C O M PA N Y N O T E

January 27, 2021

Apple, Inc. (AAPL) Overweight

Strength Continues as Secular Growth Drivers Persist

CONCLUSION
PRICE: US$142.06
Apple reported solid December quarter results, nicely beating Street expectations. Given
TARGET: US$160.00
the global uncertainty, Apple did not provide formal March quarter guidance. However, ~37x CY21E EPS of $4.30
the company pointed to accelerating year-over-year growth into the March quarter. For
the December quarter, all categories grew in the double-digit range on a year-over-year Harsh V. Kumar
Sr. Research Analyst, Piper Sandler & Co.
basis, with the iPhone category growing 17% annually on strong iPhone 12 demand.
901 302-1646, harsh.kumar@psc.com
Management noted the iPhone 12 Pro and Pro Max remain supply constrained. Gross
Matthew F. Farrell, CFA
margin came in ahead of expectations, as a higher revenue level and a better mix led to Research Analyst, Piper Sandler & Co.
upside. Overall, we believe Apple is executing well, as gross margin remains largely flat 312 267-5065, matthew.farrell@psc.com
on a lower revenue base in the March quarter. We reiterate our Overweight rating and are
increasing our price target to $160 from $135.
Changes Previous Current
Rating — Overweight
• Upside Drivers in December Quarter: In our view, the iPhone drove the bulk of the Price Tgt US$135.00 US$160.00
upside in the December quarter. The segment grew 17% year-over-year, compared to FY21E Rev (mil) US$319,635 US$338,493
expectations in the single-digit range. We suspect both units and ASPs benefited given FY22E Rev (mil) US$325,338 US$345,913
the strong demand for the new iPhone 12 series. Management noted supply constraints FY21E EPS US$3.94 US$4.43
still exist for both the iPhone 12 Pro and Pro Max models, which are two of the highest FY22E EPS US$4.08 US$4.53
ASP models in the family. 52-Week High / Low US$145.09 / US$53.15
Shares Out (mil) 17,114.0
Market Cap. (mil) US$2,431,214.8
• Gross Margins Well Ahead of Expectations: December quarter gross margin was
Avg Daily Vol (000) 109,704
39.8%, well above the Street’s 38.1% estimate. Most of the upside was from higher
Book Value/Share US$3.87
revenue and better mix. In addition, there was no FX headwind during the quarter.
Price/Book 3,671%
Management expects gross margin to be relatively flat in the March quarter despite a Net Cash Per Share US$5.17
lower revenue level. We view this dynamic positively, and we expect the company’s gross Debt to Total Capital 57.3%
margin to steadily expand over the next several quarters. Div (ann) US$0.82
Div Yield 0.58%
• No Guidance but Trends Positive: Management did not provide formal revenue Fiscal Year End Sep
guidance for the March quarter due to the global uncertainty. However, the company
Price Performance - 1 Year
sees year-over-year trends accelerating. We are not surprised to see these dynamics USD

given the delayed iPhone 12 launch and the strong demand for Apple products in a 160

work/learn from home environment. Management did note both the services and the 140

wearables/home/accessories segments face tough year-over-year compares due to 120

unique dynamics last March. Overall, we continue to believe Apple is extremely well
100
positioned for strong growth in fiscal 2021.
80
R I S K S TO A C H I E V E M E N T O F P T & R E C O M M E N D AT I O N
60
Trends in end-markets; component pricing; competitive pressures.
40
C O M PA N Y D E S C R I P T I O N Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21
Apple is the leader in the mobile device and digital content distribution markets. Source: Bloomberg

REVENUE (US$ m) EARNINGS PER SHARE (US$)

YEAR
Dec Mar Jun Sep FY CY FY RM CY RM Dec Mar Jun Sep FY CY FY P/E CY P/E
2020A 91,819.0 58,313.0 59,685.0 64,698.0 274,515 294,135 8.9x 8.3x 1.25 0.64 0.65 0.73 3.28 3.70 43.3x 38.4x
2021E 111,439A 82,911.0 68,445.0 75,698.0 338,493 335,362 7.2x 7.2x 1.68A 1.08 0.76 0.90 4.43 4.30 32.1x 33.0x
2022E 108,308 81,903.0 73,425.0 82,276.0 345,913 — 7.0x NA 1.56 1.05 0.87 1.06 4.53 — 31.4x NA

