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Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected 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 17,799 25,809 Other current assets 12,087 13,936 Total current assets 131,339 128,645 Non-current assets: Marketable securities 170,799 194,714 Property, plant and equipment, net 41,304 33,783 22,283 Other non-current assets 18,177 246,674 Total non-current assets 234,386 365,725 $ Total assets 375,319 $ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 55,888 $ 44,242 Other current liabilities 32,687 30,551 Deferred revenue 7,543 7,548 Commercial paper 11,977 11,964 Term debt 6,496 8,784 100,814 Total current liabilities 116,866 Non-current liabilities: Deferred revenue 2,797 2,836 Term debt 97,207 93,735 Other non-current liabilities 45,180 40,415 141,712 Total non-current liabilities 140,458 258,578 241,272 Total liabilities 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 outs tanding, respectively 40,201 35,867 Retained earnings 98,330 70,400 Accumulated other comprehensive income/(loss) (3,454) (150) 107,147 Total shareholders' equity 134,047 $ Total liabilities and shareholders' equity 365,725 $ 375,319 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 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 Amount Shares Earnings Balances as of September 26, 2015 5,578,753 27,416 $ 92,284 $ (345) $ 119,355 45,687 Net income 45,687 Other comprehensive income/(loss) 979 979 Dividends and dividend equivalents declared at $2.18 per share or RSU (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 (806) (419) (1,225) 37,022 Tax benefit from equity awards, including transfer pricing adjustments 379 379 96,364 Balances as of September 24, 2016 5,336,166 31,251 634 128,249 48,35 Net income 48,351 Other comprehensive income/(loss) Dividends and dividend equivalents declared at $2.40 per share or RSU (784) (784) (12,803) (12,803) (246,496) (33,001) (33,001) Repurchase of common stock Share-based compensation 4,909 4,909 Common stock issued, net of shares withheld for employee taxes (913) (581) (1,494) 36,531 Tax benefit from equity awards, including transfer pricing adjustments 620 620 5,126,201 98,330 Balances as of September 30, 2017 Cumulative effect of change in accounting principle 35,867 (150) 134,047 278 (278) Net income 59,531 59,531 Other comprehensive income/(loss) (3,026) (3,026) Dividends and dividend equivalents declared at $2.72 per share or RSU (13,735) (13,735) (405,549) (73,056) Repurchase of common stock (73,056) Share-based compensation 5,443 5,443 Common stock issued, net of shares (1,109) (2,057) withheld for employee taxes 34,334 (948) Balances as of September 29, 2018 4,754,986 $ 40,201 $ 70,400 $ (3,454) $ 107,147 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 29, 2018 September 24, 2016 September 30, 2017 Cash and cash equivalents, beginning of the year 20,289 S 20,484 $ 21,120 Operating activities: Net income 45,687 59,531 48,351 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense 10,903 10,157 10,505 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: (2,093 Accounts receivable, net (5,322) 527 (2,723 Inventories 828 ) 217 Vendor non-trade receivables (8,010) (4,254) (51) Other current and non-current assets (5,318) (423) 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 (142,428) (71,356) (159,486) Proceeds from maturities of marketable securities 55,88 31,775 21,258 Proceeds from sales of marketable securities 47,838 94,564 90,536 Payments for acquisition of property, plant and equipment (13,313) (12,734) (12,451) 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 (1,570) (2,527) (1,874) Payments for dividends and dividend equivalents (13,712) (12,150) (12,769) (72,738) Repurchases of common stock (29,722) (32,900) Proceeds from issuance of term debt, net 6,969 28,662 24,954 (3,500 Repayments of term debt (6,500) (2,500) Change in commercial paper, net (397) (37) 3,852 Cash used in financing activities (17,974) (20,890) (87,876) Increase/(Decrease) in cash and cash equivalents 5,624 (195) (636) Cash and cash equivalents, end of the year $ 25,913 S 20,289 $ 20.484 Supplemental cash flow disclosure: Cash paid for income taxes, net $ 10,417 11,591 10.444 Cash paid for interest 3,022 $ 2,092 $ 1,316 See accompanying Notes to Consolidated Financial Statements. Apple