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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 26, 2022
or
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: 001-36743
http://api.rkd.refinitiv.com/api/FilingsRetrieval3/.67525470.0000320193-22-000059aapl-20220326_g1.jpg.ashx
Apple Inc.
(Exact name of Registrant as specified in its charter)
California94-2404110
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
One Apple Park Way
Cupertino, California
95014
(Address of principal executive offices)(Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
AAPL
The Nasdaq Stock Market LLC
1.000% Notes due 2022
The Nasdaq Stock Market LLC
1.375% Notes due 2024
The Nasdaq Stock Market LLC
0.000% Notes due 2025
The Nasdaq Stock Market LLC
0.875% Notes due 2025
The Nasdaq Stock Market LLC
1.625% Notes due 2026
The Nasdaq Stock Market LLC
2.000% Notes due 2027
The Nasdaq Stock Market LLC
1.375% Notes due 2029
The Nasdaq Stock Market LLC
3.050% Notes due 2029
The Nasdaq Stock Market LLC
0.500% Notes due 2031
The Nasdaq Stock Market LLC
3.600% Notes due 2042
The Nasdaq Stock Market LLC
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       No  

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Yes       No  
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) 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       No  
16,185,181,000 shares of common stock were issued and outstanding as of April 15, 2022.



Apple Inc.

Form 10-Q
For the Fiscal Quarter Ended March 26, 2022
TABLE OF CONTENTS

Page



PART I — FINANCIAL INFORMATION
Item 1.    Financial Statements
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Net sales:
   Products$77,457 $72,683 $181,886 $168,361 
   Services19,821 16,901 39,337 32,662 
Total net sales97,278 89,584 221,223 201,023 
Cost of sales:
   Products49,290 46,447 113,599 108,577 
   Services5,429 5,058 10,822 10,039 
Total cost of sales54,719 51,505 124,421 118,616 
Gross margin42,559 38,079 96,802 82,407 
Operating expenses:
Research and development6,387 5,262 12,693 10,425 
Selling, general and administrative6,193 5,314 12,642 10,945 
Total operating expenses12,580 10,576 25,335 21,370 
Operating income29,979 27,503 71,467 61,037 
Other income/(expense), net160 508 (87)553 
Income before provision for income taxes30,139 28,011 71,380 61,590 
Provision for income taxes5,129 4,381 11,740 9,205 
Net income$25,010 $23,630 $59,640 $52,385 
Earnings per share:
Basic$1.54 $1.41 $3.65 $3.11 
Diluted$1.52 $1.40 $3.62 $3.08 
Shares used in computing earnings per share:
Basic16,278,802 16,753,476 16,335,263 16,844,298 
Diluted16,403,316 16,929,157 16,461,304 17,021,423 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 1


Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In millions)

Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Net income
$25,010 $23,630 $59,640 $52,385 
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax
(21)(78)(381)471 
Change in unrealized gains/losses on derivative instruments, net of tax:
Change in fair value of derivative instruments334 332 696 28 
Adjustment for net (gains)/losses realized and included in net income
(301)759 (208)576 
Total change in unrealized gains/losses on derivative instruments
33 1,091 488 604 
Change in unrealized gains/losses on marketable debt securities, net of tax:
Change in fair value of marketable debt securities
(5,633)(1,403)(6,809)(775)
Adjustment for net (gains)/losses realized and included in net income
54 (75)45 (180)
Total change in unrealized gains/losses on marketable debt securities
(5,579)(1,478)(6,764)(955)
Total other comprehensive income/(loss)(5,567)(465)(6,657)120 
Total comprehensive income$19,443 $23,165 $52,983 $52,505 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 2


Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)

March 26,
2022
September 25,
2021
ASSETS:
Current assets:
Cash and cash equivalents$28,098 $34,940 
Marketable securities23,413 27,699 
Accounts receivable, net20,815 26,278 
Inventories5,460 6,580 
Vendor non-trade receivables24,585 25,228 
Other current assets15,809 14,111 
Total current assets118,180 134,836 
Non-current assets:
Marketable securities141,219 127,877 
Property, plant and equipment, net39,304 39,440 
Other non-current assets51,959 48,849 
Total non-current assets
232,482 216,166 
Total assets
$350,662 $351,002 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable$52,682 $54,763 
Other current liabilities50,248 47,493 
Deferred revenue7,920 7,612 
Commercial paper6,999 6,000 
Term debt9,659 9,613 
Total current liabilities127,508 125,481 
Non-current liabilities:
Term debt
103,323 109,106 
Other non-current liabilities
52,432 53,325 
Total non-current liabilities
155,755 162,431 
Total liabilities
283,263 287,912 
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 16,207,568 and 16,426,786 shares issued and outstanding, respectively
61,181 57,365 
Retained earnings12,712 5,562 
Accumulated other comprehensive income/(loss)(6,494)163 
Total shareholders’ equity67,399 63,090 
Total liabilities and shareholders’ equity$350,662 $351,002 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 3


Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(In millions, except per share amounts)

Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Total shareholders’ equity, beginning balances$71,932 $66,224 $63,090 $65,339 
Common stock and additional paid-in capital:
Beginning balances58,424 51,744 57,365 50,779 
Common stock issued
593 561 593 561 
Common stock withheld related to net share settlement of equity awards
(149)(135)(1,412)(1,236)
Share-based compensation2,313 2,033 4,635 4,099 
Ending balances61,181 54,203 61,181 54,203 
Retained earnings:
Beginning balances14,435 14,301 5,562 14,966 
Net income25,010 23,630 59,640 52,385 
Dividends and dividend equivalents declared(3,633)(3,495)(7,298)(7,042)
Common stock withheld related to net share settlement of equity awards
(190)(174)(1,920)(2,047)
Common stock repurchased(22,910)(19,001)(43,272)(43,001)
Ending balances12,712 15,261 12,712 15,261 
Accumulated other comprehensive income/(loss):
Beginning balances(927)179 163 (406)
Other comprehensive income/(loss)(5,567)(465)(6,657)120 
Ending balances(6,494)(286)(6,494)(286)
Total shareholders’ equity, ending balances$67,399 $69,178 $67,399 $69,178 
Dividends and dividend equivalents declared per share or RSU$0.22 $0.205 $0.44 $0.41 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 4


Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)

Six Months Ended
March 26,
2022
March 27,
2021
Cash, cash equivalents and restricted cash, beginning balances$35,929 $39,789 
Operating activities:
Net income59,640 52,385 
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization5,434 5,463 
Share-based compensation expense4,517 4,001 
Deferred income tax expense/(benefit)1,088 (207)
Other(20)(474)
Changes in operating assets and liabilities:
Accounts receivable, net5,542 (2,347)
Inventories1,065 (1,226)
Vendor non-trade receivables643 6,792 
Other current and non-current assets(3,542)(4,333)
Accounts payable(1,750)(1,997)
Deferred revenue627 1,642 
Other current and non-current liabilities1,888 3,045 
Cash generated by operating activities75,132 62,744 
Investing activities:
Purchases of marketable securities(61,987)(74,424)
Proceeds from maturities of marketable securities18,000 39,605 
Proceeds from sales of marketable securities24,668 21,645 
Payments for acquisition of property, plant and equipment(5,317)(5,769)
Payments made in connection with business acquisitions, net(167)(9)
Other(568) 
Cash used in investing activities(25,371)(18,952)
Financing activities:
Payments for taxes related to net share settlement of equity awards(3,218)(3,160)
Payments for dividends and dividend equivalents(7,327)(7,060)
Repurchases of common stock(43,109)(43,323)
Proceeds from issuance of term debt, net 13,923 
Repayments of term debt(3,750)(4,500)
Proceeds from commercial paper, net999 22 
Other(105)523 
Cash used in financing activities(56,510)(43,575)
Increase/(Decrease) in cash, cash equivalents and restricted cash(6,749)217 
Cash, cash equivalents and restricted cash, ending balances$29,180 $40,006 
Supplemental cash flow disclosure:
Cash paid for income taxes, net$9,301 $10,276 
Cash paid for interest$1,406 $1,327 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 5


Apple Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The condensed consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries (collectively “Apple” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended September 25, 2021.
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters. The Company’s fiscal years 2022 and 2021 span 52 weeks each. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (net income in millions and shares in thousands):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Numerator:
Net income$25,010 $23,630 $59,640 $52,385 
Denominator:
Weighted-average basic shares outstanding16,278,802 16,753,476 16,335,263 16,844,298 
Effect of dilutive securities124,514 175,681 126,041 177,125 
Weighted-average diluted shares16,403,316 16,929,157 16,461,304 17,021,423 
Basic earnings per share$1.54 $1.41 $3.65 $3.11 
Diluted earnings per share$1.52 $1.40 $3.62 $3.08 
Apple Inc. | Q2 2022 Form 10-Q | 6


Note 2 – Revenue
Net sales disaggregated by significant products and services for the three- and six-month periods ended March 26, 2022 and March 27, 2021 were as follows (in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
iPhone® (1)
$50,570 $47,938 $122,198 $113,535 
Mac® (1)
10,435 9,102 21,287 17,777 
iPad® (1)
7,646 7,807 14,894 16,242 
Wearables, Home and Accessories (1)(2)
8,806 7,836 23,507 20,807 
Services (3)
19,821 16,901 39,337 32,662 
Total net sales (4)
$97,278 $89,584 $221,223 $201,023 
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods®, Apple TV®, Apple Watch®, Beats® products, HomePod mini®, iPod touch® and accessories.
(3)Services net sales include sales from the Company’s advertising, AppleCare®, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
(4)Includes $3.0 billion of revenue recognized in the three months ended March 26, 2022 that was included in deferred revenue as of December 25, 2021, $2.7 billion of revenue recognized in the three months ended March 27, 2021 that was included in deferred revenue as of December 26, 2020, $4.8 billion of revenue recognized in the six months ended March 26, 2022 that was included in deferred revenue as of September 25, 2021, and $4.1 billion of revenue recognized in the six months ended March 27, 2021 that was included in deferred revenue as of September 26, 2020.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 9, “Segment Information and Geographic Data” for the three- and six-month periods ended March 26, 2022 and March 27, 2021, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.
As of March 26, 2022 and September 25, 2021, the Company had total deferred revenue of $12.5 billion and $11.9 billion, respectively. As of March 26, 2022, the Company expects 63% of total deferred revenue to be realized in less than a year, 27% within one-to-two years, 8% within two-to-three years and 2% in greater than three years.
Apple Inc. | Q2 2022 Form 10-Q | 7


