Apple (AAPL) 10-Q 25 Jan 10 2010 Q1 Quarterly report Financial data

Statement Of Income

Statement Of Income (USD $)
In Millions, except Share data in Thousands	3 Months Ended Dec. 26, 2009		3 Months Ended Dec. 27, 2008
Net sales	$15,683	[1]	$11,880	[1]
Cost of sales	9,272	[1]	7,373	[1]
Gross margin	6,411	[1]	4,507	[1]
Operating expenses:
Research and development	398	[1]	315	[1]
Selling, general and administrative	1,288	[1]	1,091	[1]
Total operating expenses	1,686	[1]	1,406	[1]
Operating income	4,725	[1]	3,101	[1]
Other income and expense	33	[1]	158	[1]
Income before provision for income taxes	4,758	[1]	3,259	[1]
Provision for income taxes	1,380	[1]	1,004	[1]
Net income	$3,378	[1]	$2,255	[1]
Earnings per common share:
Basic	3.74	[1]	2.54	[1]
Diluted	3.67	[1]	2.5	[1]
Shares used in computing earnings per share:
Basic	903,542	[1]	889,142	[1]
Diluted	919,783	[1]	901,494	[1]
[1]See Note 2, "Retrospective Adoption of New Accounting Principles" of this Form 10-Q.

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 26, 2009		Sep. 26, 2009
Current assets:
Cash and cash equivalents	$7,609	[1]	$5,263	[1]
Short-term marketable securities	17,187	[1]	18,201	[1]
Accounts receivable, less allowances of $54 and $52, respectively	3,090	[1]	3,361	[1]
Inventories	576	[1]	455	[1]
Deferred tax assets	1,180	[1]	1,135	[1]
Other current assets	3,690	[1]	3,140	[1]
Total current assets	33,332	[1]	31,555	[1]
Long-term marketable securities	15,024	[1]	10,528	[1]
Property, plant and equipment, net	3,115	[1]	2,954	[1]
Goodwill	253	[1]	206	[1]
Acquired intangible assets, net	241	[1]	247	[1]
Other assets	1,961	[1]	2,011	[1]
Total assets	53,926	[1]	47,501	[1]
Current liabilities:
Accounts payable	6,511	[1]	5,601	[1]
Accrued expenses	3,996	[1]	3,852	[1]
Deferred revenue	2,590	[1]	2,053	[1]
Total current liabilities	13,097	[1]	11,506	[1]
Deferred revenue - non-current	922	[1]	853	[1]
Other non-current liabilities	4,139	[1]	3,502	[1]
Total liabilities	18,158	[1]	15,861	[1]
Shareholders' equity:
Common stock, no par value; 1,800,000,000 shares authorized; 906,282,182 and 899,805,500 shares issued and outstanding, respectively	8,962	[1]	8,210	[1]
Retained earnings	26,695	[1]	23,353	[1]
Accumulated other comprehensive income	111	[1]	77	[1]
Total shareholders' equity	35,768	[1]	31,640	[1]
Total liabilities and shareholders' equity	$53,926	[1]	$47,501	[1]
[1]See Note 2, "Retrospective Adoption of New Accounting Principles" of this Form 10-Q.

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Dec. 26, 2009		Sep. 26, 2009
Accounts receivable, allowances	$54	[1]	$52	[1]
Common stock, no par value	$0	[1]	$0	[1]
Common stock, shares authorized	1,800,000,000	[1]	1,800,000,000	[1]
Common stock, shares issued	906,282,182	[1]	899,805,500	[1]
Common stock, shares outstanding	906,282,182	[1]	899,805,500	[1]
[1]See Note 2, "Retrospective Adoption of New Accounting Principles" of this Form 10-Q.

