8-K - AAPL - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

July 30, 2020

Date of Report (Date of earliest event reported)

Apple Inc.

(Exact name of Registrant as specified in its charter)

California	001-36743	94-2404110
(State or other jurisdiction<br>of incorporation)	(Commission<br>File Number)	(I.R.S. Employer<br>Identification No.)

One Apple Park Way

Cupertino, California 95014

(Address of principal executive offices) (Zip Code)

(408) 996-1010

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value per share	AAPL	The Nasdaq Stock Market LLC
1.000% Notes due 2022	—	The Nasdaq Stock Market LLC
1.375% Notes due 2024	—	The Nasdaq Stock Market LLC
0.000% Notes due 2025	—	The Nasdaq Stock Market LLC
0.875% Notes due 2025	—	The Nasdaq Stock Market LLC
1.625% Notes due 2026	—	The Nasdaq Stock Market LLC
2.000% Notes due 2027	—	The Nasdaq Stock Market LLC
1.375% Notes due 2029	—	The Nasdaq Stock Market LLC
3.050% Notes due 2029	—	The Nasdaq Stock Market LLC
0.500% Notes due 2031	—	The Nasdaq Stock Market LLC
3.600% Notes due 2042	—	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2020, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 27, 2020. A copy of Apple’s press release is attached hereto as Exhibit 99.1.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.

Exhibit<br>Number	Exhibit Description
99.1	Press release issued by Apple Inc. on July 30, 2020.
104	Inline XBRL for the cover page of this Current Report on Form 8-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	July 30, 2020	Apple Inc.
		By:	/s/ Luca Maestri
			Luca Maestri
			Senior Vice President,<br>Chief Financial Officer

Document

Exhibit 99.1

Apple Reports Third Quarter Results

Revenue up 11 percent and EPS up 18 percent to new June quarter records

CUPERTINO, California — July 30, 2020 — Apple^®^ today announced financial results for its fiscal 2020 third quarter ended June 27, 2020. The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent. International sales accounted for 60 percent of the quarter’s revenue.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”

“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”

Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

Apple will provide live streaming of its Q3 2020 financial results conference call beginning at 2:00 p.m. PT on July 30, 2020 at apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple periodically provides information for investors on its corporate website, apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and details related to its annual meeting of shareholders.

This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company’s expectations regarding the impact of the COVID-19 pandemic; anticipated revenue, gross margin, operating expenses, other income/(expense), and tax rate; plans for return of capital; the four-for-one stock split; and the commitment to be carbon neutral by 2030. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: the effect of the COVID-19 pandemic on the Company’s business, results of operations, financial condition, and stock price; the effect of global and regional economic conditions on the Company’s business, including effects on purchasing decisions by consumers and businesses; the ability of the Company to compete in markets that are highly competitive and subject to rapid technological change; the ability of the Company to manage frequent introductions and transitions of products and services, including delivering to the marketplace, and stimulating customer demand for, new products, services, and technological innovations on a timely basis; the effect that shifts in the mix of products and services and in the geographic, currency, or channel mix, component cost increases, increases in the cost of acquiring and delivering content for the Company’s services, price competition, or the introduction of new products or services, including new products or services with higher cost structures, could have on the Company’s gross margin; the dependency of the Company on the performance of distributors of the Company’s products, including cellular network carriers and other resellers; the risk of write-downs on the value of inventory and other assets and purchase commitment cancellation risk; the continued availability on acceptable terms, or at all, of certain components, services, and new technologies essential to the Company’s business, including components and technologies that may only be available from single or limited sources; the dependency of the Company on manufacturing and logistics services provided by third parties, many of which are located outside of the US and which may affect the quality, quantity, or cost of products manufactured or services rendered to the Company; the effect of product and services design and manufacturing defects on the Company’s financial performance and reputation; the dependency of the Company on third-party intellectual property and digital content, which may not be available to the Company on commercially reasonable terms or at all; the dependency of the Company on support from third-party software developers to develop and maintain software applications and services for the Company’s products; the impact of unfavorable legal proceedings, such as a potential finding that the Company has infringed on the intellectual property rights of others; the impact of complex and changing laws and regulations worldwide, which expose the Company to potential liabilities, increased costs, and other adverse effects on the Company’s business; the ability of the Company to manage risks associated with the Company’s retail stores; the ability of the Company to manage risks associated with the Company’s investments in new business strategies and acquisitions; the impact on the Company’s business and reputation from information technology system failures, network disruptions, or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; the continued service and availability of key executives and employees; political events, international trade disputes, war, terrorism, natural disasters, public health issues, and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products; financial risks, including risks relating to currency fluctuations, credit risks, and fluctuations in the market value of the Company’s investment portfolio; and changes in tax rates and exposure to additional tax liabilities. More information on these risks and other potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. 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 five software platforms — iOS, iPadOS, 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 more than 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 Quayle

Apple

khuguet@apple.com

(408) 974-2414

Investor Relations Contact:

Tejas Gala

Apple

tgala@apple.com

(669) 227-2402

NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline at (408) 974-2042.

