01—Abstract
Summary
Summary of the 10-K filed October 31, 2012. Cited figures are marked; the original filing is the authoritative source.
Apple Inc.'s 2012 10-K filing showcases a period of robust growth, primarily driven by the continued success of its iPhone and iPad product lines.
The company reported substantial increases in net sales, reflecting strong consumer demand and successful product launches, including the iPhone 5 and the new iPad. This growth underscores Apple's dominant position in the mobile device market and its ability to innovate and expand its product ecosystem. Despite facing intense competition and various supply chain risks, Apple demonstrated strong financial performance, with significant revenue growth and healthy profit margins.
The company's strategic focus on integrating hardware, software, and services, coupled with its expanding global distribution network, positions it for sustained success. Investors can take confidence in Apple's consistent ability to deliver innovative products that resonate with a broad customer base, leading to impressive financial results and a strong market presence.
02—Key points
Key Highlights
- Significant year-over-year net sales growth, reaching $156.5 billion in fiscal year 2012, a 45% increase from 2011.
- iPhone and iPad sales were primary growth drivers, with iPhone net sales increasing 71% and iPad net sales increasing 59% compared to the prior year.
- Apple's cash, cash equivalents, and marketable securities grew substantially to $121.3 billion, indicating strong liquidity and financial flexibility.
- Research and Development (R&D) expenses increased by 39% to $3.4 billion, highlighting Apple's continued commitment to innovation.
- The company declared its first quarterly dividend of $2.65 per share in Q4 2012, signaling a shift towards returning capital to shareholders.
- Apple continued to expand its global retail footprint, with a net increase of 33 retail stores in 2012, bringing the total to 390 stores worldwide.
- Despite strong sales, the company faces significant risks related to component supply chain, intense competition, and intellectual property litigation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Apple Inc. kept $0.27.
- Revenue$156.51B100.0%
- Cost of revenue−$87.85B56.1%
- Gross profit$68.66B43.9%
- Operating costs−$13.42B8.6%
- Operating income$55.24B35.3%
- Interest, other & tax−$13.51B8.6%
- Net income$41.73B26.7%
Where FY2012 revenue went
$156.51B- Cost of revenue: $87.85B, 56% of revenue
- Net income: $41.73B, 27% of revenue
- R&D: $3.38B, 2.2% of revenue
- SG&A: $10.04B, 6.4% of revenue
- Interest, other & tax: $13.51B, 8.6% of revenue
Kept 27% as net incomeR&D $3.38B · 2.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed October 31, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $156.51B$108.25B | +44.6% |
| Cost of Revenue | $87.85B$64.43B | +36.3% |
| Gross Profit | $68.66B$43.82B | +56.7% |
| R&D Expenses | $3.38B$2.43B | +39.2% |
| SG&A Expenses | $10.04B$7.60B | +32.1% |
| Operating Expenses | $13.42B$10.03B | +33.8% |
| Operating Income | $55.24B$33.79B | +63.5% |
| Interest Expense | $0$0 | — |
| Net Income | $41.73B$25.92B | +61.0% |
| EPS (Basic) | $1.59$1.00 | +59.2% |
| EPS (Diluted) | $1.58$0.99 | +59.6% |
| Shares Outstanding (Basic) | 26.17B25.88B | +1.1% |
| Shares Outstanding (Diluted) | 26.47B26.23B | +0.9% |
05—Questions
Frequently Asked Questions
What were the primary growth drivers for Apple in fiscal year 2012?
The primary growth drivers were the iPhone and iPad product lines. Net sales for iPhone and related products and services increased by 71% to $80.5 billion, and iPad net sales increased by 59% to $32.4 billion compared to fiscal year 2011. These increases were driven by strong demand for new models like the iPhone 5 and the new iPad, as well as continued demand for existing models.
How has Apple's cash position evolved, and what does this imply?
Apple's cash, cash equivalents, and marketable securities significantly increased by 49% to $121.3 billion as of September 29, 2012. This substantial liquidity indicates a strong financial position, providing ample resources for operations, investments in R&D, capital expenditures, potential acquisitions, and shareholder returns.
What is Apple's strategy regarding dividends and share repurchases?
In March 2012, Apple initiated a dividend policy, planning to pay quarterly dividends of $2.65 per share, with the first dividend paid in Q4 2012. Additionally, the company authorized a $10 billion share repurchase program to begin in 2013, primarily aimed at neutralizing dilution from equity grants. These actions signal a commitment to returning capital to shareholders.
What are the main risks Apple highlighted in its 2012 10-K filing?
Apple highlighted several key risks, including intense global competition and rapid technological change, potential supply chain disruptions for critical components, reliance on outsourcing partners for manufacturing, significant inventory and purchase commitment risks, intellectual property litigation, and the impact of global economic conditions on consumer and business spending. The company also noted the potential for quality issues in its complex products and the dependence on third-party software developers.
06—Continue