Piper Sandler does and seeks to do business with companies covered in its research reports. As a result, investors should be aware
that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only
a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information,
including an attestation under Regulation Analyst Certification, found on pages 7 - 8 of this report or at the following site:
http://www.pipersandler.com/researchdisclosures .
Apple, Inc. Page 1 of 8
 COMPANY NOTE
January 27, 2021

 Revenue Overview: For the December quarter, the company generated revenue of
$111,439 million, compared to the Street’s expectation of $103,266 million. We note
management did not provide December quarter guidance given the global uncertainty
from coronavirus. Due to the continued uncertainty, management did not provide March
quarter revenue guidance. However, the company does expect total company revenue
growth to accelerate on a year-over-year basis in the March quarter.

iPhone revenue for the December quarter was $65.6 billion, compared to the Street’s
$59.5 billion expectation. Management highlighted strong trends for the iPhone 12 family.
As such, the iPhone install base has reached an all-time high, surpassing 1 billion
devices. Apple continues to see supply constraints for the iPhone 12 Pro and Pro Max.

Mac revenue during the December quarter was $8.7 billion, compared to our estimate of
$8.0 billion. Mac revenue grew strong double-digits in each geographic segment, as
MacBook Air, MacBook Pro, and Mac mini saw strong demand. The company is seeing
strong adoption for its new M1 chip.

iPad revenue for the first fiscal quarter was $8.4 billion, versus our estimate of $7.3
billion. iPad revenue grew double-digits in each geographic region during the quarter. As
such, the active iPad install base has reached an all-time high.

Wearables/home/accessories revenue in the December quarter was $13.0 billion, versus

our estimate of $11.0 billion. The company set all-time revenue records in each
geographic segment. For the Apple Watch, nearly 75% of customers purchasing the
product are new to the product. Management expects the wearables/home/accessories
segment to decelerate relative to the first fiscal quarter, as the company chased demand
in AirPods last year.

Services revenue for the first fiscal quarter was $15.8 billion, compared to our $14.8
billion estimate. Management noted the App Store, cloud services, music, advertising,
AppleCare, and payment services were all records. In addition, new offerings like Apple
TV+ and Apple Fitness+ continue to gain adoption. During the quarter, Apple added 35
million new subscribers, bringing the total to more than 620 million as of year-end. For
the March quarter, Apple expects its services segment to face a tougher year-over-year
comparison due to the rise in digital services last March.

Exhibit 1
Revenue Overview
PSC Estimate Actual Deviation Next Quarter Commentary
iPhone Revenue $56,760 $65,597 $8,837
Mac Revenue $8,013 $8,675 $662
iPad Revenue $7,327 $8,435 $1,108
Wearables/Home/Accessories Revenue $11,026 $12,971 $1,945 Face Tough Y/Y Comps
Total Product Revenue $83,127 $95,678 $12,551
Services Revenue $14,840 $15,761 $921 Face Tough Y/Y Comps
Total Revenue $97,967 $111,439 $13,472 Accelerate Y/Y Growth
Source: Piper Sandler estimates

Apple, Inc. Page 2 of 8

 COMPANY NOTE
January 27, 2021

 Gross Margin Overview: During the first fiscal quarter, Apple’s gross margin was
39.8%, compared to the Street’s expectation of 38.1%. Management noted higher sales
and a better mix led to the upside. Specifically, product gross margin was 35.1% in the
December quarter (versus 34.2% in the year-ago quarter), while services gross margin
was 38.4% (versus 64.4% in the year-ago quarter). Product margin was higher
sequentially due to leverage and mix, while services margin was also higher sequentially
due to a different mix. For the March quarter, management did not provide official gross
margin guidance, but the company did note it would be similar to the recent quarter.

