AA 4-1 Company Analysis LO A1 Refer to Apple's financial statements in Appendix A to answer the following. Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. (Enter your answers in millions of dollars.) Cost of goods purchased < Required 1 Required 2 > Check my work Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? Apple's 2019 current ratio d2 Required 4 Outperform Underperform Required 1 Required 2 Required 3 Required 4 Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. (Enter your answers in millions of dollars.) $ millions Current assets Cash and equivalents Marketable securities (current) Accounts receivables, net Inventories, net Vendor non-trade receivables Other current assets Total current assets Total quick assets Total current liabilities Ratio 2019 2018 Current Acid-Test Current Acid-Test Ratio Ratio Ratio Ratio $ 0 $ 0 0 0 0 < Required 1 0 0 0 Required 3 > Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Apple's 2019 acid-test ratio Outperform Underperform Required 4 appendix A Financial Statement Information APPLE GOOGLE Samsung This appendix includes financial information for (1) Apple, (2) Google, and (3) Samsung. Apple states that it designs, manufactures and markets smartphones, personal computers, tablets, wearables, and ac- cessories, and sells a variety of related services. It competes with both Google and Samsung in the United States and globally. The information in this appendix is taken from annual 10-K reports (or annual report for Samsung) filed with the SEC or other regulatory agency. An annual report is a summary of a com- pany's financial results for the year along with its current financial condition and future plans. This report is directed to external users of financial information, but it also affects the actions and decisions of inter- nal users. A company often uses an annual report to showcase itself and its products. Many annual reports in- clude photos, diagrams, and illustrations related to the company. The primary objective of annual reports, however, is the financial section, which communicates much information about a company, with most data drawn from the accounting information system. The content of a typical annual report's financial section follows. Letter to Shareholders Financial History and Highlights Quantitative and Qualitative Disclosures about Risk Factors Management Discussion and Analysis Management's Report on Financial Statements and on Internal Controls Report of Independent Accountants (Auditor's Report) and on Internal Controls Financial Statements Notes to Financial Statements Directors, Officers, and Corporate Governance Executive Compensation Accounting Fees and Services This appendix provides the financial statements for Apple (plus selected notes), Google, and Samsung. (Note: Google is part of Alphabet; we refer to Alphabet as "Google" because of its global familiarity and because Google makes up 99% of Alphabet's revenues.) The appendix is organized as follows: Apple A-1 through A-8 Google A-9 through A-12 Samsung A-13 through A-16 Many assignments at the end of each chapter refer to information in this appendix. We encourage readers to spend time with these assignments; they are especially useful in showing the relevance and diversity of accounting and reporting. Special note: The SEC maintains the EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database at SEC.gov for U.S. filers. The Form 10-K is the annual report form for most companies. It provides electronically accessible information. The Form 10-KSB is the annual report form filed by small businesses. It requires slightly less information than the Form 10-K. One of these forms must be filed within 90 days after the company's fiscal year-end. (Forms 10-K405, 10-KT, 10-KT405, and 10-KSB405 are slight variations of the usual form due to certain regulations or rules.) Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets Non-current assets Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets ASSETS September 28, 2019 September 29, 2018 48,844 25,913 51,713 40,388 22,926 23,186 4,106 3,956 22,878 25,809 12,352 12,087 162,819 131,339 105,341 170,799 37,378 41,304 32,978 22,283 175,697 234,386 $ 338,516 $ 365,725 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities Non-current liabilities Term debt Other non-current liabilities Total non-current liabilities Total liabilities $ 46,236 55,888 37,720 33,327 5,522 5,966 5,980 11,964 10,260 8,784 105,718 115,929 91,807 93,735 50,503 48,914 142,310 142,649 248,028 258,578 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 shares issued and outstanding, respectively 45,174 40,201 Retained earnings 45,898 70,400 Accumulated other comprehensive income (loss) (584) (3,454) Total shareholders' equity 90,488 107,147 Total liabilities and shareholders' equity 338,516 365,725 See accompanying Notes to Consolidated Financial Statements. APPLE A-2 Appendix A Financial Statement Information. Years ended Net sales: Products Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Services Total net sales Cost of sales: Products Services Total cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Net income Earnings per share: September 28, 2019 September 29, 2018 September 30, 2017 213,883 225,847 196,534 46,291 39,748 32,700 260,174 265,595 229,234 144,996 148,164 126,337 16,786 15,592 14,711 161,782 163,756 141,048 98,392 101,839 88,186 16,217 14,236 11,581 18,245 16,705 15,261 34,462 30,941 26,842 63,930 70,898 61,344 1,807 2,005 2,745 65,737 72,903 64,089 10,481 13,372 15,738 55,256 $ 59,531 48,351 Basic $ 11.97 $ 12.01 $ 9.27 Diluted $ 11.89 $ 11.91 $ 9.21 Shares used in computing earnings per share: Basic Diluted 4,617,834 4,648,913 4,955,377 