Refer to Apple's financial statements in Appendix A to answer the following. Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. (Enter your answers in millions of dollars.) Cost of goods purchased Refer to Apple's financial statements in Appendix A to answer the following. Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. (Enter your answers in millions of dollars.) 2019 2018 $ millions Current Acid-Test Current Acid-Test Ratio Ratio Ratio Ratio Current assets Cash and equivalents Marketable securities (current) Accounts receivables, net Inventories, net Vendor non-trade receivables Other current assets Total current assets Total quick assets Total current liabilities Ratio Refer to Apple's financial statements in Appendix A to answer the following. Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? Apple's 2019 current ratio Refer to Apple's financial statements in Appendix A to answer the following. Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Apple's 2019 acid-test ratio FINAL PAGES aptara | EQA Appendix A Financial Statement Information A-1 Apple Inc. APPLE CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, 2019 September 29, 2018 ASSETS Current assets Cash and cash equivalents 48,844 25.913 Marketable securities 51,713 40.388 Accounts receivable, net 22 926 23,1 80 Inventories 4,106 3.956 Vendor non-trade receivables 22,878 25.80 Other current assets 12,352 12.087 Total current assets 162,819 131.339 Non-current assets Marketable securities 105,341 170.799 Property, plant and equipment, net 37,378 41.304 Other non-current assets 32,978 22.28 Total non-current assets 175,697 234.386 Total assets $38,516 365.725 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 46,236 55.888 Other current liabilities 37,720 33 327 Deferred revenue 5,522 5.966 Commercial paper 5,980 11.964 Term debt 10,260 .784 Total current liabilities 05,718 1 15.929 Non-current liabilities Term debt 91,807 93.735 Other non-current liabilities 50,503 48.914 Total non-current liabilities 142,310 142.649 Total liabilities 248,028 258.578 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12.600,000 shares authorized; 4,443.236 and 4,754,986 shares issued and outstanding. respectively 45,174 40.201 Retained earnings 45.898 70.400 Accumulated other comprehensive income (loss) (584) (3.454) Total shareholders' equity 90,488 107.147 Total liabilities and shareholders' equity 338,516 365.725 See accompanying Notes to Consolidated Financial Statements.A-2 Appendix A Financial Statement Information Apple Inc. APPLE CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 28, 2019 September 29, 2018 September 30, 2017 Net sales: Products 213,883 225.847 196.534 Services 46,291 39.748 32,700 Total net sales 260,174 265,595 229,234 Cost of sales: Products 144,996 148,164 126.337 Services 16,786 15,592 14,711 Total cost of sales 61,782 63,756 141,048 Gross margin 98 392 101.839 88,186 Operating expenses: Research and development 16.217 14.236 11,581 Selling, general and administrative 18.245 16,705 3.261 Total operating expenses 34,462 30,941 26.842 Operating income 63,930 70,898 51,344 Other income (expense), net 1,807 2,005 2,745 Income before provision for income taxes 63,737 72,903 64,089 Provision for income taxes 10,481 13,372 15,738 Net income 55.256 59.53 48.351 Earnings per share: Basic 11.97 12.01 9.27 Diluted 11.89 11.91 9.21 Shares used in computing earnings per share: Basic 4,617,834 4.955,377 5.217.242 Diluted 4,648,913 5,000, 109 5,251,692 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 28, 2019 September 29, 2018 September 30, 2017 Net income 35,256 59,531 48 351 Other comprehensive income (loss): Change in foreign currency translation, net of tax (408) (325) 224 Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives (661) 523 1,315 Adjustment for net (gains) losses realized and included in net income 23 382 (1,477) Total change in unrealized gains/losses on derivative instruments (638) 905 (162) Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities 3.802 (3,407) (782) Adjustment for net (gains) losses realized and included in net income (64) Total change in unrealized gains/losses on marketable securities 3,827 (3,406 (846) Total other comprehensive income (loss) 2.781 (3,026) (784) Total comprehensive income 58.03 56.505 47-567 See accompanying Notes to Consolidated Financial Statements.EQA Appendix A Financial Statement Information A-3 Apple Inc. APPLE CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions) Years ended September 28, 2019 September 29, 2018 September 30, 2017 Total shareholders' equity, beginning balances 107,147 134,047 128,249 Common stock and additional paid-in capital Beginning