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	3 Months Ended Dec. 26, 2009		3 Months Ended Dec. 27, 2008
Cash and cash equivalents, beginning of the period	$5,263	[1]	$11,875	[1]
Operating activities:
Net income	3,378	[1]	2,255	[1]
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation, amortization and accretion	209	[1]	168	[1]
Stock-based compensation expense	205	[1]	170	[1]
Deferred income tax expense	425	[1]	276	[1]
Loss on disposition of property, plant and equipment	6	[1]	7	[1]
Changes in operating assets and liabilities:
Accounts receivable, net	271	[1]	226	[1]
Inventories	(121)	[1]	113	[1]
Other current assets	(517)	[1]	1,097	[1]
Other assets	47	[1]	7	[1]
Accounts payable	956	[1]	(767)	[1]
Deferred revenue	606	[1]	200	[1]
Other liabilities	316	[1]	186	[1]
Cash generated by operating activities	5,781	[1]	3,938	[1]
Investing activities:
Purchases of marketable securities	(12,922)	[1]	(13,082)	[1]
Proceeds from maturities of marketable securities	6,216	[1]	2,226	[1]
Proceeds from sales of marketable securities	3,199	[1]	2,668	[1]
Purchases of other long-term investments	(6)	[1]	(38)	[1]
Payment for acquisition of property, plant and equipment	(376)	[1]	(339)	[1]
Payment for acquisition of intangible assets	(5)	[1]	(14)	[1]
Other	(64)	[1]	(60)	[1]
Cash used in investing activities	(3,958)	[1]	(8,639)	[1]
Financing activities:
Proceeds from issuance of common stock	374	[1]	77	[1]
Excess tax benefits from stock-based compensation	252	[1]	19	[1]
Cash used to net share settle equity awards	(103)	[1]	(34)	[1]
Cash generated by financing activities	523	[1]	62	[1]
Increase/(decrease) in cash and cash equivalents	2,346	[1]	(4,639)	[1]
Cash and cash equivalents, end of the period	7,609	[1]	7,236	[1]
Supplemental cash flow disclosure:
Cash paid for income taxes, net	$980	[1]	$550	[1]
[1]See Note 2, "Retrospective Adoption of New Accounting Principles" of this Form 10-Q.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	3 Months Ended Dec. 26, 2009 USD / shares
Summary of Significant Accounting Policies	Note 1 Summary of Significant Accounting Policies Apple Inc. and its wholly-owned subsidiaries (collectively Apple or the Company) design, manufacture, and market personal computers, mobile communication devices, and portable digital music and video players and sell a variety of related software, third-party digital content and applications, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers and value-added resellers. In addition, the Company sells a variety of third-party Macintosh (Mac), iPhone and iPod compatible products including application software, printers, storage devices, speakers, headphones, and various other accessories and supplies through its online and retail stores. The Company sells to consumer, small and mid-sized business (SMB), education, enterprise, government and creative customers. Basis of Presentation and Preparation The accompanying condensed consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain prior year amounts in the condensed consolidated financial statements and notes thereto have been reclassified to conform to the current periods presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Companys annual consolidated financial statements and the notes thereto for the fiscal year ended September26, 2009, included in its Annual Report on Form 10-K (the 2009 Form 10-K). Unless otherwise stated, references to particular years or quarters refer to the Companys fiscal years ended in September and the associated quarters of those fiscal years. The Company has evaluated subsequent events through the date and time the financial statements were issued on January25, 2010. Retrospective Adoption of New Accounting Principles In September 2009, the Financial Accounting Standards Board (FASB) amended the accounting standards related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements (new accounting principles). The new accounting principles permit prospective or retrospective adoption, and the Company elected retrospective adoption during the first quarter of 2010. Under the historical accounting principles, the Company was required to account for sales of both iPhone and Apple TV using subscription accounting because the Company indicated it might from time-to-time provide future unspecified software upgrades and features for those products free of charge. Under subscription accounting, revenue and associated product cost of sales for iPhone and Apple TV were deferred at the time

