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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
ÈANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 27, 2014
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 000-10030
APPLE INC.
(Exact name of registrant as specified in its charter)
California 94-2404110
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1 Infinite Loop
Cupertino, California 95014
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (408) 996-1010
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.00001 par value per share The NASDAQ Stock Market LLC
(Title of class) (Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ÈNo
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes ÈNo
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files).
Yes ÈNo
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein,
and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. È
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ÈAccelerated filer
Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes No È
The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, as of March 28, 2014, the last business day
of the registrant’s most recently completed second fiscal quarter, was approximately $462,522,000,000. Solely for purposes of this disclosure,
shares of common stock held by executive officers and directors of the registrant as of such date have been excluded because such persons may
be deemed to be affiliates. This determination of executive officers and directors as affiliates is not necessarily a conclusive determination for any
other purposes.
5,864,840,000 shares of common stock were issued and outstanding as of October 10, 2014.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement relating to its 2015 annual meeting of shareholders (the “2015 Proxy Statement”) are
incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2015 Proxy Statement will be filed with the U.S.
Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Table of contents

  • Page 1
    ... company) Smaller reporting company ' Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ' No È The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, as of March 28, 2014, the last business...

  • Page 2
    ...Disclosures Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative...

  • Page 3
    ... and professional software applications, the iOS and OS X® operating systems, iCloud®, and a variety of accessory, service and support offerings. In September 2014, the Company announced Apple Watch™, which is expected to be available in early calendar year 2015, and Apple Pay™, which became...

  • Page 4
    ... new iPhones. iPhone is compatible with both Mac and Windows personal computers and Apple's iCloud services which provide synchronization of mail, contacts, calendars, apps, music, photos, documents and more across users' devices. In September 2014, the Company introduced iPhone 6 and iPhone 6 Plus...

  • Page 5
    ... of OS X. Support for iCloud is built into OS X so users can access content and information from their Macs, their iOS devices and other supported devices and access downloaded content and apps from the iTunes Store. Apps delivered with OS X include Mail, Safari web browser, Messages, Calendar...

  • Page 6
    ... allows users to access controls within apps. Apple Watch is expected to be available in early calendar year 2015 and will be compatible with iPhone 5 and newer iPhone models running the latest version of iOS 8. iOS and Mac Developer Programs The Company's iOS and Mac Developer Programs support app...

  • Page 7
    ..., a new service and support product tailored to the needs of enterprise customers; and Device Supply, Activate and Manage, a suite of value-added reselling services for iPhone, iPad and Mac. No single customer accounted for more than 10% of net sales in 2014, 2013 or 2012. Apple Inc. | 2014 Form 10...

  • Page 8
    ...including the hardware (iPhone, iPad, Mac and iPod), software (iOS, OS X and iTunes), online services and distribution of digital content and applications (iTunes Store, App Store, iBooks Store and Mac App Store). Some of the Company's current and potential competitors have substantial resources and...

  • Page 9
    ... the Company competes, current extensive patent coverage and the rapid rate of issuance of new patents, it is possible that certain components of the Company's products, processes and services may unknowingly infringe existing patents or intellectual property rights of others. From time to time, the...

  • Page 10
    ... pattern of product introductions, future net sales or financial performance. Warranty The Company offers a limited parts and labor warranty on most of its hardware products. The basic warranty period is typically one year from the date of purchase by the original end-user. The Company also offers...

  • Page 11
    ... of Operations" and the consolidated financial statements and related notes in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known...

  • Page 12
    ... cut prices and lowered product margins. An increasing number of Internet-enabled devices that include software applications and are smaller and simpler than traditional personal computers compete for market share with the Company's existing products. The Company's financial condition and operating...

  • Page 13
    ... to, timely and successful product development, market acceptance, the Company's ability to manage the risks associated with new product production ramp-up issues, the availability of application software for new products, the effective management of purchase commitments and inventory levels in...