5,000,109 5,217,242 5,251,692 Years ended Net income See accompanying Notes to Consolidated Financial Statements. Apple Inc. (In millions) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME September 28, 2019 September 29, 2018 September 30, 2017 55,256 $ 59,531 $ 48,351 Other comprehensive income (loss): Change in foreign currency translation, net of tax (408) (525) 224 Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives (661) 523 1,315 Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities 23 382 (1,477) (638) 905 (162) 3,802 (3,407) (782) Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities 25 (64) 3,827 (3,406) (846) Total other comprehensive income (loss) 2,781 (3,026) (784) Total comprehensive income 58,037 $ 56,505 $ 47,567 See accompanying Notes to Consolidated Financial Statements. Appendix A Financial Statement Information A-3 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Years ended Total shareholders' equity, beginning balances Common stock and additional paid-in capital Beginning balances Common stock issued (In millions) $ September 28, 2019 107,147 $ September 29, 2018 134,047 $ September 30, 2017 128,249 40,201 781 35,867 669 31,251 555 Common stock withheld related to net share settlement of equity awards (2,002) (1,778) Share-based compensation 6,194 5,443 (1,468) 4,909 Tax benefit from equity awards, including transfer pricing adjustments Ending balances 620 45,174 40,201 35,867 Retained earnings Beginning balances 70,400 98,330 96,364 Net income 55,256 59,531 48,351 Dividends and dividend equivalents declared (14,129) (13,735) (12,803) Common stock withheld related to net share settlement of equity awards (1,029) (948) Common stock repurchased (67,101) (73,056) (581) (33,001) Cumulative effects of changes in accounting principles 2,501 278 Ending balances 45,898 70,400 98,330 Accumulated other comprehensive income (loss) Beginning balances Other comprehensive income (loss) (3,454) 2,781 (150) (3,026) 634 (784) Cumulative effects of changes in accounting principles 89 (278) Ending balances (584) (3,454) (150) Total shareholders' equity, ending balances 90,488 $ 107,147 $ 134,047 See accompanying Notes to Consolidated Financial Statements. APPLE APPLE A-4 Appendix A Financial Statement Information Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended Cash, cash equivalents and restricted cash, beginning balances Operating activities Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense (benefit) (In millions) September 28, 2019 $ 25,913 $ September 29, 2018 20,289 September 30, 2017 $ 20,484 55,256 59,531 48,351 12,547 10,903 10,157 6,068 5,340 4,840 (340) (32,590) 5,966 Other (652) (444) (166) Changes in operating assets and liabilities: Accounts receivable, net Inventories 245 (5,322) (2,093) (289) 828 (2,723) Vendor non-trade receivables 2,931 (8,010) (4,254) Other current and non-current assets 873 (423) (5,318) Accounts payable (1,923) 9,175 8,966 Deferred revenue (625) (3) (593) Other current and non-current liabilities (4,700) 38,449 1,092 69,391 77,434 64,225 Cash generated by operating activities Investing activities Purchases of marketable securities (39,630) (71,356) (159,486) Proceeds from maturities of marketable securities 40,102 55,881 31,775 Proceeds from sales of marketable securities 56,988 47,838 94,564 Payments for acquisition of property, plant and equipment (10,495) (13,313) (12,451) Payments made in connection with business acquisitions, net (624) (721) (329) Purchases of non-marketable securities (1,001) (1,871) (521) Proceeds from non-marketable securities 1,634 353 126 Other (1,078) (745) (124) Cash generated by (used in) investing activities 45,896 16,066 (46,446) Financing activities Proceeds from issuance of common stock Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Proceeds from (Repayments of) commercial paper, net Other Cash used in financing activities Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, ending balances Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 781 669 555 (2,817) (2,527) (1,874) (14,119) (13,712) (12,769) (66,897) (72,738) (32,900) 6,963 6,969 28,662 (8,805) (6,500) (3,500) (5,977) (37) 3,852 (105) (90,976) (87,876) 24,311 5,624 (17,974) (195) 50,224 25,913 20,289 15,263 10,417 $ 11,591 3,423 $ 3,022 $ 2,092 See accompanying Notes to Consolidated Financial Statements. APPLE INC. SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Appendix A Financial Statement Information A-5 Basis of Presentation and Preparation In the opinion of the Company's management, the consoli- dated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these consoli- dated financial statements and accompanying notes in con- formity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. The Company's fiscal year is the 52- or 53-week period that ends on the last Saturday of September. The Company's fiscal years 2019 and 2018 spanned 52 weeks each, whereas fiscal year 2017 included 53 weeks. A 14th week was in- cluded in the first fiscal quarter of 2017, as is done every five or six years, to realign the Company's fiscal quarters with calendar quarters. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company's fiscal years ended in September and the associ- ated quarters, months and periods of those fiscal years. Revenue Recognition Net sales consist of revenue from the sale of iPhone, Mac, iPad, Services and other products. The Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is transferred to its custom- ers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company's Products net sales, control transfers when products are shipped. For the Compa- ny's Services net sales, control transfers over time as services are delivered. Payment for Products and Services net sales is collected within a short period following transfer of control or commencement of delivery of services, as applicable. The Company records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the Company's ex- pectations and historical experience. For arrangements with multiple performance obliga- tions, which represent promises within an arrangement that are capable of being distinct, the Company allocates reve- nue to all distinct performance obligations based on their relative stand-alone selling prices ("SSPS"). When avail- able, the Company uses observable prices to determine SSPs. When observable prices are not available, SSPs are established that reflect the Company's best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company has identified up to three performance obli- gations regularly included in arrangements involving the sale of iPhone, Mac, iPad and certain other products. The first per- formance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered at the time of sale. The second perfor- mance obligation is the right to receive certain product-related bundled services, which include iCloud, Siri and Maps. The third performance obligation is the right to receive, on a when-and-if-available basis, future unspecified software up- grades relating to the software bundled with each device. The Company allocates revenue and any related discounts to these performance obligations based on their relative SSPs. Be- cause the Company lacks observable prices for the undeliv- ered performance obligations, the allocation of revenue is based on the Company's estimated SSPs. Revenue allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product is shipped. Revenue allocated to the product-related bundled services and unspecified software upgrade rights is deferred and recognized on a straight-line basis over the estimated period they are expected to be pro- vided. Cost of sales related to delivered hardware and bundled software, including estimated warranty costs, are recognized at the time of sale. Costs incurred to provide product-related bundled services and unspecified software upgrade rights are recognized as cost of sales as incurred. For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains con- trol of third-party products including, but not limited to, evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. For thirdparty ap- plications sold through the App Store, Mac App Store, TV App Store and Watch App Store and certain digital content sold through the Company's other digital content stores, the Company does not obtain control of the product before transferring it to the customer. Therefore, the Company ac- counts for such sales on a net basis by recognizing in Services net sales only the commission it retains. The Company has elected to record revenue net of taxes collected from customers that are remitted to governmental au- thorities, with the collected taxes recorded within other current liabilities until remitted to the relevant government authority. Deferred Revenue As of September 28, 2019 and Sep- tember 29, 2018, the Company had total deferred revenue of $8.1 billion and $8.8 billion, respectively. As of September 28, 2019, the Company expects 68% of total deferred reve- nue to be realized in less than a year, 25% within one-to-two years, 6% within two-to-three years and 1% in greater than three years. Advertising Costs Advertising costs are expensed as incurred and included in selling, general and administrative expenses. APPLE APPLE Apple Inc. Notes-continued Other Income and Expense $ millions 2019 2018 Interest and dividend income $ 4,961 $5,686 2017 $ 5,201 Interest expense (3,576) (3,240) Other income (expense), net Total other income (expense), net (2,323) 422 (441) (133) $1,807 $2,005 $2,745 Cash Equivalents and Marketable Securities All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. The Company's investments in marketable debt securities have been classified and accounted for as avail- able-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in other com- prehensive income/(loss) ("OCI"). The Company's investments in marketable equity securi- ties are classified based on the nature of the securities and their availability for use in current operations. The Compa- ny's marketable equity securities are measured at fair value with gains and losses recognized in other income/(expense), net ("OI&E"). The cost of securities sold is determined us- ing the specific identification method. Restricted Cash and Restricted Marketable Securities The Company considers cash and marketable securities to be restricted when withdrawal or general use is legally re- stricted. The Company records restricted cash as other as- sets in the Consolidated Balance Sheets, and determines current or non-current classification based on the expected duration of the restriction. The Company records restricted marketable securities as current or non-current marketable securities in the Consolidated Balance Sheets based on the classification of the underlying securities. The Company's restricted cash primarily consisted of cash required to be on deposit under a contractual agree- ment with a bank to support the Company's iPhone Up- grade Program. Accounts Receivable (Trade Receivables) The Company has considerable trade receivables outstand- ing with its third-party cellular network carriers, wholesal- ers, retailers, resellers, small and mid-sized businesses and education, enterprise and government customers. As of September 28, 2019, the Company had no custom- ers that individually represented 10% or more of total trade receivables. As of September 29, 2018, the Company