APPLE INC (AAPL) SEC Filing 10-K Annual report for the fiscal year ending Saturday, September 24, 2016

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Exhibit 99.1


Apple Reports Fourth Quarter Results

Services Revenue Grows 24% to All-Time Quarterly Record of $6.3 Billion

CUPERTINO, California - October 25, 2016 - Apple® today announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016. The Company posted quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share. These results compare to revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter's revenue.

"Our strong September quarter results cap a very successful fiscal 2016 for Apple," said Tim Cook, Apple's CEO. "We're thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record."

"We are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter," said Luca Maestri, Apple's CFO. "We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital return program."

Apple is providing the following guidance for its fiscal 2017 first quarter:
revenue between $76 billion and $78 billion
gross margin between 38 percent and 38.5 percent
operating expenses between $6.9 billion and $7 billion
other income/(expense) of $400 million
tax rate of 26 percent

Apple's board of directors has declared a cash dividend of $0.57 per share of the Company's common stock. The dividend is payable on November 10, 2016 to shareholders of record as of the close of business on November 7, 2016.

Apple will provide live streaming of its Q4 2016 financial results conference call beginning at 2:00 p.m. PDT on October 25, 2016 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.





The following information was filed by APPLE INC on Tuesday, October 25, 2016 as an 8K 2.02 statement, which is a press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Click a sentiment analysis snippet below from AAPL's Management Discussions to find these positive and negative remarks within their 10-K Annual report:
  • aapl_10k_2016-10-27_74_67
    Financial - Earnings
    In general, the Company believes gross margins will remain under downward pressure due to a variety of factors, including continued industry wide global product pricing pressures, increased competition, compressed product life cycles, product transitions, potential increases in the cost of components, and potential strengthening of the U.S. dollar, as well as potential increases in the costs of outside manufacturing services and a potential shift in the Companys sales mix towards products with lower gross margins.
  • aapl_10k_2016-10-27_70_61
    Financial - Earnings
    The year-over-year increase in the gross margin percentage in 2015 was driven primarily by a favorable shift in mix to products with higher margins and, to a lesser extent, by improved leverage on fixed costs from higher net sales.
  • aapl_10k_2016-10-27_39_48
    Revenue - Geography
    The effect of weakness in most foreign currencies relative to the U.S. dollar also negatively impacted Mac net sales.
  • aapl_10k_2016-10-27_70_62
    Financial - Expense
    These positive factors were partially offset primarily by higher product cost structures and, to a lesser extent, by the effect of weakness in most foreign currencies relative to the U.S. dollar.
  • aapl_10k_2016-10-27_149_200
    Revenue - Product
    For payment terms in excess of the Companys standard payment terms, revenue is recognized as payments become due unless the Company has positive evidence that the sales price is fixed or determinable, such as a successful history of collection, without concession, on comparable arrangements.
  • aapl_10k_2016-10-27_124_155
    Financial - Shares / Equity
    In April 2016, the Companys Board of Directors increased the share repurchase program authorization from $140 billion to $175 billion of the Companys common stock, increasing the expected total size of the capital return program from $200 billion to $250 billion.
  • aapl_10k_2016-10-27_69_311
    Financial - Earnings
    Gross margin decreased in 2016 compared to 2015 due primarily to the effect of weakness in most foreign currencies relative to the U.S. dollar and, to a lesser extent, unfavorable leverage on fixed costs from lower net sales, partially offset by a favorable shift in mix to Services.
  • aapl_10k_2016-10-27_13_23
    Financial - Shares / Equity
    This included increasing its share repurchase authorization from $140 billion to $175 billion and raising its quarterly dividend from $0.52 to $0.57 per share beginning in May 2016.
  • aapl_10k_2016-10-27_15_33
