Name
Section
Date
Chapter 12 Financial Reporting Problem
Apple Inc.
2014
(a)
Net cash provided by operating activities (in millions)
(b)
(c)
(d)
(e)
(f)
713
2013
CT12-1 The financial statements of Apple Inc. are presented in Appendix A.
E
Answer the following questions.
Instructions
(a) What was the amount of net cash provided by operating activities for the year ended September 27,
2014? For the year ended September 28, 2013?
(b) What was the amount of increase or decrease in cash and cash equivalents for the year ended
September 27, 2014?
(c) Which method of computing net cash provided by operating activities does Apple use?
(d) From your analysis of the September 27, 2014, statement of cash flows, was the change in accounts
receivable a decrease or an increase? Was the change in inventories a decrease or an increase? Was the
change in accounts payable a decrease or an increase?
(e) What was the net cash used by investing activities for the year ended September 27, 2014?
(f) What was the amount of interest paid in the year ended September 27, 2014? What was the amount
of income taxes paid for the same period?
CONSOLIDATED STATEMENTS OF OPERATIONS
( In millions, except number of shares which are reflected in thousands and per share amounts)
Net sales
Years onded
September 27, September 28, September 29,
2014
2013
2012
$ 182,796 $ 170,910 $ 156,508
112,258 106,606 87,846
70,537 64,304
68,662
6,041
4,475
3,381
Cost of sales
Gross margin
Operating expenses: :
Research and development
Selling, general and administrative
Total operating expenses
Operating income
Other income/(exponse), net
Income before provision for income taxes
Provision for income taxes
Net income
11,993
18,034
10,830
15.305
48.999
10,040
13,421
55,241
522
52,503
980
1,156
50,155
55,763
53,483
13,973
39,510
13.118
14,030
$
$
37,037
$
41.733
Earnings per share:
Basic
$
6.49
$
5.72
$
6.38
Diluted
$
6.45
$
5.68
$
6.31
Shares used in computing earnings per share:
Basic
Diluted
6,085,572
6,122,663
6,477,320
6,521,634
6,543,726
6,617,483
Cash dividends declared per common share
$
1.82
$
1.64
$
0.38
See accompanying Notes to Consolidated Financial Statements. .
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
In millions) )
Years ended
September 27, September 28, September 29,
2014
2013
2012
$ 39,510 $ 37,037 $ 41,733
(137)
(112)
(15)
1,390
522
(131)
149
(458)
(399)
Net Income
Other comprehensive income/loss):
Change in foreign currency translation, net of tax effects of $50, $35
and $13, respectively
$
Change in unrecognized gains/losses on derivative instruments:
Change in fair value of derivatives, net of tax benefit/(expense) of $(297).
$(351) and $73, respectively
Adjustment for net losses/gains) realized and included in net income,
net of tax expense/benefit) of $(36), $255 and $220, respectively
Total change in unrecognized gains/losses on derivative
instruments, net of tax
Change in unrealized gains/losses on marketable securities:
Change in fair value of marketable securities, net of tax benefit/
(expense) of $(153), $458 and $(421), respectively
Adjustment for net losses/gains) realized and included in net income,
net of tax expense/benefit) of $71, $82 and $68, respectively
Total change in unrealized gains/losses on marketable securities,
net of tax
Total other comprehensive income/(loss)
Total comprehensive income
1,539
64
(530)
285
(791)
715
(134)
(131)
(114)
601
151
1.553
(922)
(970)
56
$
41,063
$
36,067
$
41,789
See accompanying Notes to Consolidated Financial Statements.
NSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands and par value)
September 27
2014
September 28.
2013
$
13,844
11,233
17,460
2,111
4,318
14,259
26,287
13,102
1,764
3,453
7,539
6.882
9,759
9,806
68,531
130,162
20,624
4,616
4,142
3,764
$ 231.839
73,286
106,215
16,597
1,577
4,179
5,146
$ 207.000
ASSETS:
Current assets:
Cash and cash equivalents
Short-term marketable securities
Accounts receivable, less allowances of $86 and $09, respectively
Inventories
Deferred tax assets
Vendor non-trade receivables
Other current assets
Total current assets
Long-term marketable securities
Property, plant and equipment, net
Goodwill
Acquired intangible assets, net
Other assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable
Accrued expenses
Deferred revenue
Commercial paper
Total current liabilities
Deferred revenue-non-current
Long-term debt
Other non-current liabilities
Total liabilities
Commitments and contingencies
Shareholders' equity:
Common stock and additional paid-in capital, $0.00001 par value; 12,600,000 shares
authorized: 5,866,161 and 6,294,494 shares issued and outstanding, respectively
Retained earnings
Accumulated other comprehensive income/loss)
Total shareholders' equity
Total liabilities and shareholders' equity
$
30,196
$
22,367
18,453
13,856
7,435
0
8,491
6,308
63,448
3,031
28,987
43,658
2,625
16,960
20,208
24,826
120,292
83,451
19,764
23,313
87,152
1,082
104,256
(471)
123,549
$ 207,000
111,547
$ 231,839
See accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years ended
September 27, September 28, September 29,
2014
2013
2012
Cash and cash equivalents, beginning of the year
$ 14,259 $ 10,746 $ 9,815
Operating activities:
Net income
39,510 37,037 41,733
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization
7,946
6,757
3,277
Share-based compensation expense
2,863
2,253
1,740
Deferred income tax expense
2,347
1,141
4,405
Changes in operating assets and liabilities:
Accounts receivable, net
(4,232) (2,172) (5,551)
Inventories
(76) (973)
(15)
Vendor non-trade receivables
2,220)
223
(1,414)
Other current and non-current assets
167
1,080 (3,162)
Accounts payable
5,938
2,340 4,467
Deferred revenue
1,460
1,459
2,824
Other current and non-current liabilities
6,010
4,521
2,552
Cash generated by operating activities
59,713 53,666 50,856
Investing activities:
Purchases of marketable securities
(217,128) (148,489) (151,232)
Proceeds from maturities of marketable securities
18,810
20,317
13,035
Proceeds from sales of marketable securities
189,301 104,130 99,770
Payments made in connection with business acquisitions, net
(3,765) (496) (350)
Payments for acquisition of property, plant and equipment
(9,571) (8.165)
(8,295)
Payments for acquisition of intangible assets
(242) (911) (1,107)
Other
16
(160)
(48)
Cash used in investing activities
(22,579) (33,774) (48,227)
Financing activities:
Proceeds from issuance of common stock
730
530
665
Excess tax benefits from equity awards
739
701
1,351
Taxes paid related to net share settlement of equity awards
(1,158) (1,082) (1,226)
Dividends and dividend equivalents paid
(11,126) (10,564) (2.488)
Repurchase of common stock
(45,000) (22,860)
0
Proceeds from issuance of long-term debt, net
11,960 16,896
Proceeds from issuance of commercial paper, net
6,306
Cash used in financing activities
(37,549) (16,379) (1,698)
Increase/(decrease) in cash and cash equivalents
(415)
3,513
931
Cash and cash equivalents, end of the year
$ 13,844 $ 14,259 $ 10,746
Supplemental cash flow disclosure:
Cash paid for income taxes, net
$ 10,026 $ 9,128 $ 7,682
Cash paid for interest
339 $ 0 $ 0
See accompanying Notes to Consolidated Financial Statements.
0
0
0
69 69
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