had one customer that represented 10% or more of total trade re- ceivables, which accounted for 10%. The Company's cellular network carriers accounted for 51% and 59% of total trade receivables as of September 28, 2019 and September 29, 2018, respectively. Inventories Inventories are measured using the first-in, first-out method. Property, Plant and Equipment Depreciation on property, plant and equipment is recog- nized on a straight-line basis over the estimated useful lives of the assets, which for buildings is the lesser of 30 years or the remaining life of the underlying building; between one and five years for machinery and equipment, including product tooling and manufacturing process equipment; and the shorter of lease term or useful life for leasehold im- provements. Capitalized costs related to internal-use soft- ware are amortized on a straight-line basis over the estimated useful lives of the assets, which range from three to five years. Depreciation and amortization expense on property and equipment was $11.3 billion, $9.3 billion and $8.2 billion during 2019, 2018 and 2017, respectively. $ millions Land and buildings Machinery, equipment and internal-use software Leasehold improvements Gross property, plant and equipment Accumulated depreciation and amortization Total property, plant and equipment, net Fair Value Measurements 2019 2018 $17,085 $16,216 69,797 65,982 9,075 8,205 95,957 90,403 (58,579) (49,099) $37,378 $41,304 The fair values of the Company's money market funds and certain marketable equity securities are based on quoted prices in active markets for identical assets. The valuation techniques used to measure the fair value of the Company's debt instruments and all other financial instruments, which generally have counterparties with high credit ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. Financial Instruments The Company typically invests in highly rated securities, with the primary objective of minimizing the potential risk of prin- cipal loss. The Company's investment policy generally re- quires securities to be investment grade and limits the amount of credit exposure to any one issuer. Fair values were deter- mined for each individual security in the investment portfolio. Accrued Warranty and Guarantees The following table shows changes in the Company's accrued warranties and related costs for 2019 and 2018: $ millions 2019 2018 Beginning accrued warranty and related costs $3,692 $3,834 Cost of warranty claims (3,857) (4,115) 3,735 $3,570 $3,692 Accruals for product warranty Ending accrued warranty and related costs 3,973 Appendix A Financial Statement Information Apple Inc. Notes-continued Other Non-Current Liabilities $ millions Long-term taxes payable Other non-current liabilities Total other non-current liabilities Term Debt 2019 2018 $29,545 $33,589 20,958 15,325 $50,503 $48,914 As of September 28, 2019, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $101.7 billion (collectively the "Notes"). The Notes are senior unsecured obligations and interest is payable in arrears. The Company recognized $3.2 billion, $3.0 billion and $2.2 billion of interest cost on its term debt for 2019, 2018 and 2017, respectively. The future principal payments for the Company's Notes as of September 28, 2019 are as follows (in millions): the Company's financial condition and operating results for that reporting period could be materially adversely af- fected. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims, except for the following matters: VirnetX iOS Performance Management Cases Qualcomm French Competition Authority Disaggregated Revenue by Significant Products and Services 2020 2021 2022 2023 2024 Thereafter Total term debt Net sales (mil.) iPhone Mac 2019 $142,381 2018 2017 $164,888 $139,337 25,740 25,198 25,569 iPad 21,280 18,380 18,802 $ 10,270 Wearables, Home and Accessories 24,482 17,381 12,826 8,750 Services 46,291 39,748 32,700 9,528 Total net sales $260,174 $265,595 $229,234 9,290 10,039 53,802 $101,679 Reportable segment (mil.) Americas: 2019 2018 2017 Net sales Operating income $116,914 $112,093 $ 35,099 $ 34,864 $96,600 $30,684 Net sales Operating income $ 60,288 $ 62,420 $54,938 $ 19,195 $ 19,955 $16,514 Net sales Operating income $ 43,678 $ 51,942 $44,764 $ 16,232 $ 19,742 $17,032 Net sales Operating income Rest of Asia Pacific: Net sales Operating income $ 21,506 $ 9,369 $ 21,733 $ 9,500 $17,733 $ 8,097 $ 17,788 $ 17,407 $ 6,055 $ 6,181 $15,199 $ 5,304 As of September 28, 2019 and September 29, 2018, the fair value of the Company's Notes, based on Level 2 inputs, was $107.5 billion and $103.2 billion, respectively. Share Repurchase Program On April 30, 2019, the Company announced the Board of Directors increased the current share repurchase pro- gram authorization from $100 billion to $175 billion of the Company's common stock, of which $96.1 billion had been utilized as of September 28, 2019. During 2019, the Company repurchased 345.2 million shares of its common stock for $67.1 billion, including 62.0 mil- lion shares delivered under a $12.0 billion accelerated share repurchase arrangement dated February 2019, which settled in August 2019. The Company's share re- purchase program does not obligate it to acquire any spe- cific number of shares. Contingencies The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a report- ing period for amounts above management's expectations, Europe: Greater China: Japan: A reconciliation of the Company's segment operating income to the Consolidated Statements of Operations for 2019, 2018 and 2017 is as follows: $ millions Segment operating income Research and development 2019 $ 85,950 2018 $ 90,242 2017 $77,631 (16,217) (5,803) $ 63,930 (14,236) (5,108) $ 70,898 (11,581) (4,706) $61,344 expense Other corporate expenses, net Total operating income A-7 APPLE APPLE Apple Inc. Notes-continued Selected Financial Data (in millions, except number of shares, which are reflected in thousands, and per share amounts). 