CONSOLIDATED STATEMENTS OF OPERATIONS (In milions, except number of shares which are reflected in thousands and per share amounts) Years ended September 27, September 26, 2015 2014 $ $ 233,715 140,089 93,626 182,795 112.258 70,537 September 28, 2013 $ 170,910 106.606 64,304 Net sales Cost of sales Gross margin Operating expenses: Research and development Solling, general and administrative Total operating expenses Operating income Other income/exponse), not Income before provision for income taxes Provision for income taxes Net income 8,067 14,329 22,396 71,230 1,285 72,515 19.121 53,394 6,041 11,993 18,034 52,503 980 53,483 13.973 39,510 4,475 10,830 15,305 48,999 1,156 50,155 13.118 37,037 $ $ $ Earnings per share: Basic Diluted $ $ 9.28 9.22 $ $ 6.49 6.45 $ $ 5.72 5.68 Shares used in computing earnings per share: Basic 5,753,421 5,793,060 6,085,572 6,122,663 6,477,320 6,521,634 Diluted Cash dividends declared per share $ 1.98 $ 1.82 $ 1.64 See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) September 26, 2015 $ 53,394 Years ended September 27, 2014 $ 39,510 September 28, 2013 $ 37,037 (137) (112) Net income Other comprehensive income/loss): Change in foreign currency translation, net of tax effects of $201, $50 and $35, respectively Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(441). $(297) and $(351), respectively Adjustment for net gains/losses realized and included in net income, not of tax expense/benefit) of $630, S(36) and $255, respectively Total change in unrealized gains/losses on derivative instruments, net of tax 2,905 1,390 522 (3,497) 149 (592) (483) 285 (791) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit/(exponse) of $264, S(153) and S458, respectively Adjustment for not (gains) losses realized and included in net income, net of tax expense/benefit) of $(32), $71 and $82, respectively Total change in unrealized gains/losses on marketable securities, net of tax Total other comprehensive income/loss) Total comprehensive income (134) 151 59 (424) (1.427) 51,967 (131) (922) (970) 36,067 1,553 41,063 $ $ $ See accompanying Notes to Consolidated Financial Statements See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED BALANCE SHEETS (In milions, except number of shares which are reflected in thousands and par value) September 26, 2015 September 27, 2014 ASSETS: $ Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, loss allowances of $82 and $86, respectively Inventories Deferred tax assets Vendor non-trade receivables Other current assets Total current assots Long-term marketable securities Property, plant and equipment, net Goodwil Acquired intangible assets, net Other assets Total assets 21,120 20,481 16,849 2,349 5,546 13,494 9.539 89,378 164,065 22,471 5.116 3,893 5,556 290,479 13,844 11,233 17,460 2,111 4,318 9,759 9,806 68,531 130,162 20,624 4,616 4,142 3,764 231.839 $ $ Total assets $ 290,479 $ 231.839 LIABILITIES AND SHAREHOLDERS' EQUITY: $ $ Current liabilities: Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long-term debt Total current liabilities Deferred revenue, non-current Long-term debt Other non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, S0.00001 par value: 12,600,000 shares authorized: 5,578,753 and 5,866,161 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income Total shareholders' equity Total liabilities and shareholders' equity 35,490 25.181 8,940 8,499 2.500 80,610 3,624 53,463 33,427 171,124 30,196 18,453 8,491 6,308 0 63,448 3,031 28,987 24.826 120,292 27,416 92,284 (345) 119,355 290,479 23,313 87,152 1,062 111,547 231,839 $ $ See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In milions, except number of shares which are reflected in thousands) Common Stock and Additional Paid-In Capital Shares Amount 6,574,458 S 16,422 0 Accumulated Other Retained Comprehensive Earnings Income (Loss) $ 101,289 $ 499 37,037 (970) (10,676) 0 (22,950) 0 0 Total Shareholders' Equity $ 118,210 37.037 (970) (10,676) (22,960) 2.253 (328,837) 0 0 2,253 48,873 (143) (444) (587) 1,232 19,764 6,294,494 104,256 39,510 1,553 1.232 123,549 39,510 1,553 (11,215) (45,000) 2,863 (11,215) (45,000 Balances as of September 29, 2012 Net income Other comprehensive income/loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 28, 2013 Net income Other comprehensive income/loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 27, 2014 Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 26, 2015 (488,677) 0 2,863 60,344 (399) (448) 735 23,313 5,866,161 1,082 87,152 53,394 (1,427) 0 735 111,547 53,394 (1,427) (11,627) (36,026) 3,585 (325,032) 0 0 3,586 (11,627) (36,026) 0 0 37,624 (231) (609) (840) 748 27,416 0 92,284 $ 0 (345) $ 748 119,355 5,578,753 $ $ CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 26, September 27, September 28, 2014 2013 13,844 S 14,259 $ 10,746 2015 Cash and cash equivalents, beginning of the year Operating activities: Net Income 53,394 39,510 37,037 11.257 3,586 1,382 7.946 2,863 2,347 6.757 2,253 1,141 611 (238) (3.735) (179) 5,400 1,042 8,746 81.266 (4,232) (76) (2,220) 167 5,938 1,460 6,010 59,713 (2,172) (973) 223 1,080 2,340 1,459 4,521 53,666 Adjustments to reconcile net income to cash generated by operating activities Depreciation and amortization Share-based compensation expense Deferred income tax expense Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities Investing activities: Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards Taxes paid related to net share settlement of equity awards Dividends and dividend equivalents paid Repurchase of common stock Proceeds from issuance of term debt, net Change in commercial paper, net Cash used in financing activities Increase/(decrease) in cash and cash equivalents Cash and cash equivalents, end of the year Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest (166,402) 14,538 107,447 (343) (11,247) (241) (26) (56.274) (217,128) 18,810 189,301 (3,765) (9,571) (242) 16 (22,579) (148,489) 20,317 104,130 (496) 8,165) (911) (160) (33,774) 543 530 749 730 739 (1,158) (11,126) (45,000) 11,960 6,306 (37,549) (415) 13,844 $ 701 (1.082) (10,564) (22.860) 16,896 (1.499) (11,561) (35.253) 27,114 2,191 (17.716) 7.276 21,120 $ (16,379) 3,513 14.259 9,128 $ $ 13,252 $ 514 $ 10,026 $ 339 $ Expand Your Critical Thinking 1-1 The financial statements of Apple, Inc. for 2015 are presented in Appendix A. Click here to view Appendix A. Instructions for accessing and using the company's complete annual report, including the notes to the financial statements, are also provided in Appendix A. Refer to Apple's financial statements and answer the following questions. What were Apple's total assets at September 26, 2015? At September 27, 2014? (Enter the amounts in millions.) Total assets at September 26, 2015 Total assets at September 27, 2014 LINK TO TEXT How much cash (and cash equivalents) did Apple have on September 26, 2015? (Enter the amount in millions.) Cash and cash equivalents s LINK TO TEXT What were Apple's total assets at September 26, 2015? At September 27, 2014? (Enter the amounts in millions.) Total assets at September 26, 2015 Total assets at September 27, 2014 LINK TO TEXT How much cash (and cash equivalents) did Apple have on September 26, 2015? (Enter the amount in millions.) Cash and cash equivalents LINK TO TEXT What amount of accounts payable did Apple report on September 26, 2015? On September 27, 2014? (Enter the amounts in millions.) Accounts payable on September 26, 2015 Accounts payable on September 27, 2014 What were Apple's net sales in 2013? In 2014? In 2015? (Enter the amounts in millions.) Net sales 2013 $ 2014 2015 LINK TO TEXT What is the amount of the change in Apple's net income from 2014 to 2015? (Enter the amount in millions.) Net income from 2014 to 2015 s Click if you would like to Show Work for this question: Open Show Work