Apple Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Years ended

September $26,2020$ September $28,2019$ September $29,2018$

Net sales:

Products $$220,747$ $$213,883$ $$225,847$

Services $53,76846,29139,748$

Total net sales $274,515260,174265,595$

Cost of sales:

Products $151,286144,996148,164$

Services $18,27316,78615,592$

Total cost of sales $169,559161,782163,756$

Gross margin $104,95698,392101,839$

Operating expenses:

Research and development $18,75216,21714,236$

Selling, general and administrative $19,91618,24516,705$

Total operating expenses $38,66834,46230,941$

Operating income $66,28863,93070,898$

Other income$/($expense$),$ net $8031,8072,005$

Income before provision for income taxes $67,09165,73772,903$

Provision for income taxes $9,68010,48113,372$

Net income $$57,411$ $$55,256$ $$59,531$

Earnings per share:

Basic $$3\mathrm{.}31$ $$2\mathrm{.}99$ $$3\mathrm{.}00$

Diluted $ $3\mathrm{.}28$ $$2\mathrm{.}97$ $$2\mathrm{.}98$

Shares used in computing earnings per share:

Basic $17,352,11918,471,33619,821,510$

Diluted $17,528,21418,595,65120,000,435$

See accompanying Notes to Consolidated Financial Statements.

Apple Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

$($In millions$)$

Years ended

September $26,2020$ September $28,2019$ September $29,2018$

Net income $ $57,411$ $ $55,256$ $ $59,531$

Other comprehensive income$/($loss$)$:

Change in foreign currency translation, net of tax $88(408)(525)$

Change in unrealized gains$/$losses on derivative instruments, net of tax:

Change in fair value of derivatives $79(661)523$

Adjustment for net $($gains$)/$losses realized and included in net income $(1,264)23382$

Total change in unrealized gains$/$losses on derivative instruments $(1,185)(638)905$

Change in unrealized gains$/$losses on marketable debt securities$,$ net of tax:

Change in fair value of marketable debt securities $1,2023,802(3,407)$

Adjustment for net $($gains$)/$losses realized and included in net income $(63)251$

Total change in unrealized gains$/$losses on marketable debt securities $1,1393,827(3,406)$

Total other comprehensive income$/($loss$)422,781(3,026)$

Total comprehensive income $ $57,453$ $ $58,037$ $ $56,505$

See accompanying Notes to Consolidated Financial Statements.

Apple Inc.

CONSOLIDATED BALANCE SHEETS

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

September $26,2020$ September $28,2019$

ASSETS:

Current assets:

Cash and cash equivalents $$38,016$ $$48,844$

Marketable securities $52,92751,713$

Accounts receivable, net $16,12022,926$

Inventories $4,0614,106$

Vendor non$-$trade receivables $21,32522,878$

Other current assets $11,26412,352$

Total current assets $143,713162,819$

Non$-$current assets:

Marketable securities $100,887105,341$

Property, plant and equipment, net $36,76637,378$

Other non$-$current assets $42,52232,978$

Total non$-$current assets $180,175175,697$

Total assets $$323,888$ $$338,516$

LIABILITIES AND SHAREHOLDERS$$ EQUITY:

Current liabilities:

Accounts payable $$42,296$ $$46,236$

Other current liabilities $42,68437,720$

Deferred revenue $6,6435,522$

Commercial paper $4,9965,980$

Term debt $8,77310,260$

Total current liabilities $105,392105,718$

Non$-$current liabilities:

Term debt $98,66791,807$

Other non$-$current liabilities $54,49050,503$

Total non$-$current liabilities $153,157142,310$

Total liabilities $258,549248,028$

Commitments and contingencies

Shareholders$$ equity:

Common stock and additional paid$-$in capital, $$0\mathrm{.}00001$ par value: $50,400,000$ shares authorized; $16,976,763$ and $17,772,945$ shares issued and outstanding, respectively $50,77945,174$

Retained earnings $14,96645,898$

Accumulated other comprehensive income$/($loss$)(406)(584)$

Total shareholders$$ equity $65,33990,488$

Total liabilities and shareholders$$ equity $$323,888$ $$338,516$

See accompanying Notes to Consolidated Financial Statements.

Apple Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS$$ EQUITY

$($In millions, except per share amounts$)$

Years ended

September $26,2020$ September $28,2019$ September $29,2018$

Total shareholders$$ equity, beginning balances $$90,488$ $$107,147$ $$134,047$

Common stock and additional paid$-$in capital:

Beginning balances $45,17440,20135,867$

Common stock issued $880781669$

Common stock withheld related to net share settlement of equity awards $(2,250)(2,002)(1,778)$