Retrospective Adoption of New A

Retrospective Adoption of New Accounting Principles
	3 Months Ended Dec. 26, 2009 USD / shares
Retrospective Adoption of New Accounting Principles	Note 2 Retrospective Adoption of New Accounting Principles In September 2009, the FASB amended the accounting standards related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. In the first quarter of 2010, the Company adopted the new accounting principles on a retrospective basis. The Company believes retrospective adoption provides the most comparable and useful financial information for financial statement users, is more consistent with the information the Companys management uses to evaluate its business, and better reflects the underlying economic performance of the Company. The financial statements and notes to the financial statements presented herein have been adjusted to reflect the retrospective adoption of the new accounting principles. Note1, Summary of Significant Accounting Policies under the subheadings Basis of Presentation and Preparation and Revenue Recognition of this Form 10-Q provides additional information on the Companys change in accounting resulting from the adoption of the new accounting principles and the Companys revenue recognition accounting policy. The following table presents the effects of the retrospective adoption of the new accounting principles to the Companys previously reported Condensed Consolidated Balance Sheet as of September26, 2009 (in millions, except share amounts): September26, 2009 AsReported Adjustments AsAmended Current assets: Cash and cash equivalents $ 5,263 $ $ 5,263 Short-term marketable securities 18,201 18,201 Accounts receivable, less allowance of $52 3,361 3,361 Inventories 455 455 Deferred tax assets 2,101 (966 ) 1,135 Other current assets 6,884 (3,744 ) 3,140 Total current assets 36,265 (4,710 ) 31,555 Long-term marketable securities 10,528 10,528 Property, plant and equipment, net 2,954 2,954 Goodwill 206 206 Acquired intangible assets, net 247 247 Other assets 3,651 (1,640 ) 2,011 Total assets $ 53,851 $ (6,350 ) $ 47,501 Current liabilities: Accounts payable $ 5,601 $ $ 5,601 Accrued expenses 3,376 476 3,852 Deferred revenue 10,305 (8,252 ) 2,053 Total current liabilities 19,282 (7,776 ) 11,506 Deferred revenue non-current 4,485 (3,632 ) 853 Other non-current liabilities 2,252 1,250 3,502 Total liabilities 26,019 (10,158 ) 15,861 Commitments and contingencies Shareholders equity: Common stock, no par value; 1,800,000,000 shares authorized; 899,805,500 shares issued and outstanding 8,210 8,210 Retained earnings 19,538 3,815 23,353 Accumulated other comprehens

Financial Instruments

Financial Instruments
	3 Months Ended Dec. 26, 2009 USD / shares
Financial Instruments	Note 3 Financial Instruments Cash, Cash Equivalents and Marketable Securities The following table summarizes the fair value of the Companys cash and available-for-sale securities held in its marketable securities investment portfolio, recorded as cash, cash equivalents or short-term or long-term marketable securities as of December26, 2009 and September26, 2009 (in millions): December26,2009 September26,2009 Cash $ 1,470 $ 1,139 Money market funds 2,135 1,608 U.S. Treasury securities 821 289 U.S. agency securities 379 273 Certificates of deposit and time deposits 897 572 Commercial paper 1,870 1,381 Corporate securities 30 Municipal securities 7 1 Total cash equivalents 6,139 4,124 U.S. Treasury securities 2,600 2,843 U.S. agency securities 5,885 8,582 Non-U.S. government securities 282 219 Certificates of deposit and time deposits 1,213 1,142 Commercial paper 3,581 2,816 Corporate securities 3,467 2,466 Municipal securities 159 133 Total short-term marketable securities 17,187 18,201 U.S. Treasury securities 421 484 U.S. agency securities 3,599 2,252 Non-U.S. government securities 679 102 Corporate securities 9,831 7,320 Municipal securities 494 370 Total long-term marketable securities 15,024 10,528 Total cash, cash equivalents and marketable securities $ 39,820 $ 33,992 The following tables summarize the Companys available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of December26, 2009 and September26, 2009 (in millions): December26, 2009 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 2,135 $ $ $ 2,135 U.S. Treasury securities 3,839 4 (1 ) 3,842 U.S. agency securities 9,850 14 (1 ) 9,863 Non-U.S. government securities 959 2 961 Certificates of deposit and time deposits 2,110 2,110 Commercial paper 5,451 5,451 Corporate securities 13,293 49 (14 ) 13,328 Municipal securities 658 3 (1 ) 660 Total cash equivalents and marketable securities $ 38,295 $ 72 $ (17 ) $ 38,350 September26, 2009 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 1,608 $ $ $ 1,608 U.S. Treasury securities 3,610 6 3,616 U.S. agency securities 11,085 22 11,107 Non-U.S. government securities 320 1 321 Certificates of deposit and time deposits 1,714 1,714

