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Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue
from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition.
ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products
are transferred to customers.
The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2018. In August
2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date, which
defers the effective date of ASU 2014-09 for one year and permits early adoption as early as the original effective date of ASU 2014-09.
Accordingly, the Company may adopt the standard in either its first quarter of 2018 or 2019. The new revenue standard may be applied
retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The
Company is currently evaluating the timing of its adoption and the impact of adopting the new revenue standard on its consolidated
financial statements.
Liquidity and Capital Resources
The following table presents selected financial information and statistics as of and for the years ended September 26, 2015,
September 27, 2014 and September 28, 2013 (in millions):
2015 2014 2013
Cash, cash equivalents and marketable securities $ 205,666 $ 155,239 $ 146,761
Property, plant and equipment, net $ 22,471 $ 20,624 $ 16,597
Commercial paper $ 8,499 $ 6,308 $ 0
Total term debt $ 55,963 $ 28,987 $ 16,960
Working capital $ 8,768 $ 5,083 $ 29,628
Cash generated by operating activities $ 81,266 $ 59,713 $ 53,666
Cash used in investing activities $ (56,274) $ (22,579) $ (33,774)
Cash used in financing activities $ (17,716) $ (37,549) $ (16,379)
The Company believes its existing balances of cash, cash equivalents and marketable securities will be sufficient to satisfy its working
capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations
over the next 12 months. The Company currently anticipates the cash used for future dividends, the share repurchase program and debt
repayments will come from its current domestic cash, cash generated from on-going U.S. operating activities and from borrowings.
As of September 26, 2015 and September 27, 2014, the Company’s cash, cash equivalents and marketable securities held by foreign
subsidiaries were $186.9 billion and $137.1 billion, respectively, and are generally based in U.S. dollar-denominated holdings. Amounts
held by foreign subsidiaries are generally subject to U.S. income taxation on repatriation to the U.S. The Company’s marketable securities
investment portfolio is invested primarily in highly-rated securities and its investment policy generally limits the amount of credit exposure
to any one issuer. The policy requires investments generally to be investment grade with the objective of minimizing the potential risk of
principal loss.
During 2015, cash generated from operating activities of $81.3 billion was a result of $53.4 billion of net income, non-cash adjustments to
net income of $16.2 billion and an increase in the net change in operating assets and liabilities of $11.7 billion. Cash used in investing
activities of $56.3 billion during 2015 consisted primarily of cash used for purchases of marketable securities, net of sales and maturities,
of $44.4 billion and cash used to acquire property, plant and equipment of $11.2 billion. Cash used in financing activities of $17.7 billion
during 2015 consisted primarily of cash used to repurchase common stock of $35.3 billion and cash used to pay dividends and dividend
equivalents of $11.6 billion, partially offset by net proceeds from the issuance of term debt of $27.1 billion.
During 2014, cash generated from operating activities of $59.7 billion was a result of $39.5 billion of net income, non-cash adjustments to
net income of $13.2 billion and an increase in net change in operating assets and liabilities of $7.0 billion. Cash used in investing activities
of $22.6 billion during 2014 consisted primarily of cash used for purchases of marketable securities, net of sales and maturities, of $9.0
billion; cash used to acquire property, plant and equipment of $9.6 billion; and cash paid for business acquisitions, net of cash acquired,
of $3.8 billion. Cash used in financing activities of $37.5 billion during 2014 consisted primarily of cash used to repurchase common stock
of $45.0 billion and cash used to pay dividends and dividend equivalents of $11.1 billion, partially offset by net proceeds from the issuance
of term debt and commercial paper of $12.0 billion and $6.3 billion, respectively.
Apple Inc. | 2015 Form 10-K | 30