Note 3 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of March 26, 2022 and September 25, 2021 (in millions):
March 26, 2022
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$14,298 $— $— $14,298 $14,298 $ $ 
Level 1 (1):
Money market funds7,653   7,653 7,653   
Mutual funds230 7 (9)228  228  
Subtotal7,883 7 (9)7,881 7,653 228  
Level 2 (2):
Equity securities1,527  (1,132)395  395  
U.S. Treasury securities28,711 2 (1,037)27,676 2,306 3,554 21,816 
U.S. agency securities6,561  (407)6,154 251 683 5,220 
Non-U.S. government securities18,868 44 (551)18,361 25 4,526 13,810 
Certificates of deposit and time deposits
2,872   2,872 2,221 601 50 
Commercial paper2,913   2,913 1,310 1,603  
Corporate debt securities93,057 94 (4,266)88,885 34 11,309 77,542 
Municipal securities990 1 (22)969  162 807 
Mortgage- and asset-backed securities
23,613 3 (1,290)22,326  352 21,974 
Subtotal179,112 144 (8,705)170,551 6,147 23,185 141,219 
Total (3)
$201,293 $151 $(8,714)$192,730 $28,098 $23,413 $141,219 
September 25, 2021
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$17,305 $— $— $17,305 $17,305 $ $ 
Level 1 (1):
Money market funds9,608   9,608 9,608   
Mutual funds175 11 (1)185  185  
Subtotal9,783 11 (1)9,793 9,608 185  
Level 2 (2):
Equity securities1,527  (564)963  963  
U.S. Treasury securities22,878 102 (77)22,903 3,596 6,625 12,682 
U.S. agency securities8,949 2 (64)8,887 1,775 1,930 5,182 
Non-U.S. government securities20,201 211 (101)20,311 390 3,091 16,830 
Certificates of deposit and time deposits
1,300   1,300 490 810  
Commercial paper2,639   2,639 1,776 863  
Corporate debt securities83,883 1,242 (267)84,858  12,327 72,531 
Municipal securities967 14  981  130 851 
Mortgage- and asset-backed securities
20,529 171 (124)20,576  775 19,801 
Subtotal162,873 1,742 (1,197)163,418 8,027 27,514 127,877 
Total (3)
$189,961 $1,753 $(1,198)$190,516 $34,940 $27,699 $127,877 
(1)Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.
(2)Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
(3)As of March 26, 2022 and September 25, 2021, total marketable securities included $15.4 billion and $17.9 billion, respectively, that were restricted from general use, related to the European Commission decision finding that Ireland granted state aid to the Company, and other agreements.
Apple Inc. | Q2 2022 Form 10-Q | 8


The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of March 26, 2022 (in millions):
Due after 1 year through 5 years$97,603 
Due after 5 years through 10 years22,899 
Due after 10 years20,717 
Total fair value$141,219 
Derivative Instruments and Hedging
The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons, including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates.
Foreign Exchange Risk
To protect gross margins from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, option contracts or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months.
To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of March 26, 2022, the Company’s hedged term debt– and marketable securities–related foreign currency transactions are expected to be recognized within 20 years.
The Company may also enter into derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign currency exchange rates, as well as to offset a portion of the foreign currency exchange gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.
Interest Rate Risk
To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may enter into interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges.
The notional amounts of the Company’s outstanding derivative instruments as of March 26, 2022 and September 25, 2021 were as follows (in millions):
March 26,
2022
September 25,
2021
Derivative instruments designated as accounting hedges:
Foreign exchange contracts$65,140 $76,475 
Interest rate contracts$20,775 $16,875 
Derivative instruments not designated as accounting hedges:
Foreign exchange contracts$110,758 $126,918 
The gross fair values of the Company’s derivative assets and liabilities were not material as of March 26, 2022 and September 25, 2021.
The gains and losses recognized in other comprehensive income/(loss) and amounts reclassified from accumulated other comprehensive income/(loss) to net income for the Company’s derivative instruments designated as cash flow hedges were not material in the three- and six-month periods ended March 26, 2022 and March 27, 2021.
Apple Inc. | Q2 2022 Form 10-Q | 9


