10-KPeriod: FY2012

Apple Inc. Annual Report, Year Ended Sep 29, 2012

Filed October 31, 2012For Securities:AAPL

Summary

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.

Financial Highlights

53 data points
Beta

Revenue

$156.51B

43.9% Gross Margin

Net Income

$41.73B

26.7% Net Margin

EPS (Diluted)

$1.58

Total Assets

$176.06B

Cash & Equivalents

$10.75B

Free Cash Flow

$50.86B

Financial Statements
Beta
Revenue$156.51B
Cost of Revenue$87.85B
Gross Profit$68.66B
R&D Expenses$3.38B
SG&A Expenses$10.04B
Operating Expenses$13.42B
Operating Income$55.24B
Interest Expense$0
Net Income$41.73B
EPS (Basic)$1.59
EPS (Diluted)$1.58
Shares Outstanding (Basic)26.17B
Shares Outstanding (Diluted)26.47B

Key Highlights

  • 1Significant year-over-year net sales growth, reaching $156.5 billion in fiscal year 2012, a 45% increase from 2011.
  • 2iPhone and iPad sales were primary growth drivers, with iPhone net sales increasing 71% and iPad net sales increasing 59% compared to the prior year.
  • 3Apple's cash, cash equivalents, and marketable securities grew substantially to $121.3 billion, indicating strong liquidity and financial flexibility.
  • 4Research and Development (R&D) expenses increased by 39% to $3.4 billion, highlighting Apple's continued commitment to innovation.
  • 5The company declared its first quarterly dividend of $2.65 per share in Q4 2012, signaling a shift towards returning capital to shareholders.
  • 6Apple continued to expand its global retail footprint, with a net increase of 33 retail stores in 2012, bringing the total to 390 stores worldwide.
  • 7Despite strong sales, the company faces significant risks related to component supply chain, intense competition, and intellectual property litigation.

Frequently Asked Questions

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.

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.

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.

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.