales during 2018.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
563
Europe net sales increased during 2017 compared to 2016 due primarily to higher net sales of iPhone and Services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
564
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Europe net sales during 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
565
Apple Inc. | 2018 Form 10-K | 25 Greater China The following table presents Greater China net sales information for 2018, 2017 and 2016 (dollars in millions): Greater China net sales increased during 2018 compared to 2017 due primarily to higher net sales of iPhone and Services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
566
The strength in foreign currencies relative to the U.S. dollar had a favorable impact on Greater China net sales during 2018.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
567
Greater China net sales decreased during 2017 compared to 2016 due primarily to lower net sales of iPhone, partially offset by higher net sales of Services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
568
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Greater China net sales during 2017.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
569
Japan The following table presents Japan net sales information for 2018, 2017 and 2016 (dollars in millions): Japan net sales increased during 2018 compared to 2017 due primarily to higher net sales of iPhone and Services.
0000320193-18-000145/full-submission.txt
0000320193
20181105
10-K
570
The year-over-year increase in Japan net sales in 2017 was due to higher net sales of Services and the strength in the Japanese yen relative to the U.S. dollar.
0000320193-18-000145/full-submission.txt