 Operating Margin Overview: For the December quarter, the company had an operating
margin of 30.1%, versus the consensus estimate of 27.8%. During the quarter, the
company’s operating expenses were $10,794 million, compared to our estimate of
$10,700 million heading into the earnings announcement. For the March quarter, Apple
expects operating expenses to be between $10.7 billion and $10.9 billion, which
compares to our estimate of $10.65 billion heading into the earnings announcement.

 Balance Sheet Overview: At the end of December, Apple had $195.6 billion of cash and
cash equivalents on its balance sheet. In addition, the company had long-term debt of
$99.3 billion, resulting in net cash per share of $5.17. During the quarter, the company
generated $38.8 billion in operating cash flow and repurchased $24.8 billion of common
stock during the quarter. We believe Apple has a strong balance sheet, with a solid cash
position and significant free cash flow generation.

 Valuation: At a price of $142.06, Apple trades at 33.0x our new calendar 2021 EPS
estimate of $4.30. The company trades at a premium to its peer group trading at 25.2x.
Our new $160 price target ($135 previously) is based on a ~37x P/E multiple (~34x
previously) of our calendar 2021 earnings estimate. Our higher price target multiple
represents our higher growth expectations. We reiterate our Overweight rating.

Exhibit 2
Valuation Table
1/27/2021 Apple Inc. (AAPL)
Ticker Company Name Price Market Cap (USD)(M) Volume (90D Avg.) Enterprise Value (M) 2021E EPS 2021E Sales 2021E P/E 2021E EV/Sales 2021E Price/Sales
MSFT Microsoft Corporation $ 232.90 $ 1,752,284.00 29.333 1,720,239.28 $ 7.62 $ 172,331 30.5 10.0 10.2
GOOG Alphabet Inc. Class C $ 1,830.79 $ 1,296,871.00 1.662 1,291,487.17 $ 61.93 $ 215,642 29.6 6.0 6.0
ADBE Adobe Inc. $ 460.00 $ 227,995.23 2.674 229,949.94 $ 11.44 $ 15,381 40.2 15.0 14.8
NFLX Netflix, Inc. $ 523.28 $ 248,257.88 5.162 263,336.52 $ 9.79 $ 29,957 53.5 8.8 8.3
DELL Dell Technologies Inc Class C $ 73.86 $ 57,015.12 2.206 104,258.84 $ 7.52 $ 94,320 9.8 1.1 0.6
HPQ HP Inc. $ 24.85 $ 31,750.94 8.960 37,218.40 $ 2.68 $ 57,841 9.3 0.6 0.5
IBM International Business Machines Corporation $ 122.47 $ 109,145.57 6.157 162,147.53 $ 11.24 $ 74,347 10.9 2.2 1.5
SNE Sony Corporation Sponsored ADR $ 97.00 $ 122,998.09 1.085 106,547.88 $ 5.34 $ 85,783 18.2 1.2 1.4
Average: 25.2 5.6 5.4

AAPL Apple Inc. $ 142.06 $ 2,408,423.80 109.704 2,540,638.12 $ 4.30 $ 335,362 33.0 7.6 7.2
*2021 estimates are calendar or calendar approximations

Source: FactSet and Piper Sandler

Apple, Inc. Page 3 of 8

 Apple Inc. (AAPL) Harsh Kumar, Senior Analyst
Quarterly Income Statement harsh.kumar@psc.com
Fiscal Year Ends September 901-302-1646
(Dollars in millions) 1/27/2021

