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 Apple Reports Fourth Quarter Results
   Tuesday, October 25, 2016 4:30:11 PM ET

Apple(R) today announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016. The Company posted quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share. These results compare to revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

"Our strong September quarter results cap a very successful fiscal 2016 for Apple," said Tim Cook, Apple’s CEO. "We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record."

"We are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter," said Luca Maestri, Apple’s CFO. "We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital return program."

Apple is providing the following guidance for its fiscal 2017 first quarter: ? revenue between $76 billion and $78 billion ? gross margin between 38 percent and 38.5 percent ? operating expenses between $6.9 billion and $7 billion ? other income/(expense) of $400 million ? tax rate of 26 percent

Apple’s board of directors has declared a cash dividend of $0.57 per share of the Company’s common stock. The dividend is payable on November 10, 2016 to shareholders of record as of the close of business on November 7, 2016.

Apple will provide live streaming of its Q4 2016 financial results conference call beginning at 2:00 p.m. PDT on October 25, 2016 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 26, 2015, its Form 10-Q for the fiscal quarter ended December 26, 2015, its Form 10-Q for the fiscal quarter ended March 26, 2016, its Form 10-Q for the fiscal quarter ended June 25, 2016, and its Form 10-K for the fiscal year ended September 24, 2016 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms -- iOS, macOS, watchOS and tvOS -- provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

(C) 2016 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

                                                                                                                             Apple Inc.
                                                                                                      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                    (In millions, except number of shares which are reflected in
                                                                                                                  thousands and per share amounts)
                                                                                                                                       
                                                                                                    Three Months Ended                                                                                          Twelve Months Ended
                                                                  ---------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------
                                                                            September 24,                      September 26,                                          September 24,                      September 26,
                                                                                2016                                                  2015                                                   2016                                                  2015
                                                                  ------------------------------                        ------------------------------                        -------------------------------                        ------------------------------
Net sales                                                            $ 46,852                                              $ 51,501                                              $ 215,639                                                    $              233,715
Cost of sales (1)                                                      29,039                             30,953                             131,376                                                140,089
                                                                  --------------------------------                      --------------------------------                      ---------------------------------                      --------------------------------
   Gross margin                                                        17,813                             20,548                              84,263                                                 93,626
                                                                  --------------------------------                      --------------------------------                      ---------------------------------                      --------------------------------
                                                                                                                                                                                                                                      
Operating expenses:
   Research and development (1)                                         2,570                                                 2,220                                                 10,045                                                                     8,067
   Selling, general and administrative (1)                              3,482                              3,705                              14,194                                                 14,329
                                                                  --------------------------------                      --------------------------------                      ---------------------------------                      --------------------------------
      Total operating expenses                                          6,052                              5,925                              24,239                                                 22,396
                                                                  --------------------------------                      --------------------------------                      ---------------------------------                      --------------------------------
                                                                                                                                                                                                                                      
Operating income                                                       11,761                                                14,623                                                 60,024                                                                    71,230
Other income/(expense), net                                               427                                439                               1,348                                                  1,285
                                                                  --------------------------------                      --------------------------------                      ---------------------------------                      --------------------------------
Income before provision for income taxes                               12,188                                                15,062                                                 61,372                                                                    72,515
Provision for income taxes                                              3,174                              3,938                              15,685                                                 19,121
                                                                  --------------------------------                      --------------------------------                      ---------------------------------                      --------------------------------
Net income                                                           $  9,014                           $ 11,124                           $  45,687                                 $               53,394
                                                                  ==== ====== ====================                      ==== ====== ====================                      ==== ======= ====================                      ========== ====================
                                                                                                                                                                                                                                      
Earnings per share:
   Basic                                                             $   1.68                                              $   1.97                                              $    8.35                                                    $                 9.28
   Diluted                                                           $   1.67                                              $   1.96                                              $    8.31                                                    $                 9.22
                                                                                                                                                                                                                                      
Shares used in computing earnings per share:
   Basic                                                            5,366,912                                             5,646,916                                              5,470,820                                                                 5,753,421
   Diluted                                                          5,393,333                                             5,682,519                                              5,500,281                                                                 5,793,069
                                                                                                                                                                                                                                      
Cash dividends declared per share                                    $   0.57                                              $   0.52                                              $    2.18                                                    $                 1.98
                                                                                                                                                                                                                                      
(1) Includes share-based compensation expense as follows:
   Cost of sales                                                     $    186                                              $    145                                              $     769                                                    $                  575
   Research and development                                          $    476                                              $    390                                              $   1,889                                                    $                1,536
   Selling, general and administrative                               $    368                                              $    380                                              $   1,552                                                    $                1,475
                                                                                                                                                                                                                                                 
                                                                                           Apple Inc.
                                                                         UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                  (In millions, except number of shares which are reflected in
                                                                                    thousands and par value)
                                                                                                                    