    Financial - Shares / Equity
    This included increasing its share repurchase authorization to $140 billion and raising its quarterly dividend to $0.52 per share beginning in May 2015.
  • aapl_10k_2016-10-27_113_139
    Financial - Earnings
    During 2016, cash generated from operating activities of $65.8 billion was a result of $45.7 billion of net income, non-cash adjustments to net income of $19.7 billion and an increase in the net change in operating assets and liabilities of $484 million.
  • aapl_10k_2016-10-27_114_142
    Financial - Earnings
    During 2015, cash generated from operating activities of $81.3 billion was a result of $53.4 billion of net income, non-cash adjustments to net income of $16.2 billion and an increase in the net change in operating assets and liabilities of $11.6 billion.
  • aapl_10k_2016-10-27_40_49
    Revenue - Product
    The year-over-year growth in Mac net sales and unit sales during 2015 was driven by strong demand for Mac portables.
  • aapl_10k_2016-10-27_58_300
    Revenue - Geography
    Greater China net sales decreased during 2016 compared to 2015 due primarily to lower net sales and unit sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar.
  • aapl_10k_2016-10-27_66_308
    Revenue - Geography
    Rest of Asia Pacific net sales decreased during 2016 compared to 2015 due primarily to lower net sales and unit sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar.
  • aapl_10k_2016-10-27_159_237
    Other - Other
    These circumstances include future demand or market conditions for the Companys products being less favorable than forecasted, unforeseen technological changes or changes to the Companys product development plans that negatively impact the utility of any of these assets, or significant deterioration in the financial condition of one or more of the Companys suppliers that hold any of the Companys manufacturing-related assets or to whom the Company has made an inventory prepayment.
  • aapl_10k_2016-10-27_34_41
    Revenue - Product
    iPad net sales decreased during 2016 compared to 2015 primarily due to lower unit sales and the effect of weakness in most foreign currencies relative to the U.S. dollar, partially offset by higher ASPs due to a shift in mix to higher-priced iPads.
  • aapl_10k_2016-10-27_29_38
    Revenue - Geography
    Average selling prices ASPs for iPhone were lower year-over-year during 2016 due primarily to a different mix of iPhones, including the iPhone SE introduced in 2016, and the effect of weakness in most foreign currencies relative to the U.S. dollar.
  • aapl_10k_2016-10-27_14_26
    Revenue - Product
    Net sales rose 28% or $50.9 billion during 2015 compared to 2014, driven by a year-over-year increase in iPhone net sales.
  • aapl_10k_2016-10-27_30_39
    Revenue - Product
    The year-over-year growth in iPhone net sales and unit sales during 2015 primarily resulted from strong demand for iPhone 6 and 6 Plus during 2015.
  • aapl_10k_2016-10-27_62_304
    Revenue - Product
    Japan net sales increased during 2016 compared to 2015 due primarily to higher net sales of Services and the strength in the Japanese yen relative to the U.S. dollar.
  • aapl_10k_2016-10-27_35_45
    Revenue - Geography
    iPad ASPs declined during 2015 compared to 2014, primarily as a result of the effect of weakness in most foreign currencies relative to the U.S. dollar and a shift in mix to lower-priced iPads.
  • aapl_10k_2016-10-27_45_288
    Revenue - Product
    The increase in net sales of Services during 2015 compared to 2014 was primarily due to growth from the App Store and licensing.
  • aapl_10k_2016-10-27_59_301
    Revenue - Geography
    Greater China experienced strong year-over-year increases in net sales during 2015 driven primarily by iPhone sales.
  • aapl_10k_2016-10-27_79_71
    Financial - Expense
    The year-over-year growth in R&D expense in 2016 and 2015 was driven primarily by an increase in headcount and related expenses, and material costs to support expanded R&D activities.
  • aapl_10k_2016-10-27_147_192
    Revenue - Product
    Management believes the Companys critical accounting policies and estimates are those related to revenue recognition, valuation and impairment of marketable securities, inventory valuation, valuation of manufacturing-related assets and estimation of purchase commitment cancellation fees, warranty costs, income taxes, and legal and other contingencies.
  • aapl_10k_2016-10-27_14_29
    Revenue - Product
