The financial statements of Apple Inc. for 2014 are presented in Appendix A. Click here to view Appendix A. Identify the liabilities classified by Apple as current. BIU T T Ix !!! 144 = F 0 Word(s) Specimen Financial Statements: Apple Inc. Once each year, a corporation communicates to its stockholders and other interested parties by issuing a complete set of audited financial statements. The annual report, as this communication is called, summarizes the financial results of the company's operations for the year and its plans for the future. Many annual reports are attractive, multicolored, glossy public relations pieces, containing pictures of corporate officers and directors as well as photos and descriptions of new products and new buildings. Yet the basic function of every annual report is to report financial information, almost all of which is a product of the corporation's accounting system. The content and organization of corporate annual reports have become fairly standardized. Excluding the public relations part of the report (pictures, products, etc.), the following are the traditional financial portions of the annual report: Financial Highlights Letter to the Stockholders Management's Discussion and Analysis Financial Statements Notes to the Financial Statements Management's Responsibility for Financial Reporting Management's Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Selected Financial Data The official SEC filing of the annual report is called a Form 10-K, which often omits the public relations pieces found in most standard annual reports. On the following pages, we present Apple Inc.'s financial statements taken from the company's 2017 Form 10-K. The complete Form 10-K, including notes to the financial statements, is available at the company's website. Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Net sales Cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income/(expense), net Income before provision for income taxes Provision for income taxes Net income Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted Cash dividends declared per share September 30, 2017 Years ended September 24, 2016 September 26, 2015 229,234 141,048 $ 215,639 131,376 $ 233,715 140,089 88,186 84,263 93,626 11,581 10,045 8,067 15,261 14,194 14,329 26,842 24,239 22,396 61,344 60,024 71,230 2,745 1,348 1,285 64,089 61,372 72,515 15,738 15,685 19,121 $ 48,351 $ 45,687 $ 53,394 9.27 $ 9.21 $ 8.35 $ 8.31 9.28 $ 9.22 5,217,242 5,251,692 5,470,820 5,500,281 5,753,421 5,793,069 2.40 $ 2.18 $ 1.98 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Net income Other comprehensive income/(loss): Change in foreign currency translation, net of tax effects of $(77), $8 and $201, respectively 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 Adjustment for net (gains)/losses realized and included in net income, net of tax expense/(benefit) of $475, $131 and $630, respectively September 30, 2017 Years ended September 24, 2016 S 48,351 $ 45,687 $ 224 September 26, 2015 53,394 75 (411) 1,315 7 2,905 (1,477) (741) (3,497) Total change in unrealized gains/losses on derivative instruments, net of tax (162) (734) (592) 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 (483) Adjustment for net (gains)/losses realized and included in net income, net of tax expense/(benefit) of $35, $(31) and $(32), respectively (64) 56 59 Total change in unrealized gains/losses on marketable securities, net of tax (846) 1,638 (424) Total other comprehensive income/(loss) Total comprehensive income (784) 979 $ 47,567 $ 46,666 (1,427) 51,967 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $58 and $53, respectively Inventories Vendor non-trade receivables Other current assets Total current assets Long-term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other non-current assets Total assets ASSETS: September 30, 2017 September 24, 2016 20,289 20,484 53,892 46,671 17,874 15,754 4,855 2,132 17,799 13,545 13,936 8,283 128,645 106,869 194,714 170,430 33,783 27,010 5,717 5,414 2,298 3,206 10,162 8,757 $ 375,319 $ 321,686 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: LIABILITIES AND SHAREHOLDERS' EQUITY: 49,049 $ 37,294 25,744 22,027 7,548 8,080 11,977 8,105 6,496 3,500 100,814 79,006 2,836 2,930 97,207 75,427 40,415 36,074 241,272 193,437 Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,126,201 and 5,336,166 shares issued and outstanding, respectively Retained earnings 35,867 98,330 31,251 96,364 Accumulated other comprehensive income/(loss) (150) 634 Total shareholders' equity Total liabilities and shareholders' equity 134,047 128,249 375,319 $ 321,686 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Common Stock and Additional Paid-In Capital Accumulated Other Retained Shares Amount Earnings Comprehensive Income/(Loss) Total Shareholders' Equity Balances as of September 27, 2014 Net income 5,866,161 $ 23,313 $ 87,152 $ 1,082 $ 111,547 53,394 53,394 Other comprehensive income/(loss) - (1,427) (1,427) Dividends and dividend equivalents declared Repurchase of common stock (325,032) (11,627) (36,026) (11,627) (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 Net income 92,284 45,687 (345) Other comprehensive income/(loss) 979 Dividends and dividend equivalents declared Repurchase of common stock (279,609) (12,188) (29,000) Share-based compensation 4,262 - Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) Tax benefit from equity awards, including transfer pricing adjustments - 379 - Balances as of September 24, 2016 5,336,166 31,251 96,364 Net income 48,351 Other comprehensive income/(loss) - Dividends and dividend equivalents declared - Repurchase of common stock (246,496) (12,803) (33,001) (12,803) Share-based compensation 4,909 Common stock issued, net of shares withheld for employee taxes 36,531 (913) (581) (33,001) 4,909 (1,494) Tax benefit from equity awards, including transfer pricing adjustments 620 620 Balances as of September 30, 2017 5,126,201 $ 35,867 $ 98,330 $ (150) $ 134,047 |g||g| | | | | g| | | | | | (784) 119,355 45,687 979 (12,188) (29,000) 4,262 (1,225) 379 128,249 48,351 (784) Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Cash and cash equivalents, beginning of the year Operating activities: Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense Other 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: Years ended September 30, 2017 September 24, 2016 September 26, 2015 $ 20,484 $ 21,120 $ 13,844 48,351 45,687 53,394 10,157 10,505 11,257 4,840 4,210 3,586 5,966 4,938 1,382 (166) 486 385 (2,093) 527 417 (2,723) 217 (238) (4,254) (51) (3,735) (5,318) 1,055 (283) 9,618 1,837 5,001 (626) (1,554) 1,042 (154) (2,033) 9,058 63,598 65,824 81,266 Purchases of marketable securities (159,486) (142,428) (166,402) Proceeds from maturities of marketable securities 31,775 21,258 14,538 Proceeds from sales of marketable securities 94,564 90,536 107,447 Payments made in connection with business acquisitions, net (329) (297) (343) Payments for acquisition of property, plant and equipment (12,451) (12,734) (11,247) Payments for acquisition of intangible assets (344) (814) (241) Payments for strategic investments, net Other (395) (1,388) 220 (110) (46,446) (45,977) (26) (56,274) Cash used in investing activities Financing activities: Proceeds from issuance of common stock 555 495 543 Excess tax benefits from equity awards 627 407 749 Payments for taxes related to net share settlement of equity awards (1,874) (1,570) (1,499) Payments for dividends and dividend equivalents (12,769) (12,150) (11,561) Repurchases of common stock (32,900) (29,722) (35,253) Proceeds from issuance of term debt, net 28,662 24,954 27,114 Repayments of term debt (3,500) (2,500) 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 3,852 (17,347) (397) (20,483) 2,191 (17,716) $ (195) 20,289 $ (636) 7,276 20,484 $ 21,120 11,591 $ 2,092 $ 10,444 13,252 1,316 $ 514 See accompanying Notes to Consolidated Financial Statements