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Exhibit


Exhibit 99.1

Apple Reports Third Quarter Results

Services Revenue Grows 19% as App Store Hits All-Time Record

CUPERTINO, California - July 26, 2016 - Apple® today announced financial results for its fiscal 2016 third quarter ended June 25, 2016. The Company posted quarterly revenue of $42.4 billion and quarterly net income of $7.8 billion, or $1.42 per diluted share. These results compare to revenue of $49.6 billion and net income of $10.7 billion, or $1.85 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 39.7 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter's revenue.

"We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter," said Tim Cook, Apple's CEO. "We had a very successful launch of iPhone SE and we're thrilled by customers' and developers' response to software and services we previewed at WWDC in June."

"Our Services business grew 19 percent year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record," said Luca Maestri, Apple's CFO. "We returned over $13 billion to investors through share repurchases and dividends, and we have now completed almost $177 billion of our $250 billion capital return program."

Apple is providing the following guidance for its fiscal 2016 fourth quarter:
•
revenue between $45.5 billion and $47.5 billion
•
gross margin between 37.5 percent and 38 percent
•
operating expenses between $6.05 billion and $6.15 billion
•
other income/(expense) of $350 million
•
tax rate of 25.5 percent

Apple's board of directors has declared a cash dividend of $.57 per share of the Company's common stock. The dividend is payable on August 11, 2016 to shareholders of record as of the close of business on August 8, 2016.

Apple will provide live streaming of its Q3 2016 financial results conference call beginning at 2:00 p.m. PDT on July 26, 2016 at www.apple.com/investor/earnings-call/. 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 Company's estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. 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 Company's reaction to those factors, on consumer and business buying decisions with respect to the Company's 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 Company's gross margin; the inventory risk associated with the Company's 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 Company's business currently obtained by the Company from sole or limited sources; the effect that the Company's dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company's international operations; the Company's reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company's dependency on the performance of distributors, carriers and other resellers of the Company's products; the effect that product and service quality problems could have on the Company's sales and operating profits; 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; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company's financial results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended September 26, 2015, its Form 10-Q for the fiscal quarter ended December 26, 2015, its Form 10-Q for the fiscal quarter ended March 26, 2016, and its Form 10-Q for the fiscal quarter ended June 25, 2016 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 revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple's four software platforms - iOS, macOS, watchOS and tvOS - provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple's 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

Press Contact:
Kristin Huguet
Apple
khuguet@apple.com
(408) 974-2414

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 Apple's PR website (www.apple.com/pr), or call Apple's Media Helpline at (408) 974-2042.


© 2016 Apple Inc. All rights reserved. Apple and the Apple logo 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 number of shares which are reflected in thousands and per share amounts)
 
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2016
 
June 27,
2015
 
June 25,
2016
 
June 27,
2015
Net sales
$
42,358

 
$
49,605

 
$
168,787

 
$
182,214

Cost of sales (1)
26,252

 
29,924

 
102,337

 
109,136

Gross margin
16,106

 
19,681

 
66,450

 
73,078

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Research and development (1)
2,560

 
2,034

 
7,475

 
5,847

Selling, general and administrative (1)
3,441

 
3,564

 
10,712

 
10,624

Total operating expenses
6,001

 
5,598

 
18,187

 
16,471

 
 
 
 
 
 
 
 
Operating income
10,105

 
14,083

 
48,263

 
56,607

Other income/(expense), net
364

 
390

 
921

 
846

Income before provision for income taxes
10,469

 
14,473

 
49,184

 
57,453

Provision for income taxes
2,673

 
3,796

 
12,511

 
15,183

Net income
$
7,796

 
$
10,677

 
$
36,673

 
$
42,270

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
1.43

 
$
1.86

 
$
6.66

 
$
7.30

Diluted
$
1.42

 
$
1.85

 
$
6.62

 
$
7.25

 
 
 
 
 
 
 
 
Shares used in computing earnings per share:
 
 
 
 
 
 
 
Basic
5,443,058

 
5,729,886

 
5,505,456

 
5,788,922

Diluted
5,472,781

 
5,773,099

 
5,535,931

 
5,829,920

 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.57

 
$
0.52

 
$
1.61

 
$
1.46

 
 
 
 
 
 
 
 