2019 2018 2017 2016 2015 $ 260,174 $ 265,595 $ 229,234 $ 215,639 $ 233,715 8.35 $ 9.28 8.31 $ 9.22 Total net sales Net income Earnings per share: $ 55,256 $ 59,531 $ 48,351 $ 45,687 $ 53,394 Basic Diluted $ 11.97 $ 12.01 $ 9.27 $ $ 11.89 $ 11.91 $ 9.21 $ Cash dividends declared per share $ 3.00 $ 2.72 $ 2.40 $ Shares used in computing earnings per share: 4,617,834 4,955,377 4,648,913 5,000,109 Basic Diluted Total cash, cash equivalents and 2.18 $ 1.98 5,217,242 5,470,820 5,753,421 5,251,692 5,500,281 5,793,069 marketable securities $ 205,898 $ 237,100 $268,895 $ 237,585 $ 205,666 Total assets $ 338,516 $ 365,725 $375,319 $ 321,686 $ 290,345 Non-current portion of term debt Other non-current liabilities $ 91,807 $ 93,735 $ 97,207 $ 75,427 $ 53,329 $ 50,503 S 48,914 S 44,212 $ 39,986 S 38,104 Company Background The Company designs, manufactures and markets smart- phones, personal computers, tablets, wearables and acces- sories, 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 comput- ers 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 tab- lets. iPad is based on the Company's iPadOS operating sys- tem, 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, HomePod, iPod touch and other Apple-branded and third-party accessories. AirPods are the Company's wireless headphones that interact with Siri. In October 2019, the Company introduced AirPods Pro Apple Watch is a personal electronic device that combines the watchOS user interface and other technolo- gies 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 con- tent streaming services, including Apple Music, which offers users a curated listening experience with on-demand radio stations, and Apple TV+, which offers exclusive original con- tent, and is expected to be available in November 2019. AppleCare AppleCare includes AppleCare+ ("AC+") and the AppleCare Protection Plan, which are fee-based services that extend the coverage of phone support eligibility and hardware repairs. AC+ offers additional coverage for instances of accidental damage and is available in certain countries for certain products. Additionally, AC+ with theft and loss protection is available for iPhone in the U.S. iCloud iCloud is the Company's cloud service, which stores music, photos, contacts, calendars, mail, doc- uments and more, keeping them up-to-date and available across multiple Apple devices and Windows personal computers. Licensing The Company licenses the use of certain of its intellectual property, and provides other related services. Other Services The Company delivers a variety of other services available in certain countries, including Apple Arcade, a game subscription service; Apple Card, a co-branded credit card; Apple News+, a sub- scription news and magazine service; and Apple Pay, a cashless payment service. Markets and Distribution The Company's customers are primarily in the consumer, small and mid-sized business, education, enterprise and gov- ernment markets. The Company sells its products and resells third-party products in most of its major markets directly to consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force. The Company also employs a variety of indirect distribution channels, such as third-party cellular network carriers, wholesalers, retailers and resellers. During 2019, the Company's net sales through its direct and indirect distribution channels accounted for 31% and 69%, respectively, of total net sales. Employees As of September 28, 2019, the Company had approximately 137,000 full-time equivalent employees. Assets Current assets Cash and cash equivalents Marketable securities Appendix A Financial Statement Information A-9 Google Inc. (Alphabet Inc.)" CONSOLIDATED BALANCE SHEETS (In millions, except share amounts which are reflected in thousands, and par value per share amounts) Total cash, cash equivalents, and marketable securities Accounts receivable, net of allowance of $729 and $753 Income taxes receivable, net Inventory Other current assets Total current assets Non-marketable investments Deferred income taxes Property and equipment, net Operating lease assets Intangible assets, net Goodwill Other non-current assets Total assets December 31, 2018 December 31, 2019 16,701 18,498 92,439 101,177 109,140 119,675 20,838 25,326 355 2,166 1,107 999 4,236 135,676 4,412 152,578 13,859 13,078 737 721 59,719 73,646 0 10,941 2,220 1,979 17,888 20,624 2,693 2,342 232,792 275,909 Liabilities and Stockholders' Equity Current liabilities Accounts payable 4,378 5,561 Accrued compensation and benefits 6,839 8,495 Accrued expenses and other current liabilities 16,958 23,067 Accrued revenue share 4,592 5,916 Deferred revenue 1,784 1,908 Income taxes payable, net 69 274 Total current liabilities Long-term debt Deferred revenue, non-current Income taxes payable, non-current Deferred income taxes Operating lease liabilities 34,620 45,221 4,012 Other long-term liabilities Total liabilities Commitments and Contingencies 358 11,327 9,885 1,264 1,701 0 10,214 3,545 2,534 55,164 74,467 396 4,554 Stockholders' equity Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 695,556 (Class A 299,242, Class B 46,636, Class C 349,678) and 688,335 (Class A 299,828, Class B 46,441, Class C 342,066) shares issued and outstanding 0 0 45,049 50,552 Accumulated other comprehensive loss (2,306) (1,232) Retained earnings 134,885 152,122 Total stockholders' equity 177,628 201,442 Total liabilities and stockholders' equity 232,792 $ 275,909 "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and because Google provides 99% of Alphabet's $161,857 billion in revenues. See accompanying notes. GOOGLE A-10 Appendix A Financial Statement Information Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF INCOME (In millions) Year Ended December 31 Revenues Costs and expenses Cost of revenues Research and development Sales and marketing General and administrative European Commission fines Total costs and expenses Income from operations Other income (expense), net Income before income taxes Provision for income taxes Net income "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and because Google provides 99% of Alphabet's $161,857 billion in revenues. 