2015 2016 2017 2018 2019 2020 2021E 2022E

Net Sales 233,715 215,639 229,234 265,595 260,174 274,515 338,493 345,913
Cost of Sales 140,089 131,376 141,048 163,756 161,782 169,559 204,943 208,697
Gross Profit 93,626 84,263 88,186 101,839 98,392 104,956 133,549 137,216
Operating Expenses:
Research and Development 8,067 10,045 11,581 14,236 16,217 18,752 21,263 22,200
Selling, General, and Administrative 14,329 14,194 15,261 16,705 18,245 19,916 22,581 23,050
Total Operating Expenses 22,396 24,239 26,842 30,941 34,462 38,668 43,844 45,250
Operating Income 71,230 60,024 61,344 70,898 63,930 66,288 89,705 91,966
Other Income 1,285 1,348 2,745 2,005 1,807 803 230 327
Income before Taxes 72,515 61,372 64,089 72,903 65,737 67,091 89,935 92,293
Provision for Taxes 19,121 15,685 15,738 13,372 10,481 9,680 14,405 15,690
Net Income 53,394 45,687 48,351 59,531 55,256 57,411 75,531 76,603
EPS $ 2.30 $ 2.08 $ 2.30 $ 2.98 $ 2.97 $ 3.28 $ 4.43 $ 4.53
Diluted Shares 23,173 22,001 21,007 20,000 18,596 17,528 17,054 16,894

Growth Rates (Y/Y)

Net Sales N/A -7.7% 6.3% 15.9% -2.0% 5.5% 23.3% 2.2%
Gross Profit N/A -10.0% 4.7% 15.5% -3.4% 6.7% 27.2% 2.7%
Operating Income N/A -15.7% 2.2% 15.6% -9.8% 3.7% 35.3% 2.5%
Net Income N/A -14.4% 5.8% 23.1% -7.2% 3.9% 31.6% 1.4%
EPS N/A -9.9% 10.8% 29.3% -0.2% 10.2% 35.2% 2.4%

Profitability Ratios
Gross Margin 40.1% 39.1% 38.5% 38.3% 37.8% 38.2% 39.5% 39.7%
Operating Margin 30.5% 27.8% 26.8% 26.7% 24.6% 24.1% 26.5% 26.6%
Non-Operating Margin 0.5% 0.6% 1.2% 0.8% 0.7% 0.3% 0.1% 0.1%
Pre-Tax Margin 31.0% 28.5% 28.0% 27.4% 25.3% 24.4% 26.6% 26.7%
Net Margin 22.8% 21.2% 21.1% 22.4% 21.2% 20.9% 22.3% 22.1%

Expense Ratios
Cost of Revenue 59.9% 60.9% 61.5% 61.7% 62.2% 61.8% 60.5% 60.3%
Research and Development 3.5% 4.7% 5.1% 5.4% 6.2% 6.8% 6.3% 6.4%
Selling, General, and Administrative 6.1% 6.6% 6.7% 6.3% 7.0% 7.3% 6.7% 6.7%
Total Operating Expenses 9.6% 11.2% 11.7% 11.6% 13.2% 14.1% 13.0% 13.1%

Tax Rate 26.4% 25.6% 24.6% 18.3% 15.9% 14.4% 16.0% 17.0%

Current disclosure information for this company is located at http://www.pipersandler.com/researchdisclosures

Apple, Inc. Page 4 of 8

 Apple Inc. (AAPL) Harsh Kumar, Senior Analyst
Quarterly Income Statement harsh.kumar@psc.com
Fiscal Year Ends September 901-302-1646
(Dollars in millions) 1/27/2021

2017 2018 2019 2020 2021E 2022E

YR YR YR 1Q 2Q 3Q 4Q YR 1Q 2QE 3QE 4QE YRE 1QE 2QE 3QE 4QE YRE
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22