The carrying amounts of the Company’s hedged items in fair value hedges as of March 26, 2022 and September 25, 2021 were as follows (in millions):
March 26,
2022
September 25,
2021
Hedged assets/(liabilities):
Current and non-current marketable securities$14,943 $15,954 
Current and non-current term debt$(19,766)$(17,857)
The gains and losses on the Company’s derivative instruments designated as fair value hedges and the related hedged item adjustments were not material in the three- and six-month periods ended March 26, 2022 and March 27, 2021.
Accounts Receivable
Trade Receivables
The Company has considerable trade receivables outstanding with its third-party cellular network carriers, wholesalers, retailers, resellers, small and mid-sized businesses and education, enterprise and government customers. The Company generally does not require collateral from its customers; however, the Company will require collateral or third-party credit support in certain instances to limit credit risk. In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers or by requiring third-party financing, loans or leases to support credit exposure. These credit-financing arrangements are directly between the third-party financing company and the end customer. As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements.
The Company’s cellular network carriers accounted for 36% and 42% of total trade receivables as of March 26, 2022 and September 25, 2021, respectively.
Vendor Non-Trade Receivables
The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. As of March 26, 2022, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 52% and 12%. As of September 25, 2021, the Company had three vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 52%, 11% and 11%.
Note 4 – Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of March 26, 2022 and September 25, 2021 (in millions):
Property, Plant and Equipment, Net
March 26,
2022
September 25,
2021
Gross property, plant and equipment$109,324 $109,723 
Accumulated depreciation and amortization(70,020)(70,283)
Total property, plant and equipment, net$39,304 $39,440 
Other Non-Current Liabilities
March 26,
2022
September 25,
2021
Long-term taxes payable$20,711 $24,689 
Other non-current liabilities31,721 28,636 
Total other non-current liabilities$52,432 $53,325 
Apple Inc. | Q2 2022 Form 10-Q | 10


Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Interest and dividend income$700 $718 $1,350 $1,465 
Interest expense(691)(670)(1,385)(1,308)
Other income/(expense), net151 460 (52)396 
Total other income/(expense), net$160 $508 $(87)$553 
Note 5 – Debt
Commercial Paper
The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of March 26, 2022 and September 25, 2021, the Company had $7.0 billion and $6.0 billion of Commercial Paper outstanding, respectively. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the six months ended March 26, 2022 and March 27, 2021 (in millions):
Six Months Ended
March 26,
2022
March 27,
2021
Maturities 90 days or less:
Proceeds from commercial paper, net$4,952 $2,008 
Maturities greater than 90 days:
Proceeds from commercial paper1,191 1,368 
Repayments of commercial paper(5,144)(3,354)
Repayments of commercial paper, net(3,953)(1,986)
Total proceeds from commercial paper, net$999 $22 
Term Debt
As of March 26, 2022 and September 25, 2021, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate carrying amount of $113.0 billion and $118.7 billion, respectively (collectively the “Notes”). As of March 26, 2022 and September 25, 2021, the fair value of the Company’s Notes, based on Level 2 inputs, was $110.5 billion and $125.3 billion, respectively.
Note 6 – Shareholders’ Equity
Share Repurchase Program
During the six months ended March 26, 2022, the Company repurchased 266 million shares of its common stock for $43.3 billion under a share repurchase program authorized by the Board of Directors (the “Program”), including 35 million shares delivered under accelerated share repurchase agreements totaling $6.0 billion that were entered into in November 2021. The Program does not obligate the Company to acquire a minimum amount of shares. Under the Program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
Apple Inc. | Q2 2022 Form 10-Q | 11


Note 7 – Benefit Plans
Restricted Stock Units
A summary of the Company’s restricted stock unit (“RSU”) activity and related information for the six months ended March 26, 2022 is as follows:
Number of
RSUs
(in thousands)
Weighted-Average
Grant Date Fair
Value Per RSU
Aggregate
Fair Value
(in millions)
Balance as of September 25, 2021240,427 $75.16 
RSUs granted76,920 $149.72 
RSUs vested(62,476)$62.86 
RSUs canceled(8,407)$95.86 
Balance as of March 26, 2022246,464 $100.84 $43,062 
The fair value as of the respective vesting dates of RSUs was $1.0 billion and $9.5 billion for the three- and six-month periods ended March 26, 2022, respectively, and was $867 million and $9.4 billion for the three- and six-month periods ended March 27, 2021, respectively.
Share-Based Compensation
The following table shows share-based compensation expense and the related income tax benefit included in the Condensed Consolidated Statements of Operations for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Share-based compensation expense$2,252 $1,981 $4,517 $4,001 
Income tax benefit related to share-based compensation expense
$(649)$(575)$(2,185)$(2,199)
As of March 26, 2022, the total unrecognized compensation cost related to outstanding RSUs and stock options was $19.3 billion, which the Company expects to recognize over a weighted-average period of 2.8 years.
Note 8 – Commitments and Contingencies
Accrued Warranty
The following table shows changes in the Company’s accrued warranties and related costs for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Beginning accrued warranty and related costs$3,530 $4,124 $3,364 $3,354 
Cost of warranty claims(581)(649)(1,253)(1,372)
Accruals for product warranty257 309 1,095 1,802 
Ending accrued warranty and related costs$3,206 $3,784 $3,206 $3,784 
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Apple Inc. | Q2 2022 Form 10-Q | 12