110000 See accompanying notes. 2017 2018 2019 $ 110,855 $ 136,819 $ 161,857 45,583 59,549 71,896 16,625 21,419 26,018 12,893 16,333 18,464 6,840 6,923 9,551 2,736 5,071 1,697 84,677 109,295 127,626 26,178 27,524 34,231 1,015 7,389 5,394 27,193 34,913 39,625 14,531 4,177 5,282 $ 12,662 $ 30,736 $ 34,343 Google Inc. (Alphabet Inc.)" CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31 2017 2018 2019 Net income Other comprehensive income (loss): 12,662 $ 30,736 $ 34,343 Change in foreign currency translation adjustment 1,543 (781) (119) Available-for-sale investments: Change in net unrealized gains (losses) 307 88 1,611 Less: reclassification adjustment for net (gains) losses included in net income Net change (net of tax effect of $0, $156, and $221) 105 (911) (111) 412 (823) 1,500 Cash flow hedges: Change in net unrealized gains (losses) (638) 290 22 Less: reclassification adjustment for net (gains) losses included in net income Net change (net of tax effect of $247, $103, and $42) 93 98 (299) (545) 388 (277) Other comprehensive income (loss) 1,410 (1,216) 1,104 Comprehensive income $ 14,072 $ 29,520 $ 35,447 "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and because Google provides 99% of Alphabet's $161,857 billion in revenues. See accompanying notes. Appendix A Financial Statement Information A-11 Google Inc. (Alphabet Inc.)" CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions, except share amounts which are reflected in thousands) Class A and Class B Common Stock, Class C Accumulated Capital Stock and Additional Paid-In Capital Other Comprehensive Shares Amount Income (Loss) Retained Earnings Total Stockholders' Equity Balance as of December 31, 2016 691,293 $ 36,307 $ (2,402) $ 105,131 $ Cumulative effect of accounting change 0 0 0 (15) 139,036 (15) Common and capital stock issued 8,652 212 0 0 212 Stock-based compensation expense 0 7,694 0 7,694 Tax withholding related to vesting of restricted stock units 0 (4,373) 0 0 (4,373) Repurchases of capital stock (5,162) (315) 0 (4,531) (4,846) Sale of interest in consolidated entities 0 722 0 0 722 Net income 0 0 0 12,662 12,662 Other comprehensive income 0 0 1,410 0 1,410 Balance as of December 31, 2017 694,783 40,247 (992) 113,247 152,502 Cumulative effect of accounting change 0 0 (98) (599) (697) Common and capital stock issued 8,975 148 0 0 148 Stock-based compensation expense 0 9,353 0 0 9,353 Tax withholding related to vesting of restricted stock units and other 0 (4,782) 0 (4,782) Repurchases of capital stock (8,202) (576) 0 (8,499) (9,075) Sale of interest in consolidated entities 0 659 0 0 659 Net income 0 0 30,736 30,736 Other comprehensive loss 0 0 (1,216) 0 (1,216) Balance as of December 31, 2018 Cumulative effect of accounting change Common and capital stock issued Stock-based compensation expense Tax withholding related to vesting of restricted stock units and other Repurchases of capital stock 695,556 45,049 (2,306) 134,885 177,628 0 0 (30) (4) (34) 8,120 202 0 0 202 10,890 0 10,890 0 (4,455) 0 0 (4,455) (15,341) (1,294) 0 (17,102) (18,396) Sale of interest in consolidated entities Net income 0 160 0 0 160 0 0 0 34,343 34,343 Other comprehensive income (loss) 0 0 1,104 Balance as of December 31, 2019 688,335 $ 50,552 $ (1,232) $ 0 152,122 $ 1,104 201,442 "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and because Google provides 99% of Alphabet's $161,857 billion in revenues. See accompanying notes. GOOGLE GOOGLE A-12 Appendix A Financial Statement Information Google Inc. (Alphabet Inc.)" CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31 Operating activities 2017 2018 2019 Net income Adjustments: 12,662 $ 30,736 34,343 Depreciation and impairment of property and equipment 6,103 8,164 10,856 Amortization and impairment of intangible assets 812 871 925 Stock-based compensation expense 7,679 9,353 10,794 Deferred income taxes 258 778 173 (Gain) loss on debt and equity securities, net 37 (6,650) (2,798) Other 294 (189) (592) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable (3,768) (2,169) (4,340) Income taxes, net 8,211 (2,251) (3,128) Other assets (2,164) (1,207) (621) Accounts payable 731 1,067 428 Accrued expenses and other liabilities 4,891 8,614 7,170 Accrued revenue share Deferred revenue Net cash provided by operating activities Investing activities Purchases of property and equipment Purchases of marketable securities 955 483 1,273 390 371 37 37,091 47,971 54,520 (13,184) (25,139) (23,548) (92,195) (50,158) (100,315) Maturities and sales of marketable securities Purchases of non-marketable investments Maturities and sales of non-marketable investments 73,959 48,507 97,825 (1,745) (2,073) (1,932) 533 1,752 405 Acquisitions, net of cash acquired, and purchases of intangible assets (287) (1,491) (2,515) Proceeds from collection of notes receivable Other investing activities Net cash used in investing activities 1,419 0 0 99 98 589 (31,401) (28,504) (29,491) Financing activities Net payments