  • Page 14
    ... suppliers experience severe financial problems or other disruptions in their business, the net realizable value of these assets could be negatively impacted. The Company's products and services may experience quality problems from time to time that can result in decreased sales and operating margin...

  • Page 15
    ... of Mac sales and the costs of developing such applications and services. If the Company's minority share of the global personal computer market causes developers to question the Mac's prospects, developers could be less inclined to develop or upgrade software for the Company's Mac products and more...

  • Page 16
    ... has grown, the intellectual property rights claims against it have increased and may continue to increase. In particular, the Company's cellular enabled products compete with mobile communication and media device companies that hold significant patent portfolios, and the number of patent claims...

  • Page 17
    ... partners, more challenging environments in managing retail operations outside the U.S., costs associated with unanticipated fluctuations in the value of retail inventory, and the Company's inability to obtain and renew leases in quality retail locations at a reasonable cost. Apple Inc. | 2014 Form...

  • Page 18
    ...products, delivery of online services, transactions processing and financial reporting. There may be breaches of the Company's information technology systems that materially damage business partner and customer relationships, curtail or otherwise adversely impact access to online stores and services...

  • Page 19
    ... the Company fails to follow payment card industry security standards, even if no customer information is compromised, the Company could incur significant fines or experience a significant increase in payment card transaction costs. The Company's success depends largely on the continued service and...

  • Page 20
    ...'s Board of Directors, and the Company's share repurchase program does not obligate it to acquire any specific number of shares. If the Company fails to meet any of these expectations related to future growth, profitability, dividends, share repurchases or other market expectations, its stock price...

  • Page 21
    ..., vendor non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen. The Company distributes its products through third-party cellular network carriers, wholesalers, retailers and value-added resellers...

  • Page 22
    ... fees. Plaintiffs are also seeking digital rights management free versions of any songs downloaded from iTunes or an order requiring the Company to license its digital rights management to all competing music players. The cases are set for trial in November 2014. Apple Inc. | 2014 Form 10-K | 20

  • Page 23
    ... Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is traded on the NASDAQ Stock Market LLC ("NASDAQ") under the symbol AAPL. Price Range of Common Stock The price range per share of common stock presented...

  • Page 24
    ... of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) Q4 Fiscal Periods Total Number of Shares Purchased Average Price Paid Per Share June 29, 2014 to August 2, 2014: Open Market Purchases...

  • Page 25
    ...for the five years ended September 27, 2014. The Company has added the S&P Information Technology Index to the graph to capture the stock performance of companies whose products and services relate to those of the Company. The S&P Information Technology Index replaces the S&P Computer Hardware Index...

  • Page 26
    ... Financial Data The information set forth below for the five years ended September 27, 2014, is not necessarily indicative of results of future operations, and should be read in conjunction with Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations...

  • Page 27
    ... value-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, and various accessories through its online and retail stores. The Company sells to consumers; small and mid-sized businesses; and education...

  • Page 28
    ... as free downloads with all new iPhone, iPad and iPod touch devices ("iOS devices"). In April 2013, the Company announced a significant increase to its program to return capital to shareholders by raising the total amount it expected to utilize for the program through December 2015 to $100 billion...

  • Page 29
    ... services and software upgrade rights. Includes revenue from the iTunes Store, the App Store, the Mac App Store, the iBooks Store, AppleCare, licensing and other services. Includes sales of Apple-branded and third-party accessories for iPhone, iPad, Mac and iPod. (3) The Company's fiscal year...

  • Page 30
    ... in product mix towards lower-priced iPhone models, particularly iPhone 4. All of the Company's geographic operating segments experienced a decline in iPhone ASPs during 2013. iPad The following table presents iPad net sales and unit sales information for 2014, 2013 and 2012 (dollars in millions...

  • Page 31
    ... hardware and software products and similar services. Further information regarding the Company's operating segments may be found in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 11, "Segment Information and Geographic Data." Apple Inc. | 2014 Form...

