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0000320193
20201030
10-K
407
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.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
408
Common Stock Split On August 28, 2020, the Company effected a four-for-one stock split to shareholders of record as of August 24, 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
409
All share, restricted stock unit (“RSU”) and per share or per RSU information has been retroactively adjusted to reflect the stock split.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
410
Holders As of October 16, 2020, there were 22,797 shareholders of record.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
411
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended September 26, 2020 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts): (1)As of September 26, 2020, the Company was authorized to pur...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
412
The remaining $56.4 billion in the table represents the amount available to repurchase shares under the authorized repurchase program as of September 26, 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
413
The Company’s share repurchase program does not obligate it to acquire any specific number of shares.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
414
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.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
415
(2)In May 2020, the Company entered into an accelerated share repurchase arrangement (“ASR”) to purchase up to $6.0 billion of the Company’s common stock.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
416
In August 2020, the purchase period for this ASR ended and an additional 3 million shares were delivered and retired.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
417
In total, 64 million shares were delivered under this ASR at an average repurchase price of $94.14.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
418
Apple Inc. | 2020 Form 10-K | 17 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...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
419
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 25, 2015.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
420
Note that past stock price performance is not necessarily indicative of future stock price performance.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
421
*$100 invested on September 25, 2015 in stock or index, including reinvestment of dividends.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
422
Data points are the last day of each fiscal year for the Company’s common stock and September 30th for indexes.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
423
Copyright© 2020 Standard & Poor’s, a division of S&P Global.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
424
All rights reserved.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
425
Copyright© 2020 S&P Dow Jones Indices LLC, a division of S&P Global.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
426
All rights reserved.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
427
Apple Inc. | 2020 Form 10-K | 18 Item 6.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
428
Selected Financial Data The information set forth below for the five years ended September 26, 2020, 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...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
429
Apple Inc. | 2020 Form 10-K | 19 Item 7.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
430
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.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
431
This section of this Form 10-K generally discusses 2020 and 2019 items and year-to-year comparisons between 2020 and 2019.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
432
Discussions of 2018 items and year-to-year comparisons between 2019 and 2018 that are not included in this Form 10-K 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 ...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
433
Fiscal Year Highlights COVID-19 Update COVID-19 has spread rapidly throughout the world, prompting governments and businesses to take unprecedented measures in response.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
434
Such measures have included restrictions on travel and business operations, temporary closures of businesses, and quarantines and shelter-in-place orders.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
435
The COVID-19 pandemic has significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
436
The COVID-19 pandemic and the measures taken by many countries in response have adversely affected and could in the future materially adversely impact the Company’s business, results of operations, financial condition and stock price.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
437
During 2020, aspects of the Company’s business were adversely affected by the COVID-19 pandemic, with many of the Company’s retail stores, as well as channel partner points of sale, temporarily closed at various times, and the vast majority of the Company’s employees working remotely.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
438
The Company has reopened some of its offices and the majority of its retail stores, subject to operating restrictions to protect public health and the health and safety of employees and customers, and it continues to work on safely re-opening the remainder of its offices and retail stores, subject to local rules and re...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
439
The full extent of the future impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and avail...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
440
Refer to Part I, Item 1A of this Form 10-K under the heading “Risk Factors,” for more information.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
441
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...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
442
Fiscal 2020 Highlights Total net sales increased 6% or $14.3 billion during 2020 compared to 2019, primarily driven by higher net sales of Services and Wearables, Home and Accessories.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
443
The weakness in foreign currencies had an unfavorable impact on net sales during 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
444
In April 2020, the Company announced an increase to its current share repurchase program authorization from $175 billion to $225 billion and raised its quarterly dividend from $0.1925 to $0.205 per share beginning in May 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
445
During 2020, the Company repurchased $72.5 billion of its common stock and paid dividends and dividend equivalents of $14.1 billion.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
446