Note 9 – Segment Information and Geographic Data
The following table shows information by reportable segment for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Americas:
Net sales$40,882 $34,306 $92,378 $80,616 
Operating income$15,279 $12,050 $34,864 $27,835 
Europe:
Net sales$23,287 $22,264 $53,036 $49,570 
Operating income$8,505 $8,265 $20,050 $17,854 
Greater China:
Net sales$18,343 $17,728 $44,126 $39,041 
Operating income$8,112 $7,758 $19,295 $16,288 
Japan:
Net sales$7,724 $7,742 $14,831 $16,027 
Operating income$3,496 $3,428 $6,845 $6,931 
Rest of Asia Pacific:
Net sales$7,042 $7,544 $16,852 $15,769 
Operating income$2,823 $2,736 $6,818 $5,689 
A reconciliation of the Company’s segment operating income to the Condensed Consolidated Statements of Operations for the three- and six-month periods ended March 26, 2022 and March 27, 2021 is as follows (in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Segment operating income$38,215 $34,237 $87,872 $74,597 
Research and development expense(6,387)(5,262)(12,693)(10,425)
Other corporate expenses, net(1,849)(1,472)(3,712)(3,135)
Total operating income$29,979 $27,503 $71,467 $61,037 
Apple Inc. | Q2 2022 Form 10-Q | 13


Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
This section and other parts of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. For example, statements in this Form 10-Q regarding the potential future impact of the COVID-19 pandemic on the Company’s business and results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2021 (the “2021 Form 10-K”) under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Unless otherwise stated, all information presented herein is based on the Company’s fiscal calendar, and references to particular years, quarters, months or periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Each of the terms the “Company” and “Apple” as used herein refers collectively to Apple Inc. and its wholly owned subsidiaries, unless otherwise stated.
The following discussion should be read in conjunction with the 2021 Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.
Available Information
The Company periodically provides certain information for investors on its corporate website, www.apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, information on environmental, social and corporate governance matters, and details related to the Company’s annual meeting of shareholders. The information contained on the websites referenced in this Form 10-Q is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
Business Seasonality and Product Introductions
The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. The timing of product introductions can also impact the Company’s net sales to its indirect distribution channels as these channels are filled with new inventory following a product launch, and channel inventory of an older product often declines as the launch of a newer product approaches. Net sales can also be affected when consumers and distributors anticipate a product introduction.
Quarterly Highlights
Total net sales increased 9% or $7.7 billion during the second quarter of 2022 compared to the same quarter in 2021, driven primarily by growth in Services, iPhone and Mac.
During the second quarter of 2022, the Company released the following products:
iPhone SE® with 5G technology;
iPad Air®, powered by the Apple M1 chip;
All-new Mac Studio™, powered by the Apple M1 Max or the new Apple M1 Ultra chip; and
All-new Apple Studio Display™.
The Company repurchased $22.9 billion of its common stock and paid dividends and dividend equivalents of $3.6 billion during the second quarter of 2022.
Apple Inc. | Q2 2022 Form 10-Q | 14


COVID-19 Update
The COVID-19 pandemic has had, and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures, such as restrictions on travel and business operations, temporary closures of businesses, and quarantine and shelter-in-place orders. The COVID-19 pandemic has at times significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The COVID-19 pandemic and the measures taken by many countries in response have affected and could in the future materially impact the Company’s business, results of operations and financial condition, as well as the price of the Company’s stock.
During the second quarter of 2022, aspects of the Company’s business continued to be affected by the COVID-19 pandemic, with a significant number of the Company’s employees working remotely and many of the Company’s retail stores operating at limited capacity or temporarily closing at various times. Substantially all of the Company’s other facilities are open, subject to operating restrictions to protect public health and the health and safety of employees. The Company continues to work on safely reopening the remainder of its facilities, subject to local rules and regulations.
At times, certain of the Company’s outsourcing partners, component suppliers and logistical service providers have experienced disruptions, resulting in supply shortages that could affect sales worldwide. Similar disruptions could occur in the future.
The extent of the continuing impact of the COVID-19 pandemic on the Company’s operational and financial performance is uncertain and will depend on many factors outside the Company’s control, including the timing, extent, trajectory and duration of the pandemic, the emergence of new variants, the development, availability, distribution and effectiveness of vaccines and treatments, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for consumer products. Refer to Part I, Item 1A of the 2021 Form 10-K under the heading “Risk Factors” for more information.
Products and Services Performance
The following table shows net sales by category for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (dollars in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
ChangeMarch 26,
2022
March 27,
2021
Change
Net sales by category:
iPhone (1)
$50,570 $47,938 %$122,198 $113,535 %
Mac (1)
10,435 9,102 15 %21,287 17,777 20 %
iPad (1)
7,646 7,807 (2)%14,894 16,242 (8)%
Wearables, Home and Accessories (1)(2)
8,806 7,836 12 %23,507 20,807 13 %
Services (3)
19,821 16,901 17 %39,337 32,662 20 %
Total net sales$97,278 $89,584 %$221,223 $201,023 10 %
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini, iPod touch and accessories.
(3)Services net sales include sales from the Company’s advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher net sales from the Company’s new iPhone models.
Mac
Mac net sales increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher net sales of MacBook Pro®, partially offset by lower net sales of MacBook Air®.
Apple Inc. | Q2 2022 Form 10-Q | 15