  • Page 32
    ... year-over-year growth in net sales in 2014 that was significantly higher than the growth rate for the Company overall. Greater China growth was driven by higher unit sales and net sales of all major product categories except iPod, in addition to higher net sales of iTunes, Software and Services...

  • Page 33
    ...growth in net sales of iTunes, Software and Service. The year-over-year growth in iPhone was driven by the successful launch of iPhone 5s and 5c in September 2013, the successful launch of iPhone 6 and 6 Plus in September 2014, increased demand for the Company's entry-priced iPhones and the addition...

  • Page 34
    ... Company's average product margins; higher expenses associated with changes to certain of the Company's service policies and other warranty costs; price reductions on certain products, including iPad 2 and iPhone 4; and unfavorable impact from foreign exchange fluctuations. Apple Inc. | 2014 Form...

  • Page 35
    ... to manage product quality and warranty costs effectively and to stimulate demand for certain of its products. Due to the Company's significant international operations, financial results can be significantly affected by fluctuations in exchange rates. Operating Expenses Operating expenses for 2014...

  • Page 36
    ... exchange rate movements. The weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 1.11%, 1.03% and 1.03% during 2014, 2013 and 2012, respectively. The Company had no debt outstanding during 2012 and accordingly did not incur any related...

  • Page 37
    ... presents selected financial information and statistics as of and for the years ended September 27, 2014, September 28, 2013 and September 29, 2012 (in millions): 2014 2013 2012 Cash, cash equivalents and marketable securities Property, plant and equipment, net Long-term debt Working capital Cash...

  • Page 38
    ... and approximately $12.4 billion for other capital expenditures, including product tooling and manufacturing process equipment, data centers and corporate facilities and infrastructure, including information systems hardware, software and enhancements. During 2015, the Company expects to open about...

  • Page 39
    ...capital return program by the end of December 2015 by paying dividends and dividend equivalents, repurchasing shares and remitting withheld taxes related to net share settlement of restricted stock units. To assist in funding its capital return program, the Company expects to access the debt markets...

  • Page 40
    ...to inventory component prepayments that are outstanding with the respective supplier. Other Obligations The Company's other obligations were comprised mainly of commitments to acquire capital assets, including product tooling and manufacturing process equipment and commitments related to advertising...

  • Page 41
    ... manufacturing-related assets and estimated purchase commitment cancellation fees, warranty costs, income taxes and legal and other contingencies. Management considers these policies critical because they are both important to the portrayal of the Company's financial condition and operating results...

  • Page 42
    ... of Manufacturing-Related Assets and Estimated Purchase Commitment Cancellation Fees The Company must order components for its products and build inventory in advance of product shipments and has invested in manufacturing process equipment, including capital assets held at its suppliers' facilities...

  • Page 43
    ...Company's product development plans that negatively impact the utility of any of these assets, or significant deterioration in the financial condition of one or more of the Company's suppliers that hold any of the Company's manufacturing process equipment or to whom the Company has made an inventory...

  • Page 44
    ... the Company's cash, cash equivalents and marketable securities and the fair value of those securities, as well as costs associated with hedging and interest paid on the Company's debt. Investments The Company's investment policy and strategy are focused on preservation of capital and supporting the...

  • Page 45
    ... 2014, the Company had $6.3 billion of Commercial Paper outstanding, with maturities generally less than nine months. In the third quarters of 2014 and 2013, the Company issued $12.0 billion and $17.0 billion of long-term debt, respectively. The debt issuances included floating- and fixed-rate notes...

  • Page 46
    ...29, 2012 Consolidated Statements of Cash Flows for the years ended September 27, 2014, September 28, 2013 and September 29, 2012 Notes to Consolidated Financial Statements Selected Quarterly Financial Information (Unaudited) Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm...

  • Page 47
    CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 28, 2013 September 27, 2014 September 29, 2012 Net sales Cost of sales Gross margin Operating expenses: Research and development Selling, ...

