01—Abstract
Summary
Summary of the 10-K/A filed January 25, 2010. Cited figures are marked; the original filing is the authoritative source.
Apple Inc. filed its Annual Report Amendment (10-K/A) on January 25, 2010, for the fiscal year ended September 26, 2009.
This amendment primarily focused on the retrospective adoption of new accounting principles related to revenue recognition for arrangements with multiple deliverables, particularly impacting how revenue and costs for the iPhone and Apple TV are recognized. Under the new principles, revenue and costs associated with iPhone and Apple TV are now recognized at the time of sale, rather than being deferred over the product's economic life as was previously done. This change significantly boosted reported net sales by $6.4 billiona in 2009, $5.0 billion in 2008, and $572 million in 2007.
The report highlights strong growth in iPhone sales, which nearly doubled in 2009 compared to 2008, and continued growth in the iTunes Store and App Store. Despite overall revenue growth, iPod sales saw a decline, and Mac sales experienced a slight decrease in net sales due to lower average selling prices, although unit sales increased. The company maintained a strong financial position with substantial cash reserves and no long-term debt.
02—Key points
Key Highlights
- Significant increase in reported Net Sales due to retrospective adoption of new revenue recognition standards for multi-deliverable arrangements, particularly affecting iPhone and Apple TV sales.
- iPhone revenue surged by 93% in 2009 to $13.0 billion, driven by a 78% increase in unit sales, indicating strong market adoption and expanded distribution.
- Despite a 12% decrease in net sales, iPods remained a significant revenue contributor, though facing pricing pressures and competition.
- Mac sales showed mixed results: net sales declined 3% due to lower average selling prices, but unit sales grew 7%, indicating a shift towards more affordable models and strong portability demand.
- iTunes Store and App Store revenues continued to grow robustly, fueled by consumer interest in digital content and third-party applications.
- Apple maintained a strong balance sheet with $34.0 billion in cash, cash equivalents, and marketable securities and no long-term debt.
- Gross margin improved to 40.1% in 2009 from 35.2% in 2008, driven by a favorable sales mix and lower product costs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Apple Inc. kept $0.19.
- Revenue$42.91B100.0%
- Cost of revenue−$25.68B59.9%
- Gross profit$17.22B40.1%
- Operating costs−$5.48B12.8%
- Operating income$11.74B27.4%
- Interest, other & tax−$3.50B8.2%
- Net income$8.23B19.2%
Where FY2009 revenue went
$42.91B- Cost of revenue: $25.68B, 60% of revenue
- Net income: $8.23B, 19% of revenue
- R&D: $1.33B, 3.1% of revenue
- SG&A: $4.15B, 9.7% of revenue
- Interest, other & tax: $3.50B, 8.2% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2009filed January 25, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $42.91B$37.49B | +14.4% |
| Cost of Revenue | $25.68B$24.29B | +5.7% |
| Gross Profit | $17.22B$13.20B | +30.5% |
| R&D Expenses | $1.33B$1.11B | +20.2% |
| SG&A Expenses | $4.15B$3.76B | +10.3% |
| Operating Expenses | $5.48B$4.87B | +12.6% |
| Operating Income | $11.74B$8.33B | +41.0% |
| Net Income | $8.23B$6.12B | +34.6% |
| EPS (Basic) | $0.33$0.25 | +32.9% |
| EPS (Diluted) | $0.32$0.24 | +33.9% |
| Shares Outstanding (Basic) | 25.00B24.68B | +1.3% |
| Shares Outstanding (Diluted) | 25.40B25.26B | +0.5% |
05—Questions
Frequently Asked Questions
What is the primary reason for the amendment to the 2009 10-K filing?
The primary reason for the amendment (10-K/A) is the retrospective adoption of new accounting principles related to revenue recognition for arrangements with multiple deliverables, specifically affecting how revenue and costs for products like the iPhone and Apple TV are recognized. This change allows for substantially all revenue and product costs to be recognized at the time of sale, rather than being deferred over time.
How did the new accounting principles impact Apple's financial results?
The adoption of the new accounting principles significantly increased reported net sales. For the fiscal year 2009, net sales increased by $6.4 billion due to this change. This was because revenue and associated costs for iPhone and Apple TV, previously recognized over time under subscription accounting, are now recognized at the point of sale.
What were the key drivers of Apple's revenue growth in fiscal year 2009?
The primary driver of revenue growth was the iPhone, with sales nearly doubling year-over-year, supported by expanded distribution and strong demand. The iTunes Store and App Store also contributed significantly with continued growth in digital content and applications sales. While Mac sales saw unit growth, net sales were impacted by lower average selling prices.
What is Apple's financial position regarding debt and cash reserves as of September 26, 2009?
Apple maintained a very strong financial position. As of September 26, 2009, the company had $33.992 billion in cash, cash equivalents, and marketable securities. Notably, Apple had no long-term debt outstanding.
06—Continue