iPad
iPad net sales decreased during the second quarter of 2022 compared to the second quarter of 2021 due primarily to lower net sales of the 10-inch version of iPad, offset by higher net sales of iPad Pro® and iPad mini®. Year-over-year iPad net sales decreased during the first six months of 2022 due primarily to lower net sales of the 10-inch version of iPad, partially offset by higher net sales of iPad mini.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher net sales of Apple Watch, AirPods and accessories.
Services
Services net sales increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher net sales from advertising, the App Store® and cloud services.
Segment Operating Performance
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia and those Asian countries not included in the Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic region. Further information regarding the Company’s reportable segments can be found in Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 9, “Segment Information and Geographic Data.”
The following table shows net sales by reportable segment for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (dollars in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
ChangeMarch 26,
2022
March 27,
2021
Change
Net sales by reportable segment:
Americas$40,882 $34,306 19 %$92,378 $80,616 15 %
Europe23,287 22,264 %53,036 49,570 %
Greater China18,343 17,728 %44,126 39,041 13 %
Japan7,724 7,742 — %14,831 16,027 (7)%
Rest of Asia Pacific7,042 7,544 (7)%16,852 15,769 %
Total net sales$97,278 $89,584 %$221,223 $201,023 10 %
Americas
Americas net sales increased during the second quarter of 2022 compared to the second quarter of 2021 due primarily to higher net sales of iPhone, Services and Mac. Year-over-year Americas net sales increased during the first six months of 2022 due primarily to higher net sales of iPhone, Services and Wearables, Home and Accessories.
Europe
Europe net sales increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher net sales of Services and Mac. The movement of foreign currencies in Europe relative to the U.S. dollar had a net unfavorable impact on Europe net sales during the second quarter and first six months of 2022.
Greater China
Greater China net sales increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher net sales of iPhone and Services. The strength of the Chinese renminbi relative to the U.S. dollar had a favorable impact on Greater China net sales during the second quarter and first six months of 2022.
Apple Inc. | Q2 2022 Form 10-Q | 16


Japan
Japan net sales were flat during the second quarter of 2022 compared to the second quarter of 2021 due primarily to the weakness of the Japanese yen relative to the U.S. dollar, offset by higher net sales of iPhone and Services. Year-over-year Japan net sales decreased during the first six months of 2022 due primarily to the weakness of the Japanese yen relative to the U.S. dollar.
Rest of Asia Pacific
Rest of Asia Pacific net sales decreased during the second quarter of 2022 compared to the second quarter of 2021 due primarily to lower net sales of iPhone, partially offset by higher net sales of Services and Mac. Year-over-year Rest of Asia Pacific net sales increased during the first six months of 2022 due primarily to higher net sales of Services, Mac and Wearables, Home and Accessories. The movement of foreign currencies in Rest of Asia Pacific relative to the U.S. dollar had a net unfavorable impact on Rest of Asia Pacific net sales during the second quarter and first six months of 2022.
Gross Margin
Products and Services gross margin and gross margin percentage for the three- and six-month periods ended March 26, 2022 and March 27, 2021 were as follows (dollars in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Gross margin:
Products$28,167 $26,236 $68,287 $59,784 
Services14,392 11,843 28,515 22,623 
Total gross margin$42,559 $38,079 $96,802 $82,407 
Gross margin percentage:
Products36.4 %36.1 %37.5 %35.5 %
Services72.6 %70.1 %72.5 %69.3 %
Total gross margin percentage43.7 %42.5 %43.8 %41.0 %
Products Gross Margin
Products gross margin increased during the second quarter of 2022 compared to the second quarter of 2021 due primarily to higher Products volume. Year-over-year Products gross margin increased during the first six months of 2022 due primarily to a different Products mix and higher Products volume.
Products gross margin percentage increased during the second quarter of 2022 compared to the second quarter of 2021 due primarily to improved leverage. Year-over-year Products gross margin percentage increased during the first six months of 2022 due primarily to a different Products mix.
Services Gross Margin
Services gross margin increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to higher Services net sales and a different Services mix, partially offset by the weakness in foreign currencies relative to the U.S. dollar.
Services gross margin percentage increased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to a different Services mix and improved leverage, partially offset by the weakness in foreign currencies relative to the U.S. dollar.
The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of the 2021 Form 10-K under the heading “Risk Factors.” As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.
Apple Inc. | Q2 2022 Form 10-Q | 17