balances 40.201 35.867 31,251 Common stock issued 781 669 535 Common stock withheld related to net share settlement of equity awards (2,002) (1,778) (1,468) Share-based compensation 6,194 5.443 4,909 Tax benefit from equity awards, including transfer pricing adjustments 620 Ending balances 45.174 40.201 35.867 Retained earnings Beginning balances 70,400 98,330 96,364 Net income 55.256 59.531 48,351 Dividends and dividend equivalents declared (14,129) (13,735) (12,803) Common stock withheld related to net share settlement of equity awards (1,029) (948) (581) Common stock repurchased (67,101) (73,056) (33,001) Cumulative effects of changes in accounting principles 2.501 278 Ending balances 45.898 70,400 98,330 Accumulated other comprehensive income (loss) Beginning balances (3.454) (150) 634 Other comprehensive income (loss) 2,781 (3,026) (784) Cumulative effects of changes in accounting principles 89 (278) Ending balances (584) (3,454) (150) Total shareholders' equity, ending balances 90.488 107,147 134,047 See accompanying Notes to Consolidated Financial Statements.FINAL PAGES aptara EQA A-4 Appendix A Financial Statement Information Apple Inc. APPLE CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 28, 2019 September 29, 2018 September 30, 2017 Cash, cash equivalents and restricted cash, beginning balances 25,915 20.289 20.484 Operating activities Net income 35,256 59.531 48.351 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 12,547 10,903 10,157 Share-based compensation expense 6,068 5.340 ,840 Deferred income tax expense (benefit) (340) (32.590) 5.966 Other (652) (444) (166) Changes in operating assets and liabilities: Accounts receivable, net 245 (5,322) (2,093) Inventories (289) 828 (2.723) Vendor non-trade receivables 2,931 (8,010) (4,254) Other current and non-current assets 873 (423) (3,318) Accounts payable (1,923) 9.175 8.966 Deferred revenue (625) (3) (393) Other current and non-current liabilities (4,700) 38,449 1,092 Cash generated by operating activities 69,39 77,434 64.223 Investing activities Purchases of marketable securities (39,630) (71,356) (159,486) Proceeds from maturities of marketable securities 40,102 35.881 31,775 Proceeds from sales of marketable securities 56,988 47.838 94,564 Payments for acquisition of property, plant and equipment (10,495) (13,313) (12,451) Payments made in connection with business acquisitions, net (624) (721) (329) Purchases of non-marketable securities (1,001) (1,871) (321) Proceeds from non-marketable securities 1,634 353 126 Other (1,078) (745 ) (124) Cash generated by (used in) investing activities 15,896 16,066 46.446) Financing activities Proceeds from issuance of common stock 781 669 Payments for taxes related to net share settlement of equity awards (2,817) (2,527) (1.874) Payments for dividends and dividend equivalents (14,119) (13,712) (12,769) Repurchases of common stock (66,897) (72,738) 32,900) Proceeds from issuance of term debt, net 6,963 6.969 28.662 Repayments of term debt (8,805) (6,300) (3,500) Proceeds from (Repayments of) commercial paper, net (5,977) (37) 3.852 Other (105 Cash used in financing activities (90,976) (87.876) (17.974) Increase (decrease) in cash, cash equivalents and restricted cash 24,31 5.624 (195) Cash, cash equivalents and restricted cash, ending balances 50,224 25.913 20.289 Supplemental cash flow disclosure: Cash paid for income taxes, net S 15,263 S 10,417 S 11.591 Cash paid for interest 1,423 3,022 2,092 See accompanying Notes to Consolidated Financial Statements.APPLE INC. APPLE SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Basis of Presentation and Preparation software delivered at the time of sale. The second perfor- In the opinion of the Company's management, the consoli- mance obligation is the right to receive certain product-related dated financial statements reflect all adjustments, which are bundled services, which include iCloud, Siri and Maps. The normal and recurring in nature, necessary for fair financial third performance obligation is the right to receive, on a statement presentation. The preparation of these consoli- when-and-if-available basis, future unspecified software up- dated financial statements and accompanying notes in con- grades relating to the software bundled with each device. The formity with U.S. generally accepted accounting principles Company allocates revenue and any related discounts to these requires management to make estimates and assumptions performance obligations based on their relative SSPs. Be- that affect the amounts reported. cause the Company lacks observable prices for the undeliv- The Company's fiscal year is the 52- or 53-week period ered performance obligations, the