    Apple Watch, which launched during the third quarter of 2015, accounted for more than 100% of the year-over-year growth in net sales of Other Products.
  • aapl_10k_2016-10-27_13_21
    Revenue - Product
    Net sales declined 8% or $18.1 billion during 2016 compared to 2015, primarily driven by a year-over-year decrease in iPhone net sales and the effect of weakness in most foreign currencies relative to the U.S. dollar, partially offset by an increase in Services.
  • aapl_10k_2016-10-27_34_42
    Revenue - Product
    The Company believes the decline in iPad sales is due in part to a longer repurchase cycle for iPads and some level of cannibalization from the Companys other products.
  • aapl_10k_2016-10-27_35_44
    Revenue - Product
    The Company believes the decline in iPad sales is due in part to a longer repurchase cycle for iPads and some level of cannibalization from the Companys other products.
  • aapl_10k_2016-10-27_14_30
    Revenue - Product
    Net sales growth during 2015 was partially offset by the effect of weakness in most foreign currencies relative to the U.S. dollar and lower iPad net sales.
  • aapl_10k_2016-10-27_89_78
    Other - Other
    The lower effective tax rate in 2016 compared to 2015 was due primarily to greater R&D tax credits.
  • aapl_10k_2016-10-27_29_37
    Revenue - Product
    The Company believes the sales decline is due primarily to a lower rate of iPhone upgrades during 2016 compared to 2015 and challenging macroeconomic conditions in a number of major markets in 2016.
  • aapl_10k_2016-10-27_92_93
    Other - Other
    Irish legislative changes, effective as of the beginning of 2015, eliminated the application of the tax opinions from that date forward.
  • aapl_10k_2016-10-27_93_100
    Other - Other
    ASU 2016-06 will be effective for the Company in its first quarter of 2019.
  • aapl_10k_2016-10-27_94_104
    Other - Other
    ASU 2016-09 will be effective for the Company beginning in its first quarter of 2018.
  • aapl_10k_2016-10-27_96_108
    Other - Other
    ASU 2016-02 will be effective for the Company beginning in its first quarter of 2020, and early adoption is permitted.
  • aapl_10k_2016-10-27_97_112
    Other - Other
    ASU 2016-01 will be effective for the Company beginning in its first quarter of 2019.
  • aapl_10k_2016-10-27_98_116
    Other - Other
    ASU 2016-13 will be effective for the Company beginning in its first quarter of 2021 and early adoption is permitted.
  • aapl_10k_2016-10-27_99_121
    Other - Other
    ASU 2014-09 will be effective for the Company beginning in its first quarter of 2019, and early adoption is permitted.
  • aapl_10k_2016-10-27_100_125
    Revenue - Product
    2016-12, Revenue from Contracts with Customers Topic 606: Narrow-Scope Improvements and Practical Expedients ASU 2016-12 .
  • aapl_10k_2016-10-27_151_209
    Revenue - Product
    Revenue allocated to the unspecified software upgrade rights and non-software services based on the Companys ESPs is deferred and recognized on a straight-line basis over the estimated period the software upgrades and non-software services are expected to be provided.
  • aapl_10k_2016-10-27_14_31
    Revenue - Product
    Total net sales increased in each of the Companys reportable operating segments, with particularly strong growth in Greater China where year-over-year net sales increased 84%.
  • aapl_10k_2016-10-27_14_27
    Revenue - Product
    iPhone net sales and unit sales in 2015 increased in all of the Companys reportable operating segments.
  • aapl_10k_2016-10-27_126_340
    Financial - Dividend
    The following table presents the Companys dividends, dividend equivalents, share repurchases and net share settlement activity from the start of the capital return program in August 2012 through
  • aapl_10k_2016-10-27_7_13
    Other - Other
    The Company designs, manufactures and markets mobile communication and media devices, personal computers and portable digital music players, and sells a variety of related software, services, accessories, networking solutions and third-party digital content and applications.
  • aapl_10k_2016-10-27_120_153
    Revenue - Geography
    In addition, the Company has entered, and in the future may enter, into currency swaps to manage foreign currency risk on the Notes.
  • aapl_10k_2016-10-27_63_305
    Revenue - Product
    The year-over-year increase in Japan net sales during 2015 was driven primarily by growth in Services largely associated with strong App Store sales, partially offset by the effect of weakness in the Japanese yen relative to the U.S. dollar.
