01—Abstract
Summary
Summary of the 10-K filed October 27, 2014. Cited figures are marked; the original filing is the authoritative source.
Apple Inc.'s 2014 10-K filing reveals a strong performance, with net sales increasing by 7% year-over-year to $182.8 billiona.
This growth was primarily driven by robust iPhone sales, bolstered by the introduction of the iPhone 6 and 6 Plus, and continued strong demand for Mac products, particularly MacBook Air and MacBook Pro. The company also saw significant growth in its iTunes, Software, and Services segment, benefiting from App Store sales and AppleCare.
Despite a slight decline in iPad sales, the overall performance underscores Apple's continued innovation and market leadership. The company also demonstrated a strong commitment to returning capital to shareholders, increasing its share repurchase authorization and dividend payouts, funded in part by significant debt issuance.
02—Key points
Key Highlights
- Net sales reached $182.8 billion, a 7% increase year-over-year, driven by strong iPhone and Mac sales.
- iPhone sales continue to be a dominant revenue driver, accounting for 56% of total net sales, with significant growth attributed to the iPhone 6 and 6 Plus launch.
- The iTunes, Software, and Services segment showed healthy growth (13%), primarily due to App Store performance, partially offset by declining music sales.
- Significant investment in Research and Development (R&D) increased by 35% to $6.0 billion, reflecting a commitment to innovation.
- Apple continued its substantial capital return program, increasing its share repurchase authorization to $90 billion and paying $11.1 billion in dividends.
- The company expanded its product and service offerings, announcing Apple Watch and Apple Pay, and acquiring Beats Music and Beats Electronics to bolster its music and audio offerings.
- Geographic segment performance showed strong growth in Greater China (17%) and Japan (11%), indicating expanding international market penetration.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Apple Inc. kept $0.22.
- Revenue$182.79B100.0%
- Cost of revenue−$112.26B61.4%
- Gross profit$70.54B38.6%
- Operating costs−$18.03B9.9%
- Operating income$52.50B28.7%
- Interest, other & tax−$12.99B7.1%
- Net income$39.51B21.6%
Where FY2014 revenue went
$182.79B- Cost of revenue: $112.26B, 61% of revenue
- Net income: $39.51B, 22% of revenue
- R&D: $6.04B, 3.3% of revenue
- SG&A: $11.99B, 6.6% of revenue
- Interest, other & tax: $12.99B, 7.1% of revenue
Kept 22% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed October 27, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $182.79B$170.91B | +7.0% |
| Cost of Revenue | $112.26B$106.61B | +5.3% |
| Gross Profit | $70.54B$64.30B | +9.7% |
| R&D Expenses | $6.04B$4.47B | +35.0% |
| SG&A Expenses | $11.99B$10.83B | +10.7% |
| Operating Expenses | $18.03B$15.30B | +17.8% |
| Operating Income | $52.50B$49.00B | +7.2% |
| Interest Expense | $384.00M$136.00M | +182.4% |
| Net Income | $39.51B$37.04B | +6.7% |
| EPS (Basic) | $1.62$1.43 | +13.5% |
| EPS (Diluted) | $1.61$1.42 | +13.6% |
| Shares Outstanding (Basic) | 24.34B25.91B | −6.0% |
| Shares Outstanding (Diluted) | 24.49B26.09B | −6.1% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Apple's revenue growth in fiscal year 2014?
Apple's revenue growth in fiscal year 2014 was primarily driven by strong sales of its iPhone products, significantly boosted by the introduction of the iPhone 6 and 6 Plus. Growth was also supported by increased sales of Mac computers, particularly the MacBook Air and MacBook Pro, and a healthy expansion in the iTunes, Software, and Services segment, fueled by the App Store and AppleCare.
How did Apple manage its capital and return value to shareholders?
Apple demonstrated a strong commitment to shareholder value by increasing its share repurchase authorization to $90 billion and raising its quarterly dividend to $0.47 per share. The company utilized $45 billion for share repurchases and paid $11.1 billion in dividends during fiscal year 2014. To support these capital return initiatives, Apple also issued $12.0 billion in long-term debt and utilized its commercial paper program.
What are the key product categories for Apple and their performance in fiscal year 2014?
Apple's key product categories include iPhone, iPad, Mac, and iPod. In fiscal year 2014, iPhone sales grew 12% to $101.99 billion, continuing its dominance. iPad sales saw a slight decrease of 5% to $30.28 billion. Mac sales increased by 12% to $24.08 billion, while iPod sales continued their decline, down 48% to $2.29 billion. The iTunes, Software, and Services segment grew 13% to $18.06 billion.
What strategic investments or acquisitions did Apple make in fiscal year 2014?
In fiscal year 2014, Apple strategically expanded its product and service portfolio. It announced the upcoming Apple Watch and launched Apple Pay, enhancing its mobile payment and wearable device offerings. Furthermore, Apple acquired Beats Music and Beats Electronics, strengthening its position in the music streaming and audio hardware markets. The company also significantly increased its R&D spending to $6.0 billion, indicating a continued focus on innovation.
06—Continue