Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 24, 2016 September 29, 2018 September 30, 2017 265,595 229,234 $ 215,639 Net sales Cost of sales 163,756 141,048 131,376 101,839 Gross margin 88,186 84,263 Operating expenses: Research and development 10,045 14,236 11,581 Selling, general and administrative 16,705 15,261 14,194 30,941 26,842 24,239 Total operating expenses Operating income 70,898 61,344 60,024 Other income/(expense), net 2,005 2,745 1,348 64,089 61,372 Income before provision for income taxes 72,903 Provision for income taxes 13,372 15,738 15,685 48,351 $ Net income 59,531 45,687 Earnings per share: 12.01 Basic 9.27 $ 8.35 Diluted 9.21 $ 11.91 $ $ 8.31 Shares used in computing earnings per share: Basic 4,955,377 5,217,242 5,470,820 Diluted 5,000,109 5,251,692 5,500,281 See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2018 Form 10-K I 38 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are refiected in thousands and par value) September 29, 2018 September 30, 2017 ASSETS: Current assets: Cash and cash equivalents 25,913 $ 20,289 Marketable securities 40,388 53,892 Accounts receivable, net 23,186 17,874 Inventories 3,956 4,855 Vendor non-trade receivables 25,809 17,799 Other current assets 12,087 13,936 Total current assets 128,645 131,339 Non-current assets: Marketable securities 170,799 194,714 Property, plant and equipment, net 41,304 33,783 Other non-current assets 22,283 18,177 234,386 Total non-current assets 246,674 375,319 Total assets $ 365,725 $ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 55,888 $ 44,242 32,687 Other current liabilities 30,551 Deferred revenue 7,543 7,548 Commercial paper 11,964 11,977 Term debt 8,784 6,496 Total current liabilities 116,866 100,814 Non-current liabilities: Deferred revenue 2,797 2,836 Term debt 93,735 97,207 Other non-current liabilities 45,180 40,415 Total non-current liabilities 141,712 140,458 Total liabilities 258,578 241,272 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,754,986 and 5,126,201 shares issued and outstanding, respectively 35,867 40,201 Retained earnings 70,400 98,330 Accumulated other comprehensive income/(loss) (3,454) (150) Total shareholders' equity 107,147 134,047 Total liabilities and shareholders' equity 365,725 $ 375,319 See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2018 Form 10-K1 40 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands and per share amounts) Accumulated Other Comprehensive Income/(Loss) Common Stock and Additional Paid-In Capital Total Shareholders Equity Retained Shares Amount Earnings 119,355 Balances as of September 26, 2015 27,416 $ 92,284 $ (345) $ 5,578,753 S Net income 45,687 45,687 979 Other comprehensive income/(loss) Dividends and dividend equivalents declared at $2.18 per share or RSu 979 (12,188) (12,188) Repurchase of common stock (279,609) (29,000) (29,000) - Share-based compensation 4,262 4,262 Common stock issued, net of shares withheld for employee taxes (419) 37,022 (806) (1,225) Tax benefit from equity awards, including transfer pricing adjustments 379 379 5,336,166 31,25 Balances as of September 24, 2016 96,364 634 128,249 48,351 48,351 Net income Other comprehensive income/(loss) (784) (784) Dividends and dividend equivalents declared at $2.40 per share or RSu (12,803) (12,803) Repurchase of common stock (246,496) (33,001) (33,001) Share-based compensation 4,909 4,909 Common stock issued, net of shares withheld for employee taxes 36,531 (913) (581) (1,494) Tax benefit from equity awards, including transfer pricing adjustments 620 620 35,867 Balances as of September 30, 2017 5,126,201 98,330 (150) 134,047 Cumulative effect of change in accounting principle 278 (278) Net income 59,531 59,53 Other comprehensive income/(loss) (3,026) (3,026) Dividends and dividend equivalents declared at $2.72 per share or RSU (13,735) (13,735) Repurchase of common stock (405,549) (73,056) (73,056) Share-based compensation 5.443 5,443 Common stock issued, net of shares withheld for employee taxes 34,334 (1,109) (948) (2,057) 4,754,986 $ 40,201 $ 70,400 $ 107,147 (3,454) $ Balances as of September 29, 2018 See accompanying Notes to Consolidated Financial Statements. Apple Inc. 1 2018 Form 10-KI 41 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 