  • Page 48
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 28, 2013 September 27, 2014 September 29, 2012...gains/losses on marketable securities: Change in fair value of marketable securities, net of... to Consolidated Financial Statements. Apple Inc. | 2014 Form 10-K | 46

  • Page 49
    ... number of shares which are reflected in thousands and par value) September 27, 2014 September 28, 2013 ASSETS: Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $86 and $99, respectively Inventories Deferred tax assets Vendor non...

  • Page 50
    ... 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 6,504,937...

  • Page 51
    ...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...

  • Page 52
    ... value-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, and various accessories through its online and retail stores. The Company sells to consumers, small and mid-sized businesses, and education...

  • Page 53
    ... include extended phone support, repair services, web-based support resources and diagnostic tools offered under the Company's standard limited warranty. The Company records reductions to revenue for estimated commitments related to price protection and other customer incentive programs. For...

  • Page 54
    ... software upgrades and non-software services are expected to be provided for each of these devices, which ranges from two to four years. Cost of sales related to delivered hardware and related essential software, including estimated warranty costs, are recognized at the time of sale. Costs incurred...

  • Page 55
    ... Company's employee stock purchase plan, unvested restricted stock and unvested RSUs. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value...

  • Page 56
    ... product tooling and manufacturing process equipment; and the shorter of lease terms or ten years for leasehold improvements. The Company capitalizes eligible costs to acquire or develop internal-use software that are incurred subsequent to the preliminary project stage. Capitalized costs related...

  • Page 57
    ... the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of the Company's debt instruments and all other financial instruments, all...

  • Page 58
    ... of each period, and inventories, property and nonmonetary assets and liabilities at historical rates. Gains and losses from these remeasurements were not significant during 2014, 2013 and 2012 and have been included in the Company's results of operations. Note 2 - Financial Instruments Cash, Cash...

  • Page 59
    ... portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates...

  • Page 60
    ... exposure associated with revenue and inventory purchases, typically for up to 12 months. To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, the Company may enter into foreign currency forward and option contracts to offset the changes...

  • Page 61
    ... terms of the contract, based on then-current currency or interest rates at each respective date. The Company's gross exposure on these transactions may be further mitigated by collateral received from certain counterparties. The Company's exposure to credit loss and market risk will vary over time...

  • Page 62
    ... Consolidated Statements of Operations for 2014, 2013 and 2012 (in millions): Gains/(Losses) Recognized in OCI-Effective Portion 2014 2013 2012 Gains/(Losses) Reclassified from AOCI into Net Income-Effective Portion 2014 2013 2012 Cash flow hedges: Foreign exchange contracts Interest rate contracts...

  • Page 63
    ...until the related products are sold by the Company, at which time any profit is recognized as a reduction of cost of sales. Note 3 - Consolidated Financial Statement Details The following tables show the Company's consolidated balance sheet details as of September 27, 2014 and September 28, 2013 (in...

  • Page 64
    ...Intangible Assets On July 31, 2014, the Company completed the acquisitions of Beats Music, LLC, which offers a subscription streaming music service, and Beats Electronics, LLC, which makes Beats® headphones, speakers and audio software (collectively, "Beats"). The total purchase price consideration...

  • Page 65
    ... in 2014, 2013 and 2012, respectively. As of September 27, 2014, the remaining weighted-average amortization period for acquired intangible assets is 3.8 years. The expected annual amortization expense related to acquired intangible assets as of September 27, 2014, is as follows (in millions): 2015...

  • Page 66
    ... equal to the tax effect of the underlying stock's fair market value. The Company had net excess tax benefits from equity awards of $706 million, $643 million and $1.4 billion in 2014, 2013 and 2012, respectively, which were reflected as increases to common stock. Apple Inc. | 2014 Form 10-K | 64

  • Page 67
    ... of September 27, 2014 and September 28, 2013, the significant components of the Company's deferred tax assets and liabilities were (in millions): 2014 2013 Deferred tax assets: Accrued liabilities and other reserves Deferred revenue Basis of capital assets and investments Share-based compensation...