allocation of revenue is that ends on the last Saturday of September. The Company's based on the Company's estimated SSPs. Revenue allocated fiscal years 2019 and 2018 spanned 52 weeks each, whereas to the delivered hardware and bundled software is recognized fiscal year 2017 included 53 weeks. A 14th week was in- when control has transferred to the customer, which generally cluded in the first fiscal quarter of 2017, as is done every occurs when the product is shipped. Revenue allocated to the five or six years, to realign the Company's fiscal quarters product-related bundled services and unspecified software with calendar quarters. Unless otherwise stated, references upgrade rights is deferred and recognized on a straight-line to particular years, quarters, months and periods refer to the basis over the estimated period they are expected to be pro- Company's fiscal years ended in September and the associ- vided. Cost of sales related to delivered hardware and bundled ated quarters, months and periods of those fiscal years. software, including estimated warranty costs, are recognized at the time of sale. Costs incurred to provide product-related Revenue Recognition bundled services and unspecified software upgrade rights are Net sales consist of revenue from the sale of iPhone, Mac, recognized as cost of sales as incurred. iPad, Services and other products. The Company recognizes For the sale of third-party products where the Company revenue at the amount to which it expects to be entitled when obtains control of the product before transferring it to the control of the products or services is transferred to its custom- customer, the Company recognizes revenue based on the ers. Control is generally transferred when the Company has a gross amount billed to customers. The Company considers present right to payment and title and the significant risks and multiple factors when determining whether it obtains con- rewards of ownership of products or services are transferred to trol of third-party products including, but not limited to, its customers. For most of the Company's Products net sales, evaluating if it can establish the price of the product, retains control transfers when products are shipped. For the Compa- inventory risk for tangible products or has the responsibility ny's Services net sales, control transfers over time as services for ensuring acceptability of the product. For thirdparty ap- are delivered. Payment for Products and Services net sales is plications sold through the App Store, Mac App Store, TV collected within a short period following transfer of control or App Store and Watch App Store and certain digital content commencement of delivery of services, as applicable. sold through the Company's other digital content stores, the The Company records reductions to Products net sales Company does not obtain control of the product before related to future product returns, price protection and other transferring it to the customer. Therefore, the Company ac- customer incentive programs based on the Company's ex- counts for such sales on a net basis by recognizing in pectations and historical experience. Services net sales only the commission it retains. For arrangements with multiple performance obliga- The Company has elected to record revenue net of taxes tions, which represent promises within an arrangement that collected from customers that are remitted to governmental au- are capable of being distinct, the Company allocates reve- thorities, with the collected taxes recorded within other current nue to all distinct performance obligations based on their liabilities until remitted to the relevant government authority. relative stand-alone selling prices ("SSPs"). When avail- Deferred Revenue As of September 28, 2019 and Sep- able, the Company uses observable prices to determine tember 29, 2018, the Company had total deferred revenue of SSPs. When observable prices are not available, SSPs are $8.1 billion and $8.8 billion, respectively. As of September established that reflect the Company's best estimates of 28, 2019, the Company expects 68% of total deferred reve- what the selling prices of the performance obligations nue to be realized in less than a year, 25% within one-to-two would be if they were sold regularly on a stand-alone basis. years, 6% within two-to-three years and 1% in greater than The Company has identified up to three performance obli- three years. gations regularly included in arrangements involving the sale of iPhone, Mac, iPad and certain other products. The first per- Advertising Costs formance obligation, which represents the substantial portion Advertising costs are expensed