On August 28, 2020, the Company effected a four-for-one stock split to shareholders of record as of August 24, 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
447
All share, RSU and per share or per RSU information has been retroactively adjusted to reflect the stock split.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
448
Apple Inc. | 2020 Form 10-K | 20 Products and Services Performance The following table shows net sales by category for 2020, 2019 and 2018 (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...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
449
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and Apple-branded and third-party accessories.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
450
(3)Services net sales include sales from the Company’s advertising, AppleCare, digital content and other services.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
451
Services net sales also include amortization of the deferred value of Maps, Siri, and free iCloud® storage and Apple TV+ services, which are bundled in the sales price of certain products.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
452
iPhone iPhone net sales decreased during 2020 compared to 2019 due primarily to the absence of new iPhone models in the fourth quarter of 2020 and the weakness in foreign currencies relative to the U.S. dollar, partially offset by the introduction of iPhone SE in the third quarter of 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
453
Mac Mac net sales increased during 2020 compared to 2019 due primarily to higher net sales of MacBook Pro.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
454
iPad iPad net sales increased during 2020 compared to 2019 due primarily to higher net sales of 10-inch versions of iPad, iPad Air and iPad Pro.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
455
Wearables, Home and Accessories Wearables, Home and Accessories net sales increased during 2020 compared to 2019 due primarily to higher net sales of AirPods and Apple Watch.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
456
Services Services net sales increased during 2020 compared to 2019 due primarily to higher net sales from the App Store, advertising and cloud services.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
457
Apple Inc. | 2020 Form 10-K | 21 Segment Operating Performance The Company manages its business primarily on a geographic basis.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
458
The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
459
Americas includes both North and South America.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
460
Europe includes European countries, as well as India, the Middle East and Africa.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
461
Greater China includes China mainland, Hong Kong and Taiwan.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
462
Rest of Asia Pacific includes Australia and those Asian countries not included in the Company’s other reportable segments.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
463
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.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
464
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 11, “Segment Information and Geographic Data.” The following table shows net sales by reportable segment for 2020, 2019 and 2018 (dollars in million...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
465
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Americas net sales during 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
466
Europe Europe net sales increased during 2020 compared to 2019 due primarily to higher net sales of iPhone, Wearables, Home and Accessories and Services.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
467
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Europe net sales during 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
468
Greater China Greater China net sales decreased during 2020 compared to 2019 due primarily to lower net sales of iPhone, partially offset by higher net sales of Services and iPad.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
469
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Greater China net sales during 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
470
Japan Japan net sales were flat during 2020 compared to 2019 due primarily to lower net sales of iPhone, offset by higher net sales of Services and Wearables, Home and Accessories.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
471
The strength of the Japanese yen relative to the U.S. dollar had a favorable impact on Japan net sales during 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
472
Rest of Asia Pacific Rest of Asia Pacific net sales increased during 2020 compared to 2019 due primarily to higher net sales of Wearables, Home and Accessories, Services and iPhone.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
473
The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Rest of Asia Pacific net sales during 2020.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
474
Apple Inc. | 2020 Form 10-K | 22 Gross Margin Products and Services gross margin and gross margin percentage for 2020, 2019 and 2018 were as follows (dollars in millions): Products Gross Margin Products gross margin increased during 2020 compared to 2019 due primarily to higher Products volume and material cost savings...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
475
Products gross margin percentage decreased during 2020 compared to 2019 due primarily to the weakness in foreign currencies relative to the U.S. dollar and a different Products mix, partially offset by material cost savings and higher leverage.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
476
Services Gross Margin Services gross margin increased during 2020 compared to 2019 due primarily to higher Services net sales and a different Services mix.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
477
Services gross margin percentage increased during 2020 compared to 2019 due primarily to a different Services mix and higher leverage, partially offset by higher Services costs.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
478
The Company’s future gross margins can be impacted by a variety of factors, as set forth in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” As a result, the Company believes, in general, gross margins will be subject to volatility and remain under downward pressure.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
479
Operating Expenses Operating expenses for 2020, 2019 and 2018 were as follows (dollars in millions): Research and Development The year-over-year growth in R&D expense in 2020 was driven primarily by increases in headcount-related expenses.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
480