related to stock-based award activities Repurchases of capital stock Proceeds from issuance of debt, net of costs (4,166) (4,993) (4,765) (4,846) (9,075) (18,396) 4,291 6,766 317 Repayments of debt (4,377) (6,827) (585) Proceeds from sale of interest in consolidated entities 800 Net cash used in financing activities (8,298) 950 (13,179) 220 (23,209) Effect of exchange rate changes on cash and cash equivalents 405 (302) (23) Net increase (decrease) in cash and cash equivalents (2,203) 5,986 1,797 Cash and cash equivalents at beginning of period 12,918 10,715 16,701 Cash and cash equivalents at end of period 10,715 $ 16,701 18,498 Supplemental disclosures of cash flow information Cash paid for taxes, net of refunds "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and because Google provides 99% of Alphabet's $161,857 billion in revenues. See accompanying notes. S 6,191 $ 5,671 8,203 Appendix A Financial Statement Information A-13 Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF FINANCIAL POSITION In thousands of US dollars Assets Current assets Cash and cash equivalents Short-term financial instruments Short-term financial assets at amortized cost December 31, 2019 December 31, 2018 $ 23,069,002 65,426,571 3,358,516 $ 26,033,073 56,538,875 2,319,851 Short-term financial assets at fair value through profit or loss Trade receivables Non-trade receivables 1,482,192 1,717,732 30,143,757 29,059,541 3,585,812 2,643,362 Advance payments 1,224,266 1,168,472 Prepaid expenses Inventories 2,064,610 3,548,957 22,966,437 24,869,754 Other current assets 2,312,887 1,996,067 Total current assets 155,634,050 149,895,684 Non-current assets Financial assets at amortized cost 204,476 Financial assets at fair value through other comprehensive income 7,654,241 6,264,780 Financial assets at fair value through profit or loss 900,077 665,340 Investment in associates and joint ventures 6,513,833 Property, plant and equipment Intangible assets Net defined benefit assets Deferred income tax assets Other non-current assets Total assets Liabilities and Equity Current liabilities Trade payables Short-term borrowings Other payables 102,813,888 17,764,234 6,274,952 99,031,047 12,777,442 506,094 3,865,469 6,859,137 482,518 4,691,711 10,890,850 $302,511,023 $291,178,800 Advances received Withholdings Accrued expenses 16,611,144 Current income tax liabilities 1,190,751 Current portion of long-term liabilities 725,971 Provisions 3,491,005 Other current liabilities 889,802 Total current liabilities Non-current liabilities Debentures Long-term borrowings Long-term other payables Net defined benefit liabilities Deferred income tax liabilities 54,727,544 836,835 1,885,248 1,874,152 825,401 73,006 2,740,586 $ 7,480,499 12,350,032 10,298,520 919,862 769,958 $ 7,276,025 11,657,766 9,190,823 703,812 816,205 17,452,068 7,482,067 28,646 3,761,637 904,980 59,274,029 403,944 14,632,684 432,502 13,009,904 Long-term provisions 524,342 569,405 Other non-current liabilities 2,066,906 Total liabilities 76,951,655 1,674,233 78,599,066 Equity attributable to owners of the parent company Preference shares Ordinary shares Share premium 102,506 667,588 3,778,674 102,506 667,588 3,778,674 Retained earnings 218,439,838 208,243,059 Other components of equity (4,263,406) (6,805,356) 218,725,200 205,986,471 Non-controlling interests 6,834,168 6,593,263 Total equity 225,559,368 212,579,734 Total liabilities and equity $302,511,023 $291,178,800 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. AMSUNG SAMSUNG A-14 Appendix A Financial Statement Information Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF PROFIT OR LOSS For the year ended December 31 In thousands of US dollars Revenue Cost of sales 2019 2018 $197,690,938 $209,163,262 126,335,995 113,598,417 Gross profit 71,354,943 95,564,845 Selling and administrative expenses 47,528,721 45,038,298 Operating profit 23,826,222 50,526,547 Other non-operating income 1,526,149 1,274,207 Other non-operating expense 1,213,861 979,886 Share of net profit of associates and joint ventures 354,332 463,203 Financial income 8,718,988 8,579,720 Financial expense 7,100,090 7,386,694 Profit before income tax Income tax expense 26,111,740 7,459,135 52,477,097 14,427,866 Profit for the year $ 18,652,605 $ 38,049,231 Profit attributable to owners of the parent company $ 18,451,988 $ 37,659,703 Profit attributable to non-controlling interests $ 200,617 $ 389,528 Earnings per share (in US dollars) -Basic $ 2.72 $ 2.72 5.54 5.54 --Diluted The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the year ended December 31 In thousands of US dollars Profit for the year 2019 2018 $18,652,605 $38,049,231 Other comprehensive income (loss) Items that will not be reclassified to profit or loss subsequently: Gain (loss) on valuation of financial assets at fair value through other comprehensive income, net of tax 983,817 (202,380) Share of other comprehensive loss of associates and joint ventures, net of tax (14,497) Remeasurement of net defined benefit liabilities (assets), net of tax (1,012,877) (9,122) (351,922) Items that may be reclassified to profit or loss subsequently: Share of other comprehensive income of associates and joint ventures, net of tax 41,742 Foreign currency translation, net of tax 2,588,248 5,739 506,786 Gain on valuation of cash flow hedge derivatives 1,553 40,395 Other comprehensive income (loss) for the year, net of tax 2,587,986 $21,240,591 Total comprehensive income for the year Comprehensive income attributable to: Owners of the parent company Non-controlling interests $20,993,415 (10,504) $38,038,727 $37,652,492 $ 247,176 $ 386,235 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Appendix A Financial Statement Information