UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

(Mark One)

 

For the quarterly period ended March 31, 2007

or

 

For the transition period from              to             .

Commission File Number: 000-10030

 

 

APPLE INC.

(Exact name of registrant as specified in its charter)

 

Registrant’s telephone number, including area code: (408) 996-1010

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o    No  x

864,948,023 shares of common stock issued and outstanding as of April 25, 2007

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

APPLE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except share and per share amounts)

		Three Months Ended						Six Months Ended
		March 31, 2007			April 1, 2006			March 31, 2007			April 1, 2006
Net sales		$	5,264		$	4,359		$	12,379		$	10,108
Cost of sales (1)		3,415			3,062			8,310			7,247
Gross margin		1,849			1,297			4,069			2,861
Operating expenses:
Research and development (1)		183			176			367			358
Selling, general, and administrative (1)		680			592			1,394			1,224
Total operating expenses		863			768			1,761			1,582
Operating income		986			529			2,308			1,279
Other income and expense		148			76			274			157
Income before provision for income taxes		1,134			605			2,582			1,436
Provision for income taxes		364			195			808			461
Net income		$	770		$	410		$	1,774		$	975
Earnings per common share:
Basic		$	0.89		$	0.49		$	2.06		$	1.17
Diluted		$	0.87		$	0.47		$	2.00		$	1.11
Shares used in computing earnings per share (in thousands):
Basic		863,003			840,910			860,347			835,658
Diluted		886,653			878,537			884,896			875,725
(1) Stock-based compensation expense was allocated as follows:
Cost of sales		$	9		$	5		$	15		$	10
Research and development		$	20		$	13		$	36		$	28
Selling, general, and administrative		$	34		$	24		$	58		$	48

 

See accompanying Notes to Condensed Consolidated Financial Statements.

2

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APPLE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except share amounts)

		March 31, 2007			September 30, 2006
ASSETS:
Current assets:
Cash and cash equivalents		$	7,095		$	6,392
Short-term investments		5,482			3,718
Accounts receivable, less allowances of $48 and $52, respectively		928			1,252
Inventories		208			270
Deferred tax assets		640			607
Other current assets		1,676			2,270
Total current assets		16,029			14,509
Property, plant and equipment, net		1,409			1,281
Goodwill		38			38