APPLE INC (AAPL) SEC Filing 10-K Annual report for the fiscal year ending Saturday, September 30, 2017

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Exhibit 99.1


Apple Reports Fourth Quarter Results

Revenue Up 12 Percent and EPS Up 24 Percent to New September Quarter Records

Services Revenue Reaches All-Time High

CUPERTINO, California — November 2, 2017 — Apple
® today announced financial results for its fiscal 2017 fourth quarter ended September 30, 2017. The Company posted quarterly revenue of $52.6 billion, an increase of 12 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.07, up 24 percent. International sales accounted for 62 percent of the quarter’s revenue.

“We’re happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services,” said Tim Cook, Apple’s CEO. “With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”

“Apple’s year-over-year revenue growth rate accelerated for the fourth consecutive quarter and drove EPS growth of 24 percent in the September quarter,” said Luca Maestri, Apple’s CFO. “We also generated strong operating cash flow of $15.7 billion and returned $11 billion to investors through our capital return program.”

Apple is providing the following guidance for its fiscal 2018 first quarter:

revenue between $84 billion and $87 billion
gross margin between 38 percent and 38.5 percent
operating expenses between $7.65 billion and $7.75 billion
other income/(expense) of $600 million
tax rate of 25.5 percent

Apple’s board of directors has declared a cash dividend of $0.63 per share of the Company’s common stock. The dividend is payable on November 16, 2017 to shareholders of record as of the close of business on November 13, 2017.

