LongBench v2 / 66f53ab2821e116aacb33299 / In the financial reports of Apple Inc. and Samsung Electronics for the years…

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 001-36743
Apple Inc.
(Exact name of Registrant as specified in its charter)
California
94-2404110
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
One Apple Park Way
Cupertino, California
95014
(Address of principal executive offices)
(Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
AAPL
The Nasdaq Stock Market LLC
1.375% Notes due 2024
—
The Nasdaq Stock Market LLC
0.000% Notes due 2025
—
The Nasdaq Stock Market LLC
0.875% Notes due 2025
—
The Nasdaq Stock Market LLC
1.625% Notes due 2026
—
The Nasdaq Stock Market LLC
2.000% Notes due 2027
—
The Nasdaq Stock Market LLC
1.375% Notes due 2029
—
The Nasdaq Stock Market LLC
3.050% Notes due 2029
—
The Nasdaq Stock Market LLC
0.500% Notes due 2031
—
The Nasdaq Stock Market LLC
3.600% Notes due 2042
—
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes  ☒     No  ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes  ☐     No  ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  ☒     No  ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Yes  ☒     No  ☐


Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes  ☐     No  ☒
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of March 31, 2023, the last business day of the Registrant’s most recently
completed second fiscal quarter, was approximately $2,591,165,000,000. Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of
the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive officers and directors as affiliates is not
necessarily a conclusive determination for any other purposes.
15,552,752,000 shares of common stock were issued and outstanding as of October 20, 2023.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s definitive proxy statement relating to its 2024 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form
10-K where indicated. The Registrant’s definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to
which this report relates.


Apple Inc.
Form 10-K
For the Fiscal Year Ended September 30, 2023
TABLE OF CONTENTS
Page
Part I
Item 1.
Business
1
Item 1A.
Risk Factors
5
Item 1B.
Unresolved Staff Comments
16
Item 1C.
Cybersecurity
16
Item 2.
Properties
17
Item 3.
Legal Proceedings
17
Item 4.
Mine Safety Disclosures
17
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
18
Item 6.
[Reserved]
19
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
20
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
26
Item 8.
Financial Statements and Supplementary Data
27
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
52
Item 9A.
Controls and Procedures
52
Item 9B.
Other Information
53
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
53
Part III
Item 10.
Directors, Executive Officers and Corporate Governance
53
Item 11.
Executive Compensation
53
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
53
Item 13.
Certain Relationships and Related Transactions, and Director Independence
53
Item 14.
Principal Accountant Fees and Services
53
Part IV
Item 15.
Exhibit and Financial Statement Schedules
54
Item 16.
Form 10-K Summary
57


This Annual Report on Form 10-K (“Form 10-K”) contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995,
that involve risks and uncertainties. Many of the forward-looking statements are located in Part I, Item 1 of this Form 10-K under the heading “Business” and Part
II, Item 7 of this Form 10-K under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking
statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical
or current fact. For example, statements in this Form 10-K regarding the potential future impact of macroeconomic conditions on the Company’s business and
results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of
future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might
cause such differences include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” The Company
assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Unless otherwise stated, all information presented herein is based on the Company’s fiscal calendar, and references to particular years, quarters, months or
periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Each of the terms the
“Company” and “Apple” as used herein refers collectively to Apple Inc. and its wholly owned subsidiaries, unless otherwise stated.
PART I
Item 1.    Business
Company Background
The Company designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related
services. The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September.
Products
iPhone
iPhone  is the Company’s line of smartphones based on its iOS operating system. The iPhone line includes iPhone 15 Pro, iPhone 15, iPhone 14, iPhone 13
and iPhone SE .
Mac
Mac  is the Company’s line of personal computers based on its macOS  operating system. The Mac line includes laptops MacBook Air  and MacBook Pro , as
well as desktops iMac , Mac mini , Mac Studio  and Mac Pro .
iPad
iPad  is the Company’s line of multipurpose tablets based on its iPadOS  operating system. The iPad line includes iPad Pro , iPad Air , iPad and iPad mini .
Wearables, Home and Accessories
Wearables includes smartwatches and wireless headphones. The Company’s line of smartwatches, based on its watchOS  operating system, includes Apple
Watch Ultra™ 2, Apple Watch  Series 9 and Apple Watch SE . The Company’s line of wireless headphones includes AirPods , AirPods Pro , AirPods Max™
and Beats  products.
Home includes Apple TV , the Company’s media streaming and gaming device based on its tvOS  operating system, and HomePod  and HomePod mini ,
high-fidelity wireless smart speakers.
Accessories includes Apple-branded and third-party accessories.
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Apple Inc. | 2023 Form 10-K | 1