Operating Expenses
Operating expenses for the three- and six-month periods ended March 26, 2022 and March 27, 2021 were as follows (dollars in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Research and development$6,387 $5,262 $12,693 $10,425 
Percentage of total net sales%%%%
Selling, general and administrative$6,193 $5,314 $12,642 $10,945 
Percentage of total net sales%%%%
Total operating expenses$12,580 $10,576 $25,335 $21,370 
Percentage of total net sales13 %12 %11 %11 %
Research and Development
The growth in research and development (“R&D”) expense during the second quarter and first six months of 2022 compared to the same periods in 2021 was driven primarily by increases in headcount-related expenses, engineering program costs and professional services. The Company continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace, and to the development of new and updated products and services that are central to the Company’s core business strategy.
Selling, General and Administrative
The growth in selling, general and administrative expense during the second quarter of 2022 compared to the second quarter of 2021 was driven primarily by increases in advertising, headcount-related expenses and professional services. Year-over-year selling, general and administrative expense increased during the first six months of 2022 due primarily to increases in headcount-related expenses, advertising and variable selling expenses.
Other Income/(Expense), Net
Other income/(expense), net (“OI&E”) for the three- and six-month periods ended March 26, 2022 and March 27, 2021 was as follows (dollars in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
ChangeMarch 26,
2022
March 27,
2021
Change
Interest and dividend income$700 $718 $1,350 $1,465 
Interest expense(691)(670)(1,385)(1,308)
Other income/(expense), net151 460 (52)396 
Total other income/(expense), net$160 $508 (69)%$(87)$553 (116)%
OI&E decreased during the second quarter and first six months of 2022 compared to the same periods in 2021 due primarily to fair value adjustments on marketable securities, partially offset by foreign exchange gains.
Apple Inc. | Q2 2022 Form 10-Q | 18


Provision for Income Taxes
Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and six-month periods ended March 26, 2022 and March 27, 2021 were as follows (dollars in millions):
Three Months EndedSix Months Ended
March 26,
2022
March 27,
2021
March 26,
2022
March 27,
2021
Provision for income taxes$5,129 $4,381 $11,740 $9,205 
Effective tax rate17.0 %15.6 %16.4 %14.9 %
Statutory federal income tax rate21 %21 %21 %21 %
The Company’s effective tax rate for the second quarter of 2022 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, including the favorable impact of changes in unrecognized tax benefits, partially offset by the impact to U.S. foreign tax credits as a result of regulations issued by the U.S. Department of the Treasury in January 2022 (the “Regulations”). The Company’s effective tax rate for the first six months of 2022 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, including the favorable impact of changes in unrecognized tax benefits.
The Company’s effective tax rate for the second quarter of 2022 was higher compared to the second quarter of 2021 due primarily to the impact to U.S. foreign tax credits as a result of the Regulations, partially offset by a lower effective tax rate on foreign earnings, including the favorable impact of changes in unrecognized tax benefits. The Company’s effective tax rate for the first six months of 2022 was higher compared to the same period in 2021 due primarily to the impact to U.S. foreign tax credits as a result of the Regulations and lower tax benefits from share-based compensation.
Liquidity and Capital Resources
The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.
The Company’s contractual cash requirements have not changed materially since the 2021 Form 10-K, except for manufacturing purchase obligations.
Manufacturing Purchase Obligations
The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. Outsourcing partners acquire components and build product based on demand information supplied by the Company, which typically covers periods up to 150 days. As of March 26, 2022, the Company had manufacturing purchase obligations of $40.6 billion, with $40.5 billion payable within 12 months. The Company’s manufacturing purchase obligations are primarily noncancelable.
In addition to its contractual cash requirements, the Company has a share repurchase program authorized by the Board of Directors (the “Program”). As of March 26, 2022, the remaining availability under the Program was $17.6 billion. On April 28, 2022, the Company announced the Board of Directors increased the Program authorization by $90 billion. The Program does not obligate the Company to acquire a minimum amount of shares.
On April 28, 2022, the Company also announced the Board of Directors raised the Company’s quarterly cash dividend from $0.22 to $0.23 per share, beginning with the dividend to be paid during the third quarter of 2022. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to condensed consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2021 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2021 Form 10-K.
Apple Inc. | Q2 2022 Form 10-Q | 19


