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Press release from Business Wire

Apple Reports Record Results

<p> 47.8 Million iPhones Sold; 22.9 Million iPads Sold </p>

Wednesday, January 23, 2013

Apple Reports Record Results16:30 EST Wednesday, January 23, 2013 CUPERTINO, Calif. (Business Wire) -- Apple® today announced financial results for its 13-week fiscal 2013 first quarter ended December 29, 2012. The Company posted record quarterly revenue of $54.5 billion and record quarterly net profit of $13.1 billion, or $13.81 per diluted share. These results compare to revenue of $46.3 billion and net profit of $13.1 billion, or $13.87 per diluted share, in the 14-week year-ago quarter. Gross margin was 38.6 percent compared to 44.7 percent in the year-ago quarter. International sales accounted for 61 percent of the quarter's revenue. Average weekly revenue was $4.2 billion in the quarter compared to $3.3 billion in the year-ago quarter. The Company sold a record 47.8 million iPhones in the quarter, compared to 37 million in the year-ago quarter. Apple also sold a record 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter. The Company sold 4.1 million Macs, compared to 5.2 million in the year-ago quarter. Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter. Apple's Board of Directors has declared a cash dividend of $2.65 per share of the Company's common stock. The dividend is payable on February 14, 2013, to shareholders of record as of the close of business on February 11, 2013. “We're thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple's CEO. “We're very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.” “We're pleased to have generated over $23 billion in cash flow from operations during the quarter,” said Peter Oppenheimer, Apple's CFO. “We established new all-time quarterly records for iPhone and iPad sales, significantly broadened our ecosystem, and generated Apple's highest quarterly revenue ever.” Apple is providing the following guidance for its fiscal 2013 second quarter: • revenue between $41 billion and $43 billion • gross margin between 37.5 percent and 38.5 percent • operating expenses between $3.8 billion and $3.9 billion • other income/(expense) of $350 million • tax rate of 26% Apple will provide live streaming of its Q1 2013 financial results conference call beginning at 2:00 p.m. PST on January 23, 2013 at 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 other 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 29, 2012, and its Form 10-Q for the quarter ended December 29, 2012 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 designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad. NOTE TO EDITORS: For additional information visit Apple's PR website (, or call Apple's Media Helpline at (408) 974-2042. © 2013 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh 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 EndedDecember 29,2012   December 31,2011   Net sales $ 54,512 $ 46,333 Cost of sales (1)   33,452   25,630   Gross margin   21,060   20,703   Operating expenses: Research and development (1) 1,010 758 Selling, general and administrative (1)   2,840   2,605   Total operating expenses   3,850   3,363   Operating income 17,210 17,340   Other income/(expense), net   462   137   Income before provision for income taxes 17,672 17,477   Provision for income taxes   4,594   4,413   Net income $ 13,078 $ 13,064   Earnings per share: Basic $ 13.93 $ 14.03 Diluted $ 13.81 $ 13.87   Shares used in computing earnings per share: Basic 938,916 931,041 Diluted 947,217 941,572   Cash dividends declared per common share $ 2.65 $ 0   (1) Includes share-based compensation expense as follows: Cost of sales $ 85 $ 63 Research and development $ 224 $ 160 Selling, general and administrative $ 236 $ 197   Apple Inc.