as incurred and included in of the allocated sales price, is the hardware and bundled selling, general and administrative expenses.A-6 Appendix A Financial Statement Information APPLE Apple Inc. Notes-continued Other Income and Expense Inventories $ millions 2019 2018 2017 Inventories are measured using the first-in, first-out method. Interest and dividend income $ 4.961 $ 5.686 $ 5,201 Interest expense (3,576) (3,240) (2,323) Property, Plant and Equipment Other income (expense), net 422 (441) (133) Depreciation on property, plant and equipment is recog- Total other income (expense), nel $ 1,807 $ 2,005 $ 2,745 nized on a straight-line basis over the estimated useful lives of the assets, which for buildings is the lesser of 30 years or Cash Equivalents and Marketable Securities the remaining life of the underlying building; between one and five years for machinery and equipment, including All highly liquid investments with maturities of three product tooling and manufacturing process equipment; and months or less at the date of purchase are classified as cash the shorter of lease term or useful life for leasehold im- equivalents. The Company's investments in marketable debt provements. Capitalized costs related to internal-use soft- securities have been classified and accounted for as avail- ware are amortized on a straight-line basis over the able-for-sale. The Company classifies its marketable debt estimated useful lives of the assets, which range from three securities as either short-term or long-term based to five years. Depreciation and amortization expense on on each instrument's underlying contractual maturity date. property and equipment was $11.3 billion, $9.3 billion and Unrealized gains and losses on marketable debt securities $8.2 billion during 2019, 2018 and 2017, respectively. classified as available-for-sale are recognized in other com- prehensive income/(loss) ("OCI"). $ millions 2019 2018 The Company's investments in marketable equity securi- Land and buildings $17,085 $16,216 ties are classified based on the nature of the securities and Machinery, equipment and internal-use software 69,797 65,982 their availability for use in current operations. The Compa- Leasehold improvement 9.075 8.203 my's marketable equity securities are measured at fair value Gross property, plant and equipment 95,957 90,403 with gains and losses recognized in other income/(expense) Accumulat ciation and amortization (58 579) (49.099) net ("OI&E"). The cost of securities sold is determined us- Total property, plant and equipment, net $37.378 $41,304 ing the specific identification method. Fair Value Measurements Restricted Cash and Restricted Marketable Securities The fair values of the Company's money market funds and The Company considers cash and marketable securities to certain marketable equity securities are based on quoted be restricted when withdrawal or general use is legally re- prices in active markets for identical assets. The valuation stricted. The Company records restricted cash as other as- techniques used to measure the fair value of the Company's sets in the Consolidated Balance Sheets, and determines debt instruments and all other financial instruments, which current or non-current classification based on the expected generally have counterparties with high credit ratings, are duration of the restriction. The Company records restricted based on quoted market prices or model-driven valuations marketable securities as current or non-current marketable using significant inputs derived from or corroborated by securities in the Consolidated Balance Sheets based on the observable market data. classification of the underlying securities. The Company's restricted cash primarily consisted of Financial Instruments cash required to be on deposit under a contractual agree- The Company typically invests in highly rated securities, with ment with a bank to support the Company's iPhone Up- the primary objective of minimizing the potential risk of prin- grade Program. cipal loss. The Company's investment policy generally re- quires securities to be investment grade and limits the amount Accounts Receivable (Trade Receivables) of credit exposure to any one issuer. Fair values were deter- The Company has considerable trade receivables outstand- mined for each individual security in the investment portfolio. ing with its third-party cellular network carriers, wholesal- ers, retailers, resellers, small and mid-sized businesses and Accrued Warranty and Guarantees education, enterprise and government customers. The following table shows changes in the Company's accrued As of September 28, 2019, the Company had no custom- warranties