Apple Inc 8-K 2010-10-18
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Exhibit 99.1
Apple Reports Fourth Quarter Results
Record Mac, iPhone and iPad Sales
Highest Revenue and Earnings Ever
CUPERTINO, CaliforniaOctober 18, 2010Apple® today announced financial results for its fiscal 2010 fourth quarter ended September 25, 2010. The Company posted record revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share. These results compare to revenue of $12.21 billion and net quarterly profit of $2.53 billion, or $2.77 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent compared to 41.8 percent in the year-ago quarter. International sales accounted for 57 percent of the quarters revenue.
Apple sold 3.89 million Macs during the quarter, a 27 percent unit increase over the year-ago quarter. The Company sold 14.1 million iPhones in the quarter, representing 91 percent unit growth over the year-ago quarter. Apple sold 9.05 million iPods during the quarter, representing an 11 percent unit decline from the year-ago quarter. The Company also sold 4.19 million iPads during the quarter.
We are blown away to report over $20 billion in revenue and over $4 billion in after-tax earningsboth all-time records for Apple, said Steve Jobs, Apples CEO. iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. We still have a few surprises left for the remainder of this calendar year.
Were thrilled with the performance and strength of our business, generating almost $5.7 billion in cash flow from operations during the quarter, said Peter Oppenheimer, Apples CFO. Looking ahead to the first fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $4.80.
Apple will provide live streaming of its Q4 2010 financial results conference call beginning at 2:00 p.m. PDT on October 18, 2010 at www.apple.com/quicktime/qtv/earningsq410/. This webcast will also be available for replay for approximately two weeks thereafter.
This press release contains forward-looking statements including without limitation those about the Companys estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Companys reaction to those factors, on consumer and business buying decisions with respect to the Companys products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Companys gross margin; the inventory risk associated with the Companys need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Companys business currently obtained by the Company from sole or limited sources; the effect that the Companys dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Companys reliance on the availability of third-party digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Companys dependency on the performance of distributors, carriers and other resellers of the Companys products; the effect that product and service quality problems could have on the Companys sales and operating profits; the Companys reliance on sole service providers for iPhone® in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Companys consolidated financial statements; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Companys financial results is included from time to time in the Companys public reports filed with the SEC, including the Companys Form 10-K, as amended, for the fiscal year ended September 26, 2009, its Forms 10-Q for the quarters ended December 26, 2009; March 27, 2010; and June 26, 2010; and its Form 10-K for the fiscal year ended September 25, 2010 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple is reinventing the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.
Press Contact:
Steve Dowling
Apple
dowling@apple.com
(408) 974-1896
Investor Relations Contacts:
Nancy Paxton
Apple
paxton1@apple.com
(408) 974-5420
Joan Hoover
Apple
hoover1@apple.com
(408) 974-4570
NOTE TO EDITORS: For additional information visit Apples PR website (www.apple.com/pr), or call Apples Media Helpline at (408) 974-2042.
© 2010 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and iPhone are trademarks of Apple. Other company and product names may be trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands and per share amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
|
September
25, 2010 |
September
26, 2009 |
September
25, 2010 |
September
26, 2009 |
|||||||||||||
| Net sales |
$ | 20,343 | $ | 12,207 | $ | 65,225 | $ | 42,905 | ||||||||
| Cost of sales (1) |
12,831 | 7,102 | 39,541 | 25,683 | ||||||||||||
| Gross margin |
7,512 | 5,105 | 25,684 | 17,222 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development (1) |
494 | 358 | 1,782 | 1,333 | ||||||||||||
| Selling, general and administrative (1) |
1,571 | 1,063 | 5,517 | 4,149 | ||||||||||||
| Total operating expenses |
2,065 | 1,421 | 7,299 | 5,482 | ||||||||||||
| Operating income |
5,447 | 3,684 | 18,385 | 11,740 | ||||||||||||
| Other income and expense |
14 | 45 | 155 | 326 | ||||||||||||
| Income before provision for income taxes |
5,461 | 3,729 | 18,540 | 12,066 | ||||||||||||
| Provision for income taxes |