                                                                                                             September 24,                                             September 26,
                                                                                                                 2016                                                      2015
                                                                                                 ----------------------------------                        ----------------------------------
                                                                                             ASSETS:
Current assets:
   Cash and cash equivalents                                                                           $  20,484                                                 $  21,120
   Short-term marketable securities                                                                       46,671                                                    20,481
   Accounts receivable, less allowances of $53 and $63, respectively                                      15,754                                                    16,849
   Inventories                                                                                             2,132                                                     2,349
   Vendor non-trade receivables                                                                           13,545                                                    13,494
   Other current assets                                                                                    8,283                                 15,085  
                                                                                                 ------------------------------------                      ------------------------------------
      Total current assets                                                                               106,869                                                    89,378
                                                                                                                                                            
Long-term marketable securities                                                                          170,430                                                   164,065
Property, plant and equipment, net                                                                        27,010                                                    22,471
Goodwill                                                                                                   5,414                                                     5,116
Acquired intangible assets, net                                                                            3,206                                                     3,893
Other non-current assets                                                                                   8,757                                  5,422  
                                                                                                 ------------------------------------                      ------------------------------------
      Total assets                                                                                     $ 321,686                              $ 290,345  
                                                                                                 ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                            
                                                                LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
   Accounts payable                                                                                    $  37,294                                                 $  35,490
   Accrued expenses                                                                                       22,027                                                    25,181
   Deferred revenue                                                                                        8,080                                                     8,940
   Commercial paper                                                                                        8,105                                                     8,499
   Current portion of long-term debt                                                                       3,500                                  2,500  
                                                                                                 ------------------------------------                      ------------------------------------
      Total current liabilities                                                                           79,006                                                    80,610
                                                                                                                                                            
Deferred revenue, non-current                                                                              2,930                                                     3,624
Long-term debt                                                                                            75,427                                                    53,329
Other non-current liabilities                                                                             36,074                                 33,427  
                                                                                                 ------------------------------------                      ------------------------------------
      Total liabilities                                                                                  193,437                                170,990  
                                                                                                 ------------------------------------                      ------------------------------------
                                                                                                                                                            
Commitments and contingencies
                                                                                                                                                            
Shareholders’ equity:
   Common stock and additional paid-in capital, $0.00001 par value:                                       31,251                                                    27,416
   12,600,000 shares authorized; 5,336,166 and 5,578,753 shares issued
   and outstanding, respectively
   Retained earnings                                                                                      96,364                                                    92,284
   Accumulated other comprehensive income/(loss)                                                             634                                   (345 )
                                                                                                 ------------------------------------                      ------------------------------------
      Total shareholders’ equity                                              128,249                                119,355  
                                                                                                 ------------------------------------                      ------------------------------------
      Total liabilities and shareholders’ equity                            $ 321,686                              $ 290,345  
                                                                                                 ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                            
                                                                                       Apple Inc.
                                                                UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                      (In millions)
                                                                       
                                                                                                                                Twelve Months Ended
                                                                                           ---------------------------------------------------------------------------------------------
                                                                                                      September 24,                         September 26,
                                                                                                          2016                                                     2015
                                                                                           --------------------------------                        ----------------------------------
Cash and cash equivalents, beginning of the period                                              $ 21,120                              $  13,844  
                                                                                           ------ ------ --------------------                      ------- ------- --------------------
                                                                                                                                                    
Operating activities:
  Net income                                                                                      45,687                                                    53,394
  Adjustments to reconcile net income to cash generated by operating
  activities:
     Depreciation and amortization                                                                10,505                                                    11,257
     Share-based compensation expense                                                              4,210                                                     3,586
     Deferred income tax expense                                                                   4,938                                                     1,382
   Changes in operating assets and liabilities:
     Accounts receivable, net                                                                      1,095                                                       611
     Inventories                                                                                     217                                                      (238 )
     Vendor non-trade receivables                                                                    (51 )                                                  (3,735 )
     Other current and non-current assets                                                          1,090                                                      (179 )
     Accounts payable                                                                              1,791                                                     5,400
     Deferred revenue                                                                             (1,554 )                                                   1,042
     Other current and non-current liabilities                                                    (2,104 )                                                   8,746  
                                                                                           ----------------------------------                      ------------------------------------
        Cash generated by operating activities                                                    65,824                                 81,266  
                                                                                           ----------------------------------                      ------------------------------------
                                                                                                                                                    
Investing activities:
  Purchases of marketable securities                                                            (142,428 )                                                (166,402 )
  Proceeds from maturities of marketable securities                                               21,258                                                    14,538
  Proceeds from sales of marketable securities                                                    90,536                                                   107,447
  Payments made in connection with business acquisitions, net                                       (297 )                                                    (343 )
  Payments for acquisition of property, plant and equipment                                      (12,734 )                                                 (11,247 )
  Payments for acquisition of intangible assets                                                     (814 )                                                    (241 )
  Payments for strategic investments                                                              (1,388 )                                          --
  Other                                                                                             (110 )                                                     (26 )
                                                                                           ----------------------------------                      ------------------------------------
        Cash used in investing activities                                                        (45,977 )                                                 (56,274 )
                                                                                           ----------------------------------                      ------------------------------------
                                                                                                                                                    
