CUPERTINO, Calif.--(BUSINESS WIRE)--Apple® today announced financial results for its fiscal 2014 first quarter ended December 28, 2013. The Company posted record quarterly revenue of $57.6 billion and quarterly net profit of $13.1 billion, or $14.50 per diluted share. These results compare to revenue of $54.5 billion and net profit of $13.1 billion, or $13.81 per diluted share, in the year-ago quarter. Gross margin was 37.9 percent compared to 38.6 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.

The Company sold 51 million iPhones, an all-time quarterly record, compared to 47.8 million in the year-ago quarter. Apple also sold 26 million iPads during the quarter, also an all-time quarterly record, compared to 22.9 million in the year-ago quarter. The Company sold 4.8 million Macs, compared to 4.1 million in the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on February 13, 2014, to shareholders of record as of the close of business on February 10, 2014.

“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”

“We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion,” said Peter Oppenheimer, Apple’s CFO.

Apple is providing the following guidance for its fiscal 2014 second quarter:

• revenue between $42 billion and $44 billion

• gross margin between 37 percent and 38 percent

• operating expenses between $4.3 billion and $4.4 billion

• other income/(expense) of $200 million

• tax rate of 26.2 percent

Apple will provide live streaming of its Q1 2014 financial results conference call beginning at 2:00 p.m. PST on January 27, 2014 at www.apple.com/quicktime/qtv/earningsq114. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 28, 2013 and its Form 10-Q for the quarter ended December 28, 2013 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2014 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Three Months Ended December 28,

2013 December 29,

2012 Net sales $ 57,594 $ 54,512 Cost of sales (1) 35,748 33,452 Gross margin 21,846 21,060 Operating expenses: Research and development (1) 1,330 1,010 Selling, general and administrative (1) 3,053 2,840 Total operating expenses 4,383 3,850 Operating income 17,463 17,210 Other income/(expense), net 246 462 Income before provision for income taxes 17,709 17,672 Provision for income taxes 4,637 4,594 Net income $ 13,072 $ 13,078 Earnings per share: Basic $ 14.59 $ 13.93 Diluted $ 14.50 $ 13.81 Shares used in computing earnings per share: Basic 896,072 938,916 Diluted 901,452 947,217 Cash dividends declared per common share $ 3.05 $ 2.65 (1) Includes share-based compensation expense as follows: Cost of sales $ 109 $ 85 Research and development $ 289 $ 224 Selling, general and administrative $ 283 $ 236

Apple Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands) December 28,

2013 September 28,

2013 ASSETS: Current assets: Cash and cash equivalents $ 14,077 $ 14,259 Short-term marketable securities 26,634 26,287 Accounts receivable, less allowances of $94 and $99, respectively 14,200 13,102 Inventories 2,122 1,764 Deferred tax assets 3,742 3,453 Vendor non-trade receivables 10,998 7,539 Other current assets 8,574 6,882 Total current assets 80,347 73,286 Long-term marketable securities 118,131 106,215 Property, plant and equipment, net 15,488 16,597 Goodwill 2,022 1,577 Acquired intangible assets, net 4,105 4,179 Other assets 5,091 5,146 Total assets $ 225,184 $ 207,000 LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts payable $ 29,588 $ 22,367 Accrued expenses 15,824 13,856 Deferred revenue 8,357 7,435 Total current liabilities 53,769 43,658 Deferred revenue – non-current 3,071 2,625 Long-term debt 16,961 16,960 Other non-current liabilities 21,699 20,208 Total liabilities 95,500 83,451 Commitments and contingencies Shareholders' equity: Common stock, no par value; 1,800,000 shares authorized; 892,447 and 899,213 shares issued and outstanding, respectively 20,559 19,764 Retained earnings 109,431 104,256 Accumulated other comprehensive income/(loss) (306) (471) Total shareholders' equity 129,684 123,549 Total liabilities and shareholders' equity $ 225,184 $ 207,000

Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Three Months Ended December 28, 2013 December 29, 2012 Cash and cash equivalents, beginning of the period $ 14,259 $ 10,746 Operating activities: Net income 13,072 13,078 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 2,144 1,588 Share-based compensation expense 681 545 Deferred income tax expense 1,253 1,179 Changes in operating assets and liabilities: Accounts receivable, net (1,098) (668) Inventories (358) (664) Vendor non-trade receivables (3,459) (2,174) Other current and non-current assets (319) 413 Accounts payable 8,191 6,145 Deferred revenue 1,368 1,611 Other current and non-current liabilities 1,195 2,373 Cash generated by operating activities 22,670 23,426 Investing activities: Purchases of marketable securities (48,397) (37,192) Proceeds from maturities of marketable securities 5,556 3,460 Proceeds from sales of marketable securities 30,302 23,002 Payments made in connection with business acquisitions, net (525) (284) Payments for acquisition of property, plant and equipment (1,985) (2,317) Payments for acquisition of intangible assets (59) (138) Other 5 (52) Cash used in investing activities (15,103) (13,521) Financing activities: Proceeds from issuance of common stock 134 76 Excess tax benefits from equity awards 280 404 Taxes paid related to net share settlement of equity awards (365) (534) Dividends and dividend equivalents paid (2,769) (2,493) Repurchase of common stock (5,029) (1,950) Cash used in financing activities (7,749) (4,497) Increase/(decrease) in cash and cash equivalents (182) 5,408 Cash and cash equivalents, end of the period $ 14,077 $ 16,154 Supplemental cash flow disclosure: Cash paid for income taxes, net $ 3,387 $ 1,890 Cash paid for interest $ 161 $ 0

Apple Inc. Q1 2014 Unaudited Summary Data (Units in thousands, Revenue in millions) Q1'14 Q4'13 Q1'13 Sequential

Change Year/Year Change Operating Segments Revenue Revenue Revenue Revenue Revenue Americas $20,098 $13,941 $20,341 44% - 1% Europe 13,073 8,005 12,464 63% 5% Greater China (a) 8,844 5,733 6,830 54% 29% Japan 4,948 3,341 4,443 48% 11% Rest of Asia Pacific 3,633 1,980 3,993 83% - 9% Retail 6,998 4,472 6,441 56% 9% Total Apple $57,594 $37,472 $54,512 54% 6% Q1'14 Q4'13 Q1'13 Sequential

Change Year/Year Change Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue iPhone (b) 51,025 $32,498 33,797 $19,510 47,789 $30,660 51% 67% 7% 6% iPad (b) 26,035 11,468 14,079 6,186 22,860 10,674 85% 85% 14% 7% Mac (b) 4,837 6,395 4,574 5,624 4,061 5,519 6% 14% 19% 16% iPod (b) 6,049 973 3,498 573 12,679 2,143 73% 70% - 52% - 55% iTunes/Software/Services (c) 4,397 4,260 3,687 3% 19% Accessories (d) 1,863 1,319 1,829 41% 2% Total Apple $57,594 $37,472 $54,512 54% 6%