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except number of shares which are reflected in thousands and per share amounts)

	Three Months Ended						Nine Months Ended
	June 27,<br>2020		June 29,<br>2019		June 27,<br>2020		June 29,<br>2019
Net sales:
Products	$	46,529	$	42,354	$	170,598	$	162,354
Services	13,156		11,455		39,219		33,780
Total net sales ^(1)^	59,685		53,809		209,817		196,134
Cost of sales:
Products	32,693		29,473		116,089		109,758
Services	4,312		4,109		13,461		12,297
Total cost of sales	37,005		33,582		129,550		122,055
Gross margin	22,680		20,227		80,267		74,079
Operating expenses:
Research and development	4,758		4,257		13,774		12,107
Selling, general and administrative	4,831		4,426		14,980		13,667
Total operating expenses	9,589		8,683		28,754		25,774
Operating income	13,091		11,544		51,513		48,305
Other income/(expense), net	46		367		677		1,305
Income before provision for income taxes	13,137		11,911		52,190		49,610
Provision for income taxes	1,884		1,867		7,452		8,040
Net income	$	11,253	$	10,044	$	44,738	$	41,570
Earnings per share:
Basic	$	2.61	$	2.20	$	10.25	$	8.92
Diluted	$	2.58	$	2.18	$	10.16	$	8.86
Shares used in computing earnings per share:
Basic	4,312,573		4,570,633		4,362,571		4,660,175
Diluted	4,354,788		4,601,380		4,404,695		4,691,759
^(1)^ Net sales by reportable segment:
Americas	$	27,018	$	25,056	$	93,858	$	87,592
Europe	14,173		11,925		51,740		45,342
Greater China	9,329		9,157		32,362		32,544
Japan	4,966		4,082		16,395		16,524
Rest of Asia Pacific	4,199		3,589		15,462		14,132
Total net sales	$	59,685	$	53,809	$	209,817	$	196,134
^(1)^ Net sales by category:
iPhone	$	26,418	$	25,986	$	111,337	$	109,019
Mac	7,079		5,820		19,590		18,749
iPad	6,582		5,023		16,927		16,624
Wearables, Home and Accessories	6,450		5,525		22,744		17,962
Services	13,156		11,455		39,219		33,780
Total net sales	$	59,685	$	53,809	$	209,817	$	196,134

Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions, except number of shares which are reflected in thousands and par value)

	June 27,<br>2020		September 28,<br>2019
ASSETS:
Current assets:
Cash and cash equivalents	$	33,383	$	48,844
Marketable securities	59,642		51,713
Accounts receivable, net	17,882		22,926
Inventories	3,978		4,106
Vendor non-trade receivables	14,193		22,878
Other current assets	10,987		12,352
Total current assets	140,065		162,819
Non-current assets:
Marketable securities	100,592		105,341
Property, plant and equipment, net	35,687		37,378
Other non-current assets	41,000		32,978
Total non-current assets	177,279		175,697
Total assets	$	317,344	$	338,516
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	35,325	$	46,236
Other current liabilities	35,005		37,720
Deferred revenue	6,313		5,522
Commercial paper and repurchase agreements	11,166		5,980
Term debt	7,509		10,260
Total current liabilities	95,318		105,718
Non-current liabilities:
Term debt	94,048		91,807
Other non-current liabilities	55,696		50,503
Total non-current liabilities	149,744		142,310
Total liabilities	245,062		248,028
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,283,939 and 4,443,236 shares issued and outstanding, respectively	48,696		45,174
Retained earnings	24,136		45,898
Accumulated other comprehensive income/(loss)	(550)		(584)
Total shareholders’ equity	72,282		90,488
Total liabilities and shareholders’ equity	$	317,344	$	338,516

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

	Nine Months Ended
	June 27,<br>2020		June 29,<br>2019
Cash, cash equivalents and restricted cash, beginning balances	$	50,224	$	25,913
Operating activities:
Net income	44,738		41,570
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization	8,354		9,368
Share-based compensation expense	5,105		4,569
Deferred income tax expense/(benefit)	182		(38)
Other	(94)		(340)
Changes in operating assets and liabilities:
Accounts receivable, net	5,149		9,013
Inventories	10		496
Vendor non-trade receivables	8,685		13,483
Other current and non-current assets	(6,760)		693
Accounts payable	(10,787)		(19,804)
Deferred revenue	1,649		(776)
Other current and non-current liabilities	3,867		(8,753)
Cash generated by operating activities	60,098		49,481
Investing activities:
Purchases of marketable securities	(96,606)		(21,902)
Proceeds from maturities of marketable securities	54,865		26,783
Proceeds from sales of marketable securities	39,760		49,516
Payments for acquisition of property, plant and equipment	(5,525)		(7,718)
Payments made in connection with business acquisitions, net	(1,473)		(611)
Purchases of non-marketable securities	(210)		(632)
Proceeds from non-marketable securities	58		1,526
Other	(689)		(268)
Cash generated by/(used in) investing activities	(9,820)		46,694
Financing activities:
Proceeds from issuance of common stock	430		391
Payments for taxes related to net share settlement of equity awards	(3,234)		(2,626)
Payments for dividends and dividend equivalents	(10,570)		(10,640)
Repurchases of common stock	(55,171)		(49,453)
Proceeds from issuance of term debt, net	10,635		—
Repayments of term debt	(12,629)		(5,500)
Proceeds from/(Repayments of) commercial paper, net	31		(2,026)
Proceeds from repurchase agreements	5,165		—
Other	(120)		(83)
Cash used in financing activities	(65,463)		(69,937)
Increase/(Decrease) in cash, cash equivalents and restricted cash	(15,185)		26,238
Cash, cash equivalents and restricted cash, ending balances	$	35,039	$	52,151
Supplemental cash flow disclosure:
Cash paid for income taxes, net	$	8,410	$	11,795
Cash paid for interest	$	2,275	$	2,563