  • aapl_10k_2016-10-27_84_75
    Financial - Income
    The year-over-year increase in other incomeexpense, net during 2016 and 2015 was due primarily to higher interest income, partially offset by higher interest expense on debt and higher expenses associated with foreign exchange activity.
  • aapl_10k_2016-10-27_153_215
    Revenue - Product
    The Companys policy requires that, if refunds cannot be reliably estimated, revenue is not recognized until reliable estimates can be made or the price protection lapses.
  • aapl_10k_2016-10-27_129_342
    Other - Other
    The Company has not entered into any transactions with unconsolidated entities whereby the Company has financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose the Company to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the Company, or engages in leasing, hedging, or R&D services with the Company.
  • aapl_10k_2016-10-27_14_28
    Revenue - Product
    The Company also experienced year-over-year net sales increases in Mac, Services and Other Products.
  • aapl_10k_2016-10-27_3_2
    Other - Other
    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.
  • aapl_10k_2016-10-27_156_224
    Revenue - Product
    Changes in the fair value of available-for-sale securities impact the Companys net income only when such securities are sold or an other-than-temporary impairment is recognized.
  • aapl_10k_2016-10-27_74_69
    Financial - Earnings
    Gross margins could also be affected by the Companys ability to manage product quality and warranty costs effectively and to stimulate demand for certain of its products.
  • aapl_10k_2016-10-27_101_127
    Revenue - Product
    The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption.
  • aapl_10k_2016-10-27_125_160
    Financial - Shares / Equity
    Under the program, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
  • aapl_10k_2016-10-27_20_270
    Other - Other
    Includes deferrals and amortization of related software upgrade rights and non-software services.
  • aapl_10k_2016-10-27_165_255
    Other - Other
    Resolution of these uncertainties in a manner inconsistent with managements expectations could have a material impact on the Companys financial condition and operating results.
  • aapl_10k_2016-10-27_13_22
    Other - Other
    In April 2016, the Company announced a significant increase to its capital return program by raising the expected total size of the program from $200 billion to $250 billion through March 2018.
  • aapl_10k_2016-10-27_15_32
    Other - Other
    In April 2015, the Company announced a significant increase to its capital return program by raising the expected total size of the program to $200 billion through March 2017.
  • aapl_10k_2016-10-27_120_150
    Other - Other
    , the Company has outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $78.4 billion collectively the Notes .
  • aapl_10k_2016-10-27_84_76
    Other - Other
    The weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 1.73%, 1.49% and 1.11% in 2016, 2015 and 2014, respectively.
  • aapl_10k_2016-10-27_49_291
    Revenue - Geography
    Americas net sales decreased during 2016 compared to 2015 due primarily to lower net sales and unit sales of iPhone.
  • aapl_10k_2016-10-27_96_107
    Other - Other
    2016-02, Leases Topic 842 ASU 2016-02 , which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements.
  • aapl_10k_2016-10-27_150_203
    Revenue - Product
    For multi-element arrangements that include hardware products containing software essential to the hardware products functionality, undelivered software elements that relate to the hardware products essential software andor undelivered non-software services, the Company allocates revenue to all deliverables based on their relative selling prices.
  • aapl_10k_2016-10-27_86_322
    Financial - Income
    Provision for income taxes and effective tax rates for

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  • Form Type: Annual
  • Number of times amended: 0
  • Accession Number: 0001628280-16-020309
  • Submitted to the SEC: Wednesday, October 26, 2016
  • Accepted by the SEC: Wednesday, October 26, 2016
  • Period Ending: September 2016
Companies
 

AAPL Morningstar

APPLE INC

$156.25 +0.27 (+0.17%)

Day's Range:
$155.96 to $157.75

52-Week Range:
$104.08 to $164.94

Volume:
23,974,146

Volume (Avg):
27,604,300

Earnings per Share:
$8.81

PEG / Short / PE Ratios:
1.40 / 1.90 / 17.74

Market Cap:
$807.07B

Book Value:
25.61

EBITDA:
$70.21B

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