itzme091/TRY · Datasets at Hugging Face

text stringlengths 0 1.55k
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 Rate Risk

To protect gross margins from fluctuations in foreign exchange rates, the Company may use forwards, options 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 exchange rates, the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of June 29, 2024, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency transactions is 18 years.

The Company may also use derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.

Apple Inc. \| Q3 2024 Form 10-Q \| 8
---
# Interest Rate Risk

To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may use 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 June 29, 2024 and September 30, 2023 were as follows (in millions):

\| \|June 29, 2024\|September 30, 2023\|
\|---\|---\|---\|
\|Derivative instruments designated as accounting hedges:\| \| \|
\|Foreign exchange contracts\|$65,542\|$74,730\|
\|Interest rate contracts\|$13,875\|$19,375\|
\|Derivative instruments not designated as accounting hedges:\| \| \|
\|Foreign exchange contracts\|$97,136\|$104,777\|

The carrying amounts of the Company’s hedged items in fair value hedges as of June 29, 2024 and September 30, 2023 were as follows (in millions):

\| \|June 29, 2024\|September 30, 2023\|
\|---\|---\|---\|
\|Hedged assets/(liabilities):\| \| \|
\|Current and non-current marketable securities\|$15,007\|$14,433\|
\|Current and non-current term debt\|($13,096)\|($18,247)\|

# Accounts Receivable

Trade Receivables

The Company’s third-party cellular network carriers accounted for 32% and 41% of total trade receivables as of June 29, 2024 and September 30, 2023, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit risk.

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. The Company does not reflect the sale of these components in products net sales. Rather, the Company recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As of June 29, 2024, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 46% and 18%. As of September 30, 2023, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 48% and 23%.

# Note 5 – Condensed Consolidated Financial Statement Details

The following table shows the Company’s condensed consolidated financial statement details as of June 29, 2024 and September 30, 2023 (in millions):

\| \|June 29, 2024\|September 30, 2023\|
\|---\|---\|---\|
\|Property, Plant and Equipment, Net\| \| \|
\|Gross property, plant and equipment\|$117,129\|$114,599\|
\|Accumulated depreciation\|($72,627)\|($70,884)\|
\|Total property, plant and equipment, net\|$44,502\|$43,715\|
---
# Note 6 – Income Taxes

European Commission State Aid Decision
On August 30, 2016, the European Commission (the “Commission”) announced its decision that Ireland granted state aid to the Company by providing
tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (the “State Aid
Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through
December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward. The
Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (the “General Court”). On
July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the Commission appealed the General Court’s decision to
the European Court of Justice (the “ECJ”) and a hearing was held on May 23, 2023. A decision from the ECJ is expected in the fourth quarter of 2024.
The Company believes it would be eligible to claim a U.S. foreign tax credit for a portion of any incremental Irish corporate income taxes potentially
due related to the State Aid Decision.

# Note 7 – Debt

Commercial Paper
The Company issues unsecured short-term promissory notes 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 June 29, 2024 and September 30, 2023,
the Company had $3.0 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 nine months ended June 29, 2024 and July 1, 2023 (in millions):

\| \|Nine Months Ended\| \| \|
\|---\|---\|---\|---\|
\| \|June 29, 2024\|July 1, 2023\| \|
\|Maturities 90 days or less:\|Repayments of commercial paper, net\|$(2,985)\|$(3,326)\|
\|Maturities greater than 90 days:\|Repayments of commercial paper\| \|$(2,645)\|
\|Total repayments of commercial paper, net\|$(2,985)\|$(5,971)\| \|

Term Debt
As of June 29, 2024 and September 30, 2023, the Company had outstanding fixed-rate notes with varying maturities for an aggregate carrying amount
of $98.3 billion and $105.1 billion, respectively (collectively the “Notes”). As of June 29, 2024 and September 30, 2023, the fair value of the Company’s
Notes, based on Level 2 inputs, was $86.2 billion and $90.8 billion, respectively.

