UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

x        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2007

 

or

 

o        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

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.

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

 

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

869,640,955 shares of common stock issued and outstanding as of July 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						Nine Months Ended
		June 30,  2007			July 1,  2006			June 30,  2007			July 1,  2006
Net sales		$	5,410		$	4,370		$	17,789		$	14,478
Cost of sales (1)		3,415			3,045			11,725			10,292
Gross margin		1,995			1,325			6,064			4,186
Operating expenses:
Research and development (1)		208			175			575			533
Selling, general, and administrative (1)		746			584			2,140			1,808
Total operating expenses		954			759			2,715			2,341
Operating income		1,041			566			3,349			1,845
Other income and expense		155			95			429			252
Income before provision for income taxes		1,196			661			3,778			2,097
Provision for income taxes		378			189			1,186			650
Net income		$	818		$	472		$	2,592		$	1,447
Earnings per common share:
Basic		$	0.94		$	0.55		$	3.01		$	1.72
Diluted		$	0.92		$	0.54		$	2.92		$	1.65
Shares used in computing earnings per share (in thousands):
Basic		866,806			851,375			862,500			840,759
Diluted		890,671			876,368			887,095			876,971

 

(1) Stock-based compensation expense was allocated as follows:
Cost of sales		$	10		$	6		$	25		$	16
Research and development		$	20		$	12		$	56		$	40
Selling, general, and administrative		$	35		$	19		$	93		$	67

 

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)

		June 30, 2007			September 30, 2006
ASSETS:
Current assets:
Cash and cash equivalents		$	7,118		$	6,392
Short-term investments		6,649			3,718
Accounts receivable, less allowances of $47 and $52, respectively		1,410			1,252
Inventories		251			270
Deferred tax assets		687			607
Other current assets		2,630			2,270
Total current assets		18,745			14,509
Property, plant and equipment, net		1,626			1,281
Goodwill		38			38
Acquired intangible assets, net		237			139
Other assets		1,001			1,238