  • Page 68
    ... from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of September 27, 2014, the Company had $6.3 billion of Commercial Paper outstanding, with a weighted-average interest rate of 0.12% and maturities generally less than nine months. The...

  • Page 69
    ..., if applicable, adjustments related to hedging. The Company recognized $381 million and $136 million of interest expense on its long-term debt for the years ended September 27, 2014 and September 28, 2013, respectively. The Company did not have any long-term debt in 2012. Apple Inc. | 2014 Form 10...

  • Page 70
    ...789 2,490 2,486 $10,528 $0.47 0.47 0.44 0.44 $1.82 $ 2,807 2,830 2,655 2,739 $11,031 The Company paid cash dividends of $0.38 per share, totaling $2.5 billion, during the fourth quarter of 2012. Future dividends are subject to declaration by the Board of Directors. Apple Inc. | 2014 Form 10-K | 68

  • Page 71
    ... Company's common stock beginning in 2013. The Company's Board of Directors increased the share repurchase authorization to $60 billion in April 2013 and to $90 billion in April 2014. As of September 27, 2014, $67.9 billion of the $90 billion had been utilized. The Company's share repurchase program...

  • Page 72
    ... of Operations and the associated financial statement line item for 2014 (in millions): Comprehensive Income Components Financial Statement Line Item 2014 Unrecognized gains/losses on derivative instruments: Foreign exchange contracts Revenue Cost of sales Other income/expense, net Interest rate...

  • Page 73
    ... number of RSUs cancelled or shares withheld. Currently, all RSUs granted under the 2014 Plan have dividend equivalent rights ("DERs"), which entitle holders of RSUs to the same dividend value per share as holders of common stock. DERs are subject to the same vesting and other terms and conditions...

  • Page 74
    ... of six-month offering periods. An employee's payroll deductions under the Purchase Plan are limited to 10% of the employee's compensation and employees may not purchase more than $25,000 of stock during any calendar year. As of September 27, 2014, approximately 7.6 million shares were reserved for...

  • Page 75
    .... The total shares withheld were approximately 15.6 million, 15.5 million and 16.1 million for 2014, 2013 and 2012, respectively, and were based on the value of the RSUs on their respective vesting dates as determined by the Company's closing stock price. Total payments for the employees' tax...

  • Page 76
    ...users of its operating system and application software against legal claims that the software infringes third-party intellectual property rights. Other agreements entered into by the Company sometimes include indemnification provisions under which the Company could be subject to costs and/or damages...

  • Page 77
    ... the Company's business are generally available from multiple sources, a number of components are currently obtained from single or limited sources. In addition, the Company competes for various components with other participants in the markets for mobile communication and media devices and personal...

  • Page 78
    ... of management's expectations, the Company's consolidated financial statements for that reporting period could be materially adversely affected. Apple Inc. v. Samsung Electronics Co., Ltd, et al. On August 24, 2012, a jury returned a verdict awarding the Company $1.05 billion in its lawsuit against...

  • Page 79
    ... includes capital assets. Segment assets exclude corporate assets, such as cash and cash equivalents, short-term and long-term marketable securities, vendor nontrade receivables, other long-term investments, manufacturing and corporate facilities, product tooling and manufacturing process equipment...

  • Page 80
    ... $23,414 A reconciliation of the Company's segment operating income to the Consolidated Statements of Operations for 2014, 2013 and 2012, is as follows (in millions): 2014 2013 2012 Segment operating income Research and development expense Share-based compensation expense Other corporate expenses...

  • Page 81
    ... Other countries Total long-lived assets (1) $ 21,502 $ 17,588 China includes Hong Kong. Long-lived assets located in China consist primarily of product tooling and manufacturing process equipment and assets related to retail stores and related infrastructure. Apple Inc. | 2014 Form 10-K | 79

  • Page 82
    ... and amortization of related non-software services and software upgrade rights. Includes revenue from the iTunes Store, the App Store, the Mac App Store, the iBooks Store, AppleCare, licensing and other services. Includes sales of Apple-branded and third-party accessories for iPhone, iPad, Mac and...