Financing activities:
  Proceeds from issuance of common stock                                                             495                                                       543
  Excess tax benefits from equity awards                                                             407                                                       749
  Payments for taxes related to net share settlement of equity awards                             (1,570 )                                                  (1,499 )
  Payments for dividends and dividend equivalents                                                (12,150 )                                                 (11,561 )
  Repurchases of common stock                                                                    (29,722 )                                                 (35,253 )
  Proceeds from issuance of term debt, net                                                        24,954                                                    27,114
  Repayments of term debt                                                                         (2,500 )                                          --
  Change in commercial paper, net                                                                   (397 )                                                   2,191  
                                                                                           ----------------------------------                      ------------------------------------
        Cash used in financing activities                                                        (20,483 )                                                 (17,716 )
                                                                                           ----------------------------------                      ------------------------------------
                                                                                                                                                    
Increase/(Decrease) in cash and cash equivalents                                                    (636 )                                                   7,276  
                                                                                           ----------------------------------                      ------------------------------------
Cash and cash equivalents, end of the period                                                    $ 20,484                              $  21,120  
                                                                                           ====== ====== ====================                      ======= ======= ====================
                                                                                                                                                    
Supplemental cash flow disclosure:
  Cash paid for income taxes, net                                                               $ 10,444                                                 $  13,252
  Cash paid for interest                                                                        $  1,316                                                 $     514
                                                                                                                                                                    
                                                                                                                                                                                  Apple Inc.
                                                                                                                                                                        Q4 2016 Unaudited Summary Data
                                                                                                                                                                   (Units in thousands, Revenue in millions)
                                                                                                                                       
                                                                     
                                                                -------------------- -------------------- --------------------
                                                                                            Q4 2016                                                                Q3 2016                                                  Q4 2015                                            Sequential Change                                              Year/Year Change
                                                                ---------------------------------------------------------------                     ------------------------------------                     ------------------------------------                     -----------------------------------                     ------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                          
Operating Segments                                                                                               Revenue                                                         Revenue                                                  Revenue                                                 Revenue                                                       Revenue
                                                                                                          --------------------                                                  -------                                                  -------                                                 -------                                                 --------------------
                     Americas                                                                                          $20,229                                                  $17,963                                                  $21,773                                                     13%                                                                 - 7%
                     Europe                                                                                             10,842                                                    9,643                                                   10,577                                                     12%                                                                   3%
                     Greater China                                                                                       8,785                                                    8,848                                                   12,518                                                    - 1%                                                                - 30%
                     Japan                                                                                               4,324                                                    3,529                                                    3,929                                                     23%                                                                  10%
                     Rest of Asia Pacific                                                                                2,672                                                    2,375                                                    2,704                                                     13%                                                                 - 1%
                                                                                                          --------------------                                                  -------                                                  -------                                                 -------                                                 --------------------
Total Apple                                                                      $46,852                                                  $42,358                                                  $51,501                                                     11%                                                                 - 9%
                                                                -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                          
                                                                     
                                                                -------------------- -------------------- --------------------
                                                                                            Q4 2016                                                                Q3 2016                                                  Q4 2015                                            Sequential Change                                              Year/Year Change
                                                                ---------------------------------------------------------------                     ------------------------------------                     ------------------------------------                     -----------------------------------                     ------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                          
Product Summary                                                         Units                                    Revenue                             Units                       Revenue                      Units                       Revenue                      Units                      Revenue                      Units                            Revenue
                                                                --------------------                      --------------------                      ------                      -------                      ------                      -------                      -----                      -------                      -----                      --------------------
                     iPhone (1)                                               45,513                                   $28,160                      40,399                      $24,048                      48,046                      $32,209                        13%                          17%                       - 5%                                     - 13%
                     iPad (1)                                                  9,267                                     4,255                       9,950                        4,876                       9,883                        4,276                       - 7%                        - 13%                       - 6%                                        0%
                     Mac (1)                                                   4,886                                     5,739                       4,252                        5,239                       5,709                        6,882                        15%                          10%                      - 14%                                     - 17%
                     Services (2)                                                                                        6,325                                                    5,976                                                    5,086                                                      6%                                                                  24%
                     Other Products (1)(3)                                                                               2,373                                                    2,219                                                    3,048                                                      7%                                                                - 22%
                                                                                                          --------------------                                                  -------                                                  -------                                                 -------                                                 --------------------
Total Apple                                                                      $46,852                                                  $42,358                                                  $51,501                                                     11%                                                                 - 9%
                                                                -------------------- -------------------- --------------------
 (1)  Includes deferrals and amortization of related software upgrade
                         rights and non-software services.
 (2)                     Includes revenue from Internet Services, AppleCare, Apple Pay,
                         licensing and other services.
 (3)                     Includes sales of Apple TV, Apple Watch, Beats products, iPod and
                         Apple-branded and third-party accessories.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20161025006677r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20161025006677/en/

SOURCE: Apple Inc.

Apple 
Press: 
Kristin Huguet, 408-974-2414 
khuguet@apple.com 
or 
Investor Relations: 
Nancy Paxton, 408-974-5420 
paxton1@apple.com 
Joan Hoover, 408-974-4570 
hoover1@apple.com


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