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Apple Results Q4 2014Summary and Commentary

Note: Apple Q4 = Calendar Q3

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Key Data PointsWall Street Reported YoY

Revenue $ 39.9 B $ 42.1 B + 12%Net Income $ 8.5 B + 13%EPS (Diluted) (vs Adjusted) $1.31 $1.42 + 20%iPhone Units 37.9 M 39.3 M + 16%iPhone ASP $603 4%iPad Units 13.2 M 12.3 M - 13%iPad ASP $432 -2%Mac Units 4.8 M 5.5 M + 21%iPod Units 2.3 M 2.6 M -24%iTunes/SW/Svcs $ $ 4.7 M $ 4.6 M + 8%Accessories $ $ 1.5 M $ 1.5 M + 13%Gross Margin 38.0% 38.0% + 1 pointCash & Long Term Securities 155 B -6% *Q1 Revenue Guidance $ 63.5 B $ 63.5 - 66.5 B FY13: $57.6 BQ4 Gross Margin Guidance 37.5% 37.5 - 38.5% FY13: 37.9%

* QoQ

AquillaSource: Apple Results

Net IncomeNet Income Up 13% •Net Income came in at

$8.5B, or 20% of revenues, reflecting Apple’s continuing ability to command a price premium over the increasingly low-margin Android business

•With the iPhone 6 set to dominate Apple’s mix this quarter, there is no reason to expect this performance to falter

Comparative Net Income CQ3 2014

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Net Income (%)

Net Income ($B)

Apple Net Income

Net Income B$ Net Income %

AquillaSource: Apple Results

Cash, Investments & Capital ReturnCapital Return Program Grows •Apple generated $13.3B of cash from

operations in the Quarter, bringing the full year total to just under $60B

•Stock buybacks and dividends returned $20B to shareholders during the quarter, reaching $56B for the year

•Long and short term cash holdings declined by $9B in the quarter, but the company still has over $150B in cash

•Much of the cash remains outside the US, held there for tax reasons

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(B$)

Cash & Capital Return

Short Term Cash B$ Long Term Cash B$

Cash Generated B$ Capital Return B$

AquillaSource: Apple Results

Revenue Mix by Product LineiPhone dominates •iPhone now generates

56% of Apple’s revenues

•A strong quarter for Mac moved it to 16% of the mix, moving back ahead of iPad

•iPad was the big loser, declining a further 14%

•iTunes/SW/Services continues to grow in line with the overall rate

•iOS hardware dropped back to just under 70% of revenues

Most recent$ Share $ YoY

4% 13%

11% 8%

1% -28%

16% 18%

13% -14%

56% 21%iPhone M$

iPad M$

Mac M$

iPod M$

iTunes/SW/Svcs M$

Accessories M$

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Product Line Revenue Mix

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iPod Trailing 12 months - Terminal?Tracking the trailing 12 months (current and 3

previous Quarters) eliminates seasonality, and

gives a better indication of the longer term trends

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Trailing 12m Units (000s)

Units (000s)

iPod Units

iPod Units kU iPod Units Trailing 12m kU

Source: Apple Results

AquillaSource: Apple Results

Geo Share with Retail - 12m TrailingAmericas/Europe Ticked Up •Trailing 12 months shows clearly

where Apple’s growth came from - Americas and Europe

•Much of this was driven by iPhone 6 availability, or lack of, by region

•China was flat, but with iPhone 6 now on sale, on all carriers, it has amassive upside

•Japan shows signs of flattening •APAC is small, but under-performing

Tracking the trailing 12 months (current and 3

previous Quarters) eliminates seasonality, and

gives a better indication of the longer term trends

0

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Revenue $M

Geo Growth 12m Trailing Revenue Inc Retail

Americas EMEIA Greater China Japan APAC

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