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands)     December 29,2012September 29,2012   ASSETS:   Current assets: Cash and cash equivalents $ 16,154 $ 10,746 Short-term marketable securities 23,666 18,383 Accounts receivable, less allowances of $119 and $98, respectively 11,598 10,930 Inventories 1,455 791 Deferred tax assets 2,895 2,583 Vendor non-trade receivables 9,936 7,762 Other current assets   6,644   6,458 Total current assets 72,348 57,653   Long-term marketable securities 97,292 92,122 Property, plant and equipment, net 15,422 15,452 Goodwill 1,381 1,135 Acquired intangible assets, net 4,462 4,224 Other assets   5,183   5,478 Total assets $ 196,088 $ 176,064     LIABILITIES AND SHAREHOLDERS' EQUITY:   Current liabilities: Accounts payable $ 26,398 $ 21,175 Accrued expenses 13,207 11,414 Deferred revenue   7,274   5,953 Total current liabilities 46,879 38,542   Deferred revenue – non-current 2,938 2,648 Other non-current liabilities   18,925   16,664 Total liabilities   68,742   57,854   Commitments and contingencies   Shareholders' equity: Common stock, no par value; 1,800,000 shares authorized; 938,973 and 939,208 shares issued and outstanding, respectively 17,167 16,422 Retained earnings 109,567 101,289 Accumulated other comprehensive income   612   499 Total shareholders' equity   127,346   118,210   Total liabilities and shareholders' equity $ 196,088 $ 176,064   Apple Inc.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions)   Three Months EndedDecember 29,2012   December 31,2011   Cash and cash equivalents, beginning of the period $ 10,746 $ 9,815   Operating activities: Net income 13,078 13,064 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 1,588 721 Share-based compensation expense 545 420 Deferred income tax expense 1,179 1,456 Changes in operating assets and liabilities: Accounts receivable, net (668) (3,561) Inventories (664) (460) Vendor non-trade receivables (2,174) (1,206) Other current and non-current assets 413 (962) Accounts payable 6,145 4,314 Deferred revenue 1,611 1,296 Other current and non-current liabilities   2,373   2,472   Cash generated by operating activities   23,426   17,554   Investing activities: Purchases of marketable securities (37,192) (40,175) Proceeds from maturities of marketable securities 3,460 3,038 Proceeds from sales of marketable securities 23,002 21,472 Payments made in connection with business acquisitions, net (284) 0 Payments for acquisition of property, plant and equipment (2,317) (1,321) Payments for acquisition of intangible assets (138) (108) Other   (52)   (34)   Cash used in investing activities   (13,521)   (17,128)   Financing activities: Proceeds from issuance of common stock 76 91 Excess tax benefits from equity awards 404 333 Dividends and dividend equivalent rights paid (2,493) 0 Repurchase of common stock (1,950) 0 Taxes paid related to net share settlement of equity awards   (534)   (355)   Cash (used in)/generated by financing activities   (4,497)   69 Increase in cash and cash equivalents   5,408   495   Cash and cash equivalents, end of the period $ 16,154 $ 10,310   Supplemental cash flow disclosure: Cash paid for income taxes, net $ 1,890 $ 1,474                       Apple Inc.Q1 2013 Unaudited Summary Data (Units in thousands, Revenue in millions)         Q1'13 (a)Q4'12 (a)Q1'12 (a)Sequential ChangeYear/Year Change   Operating SegmentsRevenueRevenueRevenueRevenueRevenue Americas $ 20,341 $ 13,810 $ 17,714 47% 15% Europe 12,464 8,023 11,256 55% 11% Greater China (b) 6,830 5,427 4,080 26% 67% Japan 4,443 2,367 3,550 88% 25% Rest of Asia Pacific 3,993 2,110 3,617 89% 10% Retail   6,441   4,229   6,116 52% 5% Total Apple     $54,512$35,966$46,33352%18%         Q1'13 (a)Q4'12 (a)Q1'12 (a)Sequential ChangeYear/Year Change   Product SummaryUnitsRevenueUnitsRevenueUnitsRevenueUnitsRevenueUnitsRevenue iPhone (c) 47,789 $ 30,660 26,910 $ 16,645 37,044 $ 23,950 78% 84% 29% 28% iPad (c) 22,860 10,674 14,036 7,133 15,434 8,769 63% 50% 48% 22% Mac (c) 4,061 5,519 4,923 6,617 5,198 6,598 - 18% - 17% - 22% - 16% iPod (c) 12,679 2,143 5,344 820 15,397 2,528 137% 161% - 18% - 15% iTunes/Software/Services (d) 3,687 3,496 3,020 5% 22% Accessories (e)   1,829   1,255   1,468 46% 25% Total Apple     $54,512$35,966$46,33352%18%   (a)   Q1'13 and Q4'12 spanned 13 weeks whereas Q1'12 included a 14th week. (b) Greater China includes China, Hong Kong and Taiwan. (c) Includes deferrals and amortization of related non-software services and software upgrade rights. (d) Includes revenue from sales on the iTunes Store, the App Store, the Mac App Store, and the iBookstore, and revenue from sales of AppleCare, licensing and other services. (e) Includes sales of hardware peripherals and Apple-branded and third-party accessories for iPhone, iPad, Mac and iPod. ApplePress:Steve Dowling, 408-974-1896dowling@apple.comorInvestor Relations:Nancy Paxton, 408-974-5420paxton1@apple.comJoan Hoover,