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Dec. 26, 2009 USD / shares
Fair Value Measurements	Note 4 Fair Value Measurements The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - 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. Level 3 - Inputs that are generally unobservable and typically reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. The Companys valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. Assets/Liabilities Measured at Fair Value on a Recurring Basis The following tables present the Companys assets and liabilities measured at fair value on a recurring basis as of December26, 2009 and September26, 2009 (in millions): December26, 2009 QuotedPrices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total(a) Assets: Money market funds $ 2,135 $ $ $ 2,135 U.S. Treasury securities 3,842 3,842 U.S. agency securities 9,863 9,863 Non-U.S. government securities 961 961 Certificates of deposit and time deposits 2,110 2,110 Commercial paper 5,451 5,451 Corporate securities 13,328 13,328 Municipal securities 660 660 Marketable equity securities 81 81 Derivative assets 135 135 Total assets measured at fair value $ 2,216 $ 36,350 $ $ 38

Condensed Consolidated Financia

Condensed Consolidated Financial Statement Details
	3 Months Ended Dec. 26, 2009 USD / shares
Condensed Consolidated Financial Statement Details	Note 5 Condensed Consolidated Financial Statement Details The following tables show the Companys condensed consolidated financial statement details as of December26, 2009 and September26, 2009 (in millions): Other Current Assets December26,2009 September26,2009 Vendor non-trade receivables $ 1,791 $ 1,696 Inventory component prepayments current 232 309 Other current assets 1,667 1,135 Total other current assets $ 3,690 $ 3,140 Property, Plant and Equipment December26,2009 September26,2009 Land and buildings $ 1,041 $ 955 Machinery, equipment and internal-use software 2,084 1,932 Office furniture and equipment 122 115 Leasehold improvements 1,739 1,665 Gross property, plant and equipment 4,986 4,667 Accumulated depreciation and amortization (1,871 ) (1,713 ) Net property, plant and equipment $ 3,115 $ 2,954 Other Assets December26,2009 September26,2009 Inventory component prepayments non-current $ 812 $ 844 Capitalized software development costs, net 93 106 Deferred tax assets non-current 130 163 Other assets 926 898 Total other assets $ 1,961 $ 2,011 Accrued Expenses December26,2009 September26,2009 Accrued warranty and related costs $ 584 $ 577 Accrued marketing and distribution 335 359 Accrued compensation and employee benefits 293 357 Income taxes payable 258 430 Deferred margin on component sales 243 225 Other current liabilities 2,283 1,904 Total accrued expenses $ 3,996 $ 3,852 Non-Current Liabilities December26,2009 September26,2009 Deferred tax liabilities $ 2,769 $ 2,216 Other non-current liabilities 1,370 1,286 Total other non-current liabilities $ 4,139 $ 3,502

Income Taxes

Income Taxes
	3 Months Ended Dec. 26, 2009 USD / shares
Income Taxes	Note 6 Income Taxes As of December26, 2009, the Company recorded gross unrecognized tax benefits of $1.0 billion, of which $333 million, if recognized, would affect the Companys effective tax rate. As of September26, 2009, the total amount of gross unrecognized tax benefits was $971 million, of which $307 million, if recognized, would affect the Companys effective tax rate. The Companys total gross unrecognized tax benefits are classified as other non-current liabilities in the Condensed Consolidated Balance Sheets. The Company had $295 million and $291 million of gross interest and penalties accrued as of December26, 2009 and September26, 2009, respectively, which are classified as other non-current liabilities in the Condensed Consolidated Balance Sheets. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Companys tax audits are resolved in a manner not consistent with managements expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. Although timing of the resolution and/or closure of audits is not certain, the Company believes it is reasonably possible that tax audit resolutions could reduce its unrecognized tax benefits by between $105 million and $145 million in the next 12months.