Item 3.    Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the Company’s market risk during the first six months of 2022. For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2021 Form 10-K.
Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of March 26, 2022 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the second quarter of 2022, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1.    Legal Proceedings
Epic Games
Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “Northern California District Court”) against the Company alleging violations of federal and state antitrust laws and California’s unfair competition law based upon the Company’s operation of its App Store. The Company filed a counterclaim for breach of contract. On September 10, 2021, the Northern California District Court ruled in favor of the Company with respect to nine out of the ten counts included in Epic’s claim, and in favor of the Company with respect to the Company’s claims for breach of contract. The Northern California District Court found that certain provisions of the Company’s App Store Review Guidelines violate California’s unfair competition law and issued an injunction. Epic appealed the decision. The Company filed a cross-appeal and has been granted a stay pending the appeal.
Other Legal Proceedings
The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. The Company settled certain matters during the second quarter of 2022 that did not individually or in the aggregate have a material impact on the Company’s financial condition or operating results. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
Item 1A.    Risk Factors
The Company’s business, reputation, results of operations and financial condition, as well as the price of the Company’s stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2021 Form 10-K under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations and financial condition, as well as the price of the Company’s stock, can be materially and adversely affected. There have been no material changes to the Company’s risk factors since the 2021 Form 10-K.
Apple Inc. | Q2 2022 Form 10-Q | 20


Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity during the three months ended March 26, 2022 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts):
PeriodsTotal Number
of Shares Purchased
Average Price
Paid Per Share
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs
Approximate Dollar Value of
Shares That May Yet Be Purchased
Under the Plans or Programs (1)
December 26, 2021 to January 29, 2022:
November 2021 ASRs4,887 
(2)
4,887 
Open market and privately negotiated purchases
43,330 $170.99 43,330 
January 30, 2022 to February 26, 2022:
Open market and privately negotiated purchases
42,895 $169.71 42,895 
February 27, 2022 to March 26, 2022:
Open market and privately negotiated purchases
50,822 $161.75 50,822 
Total141,934 $17,579 
(1)On April 28, 2021, the Board of Directors authorized the purchase of an additional $90 billion of the Company’s common stock under the Program. As of March 26, 2022, total utilization under the April 2021 authorization was $72.4 billion. On April 28, 2022, the Company announced the Board of Directors increased the Program authorization by $90 billion. The Program does not obligate the Company to acquire a minimum amount of shares. Under the Program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
(2)In November 2021, the Company entered into accelerated share repurchase agreements (“ASRs”) to purchase up to a total of $6.0 billion of the Company’s common stock. In January 2022, the purchase periods for these ASRs ended and an additional 5 million shares were delivered and retired. In total, 35 million shares were delivered under these ASRs at an average repurchase price of $170.01 per share.
Item 3.    Defaults Upon Senior Securities
None.
Item 4.    Mine Safety Disclosures
Not applicable.
Item 5.    Other Information
Rule 10b5-1 Trading Plans
During the three months ended March 26, 2022, Katherine L. Adams, Timothy D. Cook, Luca Maestri, Deirdre O’Brien and Jeffrey Williams, each an officer for purposes of Section 16 of the Exchange Act, had equity trading plans in place in accordance with Rule 10b5-1(c)(1) under the Exchange Act. An equity trading plan is a written document that preestablishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including sales of shares acquired under the Company’s employee and director equity plans.
Apple Inc. | Q2 2022 Form 10-Q | 21


Item 6.    Exhibits
Incorporated by Reference

Exhibit
Number
Exhibit DescriptionFormExhibitFiling Date/
Period End Date
10.1*8-K10.13/4/22
10.2*8-K10.23/4/22
10.3*8-K10.33/4/22
31.1**
31.2**
32.1***
101**
Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104**
Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.
*    Indicates management contract or compensatory plan or arrangement.
**    Filed herewith.
***    Furnished herewith.
Apple Inc. | Q2 2022 Form 10-Q | 22


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 28, 2022
Apple Inc.
By:/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer
Apple Inc. | Q2 2022 Form 10-Q | 23
Document

Exhibit 31.1
CERTIFICATION
I, Timothy D. Cook, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Apple Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
Date: April 28, 2022
By:/s/ Timothy D. Cook
Timothy D. Cook
Chief Executive Officer

Document

Exhibit 31.2
CERTIFICATION
I, Luca Maestri, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Apple Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
Date: April 28, 2022
By:/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer

Document

Exhibit 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy D. Cook, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Apple Inc. on Form 10-Q for the period ended March 26, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Apple Inc. at the dates and for the periods indicated.
Date: April 28, 2022
By:/s/ Timothy D. Cook
Timothy D. Cook
Chief Executive Officer
I, Luca Maestri, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Apple Inc. on Form 10-Q for the period ended March 26, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Apple Inc. at the dates and for the periods indicated.
Date: April 28, 2022
By:/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to Apple Inc. and will be retained by Apple Inc. and furnished to the Securities and Exchange Commission or its staff upon request.