The Company continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace, and to the development of new and updated products and services that are central to the Company’s core business strategy.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
481
Selling, General and Administrative The year-over-year growth in selling, general and administrative expense in 2020 was driven primarily by increases in headcount-related expenses, higher spending on marketing and advertising, and higher variable selling expenses.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
482
Apple Inc. | 2020 Form 10-K | 23 Other Income/(Expense), Net Other income/(expense), net (“OI&E”) for 2020, 2019 and 2018 was as follows (dollars in millions): The year-over-year decrease in OI&E during 2020 was due primarily to lower interest income and net impairment/gain activity on non-marketable securities, partia...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
483
The weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 1.85% and 2.19% in 2020 and 2019, respectively.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
484
Provision for Income Taxes Provision for income taxes, effective tax rate and statutory federal income tax rate for 2020, 2019 and 2018 were as follows (dollars in millions): The Company’s effective tax rate for both 2020 and 2019 was lower than the statutory federal income tax rate due primarily to the lower tax rate ...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
485
The Company’s effective tax rate for 2020 was lower compared to 2019 due primarily to a one-time adjustment of U.S. foreign tax credits in response to regulations issued by the U.S. Department of the Treasury in December 2019 in connection with the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”) and higher tax benefits ...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
486
As of September 26, 2020, the Company had net deferred tax assets arising from deductible temporary differences and tax credits of $11.0 billion and deferred tax liabilities of $2.8 billion.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
487
Management believes it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with future reversals of existing taxable temporary differences, will be sufficient to recover the net deferred tax assets.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
488
The Company will continue to evaluate the amount of the valuation allowance, if any, by assessing the realizability of deferred tax assets.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
489
Recent Accounting Pronouncements Financial Instruments In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update No.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
490
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.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
491
The Company will adopt ASU 2016-13 in its first quarter of 2021 utilizing the modified retrospective transition method.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
492
Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 will not have a material impact on its consolidated financial statements.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
493
Apple Inc. | 2020 Form 10-K | 24 Liquidity and Capital Resources The following table presents selected financial information and statistics as of and for the years ended September 26, 2020, September 28, 2019 and September 29, 2018 (in millions): (1)As of September 26, 2020 and September 28, 2019, total marketable secu...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
494
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...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
495
In connection with the State Aid Decision, as of September 26, 2020, 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 legal proceedings.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
496
Further information regarding the State Aid Decision can be found in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 5, “Income Taxes.” The Company’s marketable securities investment portfolio is primarily invested in highly rated securities, with the primary objective of min...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
497
The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
498
During 2020, cash generated by operating activities of $80.7 billion was a result of $57.4 billion of net income, non-cash adjustments to net income of $17.6 billion and an increase in the net change in operating assets and liabilities of $5.7 billion.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
499
Cash used in investing activities of $4.3 billion during 2020 consisted primarily of cash used to acquire property, plant and equipment of $7.3 billion and cash paid for business acquisitions, net of cash acquired, of $1.5 billion, partially offset by proceeds from maturities and sales of marketable securities, net of ...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
500
Cash used in financing activities of $86.8 billion during 2020 consisted primarily of cash used to repurchase common stock of $72.4 billion, cash used to pay dividends and dividend equivalents of $14.1 billion, cash used to repay or redeem term debt of $12.6 billion and net repayments of commercial paper of $1.0 billio...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
501
During 2019, cash generated by operating activities of $69.4 billion was a result of $55.3 billion of net income and non-cash adjustments to net income of $17.6 billion, partially offset by a decrease in the net change in operating assets and liabilities of $3.5 billion.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
502
Cash generated by investing activities of $45.9 billion during 2019 consisted primarily of proceeds from sales and maturities of marketable securities, net of purchases, of $57.5 billion, partially offset by cash used to acquire property, plant and equipment of $10.5 billion.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
503
Cash used in financing activities of $91.0 billion during 2019 consisted primarily of cash used to repurchase common stock of $66.9 billion, cash used to pay dividends and dividend equivalents of $14.1 billion, cash used to repay term debt of $8.8 billion and net repayments of commercial paper of $6.0 billion, partiall...
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
504
Debt The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
505
The Company uses the net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases.
0000320193-20-000096/full-submission.txt
0000320193
20201030
10-K
506
As of September 26, 2020, the Company had $5.0 billion of Commercial Paper outstanding, with a weighted-average interest rate of 0.62% and maturities generally less than nine months.
0000320193-20-000096/full-submission.txt