Net Sales 229,234 265,595 260,174 91,819 58,313 59,685 64,698 274,515 111,439 82,911 68,445 75,698 338,493 108,308 81,903 73,425 82,276 345,913
Cost of Sales 141,048 163,756 161,782 56,602 35,943 37,005 40,009 169,559 67,111 49,912 41,820 46,100 204,943 65,202 49,469 44,496 49,530 208,697
Gross Profit 88,186 101,839 98,392 35,217 22,370 22,680 24,689 104,956 44,328 32,998 26,625 29,598 133,549 43,107 32,434 28,930 32,746 137,216
Operating Expenses:
Research and Development 11,581 14,236 16,217 4,451 4,565 4,758 4,978 18,752 5,163 5,250 5,350 5,500 21,263 5,550 5,500 5,550 5,600 22,200
Selling, General, and Administrative 15,261 16,705 18,245 5,197 4,952 4,831 4,936 19,916 5,631 5,550 5,650 5,750 22,581 5,800 5,700 5,750 5,800 23,050
Total Operating Expenses 26,842 30,941 34,462 9,648 9,517 9,589 9,914 38,668 10,794 10,800 11,000 11,250 43,844 11,350 11,200 11,300 11,400 45,250
Operating Income 61,344 70,898 63,930 25,569 12,853 13,091 14,775 66,288 33,534 22,198 15,625 18,348 89,705 31,757 21,234 17,630 21,346 91,966
Other Income 2,745 2,005 1,807 349 282 46 126 803 45 50 65 70 230 75 80 85 87 327
Income before Taxes 64,089 72,903 65,737 25,918 13,135 13,137 14,901 67,091 33,579 22,248 15,690 18,418 89,935 31,832 21,314 17,715 21,433 92,293
Provision for Taxes 15,738 13,372 10,481 3,682 1,886 1,884 2,228 9,680 4,824 3,782 2,667 3,131 14,405 5,411 3,623 3,011 3,644 15,690
Net Income 48,351 59,531 55,256 22,236 11,249 11,253 12,673 57,411 28,755 18,466 13,023 15,287 75,531 26,420 17,690 14,703 17,789 76,603
EPS $ 2.30 $ 2.98 $ 2.97 $ 1.25 $ 0.64 $ 0.65 $ 0.73 $ 3.28 $ 1.68 $ 1.08 $ 0.76 $ 0.90 $ 4.43 $ 1.56 $ 1.05 $ 0.87 $ 1.06 $ 4.53
Diluted Shares 21,007 20,000 18,596 17,818 17,619 17,419 17,257 17,528 17,114 17,074 17,034 16,994 17,054 16,954 16,914 16,874 16,834 16,894

Growth Rates (Y/Y)

Net Sales 6.3% 15.9% -2.0% 8.9% 0.5% 10.9% 1.0% 5.5% 21.4% 42.2% 14.7% 17.0% 23.3% -2.8% -1.2% 7.3% 8.7% 2.2%
Gross Profit 4.7% 15.5% -3.4% 9.9% 2.5% 12.1% 1.5% 6.7% 25.9% 47.5% 17.4% 19.9% 27.2% -2.8% -1.7% 8.7% 10.6% 2.7%
Operating Income 2.2% 15.6% -9.8% 9.5% -4.2% 13.4% -5.4% 3.7% 31.2% 72.7% 19.4% 24.2% 35.3% -5.3% -4.3% 12.8% 16.3% 2.5%
Net Income 5.8% 23.1% -7.2% 11.4% -2.7% 12.0% -7.4% 3.9% 29.3% 64.2% 15.7% 20.6% 31.6% -8.1% -4.2% 12.9% 16.4% 1.4%
EPS 10.8% 29.3% -0.2% 19.3% 3.8% 18.4% -3.0% 10.2% 34.6% 69.4% 18.3% 22.5% 35.2% -7.3% -3.3% 14.0% 17.5% 2.4%

Profitability Ratios
Gross Margin 38.5% 38.3% 37.8% 38.4% 38.4% 38.0% 38.2% 38.2% 39.8% 39.8% 38.9% 39.1% 39.5% 39.8% 39.6% 39.4% 39.8% 39.7%
Operating Margin 26.8% 26.7% 24.6% 27.8% 22.0% 21.9% 22.8% 24.1% 30.1% 26.8% 22.8% 24.2% 26.5% 29.3% 25.9% 24.0% 25.9% 26.6%
Non-Operating Margin 1.2% 0.8% 0.7% 0.4% 0.5% 0.1% 0.2% 0.3% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
Pre-Tax Margin 28.0% 27.4% 25.3% 28.2% 22.5% 22.0% 23.0% 24.4% 30.1% 26.8% 22.9% 24.3% 26.6% 29.4% 26.0% 24.1% 26.0% 26.7%
Net Margin 21.1% 22.4% 21.2% 24.2% 19.3% 18.9% 19.6% 20.9% 25.8% 22.3% 19.0% 20.2% 22.3% 24.4% 21.6% 20.0% 21.6% 22.1%

