Guugle ml. Arrabel C.) CONSOLIDATED BALANCE SHEETS (In millions, except share and par value amounts which are reflected in thousands, and par value per share amounts) As of December 31, 2016 As of December 31, 2017 $ $ 12,918 73,415 86,333 14,137 95 Assets Current assets Cash and cash equivalents Marketable securities Total cash, cash equivalents, and marketable securities Accounts receivable, net of allowance of $467 and $674 Income taxes receivable, net Inventory Other current assets Total current assets Non-marketable investments Deferred income taxes Property and equipment, net Intangible assets, net Goodwill Other non-current assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued compensation and benefits Accrued expenses and other current liabilities Accrued revenue share Deferred revenue Income taxes payable, net Total current liabilities Long-term debt Deferred revenue, non-current 268 4,575 105,408 5,878 383 34,234 3,307 16,468 1,819 167,497 10,715 91,156 101,871 18,336 369 749 2,983 124,308 7,813 680 42,383 2,692 16,747 2,672 197,295 $ $ $ $ 3,137 4,581 GOOGLE 2,041 3,976 6,144 2,942 1,099 554 16,756 3,935 202 4.627 10,177 3,975 1,432 881 24,183 3,969 340 12012 (159,486 31,775 94,564 (329) (12,451) (344) (395) (142,428) 21,258 90,536 (297) (12,734) (814) (1,388) (110) (45.977) (166,402) 14,538 107,447 (343) (11,247) (241) 220 (26) (46,446) (56.274) 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 Payments for strategic investments, net Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards 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 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 555 495 407 543 749 (1,499) (11,561) (35,253) 27,114 627 (1,874) (12,769) (32,900) 28,662 (3,500) 3,852 (17,347) (195) 20,289 (1,570) (12,150) (29,722) 24,954 (2,500) (397) (20,483) (636) 20,484 2,191 (17,716) 7,276 21,120 $ s. Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 11,591 2,092 $ $ 10,444 1,316 $ $ 13,252 514 S See accompanying Notes to Consolidated Financial Statements. APPL September 26, 2015 $ 13,844 53,394 11,257 3,586 1,382 385 527 417 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year 20,484 $ 21,120 Operating activities: Net income 48,351 45,687 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 10,157 10,505 Share-based compensation expense 4,840 4,210 Deferred income tax expense 5,966 4,938 Other (166) 486 Changes in operating assets and liabilities: Accounts receivable, net (2,093) Inventories (2,723) 217 Vendor non-trade receivables (4,254) (51) Other current and non-current assets (5,318) 1,055 Accounts payable 9,618 1,837 Deferred revenue (626) (1,554) Other current and non-current liabilities (154) (2,033) Cash generated by operating activities 63.598 65,824 Investing activities: Purchases of marketable securities (159,486) (142,428) Proceeds from maturities of marketable securities 31,775 21,258 Proceeds from sales of marketable securities 94,564 90,536 Payments made in connection with business acquisitions, net (329) (297) Payments for acquisition of property, plant and equipment (12,451) (12,734) Payments for acquisition of intangible assets (344) (814) Payments for strategic investments, net (395) (1,388) Other 220 (110) Cash used in investing activities (46.446) (45.977) (238) (3,735) (283) 5,001 1,042 9,058 81,266 (166,402) 14,538 107,447 (343) (11,247) (241) (26) (56.274) (246,496) (33,001) (33,001) 4,909 4,909 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 30, 2017 36,531 (913) (581) (1.494) 620 620 5,126,201 $ 35,867 $ 98,330 $ (150) S 134,047 See accompanying Notes to Consolidated Financial Statements. Inc Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Comprehensive Total Additional Paid-In Capital Retained Income Shareholders Shares Amount Earnings _ (Loss) Equity Balances as of September 27, 2014 5,866,161 $ 23,313 $ 87,152 $ 1,082 $ 111,547 Net income - 53,394 53,394 Other comprehensive income (loss) (1,427) (1,427) Dividends and dividend equivalents declared - (11,627) - (11,627) Repurchase of common stock (325,032) (36,026) - (36,026) Share-based compensation 3,586 - - 3,586 Common stock issued, net of shares withheld for employee taxes 37,624 (231) (609) (840) Tax benefit from equity awards, including transfer pricing adjustments 748 748 Balances as of September 26, 2015 5,578,753 27,416 $ 92,284 $ (345) $ 119,355 Net income 45,687 45,687 Other comprehensive income (loss) 979 979 Dividends and dividend equivalents declared - (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 37,022 (806) (419) (1,225) Tax benefit from equity awards, including transfer pricing adjustments 379 Balances as of September 24, 2016 5,336,166 $ 31,251 $ 96,364 $ 634 $ 128,249 Net income 48,351 48,351 Other comprehensive income (loss) (784) (784) Dividends and dividend equivalents declared - - (12,803) - (12,803) 379 22 2001 penyes September 26, 2015 $ 53,394 75 (411) 2,905 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 Net income $ 48,351 $ 45,687 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77), $8 and $201, respectively 224 Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit (expense) of $(478), $(7) and $(441), respectively 1,315 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit) of $475, $131 and $630, respectively (1,477) Total change in unrealized gains/losses on derivative instruments, net of tax (162) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, $(863) and $264, respectively (782) 1,582 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit of $35, $(31), and $(32), respectively (64) Total change in unrealized gains/losses on marketable securities, net of tax (846) 1,638 Total other comprehensive income (loss) (784) 979 Total comprehensive income 47,567 46.666 (3,497) (592) (483) 56 59 (424) (1,427) 51,967 See accompanying Notes to Consolidated Financial Statements. APPLI September 26, 2015 233,715 140,089 93,626 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 30, 2017 September 24, 2016 Net sales $ 229,234 $ 215,639 Cost of sales 141,048 131,376 Gross margin 88,186 84,263 Operating expenses Research and development 11,581 10,045 Selling, general and administrative 15,261 14,194 Total operating expenses 26,842 24,239 Operating income 61,344 60,024 Other income (expense), net 2,745 1,348 Income before provision for income taxes 64,089 61,372 Provision for income taxes 15,738 15,685 Net income 48,351 45,687 8,067 14,329 22,396 71,230 1,285 72,515 19,121 53,394 9.27 9.21 $ $ 8.35 8.31 $ $ 9.28 9.22 $ Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted Cash dividends declared per share 5,217,242 5,251,692 2.40 5,470,820 5,500,281 2.18 5,753,421 5,793,069 1.98 $ $ See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 Net income 48,351 $ 45,687 Other comprehensive income (loss): September 26, 2015 $ 53,394 APPL September 24, 2016 $ Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 ASSETS Current assets Cash and cash equivalents $ 20,289 Short-term marketable securities 53,892 Accounts receivable, less allowances of $58 and $53, respectively 17,874 Inventories 4,855 Vendor non-trade receivables 17,799 Other current assets 13,936 Total current assets 128,645 Long-term marketable securities 194,714 Property, plant and equipment, net 33,783 Goodwill 5,717 Acquired intangible assets, net 2,298 Other non-current assets 10,162 Total assets $ 375,319 20,484 46,671 15,754 2,132 13,545 8,283 106,869 170,430 27,010 5,414 3,206 8,757 321,686 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 49,049 25,744 7,548 11,977 6,496 100,814 2.836 97,207 40,415 241.272 37,294 22,027 8,080 8,105 3,500 79,006 2,930 75,427 36,074 193.437 Guugle ml. Arrabel C.) CONSOLIDATED BALANCE SHEETS (In millions, except share and par value amounts which are reflected in thousands, and par value per share amounts) As of December 31, 2016 As of December 31, 2017 $ $ 12,918 73,415 86,333 14,137 95 Assets Current assets Cash and cash equivalents Marketable securities Total cash, cash equivalents, and marketable securities Accounts receivable, net of allowance of $467 and $674 Income taxes receivable, net Inventory Other current assets Total current assets Non-marketable investments Deferred income taxes Property and equipment, net Intangible assets, net Goodwill Other non-current assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued compensation and benefits Accrued expenses and other current liabilities Accrued revenue share Deferred revenue Income taxes payable, net Total current liabilities Long-term debt Deferred revenue, non-current 268 4,575 105,408 5,878 383 34,234 3,307 16,468 1,819 167,497 10,715 91,156 101,871 18,336 369 749 2,983 124,308 7,813 680 42,383 2,692 16,747 2,672 197,295 $ $ $ $ 3,137 4,581 GOOGLE 2,041 3,976 6,144 2,942 1,099 554 16,756 3,935 202 4.627 10,177 3,975 1,432 881 24,183 3,969 340 12012 (159,486 31,775 94,564 (329) (12,451) (344) (395) (142,428) 21,258 90,536 (297) (12,734) (814) (1,388) (110) (45.977) (166,402) 14,538 107,447 (343) (11,247) (241) 220 (26) (46,446) (56.274) 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 Payments for strategic investments, net Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards 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 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 555 495 407 543 749 (1,499) (11,561) (35,253) 27,114 627 (1,874) (12,769) (32,900) 28,662 (3,500) 3,852 (17,347) (195) 20,289 (1,570) (12,150) (29,722) 24,954 (2,500) (397) (20,483) (636) 20,484 2,191 (17,716) 7,276 21,120 $ s. Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 11,591 2,092 $ $ 10,444 1,316 $ $ 13,252 514 S See accompanying Notes to Consolidated Financial Statements. APPL September 26, 2015 $ 13,844 53,394 11,257 3,586 1,382 385 527 417 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year 20,484 $ 21,120 Operating activities: Net income 48,351 45,687 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 10,157 10,505 Share-based compensation expense 4,840 4,210 Deferred income tax expense 5,966 4,938 Other (166) 486 Changes in operating assets and liabilities: Accounts receivable, net (2,093) Inventories (2,723) 217 Vendor non-trade receivables (4,254) (51) Other current and non-current assets (5,318) 1,055 Accounts payable 9,618 1,837 Deferred revenue (626) (1,554) Other current and non-current liabilities (154) (2,033) Cash generated by operating activities 63.598 65,824 Investing activities: Purchases of marketable securities (159,486) (142,428) Proceeds from maturities of marketable securities 31,775 21,258 Proceeds from sales of marketable securities 94,564 90,536 Payments made in connection with business acquisitions, net (329) (297) Payments for acquisition of property, plant and equipment (12,451) (12,734) Payments for acquisition of intangible assets (344) (814) Payments for strategic investments, net (395) (1,388) Other 220 (110) Cash used in investing activities (46.446) (45.977) (238) (3,735) (283) 5,001 1,042 9,058 81,266 (166,402) 14,538 107,447 (343) (11,247) (241) (26) (56.274) (246,496) (33,001) (33,001) 4,909 4,909 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 30, 2017 36,531 (913) (581) (1.494) 620 620 5,126,201 $ 35,867 $ 98,330 $ (150) S 134,047 See accompanying Notes to Consolidated Financial Statements. Inc Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Comprehensive Total Additional Paid-In Capital Retained Income Shareholders Shares Amount Earnings _ (Loss) Equity Balances as of September 27, 2014 5,866,161 $ 23,313 $ 87,152 $ 1,082 $ 111,547 Net income - 53,394 53,394 Other comprehensive income (loss) (1,427) (1,427) Dividends and dividend equivalents declared - (11,627) - (11,627) Repurchase of common stock (325,032) (36,026) - (36,026) Share-based compensation 3,586 - - 3,586 Common stock issued, net of shares withheld for employee taxes 37,624 (231) (609) (840) Tax benefit from equity awards, including transfer pricing adjustments 748 748 Balances as of September 26, 2015 5,578,753 27,416 $ 92,284 $ (345) $ 119,355 Net income 45,687 45,687 Other comprehensive income (loss) 979 979 Dividends and dividend equivalents declared - (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 37,022 (806) (419) (1,225) Tax benefit from equity awards, including transfer pricing adjustments 379 Balances as of September 24, 2016 5,336,166 $ 31,251 $ 96,364 $ 634 $ 128,249 Net income 48,351 48,351 Other comprehensive income (loss) (784) (784) Dividends and dividend equivalents declared - - (12,803) - (12,803) 379 22 2001 penyes September 26, 2015 $ 53,394 75 (411) 2,905 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 Net income $ 48,351 $ 45,687 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77), $8 and $201, respectively 224 Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit (expense) of $(478), $(7) and $(441), respectively 1,315 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit) of $475, $131 and $630, respectively (1,477) Total change in unrealized gains/losses on derivative instruments, net of tax (162) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, $(863) and $264, respectively (782) 1,582 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit of $35, $(31), and $(32), respectively (64) Total change in unrealized gains/losses on marketable securities, net of tax (846) 1,638 Total other comprehensive income (loss) (784) 979 Total comprehensive income 47,567 46.666 (3,497) (592) (483) 56 59 (424) (1,427) 51,967 See accompanying Notes to Consolidated Financial Statements. APPLI September 26, 2015 233,715 140,089 93,626 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 30, 2017 September 24, 2016 Net sales $ 229,234 $ 215,639 Cost of sales 141,048 131,376 Gross margin 88,186 84,263 Operating expenses Research and development 11,581 10,045 Selling, general and administrative 15,261 14,194 Total operating expenses 26,842 24,239 Operating income 61,344 60,024 Other income (expense), net 2,745 1,348 Income before provision for income taxes 64,089 61,372 Provision for income taxes 15,738 15,685 Net income 48,351 45,687 8,067 14,329 22,396 71,230 1,285 72,515 19,121 53,394 9.27 9.21 $ $ 8.35 8.31 $ $ 9.28 9.22 $ Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted Cash dividends declared per share 5,217,242 5,251,692 2.40 5,470,820 5,500,281 2.18 5,753,421 5,793,069 1.98 $ $ See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 Net income 48,351 $ 45,687 Other comprehensive income (loss): September 26, 2015 $ 53,394 APPL September 24, 2016 $ Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 ASSETS Current assets Cash and cash equivalents $ 20,289 Short-term marketable securities 53,892 Accounts receivable, less allowances of $58 and $53, respectively 17,874 Inventories 4,855 Vendor non-trade receivables 17,799 Other current assets 13,936 Total current assets 128,645 Long-term marketable securities 194,714 Property, plant and equipment, net 33,783 Goodwill 5,717 Acquired intangible assets, net 2,298 Other non-current assets 10,162 Total assets $ 375,319 20,484 46,671 15,754 2,132 13,545 8,283 106,869 170,430 27,010 5,414 3,206 8,757 321,686 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 49,049 25,744 7,548 11,977 6,496 100,814 2.836 97,207 40,415 241.272 37,294 22,027 8,080 8,105 3,500 79,006 2,930 75,427 36,074 193.437