Services
Advertising
The Company’s advertising services include third-party licensing arrangements and the Company’s own advertising platforms.
AppleCare
The Company offers a portfolio of fee-based service and support products under the AppleCare  brand. The offerings provide priority access to Apple technical
support, access to the global Apple authorized service network for repair and replacement services, and in many cases additional coverage for instances of
accidental damage or theft and loss, depending on the country and type of product.
Cloud Services
The Company’s cloud services store and keep customers’ content up-to-date and available across multiple Apple devices and Windows personal computers.
Digital Content
The Company operates various platforms, including the App Store , that allow customers to discover and download applications and digital content, such as
books, music, video, games and podcasts.
The Company also offers digital content through subscription-based services, including Apple Arcade , a game subscription service; Apple Fitness+
, a
personalized fitness service; Apple Music , which offers users a curated listening experience with on-demand radio stations; Apple News+ , a subscription news
and magazine service; and Apple TV+ , which offers exclusive original content and live sports.
Payment Services
The Company offers payment services, including Apple Card , a co-branded credit card, and Apple Pay , a cashless payment service.
Segments
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of the Americas, Europe, Greater China,
Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and
Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia and those Asian countries not included in the
Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is
managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic
region.
Markets and Distribution
The Company’s customers are primarily in the consumer, small and mid-sized business, education, enterprise and government markets. The Company sells its
products and resells third-party products in most of its major markets directly to customers through its retail and online stores and its direct sales force. The
Company also employs a variety of indirect distribution channels, such as third-party cellular network carriers, wholesalers, retailers and resellers. During 2023,
the Company’s net sales through its direct and indirect distribution channels accounted for 37% and 63%, respectively, of total net sales.
Competition
The markets for the Company’s products and services are highly competitive, and are characterized by aggressive price competition and resulting downward
pressure on gross margins, frequent introduction of new products and services, short product life cycles, evolving industry standards, continual improvement in
product price and performance characteristics, rapid adoption of technological advancements by competitors, and price sensitivity on the part of consumers and
businesses. Many of the Company’s competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating the
Company’s products and infringing on its intellectual property.
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Apple Inc. | 2023 Form 10-K | 2


The Company’s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and
technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system,
numerous software applications and related services. Principal competitive factors important to the Company include price, product and service features
(including security features), relative price and performance, product and service quality and reliability, design innovation, a strong third-party software and
accessories ecosystem, marketing and distribution capability, service and support, and corporate reputation.
The Company is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables and accessories, and services.
The Company faces substantial competition in these markets from companies that have significant technical, marketing, distribution and other resources, as well
as established hardware, software, and service offerings with large customer bases. In addition, some of the Company’s competitors have broader product lines,
lower-priced products and a larger installed base of active devices. Competition has been particularly intense as competitors have aggressively cut prices and
lowered product margins. Certain competitors have the resources, experience or cost structures to provide products at little or no profit or even at a loss. The
Company’s services compete with business models that provide content to users for free and use illegitimate means to obtain third-party digital content and
applications. The Company faces significant competition as competitors imitate the Company’s product features and applications within their products, or
collaborate to offer integrated solutions that are more competitive than those they currently offer.
Supply of Components
Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from
single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers,
tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times
subject to industry-wide shortage and significant commodity pricing fluctuations.
The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize
custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the
suppliers’ yields have matured or their manufacturing capacities have increased. The continued availability of these components at acceptable prices, or at all,
may be affected if suppliers decide to concentrate on the production of common components instead of components customized to meet the Company’s
requirements.
The Company has entered into agreements for the supply of many components; however, there can be no guarantee that the Company will be able to extend or
renew these agreements on similar terms, or at all.
Research and Development
Because the industries in which the Company competes are characterized by rapid technological advances, the Company’s ability to compete successfully
depends heavily upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. The Company
continues to develop new technologies to enhance existing products and services, and to expand the range of its offerings through research and development
(“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology.
Intellectual Property
The Company currently holds a broad collection of intellectual property rights relating to certain aspects of its hardware devices, accessories, software and
services. This includes patents, designs, copyrights, trademarks and other forms of intellectual property rights in the U.S. and various foreign countries. Although
the Company believes the ownership of such intellectual property rights is an important factor in differentiating its business and that its success does depend in
part on such ownership, the Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel.
The Company regularly files patent, design, copyright and trademark applications to protect innovations arising from its research, development, design and
marketing, and is currently pursuing thousands of applications around the world. Over time, the Company has accumulated a large portfolio of issued and
registered intellectual property rights around the world. No single intellectual property right is solely responsible for protecting the Company’s products and
services. The Company believes the duration of its intellectual property rights is adequate relative to the expected lives of its products and services.
In addition to Company-owned intellectual property, many of the Company’s products and services are designed to include intellectual property owned by third
parties. It may be necessary in the future to seek or renew licenses relating to various aspects of the Company’s products, processes and services. While the
Company has generally been able to obtain such licenses on commercially reasonable terms in the past, there is no guarantee that such licenses could be
obtained in the future on reasonable terms or at all.
Apple Inc. | 2023 Form 10-K | 3