(1) Includes share-based compensation expense as follows:
Cost of sales
$
188

 
$
148

 
$
583

 
$
430

Research and development
$
479

 
$
388

 
$
1,413

 
$
1,146

Selling, general and administrative
$
387

 
$
320

 
$
1,184

 
$
1,095






Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands and par value)
 
 
June 25,
2016
 
September 26,
2015
ASSETS:
Current assets:
 
 
 
Cash and cash equivalents
$
18,237

 
$
21,120

Short-term marketable securities
43,519

 
20,481

Accounts receivable, less allowances of $55 and $63, respectively
11,714

 
16,849

Inventories
1,831

 
2,349

Vendor non-trade receivables
7,328

 
13,494

Other current assets
11,132

 
15,085

Total current assets
93,761

 
89,378

 
 
 
 
Long-term marketable securities
169,764

 
164,065

Property, plant and equipment, net
25,448

 
22,471

Goodwill
5,261

 
5,116

Acquired intangible assets, net
3,506

 
3,893

Other non-current assets
7,862

 
5,556

Total assets
$
305,602

 
$
290,479

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
26,318

 
$
35,490

Accrued expenses
20,820

 
25,181

Deferred revenue
8,352

 
8,940

Commercial paper
12,496

 
8,499

Current portion of long-term debt
3,500

 
2,500

Total current liabilities
71,486

 
80,610

 
 
 
 
Deferred revenue, non-current
3,064

 
3,624

Long-term debt
68,939

 
53,463

Other non-current liabilities
35,572

 
33,427

Total liabilities
179,061

 
171,124

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,393,165 and 5,578,753 shares issued and outstanding, respectively
30,106

 
27,416

Retained earnings
96,542

 
92,284

Accumulated other comprehensive income/(loss)
(107
)
 
(345
)
Total shareholders’ equity
126,541

 
119,355

Total liabilities and shareholders’ equity
$
305,602

 
$
290,479






Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 
 
Nine Months Ended
 
June 25,
2016
 
June 27,
2015
Cash and cash equivalents, beginning of the period
$
21,120

 
$
13,844

 
 
 
 
Operating activities:
 
 
 
Net income
36,673

 
42,270

Adjustments to reconcile net income to cash generated by operating activities:
 
 
 
Depreciation and amortization
7,957

 
8,138

Share-based compensation expense
3,180

 
2,671

Deferred income tax expense
5,191

 
2,820

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
5,135

 
7,090

Inventories
518

 
69

Vendor non-trade receivables
6,166

 
222

Other current and non-current assets
1,143

 
2,286

Accounts payable
(9,622
)
 
(3,263
)
Deferred revenue
(1,148
)
 
1,040

Other current and non-current liabilities
(5,495
)
 
4,448

Cash generated by operating activities
49,698

 
67,791

 
 
 
 
Investing activities:
 
 
 
Purchases of marketable securities
(112,068
)
 
(137,524
)
Proceeds from maturities of marketable securities
14,915

 
9,916

Proceeds from sales of marketable securities
69,926

 
80,635

Payments made in connection with business acquisitions, net
(146
)
 
(230
)
Payments for acquisition of property, plant and equipment
(8,757
)
 
(7,629
)
Payments for acquisition of intangible assets
(753
)
 
(201
)
Payments for strategic investments
(1,376
)
 
—

Other
(321
)
 
134

Cash used in investing activities
(38,580
)
 
(54,899
)
 
 
 
 
Financing activities:
 
 
 
Proceeds from issuance of common stock
247

 
324

Excess tax benefits from equity awards
391

 
684

Payments for taxes related to net share settlement of equity awards
(1,361
)
 
(1,332
)
Payments for dividends and dividend equivalents
(9,058
)
 
(8,597
)
Repurchases of common stock
(23,696
)
 
(22,000
)
Proceeds from issuance of term debt, net
17,984

 
21,312

Repayments of term debt
(2,500
)
 
—

Change in commercial paper, net
3,992

 
(1,808
)
Cash used in financing activities
(14,001
)
 
(11,417
)
 
 
 
 
Increase/(decrease) in cash and cash equivalents
(2,883
)
 
1,475

Cash and cash equivalents, end of the period
$
18,237

 
$
15,319

 
 
 
 
Supplemental cash flow disclosure:
 
 
 
Cash paid for income taxes, net
$
8,990

 
$
10,604

Cash paid for interest
$
892

 
$
427



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