and related costs for 2019 and 2018: ers that individually represented 10% or more of total trade receivables. As of September 29, 2018, the Company had $ millions 2019 2018 one customer that represented 10% or more of total trade re- Beginning accrued warranty and related costs $ 3.692 $3.834 ceivables, which accounted for 10%. The Company's cellular Cost of warranty claimis (3,857) (4,115) network carriers accounted for 51% and 59% of total trade receivables as of September 28, 2019 and September 29, Accruals for product warranty 3.735 3.973 2018, respectively. Ending accrued warranty and related costs $ 3,570 $3,692Appendix A Financial Statement Information A-7 Apple Inc. Notes-continued APPLE Other Non-Current Liabilities the Company's financial condition and operating results $ millions 2019 2018 for that reporting period could be materially adversely af- Long-term taxes payable $29,545 $33,589 fected. In the opinion of management, there was not Other non-current liabilities 20.958 15,325 at least a reasonable possibility the Company may have Total other non-current liabilities $50.503 $48,914 incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims, except for the following Term Debt matters: As of September 28, 2019, the Company had outstanding . VirnetX iOS Performance Management Cases floating- and fixed-rate notes with varying maturities for an . Qualcomm . French Competition Authority aggregate principal amount of $101.7 billion (collectively the "Notes"). The Notes are senior unsecured obligations Disaggregated Revenue by Significant Products and interest is payable in arrears. and Services The Company recognized $3.2 billion, $3.0 billion and $2.2 billion of interest cost on its term debt for 2019, 2018 and 2017, respectively. Net sales (mil.) 2019 2018 2017 The future principal payments for the Company's Notes iPhone $142,381 $164,888 $139,337 as of September 28, 2019 are as follows (in millions): Mac 25,740 25,198 25.56 iPad 21.280 18380 18.802 2020 $ 10,270 Wearables, Home and Accessories 24,482 17,381 12,826 2021 8,750 Services 46,291 39,748 32,70 2022 9.528 Total net sales $260.174 $265.595 $229.234 2023 9,290 2024 10,039 Thereafter 53,800 Reportable segment (mil.) 2019 2018 2017 Total term debt $101,679 Americas: Net sales $1 16,914 $112,093 $96.600 Operating income $ 35,099 $ 34,864 $30.684 As of September 28, 2019 and September 29, 2018, the fair value of the Company's Notes, based on Level 2 inputs, was Europe: $107.5 billion and $103.2 billion, respectively. Net sales $ 60,288 $ 62,420 $54,938 Operating income $ 19,195 $ 19.955 $16,514 Share Repurchase Program Greater China: Net sales $ 43,678 $ 51,942 $44.764 On April 30, 2019, the Company announced the Board Operating income $ 16,232 $ 19,742 $17,032 of Directors increased the current share repurchase pro- Japan: gram authorization from $100 billion to $175 billion of the Company's common stock, of which $96.1 billion Net sales $ 21,506 $ 21.733 $17,733 had been utilized as of September 28, 2019. During Operating income $ 9.369 $ 9.500 $ 8.097 2019, the Company repurchased 345.2 million shares of Rest of Asia Pacific: its common stock for $67.1 billion, including 62.0 mil- Net sales $ 17,78B $ 17,407 $15,199 lion shares delivered under a $12.0 billion accelerated Operating income $ 6,055 $ 6,181 $ 5,304 share repurchase arrangement dated February 2019, which settled in August 2019. The Company's share re- purchase program does not obligate it to acquire any spe- A reconciliation of the Company's segment operating cific number of shares. income to the Consolidated Statements of Operations for 2019, 2018 and 2017 is as follows Contingencies $ millions 2019 2018 2017 The Company is subject to various legal proceedings and Segment operating income $ 85,950 $90.242 $77,631 claims that have arisen in the ordinary course of business Research and development and that have not been fully resolved. The outcome of expense (16.217) (14,236) (11,581) litigation is inherently uncertain. If one or more legal Other corporate expenses, net (5.803) (5,108) (4,706) matters were resolved against the Company in a report- Total operating income $ 63.930 $ 70.898 $61,344 ing period for amounts above management's expectations,FINAL PAGES aptara EQA A-8 Appendix A Financial Statement Information APPLE Apple Inc. Notes-continued Selected Financial Data combines the watchOS user interface and other technolo (in millions, except number of shares, which are reflected gies created specifically for a smaller device. In September in thousands, and per share amounts). 2019, the Company introduced Apple Watch Series 5. 