Business Seasonality and Product Introductions
The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday
demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. The timing of product
introductions can also impact the Company’s net sales to its indirect distribution channels as these channels are filled with new inventory following a product
launch, and channel inventory of an older product often declines as the launch of a newer product approaches. Net sales can also be affected when consumers
and distributors anticipate a product introduction.
Human Capital
The Company believes it has a talented, motivated and dedicated team, and works to create an inclusive, safe and supportive environment for all of its team
members. As of September 30, 2023, the Company had approximately 161,000 full-time equivalent employees.
Workplace Practices and Policies
The Company is an equal opportunity employer committed to inclusion and diversity and to providing a workplace free of harassment or discrimination.
Compensation and Benefits
The Company believes that compensation should be competitive and equitable, and should enable employees to share in the Company’s success. The
Company recognizes its people are most likely to thrive when they have the resources to meet their needs and the time and support to succeed in their
professional and personal lives. In support of this, the Company offers a wide variety of benefits for employees around the world and invests in tools and
resources that are designed to support employees’ individual growth and development.
Inclusion and Diversity
The Company is committed to its vision to build and sustain a more inclusive workforce that is representative of the communities it serves. The Company
continues to work to increase diverse representation at every level, foster an inclusive culture, and support equitable pay and access to opportunity for all
employees.
Engagement
The Company believes that open and honest communication among team members, managers and leaders helps create an open, collaborative work
environment where everyone can contribute, grow and succeed. Team members are encouraged to come to their managers with questions, feedback or
concerns, and the Company conducts surveys that gauge employee sentiment in areas like career development, manager performance and inclusivity.
Health and Safety
The Company is committed to protecting its team members everywhere it operates. The Company identifies potential workplace risks in order to develop
measures to mitigate possible hazards. The Company supports employees with general safety, security and crisis management training, and by putting specific
programs in place for those working in potentially high-hazard environments. Additionally, the Company works to protect the safety and security of its team
members, visitors and customers through its global security team.
Available Information
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to
Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the U.S. Securities and Exchange
Commission (the “SEC”). Such reports and other information filed by the Company with the SEC are available free of charge at investor.apple.com/investor-
relations/sec-filings/default.aspx when such reports are available on the SEC’s website. The Company periodically provides certain information for investors on
its corporate website, www.apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial
performance, information on environmental, social and governance matters, and details related to the Company’s annual meeting of shareholders. The
information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing. Further, the Company’s references to website
URLs are intended to be inactive textual references only.
Apple Inc. | 2023 Form 10-K | 4