Apple will provide live streaming of its Q4 2017 financial results conference call beginning at 2:00 p.m. PDT on November 2, 2017 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 Thursday, November 2, 2017 as an 8K 2.02 statement, which is an earnings 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 APPLE INC's Management Discussions to find these positive and negative remarks within their 10-K Annual report:
  • aapl_10k_2017-11-03_66_72
    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_2017-11-03_33_46
    Revenue - Geography
    The effect of weakness in most foreign currencies relative to the U.S. dollar also negatively impacted Mac net sales.
  • aapl_10k_2017-11-03_61_66
    Financial - Earnings
    Year-over-year gross margin increased due primarily to a shift in mix to services and an overall increase in product volumes.
  • aapl_10k_2017-11-03_28_299
    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 average selling price due to a shift in mix to higher-priced iPads.
  • aapl_10k_2017-11-03_175_222
    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_2017-11-03_58_64
    Revenue - Geography
    The strength in foreign currencies relative to the U.S. dollar had a favorable impact on Rest of Asia Pacific net sales during 2017 compared to 2016.
  • aapl_10k_2017-11-03_62_324
    Financial - Earnings
    Gross margin percentage 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_2017-11-03_7_25
    Financial - Shares / Equity
    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.
  • aapl_10k_2017-11-03_10_31
    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_2017-11-03_59_322
    Revenue - Geography
    Rest of Asia Pacific net sales decreased during 2016 compared to 2015 due primarily to lower net sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar.
  • aapl_10k_2017-11-03_52_316
    Revenue - Geography
    Greater China net sales decreased during 2016 compared to 2015 due primarily to lower net sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar.
  • aapl_10k_2017-11-03_71_76
    Financial - Expense
    The year-over-year growth in R&D expense in 2017 and 2016 was driven primarily by increases in headcount-related expenses and material costs to support expanded R&D activities.
  • aapl_10k_2017-11-03_55_319
    Revenue - Product
    The year-over-year increase in Japan net sales in 2017 and 2016 was due primarily to higher net sales of Services and the strength in the Japanese yen relative to the U.S. dollar.
  • aapl_10k_2017-11-03_76_81
    Financial - Income
    The year-over-year increase in other incomeexpense, net during 2016 was due primarily to higher interest income, partially offset by higher interest expense on debt and the unfavorable impact of foreign exchange-related items.
  • aapl_10k_2017-11-03_185_259
    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_2017-11-03_7_21
    Revenue - Product
    Net sales increased 6% or $13.6 billion during 2017 compared to 2016, primarily driven by growth in Services, iPhone and Mac.
  • aapl_10k_2017-11-03_145_375
    Financial - Shares / Equity
    , which included an increase in the share repurchase authorization from $175 billion to
  • aapl_10k_2017-11-03_23_40
    Revenue - Geography
    Average selling prices 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_2017-11-03_37_47
    Revenue - Product
    The year-over-year growth in Services net sales in 2017 was due primarily to increases in App Store and licensing sales.
  • aapl_10k_2017-11-03_42_308
    Revenue - Geography
    Americas net sales increased during 2017 compared to 2016 due primarily to higher net sales of iPhone, Services and Mac.
  • aapl_10k_2017-11-03_58_63
    Revenue - Geography
    Rest of Asia Pacific net sales increased during 2017 compared to 2016 due primarily to higher net sales of iPhone, Services and Mac.
  • aapl_10k_2017-11-03_46_59
    Revenue - Geography
    Europe net sales increased during 2017 compared to 2016 due primarily to higher net sales of iPhone and Services.
  • aapl_10k_2017-11-03_22_36
    Revenue - Product
    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.
  • aapl_10k_2017-11-03_32_43
    Revenue - Product
    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.
  • aapl_10k_2017-11-03_7_22
    Revenue - Product
    The year-over-year increase in net sales reflected growth in each of the geographic operating segments, with the exception of Greater China.
  • aapl_10k_2017-11-03_174_214
    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_2017-11-03_10_29
    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_2017-11-03_81_85
    Other - Other
    The lower effective tax rate in 2016 compared to 2015 was due primarily to greater R&D tax credits.
  • aapl_10k_2017-11-03_23_39
    Revenue - Product
    The Company believes the sales decline was 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_2017-11-03_72_78
    Financial - Expense
    The year-over-year growth in selling, general and administrative expense in 2017 compared to 2016 was driven primarily by an increase in headcount-related expenses, variable selling expenses and infrastructure-related costs.
  • aapl_10k_2017-11-03_85_98
    Other - Other
    Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward.
  • aapl_10k_2017-11-03_97_146
    Revenue - Product
    2016-12, Revenue from Contracts with Customers Topic 606: Narrow-Scope Improvements and Practical Expedients ASU 2016-12 and ASU No.
  • aapl_10k_2017-11-03_97_147
    Revenue - Product
    2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers ASU 2016-20 .
  • aapl_10k_2017-11-03_177_231
    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_2017-11-03_189_267
    Financial - Expense
    If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty liabilities could be required and could materially affect the Companys financial condition and operating results.
  • aapl_10k_2017-11-03_148_376
    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_2017-11-03_91_125
    Financial - Income
    As a result, subsequent to adoption the Companys income tax expense and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards.
  • aapl_10k_2017-11-03_141_178
    Revenue - Geography
    In addition, the Company has entered, and in the future may enter, into foreign currency swaps to manage foreign currency risk on the Notes.
  • aapl_10k_2017-11-03_16_35
    Revenue - Product
    Services net sales in the fourth quarter of 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information.
  • aapl_10k_2017-11-03_37_48
    Revenue - Product
    Services net sales in the fourth quarter of 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information.
  • aapl_10k_2017-11-03_180_237
    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_2017-11-03_151_378
    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_2017-11-03_144_374
    Other - Other
    , the Companys Board of Directors increased the total capital return program from $250 billion to
  • aapl_10k_2017-11-03_182_246
    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_2017-11-03_27_41
    Revenue - Product
    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.
  • aapl_10k_2017-11-03_66_74
    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_2017-11-03_33_45
    Revenue - Product
    Mac net sales decreased during 2016 compared to 2015 primarily due to lower year-over-year Mac unit sales, which declined at rates similar to the overall market.
  • aapl_10k_2017-11-03_98_149
    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_2017-11-03_147_185
    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_2017-11-03_95_139
    Other - Other
    Based on the composition of the Companys investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements.
  • aapl_10k_2017-11-03_15_290
    Other - Other
    Includes deferrals and amortization of related software upgrade rights and non-software services.
  • aapl_10k_2017-11-03_113_350
    Other - Other
    and a decrease in the net change in operating assets and liabilities of
  • aapl_10k_2017-11-03_168_201
    Financial - Expense
    Agreements entered into by the Company sometimes include indemnification provisions which may subject the Company to costs and damages in the event of a claim against an indemnified third party.
  • aapl_10k_2017-11-03_3_11
    Other - Other
    The Companys products and services include iPhone, iPad, Mac, Apple Watch, Apple TV, a portfolio of consumer and professional software applications, iOS, macOS, watchOS and tvOS operating systems, iCloud, Apple Pay and a variety of accessory, service and support offerings.
  • aapl_10k_2017-11-03_192_277
    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_2017-11-03_10_30
    Other - Other
    In April 2016, the Company announced an 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_2017-11-03_7_24
    Other - Other
    In May 2017, the Company announced an increase to its capital return program by raising the expected total size of the program from $250 billion to $300 billion through March 2019.
  • aapl_10k_2017-11-03_140_371
    Other - Other
    , the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of
  • aapl_10k_2017-11-03_76_82
    Other - Other
    The weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 1.99%, 1.73% and 1.49% in
  • aapl_10k_2017-11-03_43_309
    Revenue - Geography
    Americas net sales decreased during 2016 compared to 2015 due primarily to lower net sales of iPhone.
  • aapl_10k_2017-11-03_176_225
    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_2017-11-03_109_160
    Other - Other
    These amounts are expected to be placed into escrow in 2018, where they will remain pending conclusion of all appeals.
  • aapl_10k_2017-11-03_86_104
    Other - Other
    These amounts are expected to be placed into escrow in 2018, where they will remain pending conclusion of all appeals.
  • aapl_10k_2017-11-03_61_65
    Financial - Earnings
    Gross margin percentage decreased in 2017 compared to 2016 due primarily to higher product costs, partially offset by a favorable shift in mix to services.
  • aapl_10k_2017-11-03_78_335
    Financial - Income
    Provision for income taxes and effective tax rates for

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Exhibit 12.1 - STATEMENT REGARDING CALCULATION OF RATIOS

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  • Form Type: Annual
  • Number of times amended: 0
  • Accession Number: 0000320193-17-000070
  • Submitted to the SEC: Friday, November 3, 2017 8:01:37 AM EST
  • Accepted by the SEC: Friday, November 3, 2017
  • Fiscal Year ending: September 2017
  • Industry: Electronic Computers