  • Page 83
    ... PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders of Apple Inc. We have audited the accompanying consolidated balance sheets of Apple Inc. as of September 27, 2014 and September 28, 2013, and the related consolidated statements of operations, comprehensive income, shareholders' equity...

  • Page 84
    ... of the Public Company Accounting Oversight Board (United States), the 2014 consolidated financial statements of Apple Inc. and our report dated October 27, 2014 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP San Jose, California October 27, 2014 Apple Inc. | 2014 Form 10-K | 82

  • Page 85
    ... of financial statements in accordance with GAAP. The Company's independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the Company's internal control over financial reporting, which appears in Part II, Item 8 of this Form 10-K. Apple Inc. | 2014 Form 10...

  • Page 86
    ...connection with management's evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Item 9B. Other Information Not applicable. PART...

  • Page 87
    ...29, 2012 Consolidated Statements of Cash Flows for the years ended September 27, 2014, September 28, 2013 and September 29, 2012 Notes to Consolidated Financial Statements Selected Quarterly Financial Information (Unaudited) Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm...

  • Page 88
    ... Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: October 27, 2014 APPLE INC. By: /s/ Luca Maestri Luca Maestri Senior Vice President, Chief Financial Officer Power of Attorney KNOW ALL PERSONS...

  • Page 89
    ..., dated as of May 6, 2014, including forms of global notes representing the Floating Rate Notes due 2017, Floating Rate Notes due 2019, 1.05% Notes due 2017, 2.10% Notes due 2019, 2.85% Notes due 2021, 3.45% Notes due 2024 and 4.45% Notes due 2044. Amended Employee Stock Purchase Plan, effective...

  • Page 90
    ... & Young LLP, Independent Registered Public Accounting Firm. Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K). Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer. Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer. Section 1350...

  • Page 91
    ...Award: Award Date: (the "Award Date") (the "Participant") Vesting Commencement Date: Vesting Schedule: This restricted stock unit award (the "Award") is granted under and governed by the terms and conditions of the Apple Inc. 2014 Employee Stock Plan and the Terms and Conditions of Restricted Stock...

  • Page 92
    ... "Participant." The effective date of grant of the Award as set forth in the Grant Notice is referred to as the "Award Date." The Award was granted under and is subject to the provisions of the Apple Inc. 2014 Employee Stock Plan (the "Plan"). Capitalized terms are defined in the Plan if not defined...

  • Page 93
    ... record date is prior to the date of issuance of the stock certificate or book entry evidencing such Shares. (b) Dividend Equivalent Rights Distributions. As of any date that the Company pays an ordinary cash dividend on its Common Stock, the Company shall credit the Participant with a dollar amount...

  • Page 94
    ..., such Stock Units (as well as the related Dividend Equivalent Rights) shall automatically terminate and be cancelled as of the applicable Severance Date without payment of any consideration by the Company and without any other action by the Participant or the Participant's personal representative...

  • Page 95
    ... to the Participant by the Company and/or the Employer; (b) withholding otherwise deliverable Shares and/or from otherwise payable Dividend Equivalent Rights to be issued or paid upon vesting/settlement of the Award; (c) arranging for the sale of Shares otherwise deliverable to the Participant...

  • Page 96
    ...the collection, use, processing and transfer of personal data as described in this Section 13. The Company, its related entities, and the Participant's employer hold certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth...

  • Page 97
    ... unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Committee so conferred by appropriate action of the Board or the Committee under the Plan after the date hereof. 16. Entire Agreement. This Award Agreement and the Plan together constitute...

  • Page 98
    ... of Other Requirements. The Company reserves the right to impose other requirements on the Participant's participation in the Plan, on the Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law...