2019 2018 2017 Services 2016 2015 Total net sales $ 260,174 $ 265,595 5 229,234 $ 215,639 5 233,715 Digital Content Stores and Streaming Services The Net income $ 35,256 $ 50,531 5 48,351 $ 45,687 5 53 394 Company operates various platforms that allow customers to Earnings per share discover and download applications and digital content, such Basic 11.97 5 1201 5 9.27 5 835 5 9.28 as books, music, video, games and podcasts. These platforms Diluted 11.89 5 11.91 5 921 $ 831 include the App Store", available for iPhone and iPad, the Cash dividends declared per share 3.00 5 272 5 240 5 218 5 1.98 Mac App Store, the TV App Store and the Watch App Store. Shires med in The Company also offers subscription-based digital con- computing earnings tent streaming services, including Apple Music", which offers per shine users a curated listening experience with on-demand radio Basic 4,617,834 4,953,377 5.217,242 5,470,820 5,753,42 1,648,913 5,000,109 5,251,602 5,500,281 5,393,069 stations, and Apple TV+, which offers exclusive original con- Diluted Told cash, cash tent, and is expected to be available in November 2019. equivalents and AppleCare AppleCare" includes AppleCare+ ("AC+") marketable securities $ 205,898 $ 237,100 $ 268,895 $ 237,585 $ 206.666 and the AppleCare Protection Plan, which are fee-based Toul assets $ 338,516 $ 365,725 5 375,319 5 321,686 5 290 345 services that extend the coverage of phone support eligibility Non-current portion of term debt 5 91,807 5 93,735 5 97,207 5 75427 5 53 329 and hardware repairs. AC+ offers additional coverage for Other non-current instances of accidental damage and is available in certain lishilities 5 50,503 5 48,914 $ 44,212 5 39,986 $ 38, 104 countries for certain products. Additionally, AC+ with theft and loss protection is available for iPhone in the U.S. iCloud iCloud" is the Company's cloud service, Company Background which stores music, photos, contacts, calendars, mail, doc- The Company designs, manufactures and markets smart- uments and more, keeping them up-to-date and available phones, personal computers, tablets, wearables and acces- across multiple Apple devices and Windows personal sories, and sells a variety of related services. The computers. Company's fiscal year is the 52- or 53-week period that Licensing The Company licenses the use of certain of ends on the last Saturday of September. The Company is a its intellectual property, and provides other related services. California corporation established in 1977. Other Services The Company delivers a variety of other services available in certain countries, including Products Apple Arcade", a game subscription service; Apple iPhone iPhone" is the Company's line of smartphones Card", a co-branded credit card; Apple News+, a sub- based on its iOS operating system. In September 2019, the scription news and magazine service; and Apple Pay, a Company introduced three new iPhones: iPhone 11, iPhone cashless payment service. 1 1 Pro and iPhone 11 Pro Max. Markets and Distribution Mac Mac" is the Company's line of personal comput- ers based on its macOS" operating system. During 2019. The Company's customers are primarily in the consumer, the Company released a new version of MacBook Air and small and mid-sized business, education, enterprise and gov- a new Mac mini", and introduced an updated Mac Pro", ernment markets. The Company sells its products and resells which is expected to be available in the fall of 2019. third-party products in most of its major markets directly to iPad iPad" is the Company's line of multi-purpose tab- consumers, small and mid-sized businesses, and education, lets. iPad is based on the Company's iPadOS" operating sys- enterprise and government customers through its retail and tem, which was introduced during 2019. Also during 2019, online stores and its direct sales force. The Company also the Company released two new versions of iPad Pro", an employs a variety of indirect distribution channels, such as iPad Air", an updated iPad mini" and a new 10.2-inch iPad. third-party cellular network carriers, wholesalers, retailers Wearables, Home and Accessories Wearables, Home and resellers. During 2019, the Company's net sales through and Accessories includes AirPods", Apple TV, Apple its direct and indirect distribution channels accounted for Watch", Beats" products, HomePod", ipod touch and 31% and 69%, respectively, of total net sales. other Apple-branded and third-party accessories. AirPods are the Company's wireless headphones that interact with Employees Siri. In October 2019, the Company introduced AirPods As of September 28, 2019, the Company had approximately Pro". Apple Watch is a personal electronic device that 137,000 full-time equivalent employees