Shareholders' Equity and Stock-

Shareholders' Equity and Stock-Based Compensation
	3 Months Ended Dec. 26, 2009 USD / shares
Shareholders' Equity and Stock-Based Compensation	Note 7 Shareholders Equity and Stock-Based Compensation Preferred Stock The Company has five million shares of authorized preferred stock, none of which is issued or outstanding. Under the terms of the Companys Restated Articles of Incorporation, the Board of Directors is authorized to determine or alter the rights, preferences, privileges and restrictions of the Companys authorized but unissued shares of preferred stock. Comprehensive Income Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of shareholders equity but are excluded from net income. The Companys other comprehensive income consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, unrealized gains and losses on marketable securities categorized as available-for-sale, and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges. The following table summarizes the components of total comprehensive income, net of taxes, during the three months ended December26, 2009 and December27, 2008 (in millions): Three Months Ended December26,2009 December27,2008 Net income $ 3,378 $ 2,255 Other comprehensive income: Change in unrecognized gains on derivative instruments 18 41 Change in foreign currency translation 5 (105 ) Net change in unrealized gains/losses on marketable securities 11 49 Total comprehensive income $ 3,412 $ 2,240 The following table summarizes activity in other comprehensive income related to derivatives, net of taxes, held by the Company during the three months ended December26, 2009 and December27, 2008 (in millions): Three Months Ended December26,2009 December27,2008 Change in fair value of derivatives $ 6 $ 223 Adjustment for net gains/losses realized and included in net income 12 (182 ) Change in unrecognized gains on derivative instruments $ 18 $ 41 The following table summarizes the components of accumulated other comprehensive income, net of taxes, as of December26, 2009 and September26, 2009 (in millions): December26,2009 September26,2009 Net unrealized gains/losses on marketable securities $ 59 $ 48 Net unrecognized gains on derivative instruments 19 1 Cumulative foreign currency translation 33 28 Accumulated other comprehensive income $ 111 $ 77 Employee Benefit Plans Rule 10b5-1 Trading Plans During the first quarter of 2010, executive officers Timothy D. Cook, Ronald B. Johnson, Peter Oppenheimer, Philip W. Schiller and Bertrand Serlet had trading plans pursuant to Rule 10b5-1(c)(1) of the Securities Exchange Act of 1934, as amended (the Exchange Act). A trading plan is a written document that pre-establishes the amounts, prices and dates (or formula f

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Dec. 26, 2009 USD / shares
Commitments and Contingencies	Note 8 Commitments and Contingencies Lease Commitments The Company leases various equipment and facilities, including retail space, under noncancelable operating lease arrangements. The Company does not currently utilize any other off-balance sheet financing arrangements. The major facility leases are generally for terms of one to 20 years and generally provide renewal options for terms of one to five additional years. Leases for retail space are for terms of five to 20 years, the majority of which are for ten years, and often contain multi-year renewal options. As of September26, 2009, the Companys total future minimum lease payments under noncancelable operating leases were $1.9 billion, of which $1.5 billion related to leases for retail space. As of December26, 2009, total future minimum lease payments under noncancelable operating leases related to leases for retail space increased $100 million to $1.6 billion. Accrued Warranty and Indemnifications The following table reconciles changes in the Companys accrued warranties and related costs for the three months ended December26, 2009 and December27, 2008 (in millions): Three Months Ended December26,2009 December27,2008 Beginning accrued warranty and related costs $ 577 $ 671 Cost of warranty claims (135 ) (143 ) Accruals for product warranties 142 165 Ending accrued warranty and related costs $ 584 $ 693 The Company generally does not indemnify end-users of its operating system and application software against legal claims that the software infringes third-party intellectual property rights. Other agreements entered into by the Company sometimes include indemnification provisions under which the Company could be subject to costs and/or damages in the event of an infringement claim against the Company or an indemnified third-party. However, the Company has not been required to make any significant payments resulting from such an infringement claim asserted against it or an indemnified third-party and, in the opinion of management, does not have a potential liability related to unresolved infringement claims subject to indemnification that would materially adversely affect its financial condition or operating results. Therefore, the Company did not record a liability for infringement costs as of either December26, 2009 or September26, 2009. The Company has entered into indemnification agreements with its directors and executive officers. Under these agreements, the Company has agreed to indemnify such individuals to the fullest extent permitted by law against liabilities that arise by reason of their status as directors or officers and to advance expenses incurred by such individuals in connection with related legal proceedings. It is not possible to determine the maximum potential amount of payments the Company could be required to make under these agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each claim. However, the Company maintains directors and officers liability insurance cove