Item 1A.    Risk Factors
The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known
or unknown, including those described below. When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of
operations, financial condition and stock price can be materially and adversely affected.
Because of the following factors, as well as other factors affecting the Company’s results of operations and financial condition, past financial performance should
not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
This discussion of risk factors contains forward-looking statements.
This section should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the
consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
Macroeconomic and Industry Risks
The Company’s operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can
materially adversely affect the Company’s business, results of operations and financial condition.
The Company has international operations with sales outside the U.S. representing a majority of the Company’s total net sales. In addition, the Company’s
global supply chain is large and complex and a majority of the Company’s supplier facilities, including manufacturing and assembly sites, are located outside the
U.S. As a result, the Company’s operations and performance depend significantly on global and regional economic conditions.
Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency
fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for the Company’s products and services. In
addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility,
declines in income or asset values, and other economic factors.
In addition to an adverse impact on demand for the Company’s products and services, uncertainty about, or a decline in, global or regional economic conditions
can have a significant impact on the Company’s suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel
partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.
Adverse economic conditions can also lead to increased credit and collectibility risk on the Company’s trade receivables; the failure of derivative counterparties
and other financial institutions; limitations on the Company’s ability to issue new debt; reduced liquidity; and declines in the fair values of the Company’s financial
instruments. These and other impacts can materially adversely affect the Company’s business, results of operations, financial condition and stock price.
The Company’s business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health
issues, industrial accidents and other business interruptions.
Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business
interruptions can harm or disrupt international commerce and the global economy, and could have a material adverse effect on the Company and its customers,
suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners.
Apple Inc. | 2023 Form 10-K | 5


The Company has a large, global business with sales outside the U.S. representing a majority of the Company’s total net sales, and the Company believes that it
generally benefits from growth in international trade. Substantially all of the Company’s manufacturing is performed in whole or in part by outsourcing partners
located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam. Restrictions on international trade, such as tariffs and other controls on
imports or exports of goods, technology or data, can materially adversely affect the Company’s operations and supply chain and limit the Company’s ability to
offer and distribute its products and services to customers. The impact can be particularly significant if these restrictive measures apply to countries and regions
where the Company derives a significant portion of its revenues and/or has significant supply chain operations. Restrictive measures can require the Company
to take various actions, including changing suppliers, restructuring business relationships, and ceasing to offer third-party applications on its platforms. Changing
the Company’s operations in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the
Company’s operations. Such restrictions can be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse
impacts from such measures. For example, tensions between governments, including the U.S. and China, have in the past led to tariffs and other restrictions
being imposed on the Company’s business. If disputes and conflicts further escalate in the future, actions by governments in response could be significantly
more severe and restrictive and could materially adversely affect the Company’s business. Political uncertainty surrounding trade and other international
disputes could also have a negative effect on consumer confidence and spending, which could adversely affect the Company’s business.
Many of the Company’s operations and facilities, as well as critical business operations of the Company’s suppliers and contract manufacturers, are in locations
that are prone to earthquakes and other natural disasters. In addition, such operations and facilities are subject to the risk of interruption by fire, power
shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks,
labor disputes, public health issues, including pandemics such as the COVID-19 pandemic, and other events beyond the Company’s control. Global climate
change is resulting in certain types of natural disasters, such as droughts, floods, hurricanes and wildfires, occurring more frequently or with more intense
effects. Such events can make it difficult or impossible for the Company to manufacture and deliver products to its customers, create delays and inefficiencies in
the Company’s supply and manufacturing chain, and result in slowdowns and outages to the Company’s service offerings, and negatively impact consumer
spending and demand in affected areas. Following an interruption to its business, the Company can require substantial recovery time, experience significant
expenditures to resume operations, and lose significant sales. Because the Company relies on single or limited sources for the supply and manufacture of many
critical components, a business interruption affecting such sources would exacerbate any negative consequences to the Company.
The Company’s operations are also subject to the risks of industrial accidents at its suppliers and contract manufacturers. While the Company’s suppliers are
required to maintain safe working environments and operations, an industrial accident could occur and could result in serious injuries or loss of life, disruption to
the Company’s business, and harm to the Company’s reputation. Major public health issues, including pandemics such as the COVID-19 pandemic, have
adversely affected, and could in the future materially adversely affect, the Company due to their impact on the global economy and demand for consumer
products; the imposition of protective public safety measures, such as stringent employee travel restrictions and limitations on freight services and the movement
of products between regions; and disruptions in the Company’s operations, supply chain and sales and distribution channels, resulting in interruptions to the
supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.
While the Company maintains insurance coverage for certain types of losses, such insurance coverage may be insufficient to cover all losses that may arise.
Global markets for the Company’s products and services are highly competitive and subject to rapid technological change, and the Company may be
unable to compete effectively in these markets.
The Company’s products and services are offered in highly competitive global markets characterized by aggressive price competition and resulting downward
pressure on gross margins, frequent introduction of new products and services, short product life cycles, evolving industry standards, continual improvement in
product price and performance characteristics, rapid adoption of technological advancements by competitors, and price sensitivity on the part of consumers and
businesses.
The Company’s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and
technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system,
numerous software applications and related services. As a result, the Company must make significant investments in R&D. There can be no assurance these
investments will achieve expected returns, and the Company may not be able to develop and market new products and services successfully.
Apple Inc. | 2023 Form 10-K | 6