1,153 | 1,197 | 4,527 | 3,831 | ||||||||||||
| Net income |
$ | 4,308 | $ | 2,532 | $ | 14,013 | $ | 8,235 | ||||||||
| Earnings per common share: |
||||||||||||||||
| Basic |
$ | 4.71 | $ | 2.82 | $ | 15.41 | $ | 9.22 | ||||||||
| Diluted |
$ | 4.64 | $ | 2.77 | $ | 15.15 | $ | 9.08 | ||||||||
| Shares used in computing earnings per share: |
||||||||||||||||
| Basic |
914,555 | 898,032 | 909,461 | 893,016 | ||||||||||||
| Diluted |
928,825 | 914,374 | 924,712 | 907,005 | ||||||||||||
| (1) Includes stock-based compensation expense as follows: | ||||||||||||||||
| Cost of sales |
$ | 39 | $ | 29 | $ | 151 | $ | 114 | ||||||||
| Research and development |
$ | 83 | $ | 66 | $ | 323 | $ | 258 | ||||||||
| Selling, general and administrative |
$ | 102 | $ | 85 | $ | 405 | $ | 338 | ||||||||
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
|
September 25, 2010 |
September 26, 2009 |
|||||||
| ASSETS: | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 11,261 | $ | 5,263 | ||||
| Short-term marketable securities |
14,359 | 18,201 | ||||||
| Accounts receivable, less allowances of $55 and $52, respectively |
5,510 | 3,361 | ||||||
| Inventories |
1,051 | 455 | ||||||
| Deferred tax assets |
1,636 | 1,135 | ||||||
| Vendor non-trade receivables |
4,414 | 1,696 | ||||||
| Other current assets |
3,447 | 1,444 | ||||||
| Total current assets |
41,678 | 31,555 | ||||||
| Long-term marketable securities |
25,391 | 10,528 | ||||||
| Property, plant and equipment, net |
4,768 | 2,954 | ||||||
| Goodwill |
741 | 206 | ||||||
| Acquired intangible assets, net |
342 | 247 | ||||||
| Other assets |
2,263 | 2,011 | ||||||
| Total assets |
$ | 75,183 | $ | 47,501 | ||||
| LIABILITIES AND SHAREHOLDERS EQUITY: | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 12,015 | $ | 5,601 | ||||
| Accrued expenses |
5,723 | 3,852 | ||||||
| Deferred revenue |
2,984 | 2,053 | ||||||
| Total current liabilities |
20,722 | 11,506 | ||||||
| Deferred revenue non-current |
1,139 | 853 | ||||||
| Other non-current liabilities |
5,531 | 3,502 | ||||||
| Total liabilities |
27,392 | 15,861 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders equity: |
||||||||
| Common stock, no par value; 1,800,000,000 shares authorized; 915,970,050 and 899,805,500 shares issued and outstanding, respectively |
10,668 | 8,210 | ||||||
| Retained earnings |
37,169 | 23,353 | ||||||
| Accumulated other comprehensive (loss)/income |
(46 | ) | 77 | |||||
| Total shareholders equity |
47,791 | 31,640 | ||||||
| Total liabilities and shareholders equity |
$ | 75,183 | $ | 47,501 | ||||
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
| Twelve Months Ended | ||||||||
| September 25, 2010 |
September 26, 2009 |
|||||||
| Cash and cash equivalents, beginning of the year |
$ | 5,263 | $ | 11,875 | ||||
| Operating activities: |
||||||||
| Net income |
14,013 | 8,235 | ||||||
| Adjustments to reconcile net income to cash generated by operating activities: |
||||||||
| Depreciation, amortization and accretion |
1,027 | 734 | ||||||
| Stock-based compensation expense |
879 | 710 | ||||||
| Deferred income tax expense |
1,440 | 1,040 | ||||||
| Loss on disposition of property, plant and equipment |
24 | 26 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable, net |
(2,142 | ) | (939 | ) | ||||
| Inventories |
(596 | ) | 54 | |||||
| Vendor non-trade receivables |
(2,718 | ) | 586 | |||||
| Other current assets |
(1,514 | ) | 163 | |||||
| Other assets |
(120 | ) | (902 | ) | ||||
| Accounts payable |
6,307 | 92 | ||||||
| Deferred revenue |
1,217 | 521 | ||||||
| Other liabilities |
778 | (161 | ) | |||||
| Cash generated by operating activities |
18,595 | 10,159 | ||||||
| Investing activities: |
||||||||
| Purchases of marketable securities |
(57,793 | ) | (46,724 | ) | ||||
| Proceeds from maturities of marketable securities |
24,930 | 19,790 | ||||||
| Proceeds from sales of marketable securities |
21,788 | 10,888 | ||||||
| Purchases of other long-term investments |
(18 | ) | (101 | ) | ||||
| Payments made in connection with business acquisitions, net of cash acquired |
(638 | ) | 0 | |||||
| Payments for acquisition of property, plant and equipment |
(2,005 | ) | (1,144 | ) | ||||
| Payments for acquisition of intangible assets |
(116 | ) | (69 | ) | ||||
| Other |
(2 | ) | (74 | ) | ||||
| Cash used in investing activities |
(13,854 | ) | (17,434 | ) | ||||
| Financing activities: |
||||||||
| Proceeds from issuance of common stock |
912 | 475 | ||||||
| Excess tax benefits from stock-based compensation |
751 | 270 | ||||||
| Taxes paid related to net share settlement of equity awards |
(406 | ) | (82 | ) | ||||
| Cash generated by financing activities |
1,257 | 663 | ||||||
| Increase/(decrease) in cash and cash equivalents |
5,998 | (6,612 | ) | |||||
| Cash and cash equivalents, end of the year |
$ | 11,261 | $ | 5,263 | ||||
| Supplemental cash flow disclosure: |
||||||||
| Cash paid for income taxes, net |
$ | 2,697 | $ | 2,997 | ||||