Segment Information and Geograp

Segment Information and Geographic Data
	3 Months Ended Dec. 26, 2009 USD / shares
Segment Information and Geographic Data	Note 9 Segment Information and Geographic Data The Company reports segment information based on the management approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Companys reportable segments. The Company manages its business primarily on a geographic basis. Accordingly, the Company determined its operating and reporting segments, which are generally based on the nature and location of its customers, to be the Americas, Europe, Japan, Asia-Pacific and Retail operations. The Americas, Europe, Japan and Asia Pacific segments exclude activities related to the Retail segment. The Americas segment includes both North and South America. The Europe segment includes European countries, as well as the Middle East and Africa. The Asia-Pacific segment includes Australia and Asia, but does not include Japan. The Retail segment operates Apple-owned retail stores in the U.S. and in international markets. Each reportable operating segment provides similar hardware and software products and similar services to the same types of customers. The accounting policies of the various segments are the same as those described in Note 1, Summary of Significant Accounting Policies of this Form 10-Q and in the Notes to Consolidated Financial Statements in the Companys 2009 Form 10-K. The Company evaluates the performance of its operating segments based on net sales and operating income. Net sales for geographic segments are generally based on the location of customers, while Retail segment net sales are based on sales from the Companys retail stores. Operating income for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributable to the segment. Advertising expenses are generally included in the geographic segment in which the expenditures are incurred. Operating income for each segment excludes other income and expense and certain expenses managed outside the operating segments. Costs excluded from segment operating income include various corporate expenses, such as manufacturing costs and variances not included in standard costs, research and development, corporate marketing expenses, stock-based compensation expense, income taxes, various nonrecurring charges, and other separately managed general and administrative costs. The Company does not include intercompany transfers between segments for management reporting purposes. Segment assets exclude corporate assets, such as cash, short-term and long-term investments, manufacturing and corporate facilities, miscellaneous corporate infrastructure, goodwill and other acquired intangible assets. Except for the Retail segment, capital asset purchases for long-lived assets are not reported to management by segment. Cash payments for capital asset purchases by the Retail segment were $107 million and $71 million during the first quarters of 2010 and 2009, respectively. The Company has certain retail stores that have been designed and built to serve as high-profile venues to promote brand awareness and serve as vehicles for corporate sales and marketing a

Related Party Transactions and

Related Party Transactions and Certain Other Transactions
	3 Months Ended Dec. 26, 2009 USD / shares
Related Party Transactions and Certain Other Transactions	Note 10 Related Party Transactions and Certain Other Transactions The Company entered into a Reimbursement Agreement with its CEO, Steve Jobs, for the reimbursement of expenses incurred by Mr.Jobs in the operation of his private plane when used for Apple business. The Company recognized a total of $16,000 and $4,000 in expenses pursuant to the Reimbursement Agreement during the first quarters of 2010 and 2009, respectively. All expenses recognized pursuant to the Reimbursement Agreement have been included in selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations.

Document Information

Document Information
	3 Months Ended Dec. 26, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-12-26

Entity Information

Entity Information (USD $)
	3 Months Ended Dec. 26, 2009	Jan. 15, 2010
Entity [Text Block]
Trading Symbol	AAPL
Entity Registrant Name	APPLE INC
Entity Central Index Key	0000320193
Current Fiscal Year End Date	--09-25
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		906,794,589