Apple Annual Report 2019 - StockLight

Apple Annual Report 2019

Form 10-K (NASDAQ:AAPL)

Published: October 31st, 2019

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(Mark One)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 28, 2019

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

.

Commission File Number: 001-36743

Apple Inc.

(Exact name of Registrant as specified in its charter)

California

(State or other jurisdiction of incorporation or organization)

One Apple Park Way Cupertino California (Address of principal executive offices)

(408) 996-1010 (Registrant's telephone number, including area code)

94-2404110 (I.R.S. Employer Identification No.)

95014 (Zip Code)

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

Title of each class Common Stock, $0.00001 par value per share

1.000% Notes due 2022 1.375% Notes due 2024 0.875% Notes due 2025 1.625% Notes due 2026 2.000% Notes due 2027 1.375% Notes due 2029 3.050% Notes due 2029 3.600% Notes due 2042

Trading symbol(s)

AAPL -- -- -- -- -- -- -- --

Name of each exchange on which registered The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes No

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes No

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (?232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Non-accelerated filer

Accelerated filer

Smaller reporting company

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.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes No

The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of March 29, 2019, the last business day of the Registrant's most recently completed second fiscal quarter, was approximately $874,698,000,000. Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of the

Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive officers and directors as affiliates is not necessarily a conclusive determination for any other purposes.

4,443,265,000 shares of common stock were issued and outstanding as of October 18, 2019.

DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's definitive proxy statement relating to its 2020 annual meeting of shareholders (the "2020 Proxy Statement") are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2020 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4.

Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B.

Item 10. Item 11. Item 12. Item 13.

Item 14.

Item 15. Item 16.

Apple Inc.

Form 10-K For the Fiscal Year Ended September 28, 2019

TABLE OF CONTENTS

Part I Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures

Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information

Part III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services

Part IV Exhibits, Financial Statement Schedules Form 10-K Summary

Page

1 5 14 14 14 14

15 17 18 26 28 59 59 59

60 60 60

60 60

61 63

This Annual Report on Form 10-K ("Form 10-K") contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Many of the forward-looking statements are located in Part II, Item 7 of this Form 10-K under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." 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. Forward-looking statements can also be identified by words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "will," "would," "could," "can," "may," and similar terms. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading "Risk Factors," which are incorporated herein by reference. Unless otherwise stated, all information presented herein is based on the Company's fiscal calendar, and references to particular years, quarters, months or periods refer to the Company's fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Each of the terms the "Company" and "Apple" as used herein refers collectively to Apple Inc. and its wholly owned subsidiaries, unless otherwise stated. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

PART I

Item 1. Business

Company Background The Company designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The Company's fiscal year is the 52- or 53-week period that ends on the last Saturday of September. The Company is a California corporation established in 1977.

Products

iPhone iPhone? is the Company's line of smartphones based on its iOS operating system. In September 2019, the Company introduced three new iPhones: iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max.

Mac Mac? is the Company's line of personal computers based on its macOS? operating system. During 2019, the Company released a new version of MacBook Air? and a new Mac mini?, and introduced an updated Mac Pro?, which is expected to be available in the fall of 2019.

iPad iPad? is the Company's line of multi-purpose tablets. iPad is based on the Company's iPadOSTM operating system, which was introduced during 2019. Also during 2019, the Company released two new versions of iPad Pro?, an iPad Air?, an updated iPad mini? and a new 10.2-inch iPad.

Wearables, Home and Accessories Wearables, Home and Accessories includes AirPods?, Apple TV?, Apple Watch?, Beats? products, HomePodTM, iPod touch? and other Apple-branded and thirdparty accessories. AirPods are the Company's wireless headphones that interact with Siri. In October 2019, the Company introduced AirPods ProTM. Apple Watch is a personal electronic device that combines the watchOS? user interface and other technologies created specifically for a smaller device. In September 2019, the Company introduced Apple Watch Series 5.

Services

Digital Content Stores and Streaming Services The Company operates various platforms that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. These platforms include the App Store?, available for iPhone and iPad, the Mac App Store, the TV App Store and the Watch App Store.

The Company also offers subscription-based digital content streaming services, including Apple Music?, which offers users a curated listening experience with ondemand radio stations, and Apple TV+, which offers exclusive original content, and is expected to be available in November 2019.

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