Expense Ratios
Cost of Revenue 61.5% 61.7% 62.2% 61.6% 61.6% 62.0% 61.8% 61.8% 60.2% 60.2% 61.1% 60.9% 60.5% 60.2% 60.4% 60.6% 60.2% 60.3%
Research and Development 5.1% 5.4% 6.2% 4.8% 7.8% 8.0% 7.7% 6.8% 4.6% 6.3% 7.8% 7.3% 6.3% 5.1% 6.7% 7.6% 6.8% 6.4%
Selling, General, and Administrative 6.7% 6.3% 7.0% 5.7% 8.5% 8.1% 7.6% 7.3% 5.1% 6.7% 8.3% 7.6% 6.7% 5.4% 7.0% 7.8% 7.0% 6.7%
Total Operating Expenses 11.7% 11.6% 13.2% 10.5% 16.3% 16.1% 15.3% 14.1% 9.7% 13.0% 16.1% 14.9% 13.0% 10.5% 13.7% 15.4% 13.9% 13.1%

Tax Rate 24.6% 18.3% 15.9% 14.2% 14.4% 14.3% 15.0% 14.4% 14.4% 17.0% 17.0% 17.0% 16.0% 17.0% 17.0% 17.0% 17.0% 17.0%

Current disclosure information for this company is located at http://www.pipersandler.com/researchdisclosures

Apple, Inc. Page 5 of 8

 Apple Inc. (AAPL) Harsh Kumar, Senior Analyst
Balance Sheet harsh.kumar@psc.com
Fiscal Year Ends September 901-302-1646
(Dollars in millions) 1/27/2021

Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
Assets
Current Assets:
Cash and cash equivalents 20,484 16,371 15,157 18,571 20,289 27,491 45,059 31,971 25,913 44,771 37,988 50,530 48,844 39,771 40,174 33,383 38,016 36,010
Marketable securities 46,671 44,081 51,944 58,188 53,892 49,662 42,881 38,999 40,388 41,656 42,104 44,084 51,713 67,391 53,877 59,642 52,927 40,816
Accounts receivable, net 15,754 14,057 11,579 12,399 17,874 23,440 14,324 14,104 23,186 18,077 15,085 14,148 22,926 20,970 15,722 17,882 16,120 27,101
Inventories 2,132 2,712 2,910 3,146 4,855 4,421 7,662 5,936 3,956 4,988 4,884 3,355 4,106 4,097 3,334 3,978 4,061 4,973
Vendor non-trade receivables 13,545 13,920 9,033 10,233 17,799 27,459 8,084 12,263 25,809 18,904 11,193 12,326 22,878 18,976 14,955 14,193 21,325 31,519
Other current assets 8,283 12,191 11,367 10,338 13,936 11,337 12,043 12,488 12,087 12,432 12,092 10,530 12,352 12,026 15,691 10,987 11,264 13,687
Total current assets 106,869 103,332 101,990 112,875 128,645 143,810 130,053 115,761 131,339 140,828 123,346 134,973 162,819 163,231 143,753 140,065 143,713 154,106
Marketable securities 170,430 185,638 189,740 184,757 194,714 207,944 179,286 172,773 170,799 158,608 145,319 115,996 105,341 99,899 98,793 100,592 100,887 118,745
Property, plant, and equipment, net 27,010 26,510 27,163 29,286 33,783 33,679 35,077 38,117 41,304 39,597 38,746 37,636 37,378 37,031 35,889 35,687 36,766 37,933
Other non-current assets 17,377 15,661 15,639 18,255 18,177 21,361 23,086 22,546 22,283 34,686 34,587 33,634 32,978 40,457 41,965 41,000 42,522 43,270
Total Assets 321,686 331,141 334,532 345,173 375,319 406,794 367,502 349,197 365,725 373,719 341,998 322,239 338,516 340,618 320,400 317,344 323,888 354,054