The Company currently holds a significant number of patents, trademarks and copyrights and has registered, and applied to register, additional patents,
trademarks and copyrights. In contrast, many of the Company’s competitors seek to compete primarily through aggressive pricing and very low cost structures,
and by imitating the Company’s products and infringing on its intellectual property. Effective intellectual property protection is not consistently available in every
country in which the Company operates. If the Company is unable to continue to develop and sell innovative new products with attractive margins or if
competitors infringe on the Company’s intellectual property, the Company’s ability to maintain a competitive advantage could be materially adversely affected.
The Company has a minority market share in the global smartphone, personal computer and tablet markets. The Company faces substantial competition in
these markets from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software and digital
content supplier relationships. In addition, some of the Company’s competitors have broader product lines, lower-priced products and a larger installed base of
active devices. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have
the resources, experience or cost structures to provide products at little or no profit or even at a loss. Some of the markets in which the Company competes have
from time to time experienced little to no growth or contracted overall.
Additionally, the Company faces significant competition as competitors imitate the Company’s product features and applications within their products or
collaborate to offer solutions that are more competitive than those they currently offer. The Company also expects competition to intensify as competitors imitate
the Company’s approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions.
The Company’s services also face substantial competition, including from companies that have significant resources and experience and have established
service offerings with large customer bases. The Company competes with business models that provide content to users for free. The Company also competes
with illegitimate means to obtain third-party digital content and applications.
The Company’s business, results of operations and financial condition depend substantially on the Company’s ability to continually improve its products and
services to maintain their functional and design advantages. There can be no assurance the Company will be able to continue to provide products and services
that compete effectively.
Business Risks
To remain competitive and stimulate customer demand, the Company must successfully manage frequent introductions and transitions of products
and services.
Due to the highly volatile and competitive nature of the markets and industries in which the Company competes, the Company must continually introduce new
products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products and
services, and successfully manage the transition to these new and upgraded products and services. The success of new product and service introductions
depends on a number of factors, including timely and successful development, market acceptance, the Company’s ability to manage the risks associated with
new technologies and production ramp-up issues, the availability of application software for the Company’s products, the effective management of purchase
commitments and inventory levels in line with anticipated product demand, the availability of products in appropriate quantities and at expected costs to meet
anticipated demand, and the risk that new products and services may have quality or other defects or deficiencies. There can be no assurance the Company will
successfully manage future introductions and transitions of products and services.
The Company depends on component and product manufacturing and logistical services provided by outsourcing partners, many of which are
located outside of the U.S.
Substantially all of the Company’s manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan,
South Korea, Taiwan and Vietnam, and a significant concentration of this manufacturing is currently performed by a small number of outsourcing partners, often
in single locations. Changes or additions to the Company’s supply chain require considerable time and resources and involve significant risks and uncertainties.
The Company has also outsourced much of its transportation and logistics management. While these arrangements can lower operating costs, they also reduce
the Company’s direct control over production and distribution. Such diminished control has from time to time and may in the future have an adverse effect on the
quality or quantity of products manufactured or services provided, or adversely affect the Company’s flexibility to respond to changing conditions. Although
arrangements with these partners may contain provisions for product defect expense reimbursement, the Company generally remains responsible to the
consumer for warranty and out-of-warranty service in the event of product defects and experiences unanticipated product defect liabilities from time to time.
While the Company relies on its partners to adhere to its supplier code of conduct, violations of the supplier code of conduct occur from time to time and can
materially adversely affect the Company’s business, reputation, results of operations and financial condition.
Apple Inc. | 2023 Form 10-K | 7