# Note 8 – Shareholders’ Equity

Share Repurchase Program
During the nine months ended June 29, 2024, the Company repurchased 387 million shares of its common stock for $70.0 billion. The Company’s
share repurchase programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in
privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”).

Apple Inc. \| Q3 2024 Form 10-Q \| 10
---
# Note 9 – Share-Based Compensation

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 Rate Risk

To protect gross margins from fluctuations in foreign exchange rates, the Company may use forwards, options 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 exchange rates, the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of June 29, 2024, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency transactions is 18 years.

The Company may also use derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.

Apple Inc. | Q3 2024 Form 10-Q | 8

---

# Interest Rate Risk

To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may use 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 June 29, 2024 and September 30, 2023 were as follows (in millions):

| |June 29, 2024|September 30, 2023|

|---|---|---|

|Derivative instruments designated as accounting hedges:| | |

|Foreign exchange contracts|$65,542|$74,730|

|Interest rate contracts|$13,875|$19,375|

|Derivative instruments not designated as accounting hedges:| | |

|Foreign exchange contracts|$97,136|$104,777|

The carrying amounts of the Company’s hedged items in fair value hedges as of June 29, 2024 and September 30, 2023 were as follows (in millions):

| |June 29, 2024|September 30, 2023|

|---|---|---|

|Hedged assets/(liabilities):| | |

|Current and non-current marketable securities|$15,007|$14,433|

|Current and non-current term debt|($13,096)|($18,247)|

# Accounts Receivable

Trade Receivables

The Company’s third-party cellular network carriers accounted for 32% and 41% of total trade receivables as of June 29, 2024 and September 30, 2023, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit risk.

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. The Company does not reflect the sale of these components in products net sales. Rather, the Company recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As of June 29, 2024, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 46% and 18%. As of September 30, 2023, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 48% and 23%.

# Note 5 – Condensed Consolidated Financial Statement Details

The following table shows the Company’s condensed consolidated financial statement details as of June 29, 2024 and September 30, 2023 (in millions):

| |June 29, 2024|September 30, 2023|

|---|---|---|

|Property, Plant and Equipment, Net| | |

|Gross property, plant and equipment|$117,129|$114,599|

|Accumulated depreciation|($72,627)|($70,884)|

|Total property, plant and equipment, net|$44,502|$43,715|

---

# Note 6 – Income Taxes

European Commission State Aid Decision

On August 30, 2016, the European Commission (the “Commission”) announced its decision that Ireland granted state aid to the Company by providing

tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (the “State Aid

Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through

December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward. The

Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (the “General Court”). On

July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the Commission appealed the General Court’s decision to

the European Court of Justice (the “ECJ”) and a hearing was held on May 23, 2023. A decision from the ECJ is expected in the fourth quarter of 2024.

The Company believes it would be eligible to claim a U.S. foreign tax credit for a portion of any incremental Irish corporate income taxes potentially

due related to the State Aid Decision.

# Note 7 – Debt

Commercial Paper

The Company issues unsecured short-term promissory notes 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 June 29, 2024 and September 30, 2023,

the Company had $3.0 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 nine months ended June 29, 2024 and July 1, 2023 (in millions):

|---|---|---|---|

|Maturities 90 days or less:|Repayments of commercial paper, net|$(2,985)|$(3,326)|

|Total repayments of commercial paper, net|$(2,985)|$(5,971)| |

Term Debt

As of June 29, 2024 and September 30, 2023, the Company had outstanding fixed-rate notes with varying maturities for an aggregate carrying amount

of $98.3 billion and $105.1 billion, respectively (collectively the “Notes”). As of June 29, 2024 and September 30, 2023, the fair value of the Company’s

Notes, based on Level 2 inputs, was $86.2 billion and $90.8 billion, respectively.

# Note 8 – Shareholders’ Equity

Share Repurchase Program

During the nine months ended June 29, 2024, the Company repurchased 387 million shares of its common stock for $70.0 billion. The Company’s

share repurchase programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in

privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as

amended (the “Exchange Act”).

Apple Inc. | Q3 2024 Form 10-Q | 10

---

# Note 9 – Share-Based Compensation