Liabilities and Shareholder's Equity

Current Liabilities
Accounts payable 37,294 38,510 28,573 31,915 49,049 62,985 34,311 38,489 55,888 44,293 30,443 29,115 46,236 45,111 32,421 35,325 42,296 63,846
Other current liabilities 22,027 23,739 23,096 23,304 25,744 26,281 26,756 25,184 33,327 36,703 35,368 31,673 37,720 36,263 37,324 35,005 42,684 48,504
Deferred revenue 8,080 7,889 7,682 7,608 7,548 8,044 7,775 7,403 5,966 5,546 5,532 5,434 5,522 5,573 5,928 6,313 6,643 7,395
Commercial paper 8,105 10,493 9,992 11,980 11,977 11,980 11,980 11,974 11,964 11,969 11,924 9,953 5,980 4,990 10,029 11,166 4,996 5,000
Term Debt 3,500 3,499 3,999 6,495 6,496 6,498 8,498 5,498 8,784 9,772 10,505 13,529 10,260 10,224 10,392 7,509 8,773 7,762
Total current liabilities 79,006 84,130 73,342 81,302 100,814 115,788 89,320 88,548 115,929 108,283 93,772 89,704 105,718 102,161 96,094 95,318 105,392 132,507
Term debt 75,427 73,557 84,531 89,864 97,207 103,922 101,362 97,128 93,735 92,989 90,201 84,936 91,807 93,078 89,086 94,048 98,667 99,281
Other non-current liabilities 39,004 41,064 42,577 41,582 43,251 46,885 49,942 48,572 48,914 54,555 52,165 51,143 50,503 55,848 56,795 55,696 54,490 56,042
Total shareholder's equity 128,249 132,390 134,082 132,425 134,047 140,199 126,878 114,949 107,147 117,892 105,860 96,456 90,488 89,531 78,425 72,282 65,339 66,224
Total Liabilities and Shareholder's Equity 321,686 331,141 334,532 345,173 375,319 406,794 367,502 349,197 365,725 373,719 341,998 322,239 338,516 340,618 320,400 317,344 323,888 354,054

Key Balance Sheet Data

Cash per share $ 11.01 $ 11.55 $ 12.20 $ 12.49 $ 12.97 $ 13.82 $ 13.18 $ 12.37 $ 12.23 $ 12.83 $ 11.99 $ 11.44 $ 11.39 $ 11.62 $ 10.95 $ 11.12 $ 11.12 $ 11.43
Net cash per share $ 7.35 $ 7.93 $ 8.00 $ 7.89 $ 7.97 $ 8.47 $ 7.76 $ 7.16 $ 6.94 $ 7.45 $ 6.63 $ 6.09 $ 5.74 $ 5.82 $ 5.30 $ 5.28 $ 4.89 $ 5.17
Book value per share $ 5.94 $ 6.21 $ 6.37 $ 6.33 $ 6.46 $ 6.80 $ 6.26 $ 5.83 $ 5.53 $ 6.17 $ 5.63 $ 5.24 $ 5.00 $ 5.02 $ 4.45 $ 4.15 $ 3.79 $ 3.87
Long-term debt to total capital 36.4% 35.1% 38.0% 39.3% 40.9% 41.5% 42.8% 44.6% 44.7% 42.1% 43.7% 43.6% 47.7% 48.3% 50.1% 54.1% 57.1% 57.3%
Return on equity 7.0% 13.5% 8.2% 6.6% 8.0% 14.3% 10.9% 10.0% 13.2% 16.9% 10.9% 10.4% 15.1% 24.8% 14.3% 15.6% 19.4% 43.4%