A-15 Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands of US dollars) Balance as of January 1, 2018 Cumulative effect of changes in accounting policies Restated total equity at the beginning of the financial year Profit for the year Gain (loss) on valuation of financial assets at fair value through other comprehensive income, net of tax Share of other comprehensive income (loss) of associates and joint ventures, net of tax Foreign currency translation, net of tax Remeasurement of net defined benefit liabilities (assets), net of tax Gain on valuation of cash flow hedge derivatives Total comprehensive income (loss) Dividends Capital transaction under common control Changes in consolidated entities Acquisition of treasury shares Retirement of treasury shares Other Total transactions with owners Balance as of December 31, 2018 Balance as of January 1, 2019 Profit for the year Gain (loss) on valuation of financial assets at fair value through other comprehensive income, net of tax Share of other comprehensive income (loss) of associates and joint ventures, net of tax Foreign currency translation, net of tax Remeasurement of net defined benefit liabilities (assets), net of tax Gain on valuation of cash flow hedge derivatives Total comprehensive income Dividends Capital transaction under common control Changes in consolidated entities Other Total transactions with owners Balance as of December 31, 2019 Equity attributable Other to owners Non- Preference Ordinary Share Retained shares shares premium earnings 102,506 667,588 $3,778,674 $185,172,550 components of equity of the parent company $(11,925,927) $177,795,391 $6,244,755 $184,040,146 controlling interests Total 102,506 667,588 3,778,674 211,529 (224,576) (13,047) (13,047) - 185,384,079 37,659,703 (12,150,503) 177,782,344 6,244,755 37,659,703 389,528 184,027,099 38,049,231 (2,581) (202,789) (205,370) 2,990 (202,380) (3,463) 497,023 (3,463) 497,023 80 9,763 (3,383) 506,786 (335,796) (335,796) (16,126) (351,922) 40,395 40,395 40,395 37,657,122 (8,703,297) (4,630) 37,652,492 - 1,474 (8,703,297) 1,474 386,235 (43,465) 6,856 35 38,038,727 (8,746,762) 8,330 35 (6,094,845) (750,872) 6,094,845 4,330 (750,872) (750,872) 4,330 (1,153) (14,798,142) 102,506 667,588 3,778,674 208,243,059 102,506 667,588 3,778,674 208,243,059 18,451,988 - 5,349,777 (9,448,365) (37,727) (6,805,356) 205,986,471 6,593,263 (6,805,356) 205,986,471 6,593,263 18,451,988 200,617 3,177 (9,486,092) 212,579,734 212,579,734 18,652,605 (1,085) 953,498 952,413 31,404 983,817 (522) 27,009 2,545,753 26,487 2,545,753 758 42,495 27,245 2,588,248 (984,779) (984,779) (28,098) (1,012,877) 18,450,381 (8,253,602) 1,553 2,543,034 1,553 1,553 - (73) 20,993,415 (8,253,602) (73) 247,176 (18,327) 6,312 21,240,591 (8,271,929) 6,239 4,917 4,917 (1,011) (1,011) 827 (184) (1,084) (8,254,686) (6,271) (8,260,957) $(4,263,406) $218,725,200 $6,834,168 $225,559,368 102,506 (8,253,602) 667,588 $3,778,674 $218,439,838 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. AMSUNG A-16 Appendix A Financial Statement Information Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended December 31 2019 2018 In thousands of US dollars Cash flows from operating activities Profit for the year $18,652,605 $38,049,231 Adjustments 32,126,956 37,414,045 Changes in assets and liabilities arising from operating activities (2,184,336) (8,515,406) Cash generated from operations 48,595,225 66,947,870 Interest received Interest paid Dividends received Income tax paid 1,978,962 1,534,604 (497,640) (470,434) 207,473 185,328 (11,344,104) (10,681,998) Net cash inflow from operating activities 38,939,916 57,515,370 Cash flows from investing activities Net increase in short-term financial instruments (1,742,585) (10,612,375) Net increase in short-term financial assets at amortized cost (701,945) (1,232,856) Net decrease (increase) in short-term financial assets at fair value through profit or loss 321,746 (119,839) Disposal of long-term financial instruments 3,935,450 219,527 Acquisition of long-term financial instruments (10,918,835) (6,588,518) Disposal of financial assets at amortized cost 595,974 Acquisition of financial assets at amortized cost (707,898) (136,183) Disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through profit or loss Acquisition of financial assets at fair value through profit or loss 1,351 13,910 (54,719) (391,377) 55,189 (116,543) 68,761 (166,327) Disposal of investment in associates and joint ventures 10,424 127 Acquisition of investment in associates and joint ventures (10,964) (43,953) Disposal of property, plant and equipment 440,397 477,900 Acquisition of property, plant and equipment (21,766,303) (25,360,292) Disposal of intangible assets 6,213 10,241 Acquisition of intangible assets (2,788,525) (875,635) Cash outflow from business combinations (874,680) (85,038) Cash inflow (outflow) from other investing activities 39,512 (1,965) Net cash outflow from investing activities (34,276,741) (44,823,892) Net increase (decrease) in short-term borrowings Cash flows from financing activities Acquisition of treasury shares Proceeds from long-term borrowings Repayment of debentures and long-term borrowings Dividends paid Net increase (decrease) in non-controlling interests Net cash outflow from financing activities 742,876 (1,755,933) (750,872) 3,072 (608,687) (1,704,560) Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents (8,270,727) (1,459) (8,137,997) 510,751 (2,964,071) (8,746,499) 6,924 (12,947,868) 80,816 (175,574) Cash and cash equivalents Beginning of the year 26,033,073 26,208,647 End of the year $23,069,002 $26,033,073 The above consolidated statements of cash flows should be read in conjunction with the accompanying notes