  • Page 99
    ...Name: Employee ID: Grant Number: Target No. of Units Subject to Award: Award Date: Vesting Schedule: Performance Period: This restricted stock unit award (the "Award") is granted under and governed by the terms and conditions of the Apple Inc. 2014 Employee Stock Plan and the Terms and Conditions of...

  • Page 100
    ... "Participant." The effective date of grant of the Award as set forth in the Grant Notice is referred to as the "Award Date." The Award was granted under and is subject to the provisions of the Apple Inc. 2014 Employee Stock Plan (the "Plan"). Capitalized terms are defined in the Plan if not defined...

  • Page 101
    ... record date is prior to the date of issuance of the stock certificate or book entry evidencing such Shares. (b) Dividend Equivalent Rights Distributions. As of any date that the Company pays an ordinary cash dividend on its Common Stock, the Company shall credit the Participant with a dollar amount...

  • Page 102
    ... to this Award Agreement, such Stock Units (as well as the related Dividend Equivalent Rights) shall automatically terminate and be cancelled as of the applicable Severance Date (or, to the extent the applicable performance-based vesting conditions are not satisfied, the Vesting Date, as provided...

  • Page 103
    ... vesting of the Stock Units, the delivery of Shares, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends and/or dividend equivalents; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or...

  • Page 104
    ...the collection, use, processing and transfer of personal data as described in this Section 13. The Company, its related entities, and the Participant's employer hold certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth...

  • Page 105
    ... unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Committee so conferred by appropriate action of the Board or the Committee under the Plan after the date hereof. 16. Entire Agreement. This Award Agreement and the Plan together constitute...

  • Page 106
    ... of Other Requirements. The Company reserves the right to impose other requirements on the Participant's participation in the Plan, on the Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law...

  • Page 107
    ... (and related Dividend Equivalent Rights) subject to the Award that will vest on the Vesting Date will be determined based on the Company's relative total shareholder return ("TSR") Percentile for the Performance Period. The percentage of the Stock Units (and related Dividend Equivalent Rights) that...

  • Page 108
    ... the applicable Beginning Price. Any noncash distributions shall be valued at fair market value. For the purpose of determining TSR, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares of stock at the closing market price on the date...

  • Page 109
    ...to preserve the intended incentives of the awards and mitigate the impact of any stock split, stock dividend or reverse stock split occurring during the Performance Period (or during the applicable 20-day period in determining Beginning Price or Ending Price, as the case may be). In the event of any...

  • Page 110
    ...an employee with outstanding time-based RSUs died or terminated employment due to disability, only a pro-rata portion of the RSUs related to the next vesting date would have vested. The remaining unvested RSUs were cancelled. This pro-rata calculation was based on the number of whole calendar months...

  • Page 111
    ... due to disability. Previously, if an employee with performance-based awards died or terminated employment due to disability, a pro-rata portion of the RSUs related to the next vesting date would have vested. The remaining unvested RSUs were cancelled. Depending on the specific award terms, this pro...

  • Page 112
    ...Apple Inc. Computation of Ratio of Earnings to Fixed Charges (In millions, except ratios) Years ended September 29, 2012 September 27, 2014 September 28, 2013... 344 Fixed charges include the portion of rental expense that management believes is representative of the interest component. The ratio of...

  • Page 113
    ...APPLE INC.* Jurisdiction of Incorporation Apple Sales International Apple Operations International Apple Operations Europe Braeburn Capital...Apple Inc. are omitted because, considered in the aggregate, they would not constitute a significant subsidiary as of the end of the year covered by this report...

  • Page 114
    ... to 1997 Employee Stock Option Plan; of our reports dated October 27, 2014 with respect to the consolidated financial statements of Apple Inc., and the effectiveness of internal control over financial reporting of Apple Inc., included in this Annual Report on Form 10-K for the year ended September...

  • Page 115
    ... ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 27, 2014 By: /s/ Timothy D. Cook...

  • Page 116
    ...'s ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 27, 2014 By: /s/ Luca Maestri...

  • Page 117
    ... year ended September 27, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of Apple Inc. at the dates...