Inc. 1 2018 Form 10-K1 42 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected 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 17,799 25,809 Other current assets 12,087 13,936 Total current assets 131,339 128,645 Non-current assets: Marketable securities 170,799 194,714 Property, plant and equipment, net 41,304 33,783 22,283 Other non-current assets 18,177 246,674 Total non-current assets 234,386 365,725 $ Total assets 375,319 $ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 55,888 $ 44,242 Other current liabilities 32,687 30,551 Deferred revenue 7,543 7,548 Commercial paper 11,977 11,964 Term debt 6,496 8,784 100,814 Total current liabilities 116,866 Non-current liabilities: Deferred revenue 2,797 2,836 Term debt 97,207 93,735 Other non-current liabilities 45,180 40,415 141,712 Total non-current liabilities 140,458 258,578 241,272 Total liabilities 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 outs tanding, respectively 40,201 35,867 Retained earnings 98,330 70,400 Accumulated other comprehensive income/(loss) (3,454) (150) 107,147 Total shareholders' equity 134,047 $ Total liabilities and shareholders' equity 365,725 $ 375,319 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 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 Amount Shares Earnings Balances as of September 26, 2015 5,578,753 27,416 $ 92,284 $ (345) $ 119,355 45,687 Net income 45,687 Other comprehensive income/(loss) 979 979 Dividends and dividend equivalents declared at $2.18 per share or RSU (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 (806) (419) (1,225) 37,022 Tax benefit from equity awards, including transfer pricing adjustments 379 379 96,364 Balances as of September 24, 2016 5,336,166 31,251 634 128,249 48,35 Net income 48,351 Other comprehensive income/(loss) Dividends and dividend equivalents declared at $2.40 per share or RSU (784) (784) (12,803) (12,803) (246,496) (33,001) (33,001) Repurchase of common stock Share-based compensation 4,909 4,909 Common stock issued, net of shares withheld for employee taxes (913) (581) (1,494) 36,531 Tax benefit from equity awards, including transfer pricing adjustments 620 620 5,126,201 98,330 Balances as of September 30, 2017 Cumulative effect of change in accounting principle 35,867 (150) 134,047 278 (278) Net income 59,531 59,531 Other comprehensive income/(loss) (3,026) (3,026) Dividends and dividend equivalents declared at $2.72 per share or RSU (13,735) (13,735) (405,549) (73,056) Repurchase of common stock (73,056) Share-based compensation 5,443 5,443 Common stock issued, net of shares (1,109) (2,057) withheld for employee taxes 34,334 (948) Balances as of September 29, 2018 4,754,986 $ 40,201 $ 70,400 $ (3,454) $ 107,147 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 29, 2018 September 24, 2016 September 30, 2017 Cash and cash equivalents, beginning of the year 20,289 S 20,484 $ 21,120 Operating activities: Net income 45,687 59,531 48,351 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense 10,903 10,157 10,505 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: (2,093 Accounts receivable, net (5,322) 527 (2,723 Inventories 828 ) 217 Vendor non-trade receivables (8,010) (4,254) (51) Other current and non-current assets (5,318) (423) 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 (142,428) (71,356) (159,486) Proceeds from maturities of marketable securities 55,88 31,775 21,258 Proceeds from sales of marketable securities 47,838 94,564 90,536 Payments for acquisition of property, plant and equipment (13,313) (12,734) (12,451) 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 (1,570) (2,527) (1,874) Payments for dividends and dividend equivalents (13,712) (12,150) (12,769) (72,738) Repurchases of common stock (29,722) (32,900) Proceeds from issuance of term debt, net 6,969 28,662 24,954 (3,500 Repayments of term debt (6,500) (2,500) Change in commercial paper, net (397) (37) 3,852 Cash used in financing activities (17,974) (20,890) (87,876) Increase/(Decrease) in cash and cash equivalents 5,624 (195) (636) Cash and cash equivalents, end of the year $ 25,913 S 20,289 $ 20.484 Supplemental cash flow disclosure: Cash paid for income taxes, net $ 10,417 11,591 10.444 Cash paid for interest 3,022 $ 2,092 $ 1,316 See accompanying Notes to Consolidated Financial Statements. Apple Inc. 1 2018 Form 10-K1 42