29, 2018 September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year 20,289 $ 20,484 $ 21,120 Operating activities: Net income 59,531 45,687 48,35 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 10,903 10,157 10,505 Share-based compensation expense 5,340 4,840 4,210 Deferred income tax expense/(benefit) (32,590) 5,966 4,938 Other (444) (166) 486 Changes in operating assets and liabilities Accounts receivable, net (5,322) 527 (2,093) Inventories 828 (2,723) 217 Vendor non-trade receivables (8,010) (4,254) (51) Other current and non-current assets (423) (5,318) 1,055 Accounts payable 9,175 8,966 2,117 Deferred revenue (44) (626) (1,554) Other current and non-current liabilities 38,490 1,125 (1,906) Cash generated by operating activities 77,434 64,225 66,231 Investing activities Purchases of marketable securities (71,356) (159,486) (142,428) Proceeds from maturities of marketable securities 55,881 31,775 21,258 Proceeds from sales of marketable securities 90,536 47,838 94,564 Payments for acquisition of property, plant and equipment (13,313) (12,451) (12,734) Payments made in connection with business acquisitions, net (721) (329) (297) Purchases of non-marketable securities (1,871) (521) (1,388) Proceeds from non-marketable securities 353 126 Other (745) (124) (924) Cash generated by/(used in) investing activities 16,066 (46,446) (45,977) Financing activities: Proceeds from issuance of common stock 669 555 495 Payments for taxes related to net share settlement of equity awards (2,527) (1,874) (1,570) Payments for dividends and dividend equivalents (13,712) (12,769) (12,150) (29,722) Repurchases of common stock (72,738) (32,900) Proceeds from issuance of term debt, net 24,954 6,969 28,662 Repayments of term debt (2,500) (6,500) (3,500) Change in commercial paper, net (37) 3,852 (397) Cash used in financing activities (87,876) (17,974) (20,890) (636) 20,484 Increase/(Decrease) in cash and cash equivalents 5,624 (195) Cash and cash equivalents, end of the year 20,289 $ 25,913 $ Supplemental cash flow disclosure: Cash paid for income taxes, net 11,591 10,417 $ 10,444 Cash paid for interest 2,092 $ 3,022 $ 1,316 See accompanying Notes to Consolidated Financial Statements. Apple Inc. 1 2018 Form 10-K1 42 Dollar Amount or Financial Other Statement Answer BS 1. What is the company's total assets? BS 2. What is the company's total liabilities? BS What is the company's total stockholders' equity? 3. BS 4. What is the company's total current assets? BS 5. What is the company's total property, plant, and equipment (net)? BS What is the company's total non-current assets? 6. BS 7.What is the company's total current liabilities? BS 8.What is the company's total long-term liabilities? BS 9.What is the company's total contributed capital? BS 10. What is the company's largest current asset? 11.What is the amount of cash dividends paid on common stock? CF (enter as a positive number) What is the company's ending Retained Earnings for the most SE 12. recent year presented? What is the company's beginning Retained Earnings for the most SE 13. recent year presented? IS 14. What is the company's total revenues? IS 15. What is the company's total operating income? What is the company's interest expense? IS 16. (enter as a positive number) 17. What is the company's pretax income? IS IS What is the company's income tax expense? 18. IS What is the company's net income? 19. IS 20. What is the company's gross profit? LO Apple (AAPL) Additional Tips Total stockholders' equity Total shareholders' equity Question 3 Total non-current assets Total assets-Total current assets 6 Long-term liabilities Total liabilities - Total current liabilities Contributed capital Common Stock Find cash dividends paid on statement of cash flows (financing activities section) Ending Retained Earnings is dated 9/29/18 (see statements of shareholders' equity) Beginning Retained Earnings is dated 9/30/17 (see statements of shareholders' equity) Total revenues are net sales (see consolidated statements of income) Assume Interest Expense is zero 9 11 12 13 14 16 Pre-tax income is Income before provision for income taxes Income tax expense is Provision for income taxes 17 18 Gross profit is Gross Margin 20