Working capital $ 27,863 $ 19,202 $ 28,648 $ 31,573 $ 27,831 $ 28,022 $ 40,733 $ 27,213 $ 15,410 $ 32,545 $ 29,574 $ 45,269 $ 57,101 $ 61,070 $ 47,659 $ 44,747 $ 38,321 $ 21,599
Current ratio 1.4x 1.2x 1.4x 1.4x 1.3x 1.2x 1.5x 1.3x 1.1x 1.3x 1.3x 1.5x 1.5x 1.6x 1.5x 1.5x 1.4x 1.2x
Inventory turnover 54.5x 71.1x 44.4x 35.5x 26.9x 49.2x 19.7x 22.1x 39.2x 41.9x 29.6x 40.x 38.7x 55.3x 43.1x 37.2x 39.4x 54.x
Days sales outstanding 30.7x 16.4x 20.x 24.9x 31.x 24.2x 21.4x 24.2x 33.6x 19.6x 23.7x 24.x 32.7x 20.8x 24.6x 27.3x 22.7x 22.2x

Net sales 46,852 78,351 52,896 45,408 52,579 88,293 61,137 53,265 62,900 84,310 58,015 53,809 64,040 91,819 58,313 59,685 64,698 111,439
Cost of goods sold 29,039 48,175 32,305 27,920 32,648 54,381 37,715 32,844 38,816 52,279 36,194 33,582 39,727 56,602 35,943 37,005 40,009 67,111
Net income 9,014 17,891 11,029 8,717 10,714 20,065 13,822 11,519 14,125 19,965 11,561 10,044 13,686 22,236 11,249 11,253 12,673 28,755
Average shares outstanding 21,573 21,312 21,047 20,934 20,734 20,631 20,274 19,706 19,390 19,093 18,803 18,406 18,081 17,818 17,619 17,419 17,257 17,114

Current disclosure information for this company is located at http://www.pipersandler.com/researchdisclosures

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 C O M PA N Y N O T E
January 27, 2021

IMPORTANT RESEARCH DISCLOSURES

Rating and Price Target History for: Apple, Inc. (AAPL) as of 01-26-2021
05/02/18 08/01/18 09/07/18 12/13/18 01/03/19 03/25/19 05/01/19 07/31/19 10/31/19 12/20/19 01/29/20 03/24/20 04/08/20 04/30/20
OW:$53.5 OW:$54.5 OW:$62.5 OW:$55.5 OW:$47 OW:$50.25 OW:$58 OW:$61 OW:$73 OW:$76 OW:$86 T:OW:$65 OW:$75 OW:$77.5
160
140
120
100
80
60
40
20
2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3 2021 Q1
07/30/20 09/15/20 10/22/20
OW:$113 OW:$130 OW:$135

Created by: BlueMatrix

Notes: The boxes on the Rating and Price Target History chart above indicate the date of the fundamental Equity Research Note, the rating and the price
target. Each box represents a date on which an analyst made a change to a rating or price target, except for the first box, which may only represent the
first Note written during the past three years.
Legend:
I: Initiating Coverage
R: Resuming Coverage
T: Transferring Coverage
D: Discontinuing Coverage
S: Suspending Coverage
OW: Overweight
N: Neutral
UW: Underweight
NA: Not Available
UR: Under Review

Distribution of Ratings/IB Services

Piper Sandler

IB Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY [OW] 575 62.43 202 35.13
HOLD [N] 336 36.48 53 15.77
SELL [UW] 10 1.09 0 0.00

Note: Distribution of Ratings/IB Services shows the number of companies currently covered by fundamental equity research in each rating category from
which Piper Sandler and its affiliates received compensation for investment banking services within the past 12 months. FINRA rules require disclosure
of which ratings most closely correspond with "buy," "hold," and "sell" recommendations. Piper Sandler ratings are not the equivalent of buy, hold or sell,
but instead represent recommended relative weightings. Nevertheless, Overweight corresponds most closely with buy, Neutral with hold and Underweight
with sell. See Stock Rating definitions below.

Analyst Certification
The analyst Harsh V. Kumar, primarily responsible for the preparation of this research report, attests to the following:

The views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of my
compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report.

Piper Sandler research analysts receive compensation that is based, in part, on overall firm revenues, which include investment banking revenues.

Time of dissemination: 27 January 2021 21:11EST.

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 C O M PA N Y N O T E
January 27, 2021

Research Disclosures
Piper Sandler was a registered market maker in the securities of Apple, Inc. at the time this research report was published.

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Apple, Inc. Page 8 of 8