The Company relies on single-source outsourcing partners in the U.S., Asia and Europe to supply and manufacture many components, and on outsourcing
partners primarily located in Asia, for final assembly of substantially all of the Company’s hardware products. Any failure of these partners to perform can have a
negative impact on the Company’s cost or supply of components or finished goods. In addition, manufacturing or logistics in these locations or transit to final
destinations can be disrupted for a variety of reasons, including natural and man-made disasters, information technology system failures, commercial disputes,
armed conflict, economic, business, labor, environmental, public health or political issues, or international trade disputes.
The Company has invested in manufacturing process equipment, much of which is held at certain of its outsourcing partners, and has made prepayments to
certain of its suppliers associated with long-term supply agreements. While these arrangements help ensure the supply of components and finished goods, if
these outsourcing partners or suppliers experience severe financial problems or other disruptions in their business, such continued supply can be reduced or
terminated, and the recoverability of manufacturing process equipment or prepayments can be negatively impacted.
Future operating results depend upon the Company’s ability to obtain components in sufficient quantities on commercially reasonable terms.
Because the Company currently obtains certain components from single or limited sources, the Company is subject to significant supply and pricing risks. Many
components, including those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing
fluctuations that can materially adversely affect the Company’s business, results of operations and financial condition. For example, the global semiconductor
industry has in the past experienced high demand and shortages of supply, which adversely affected the Company’s ability to obtain sufficient quantities of
components and products on commercially reasonable terms or at all. Such disruptions could occur in the future. While the Company has entered into
agreements for the supply of many components, there can be no assurance the Company will be able to extend or renew these agreements on similar terms, or
at all. Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular
industry, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms or at all. The effects of global or
regional economic conditions on the Company’s suppliers, described in “The Company’s operations and performance depend significantly on global and regional
economic conditions and adverse economic conditions can materially adversely affect the Company’s business, results of operations and financial condition,”
above, can also affect the Company’s ability to obtain components. Therefore, the Company remains subject to significant risks of supply shortages and price
increases that can materially adversely affect its business, results of operations and financial condition.
The Company’s new products often utilize custom components available from only one source. When a component or product uses new technologies, initial
capacity constraints may exist until the suppliers’ yields have matured or their manufacturing capacities have increased. The continued availability of these
components at acceptable prices, or at all, can be affected for any number of reasons, including if suppliers decide to concentrate on the production of common
components instead of components customized to meet the Company’s requirements. When the Company’s supply of components for a new or existing product
has been delayed or constrained, or when an outsourcing partner has delayed shipments of completed products to the Company, the Company’s business,
results of operations and financial condition have been adversely affected and future delays or constraints could materially adversely affect the Company’s
business, results of operations and financial condition. The Company’s business and financial performance could also be materially adversely affected
depending on the time required to obtain sufficient quantities from the source, or to identify and obtain sufficient quantities from an alternative source.
The Company’s products and services may be affected from time to time by design and manufacturing defects that could materially adversely affect
the Company’s business and result in harm to the Company’s reputation.
The Company offers complex hardware and software products and services that can be affected by design and manufacturing defects. Sophisticated operating
system software and applications, such as those offered by the Company, often have issues that can unexpectedly interfere with the intended operation of
hardware or software products and services. Defects can also exist in components and products the Company purchases from third parties. Component defects
could make the Company’s products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase as the
Company’s products are introduced into specialized applications, including health. In addition, the Company’s service offerings can have quality issues and from
time to time experience outages, service slowdowns or errors. As a result, from time to time the Company’s services have not performed as anticipated and may
not meet customer expectations. There can be no assurance the Company will be able to detect and fix all issues and defects in the hardware, software and
services it offers. Failure to do so can result in widespread technical and performance issues affecting the Company’s products and services. In addition, the
Company can be exposed to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or
intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can also adversely affect the
experience for users of the Company’s products and services, and result in harm to the Company’s reputation, loss of competitive advantage, poor market
acceptance, reduced demand for products and services, delay in new product and service introductions and lost sales.
Apple Inc. | 2023 Form 10-K | 8


The Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation
risk.
The Company records a write-down for product and component inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds
net realizable value. The Company also accrues necessary cancellation fee reserves for orders of excess products and components. The Company reviews
long-lived assets, including capital assets held at its suppliers’ facilities and inventory prepayments, for impairment whenever events or circumstances indicate
the assets may not be recoverable. If the Company determines that an impairment has occurred, it records a write-down equal to the amount by which the
carrying value of the asset exceeds its fair value. Although the Company believes its inventory, capital assets, inventory prepayments and other assets and
purchase commitments are currently recoverable, there can be no assurance the Company will not incur write-downs, fees, impairments and other charges
given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.
The Company orders components for its products and builds inventory in advance of product announcements and shipments. Manufacturing purchase
obligations cover the Company’s forecasted component and manufacturing requirements, typically for periods up to 150 days. Because the Company’s markets
are volatile, competitive and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or
insufficient amounts of components or products, or not fully utilize firm purchase commitments.
The Company relies on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms or
at all.
The Company’s products and services are designed to include intellectual property owned by third parties, which requires licenses from those third parties. In
addition, because of technological changes in the industries in which the Company currently competes or in the future may compete, current extensive patent
coverage and the rapid rate of issuance of new patents, the Company’s products and services can unknowingly infringe existing patents or intellectual property
rights of others. From time to time, the Company has been notified that it may be infringing certain patents or other intellectual property rights of third parties.
Based on experience and industry practice, the Company believes licenses to such third-party intellectual property can generally be obtained on commercially
reasonable terms. However, there can be no assurance the necessary licenses can be obtained on commercially reasonable terms or at all. Failure to obtain the
right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, can preclude the Company from selling certain
products or services, or otherwise have a material adverse impact on the Company’s business, results of operations and financial condition.
The Company’s future performance depends in part on support from third-party software developers.
The Company believes decisions by customers to purchase its hardware products depend in part on the availability of third-party software applications and
services. There can be no assurance third-party developers will continue to develop and maintain software applications and services for the Company’s
products. If third-party software applications and services cease to be developed and maintained for the Company’s products, customers may choose not to buy
the Company’s products.
The Company believes the availability of third-party software applications and services for its products depends in part on the developers’ perception and
analysis of the relative benefits of developing, maintaining and upgrading such software and services for the Company’s products compared to competitors’
platforms, such as Android for smartphones and tablets, Windows for personal computers and tablets, and PlayStation, Nintendo and Xbox for gaming platforms.
This analysis may be based on factors such as the market position of the Company and its products, the anticipated revenue that may be generated, expected
future growth of product sales, and the costs of developing such applications and services.
The Company’s minority market share in the global smartphone, personal computer and tablet markets can make developers less inclined to develop or upgrade
software for the Company’s products and more inclined to devote their resources to developing and upgrading software for competitors’ products with larger
market share. When developers focus their efforts on these competing platforms, the availability and quality of applications for the Company’s devices can suffer.
The Company relies on the continued availability and development of compelling and innovative software applications for its products. The Company’s products
and operating systems are subject to rapid technological change, and when third-party developers are unable to or choose not to keep up with this pace of
change, their applications can fail to take advantage of these changes to deliver improved customer experiences, can operate incorrectly, and can result in
dissatisfied customers and lower customer demand for the Company’s products.
Apple Inc. | 2023 Form 10-K | 9


The Company distributes third-party applications for its products through the App Store. For the vast majority of applications, developers keep all of the revenue
they generate on the App Store. The Company retains a commission from sales of applications and sales of digital services or goods initiated within an
application. From time to time, the Company has made changes to its App Store, including actions taken in response to competition, market conditions and legal
and regulatory requirements. The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the
App Store, such as the European Union (“EU”) Digital Markets Act, which the Company is required to comply with by March 2024. The Company is also subject
to litigation and investigations relating to the App Store, which have resulted in changes to the Company’s business practices, and may in the future result in
further changes. Changes have included how developers communicate with consumers outside the App Store regarding alternative purchasing mechanisms.
Future changes could also affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App
Store, and how and to what extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms. This
could reduce the volume of sales, and the commission that the Company earns on those sales, would decrease. If the rate of the commission that the Company
retains on such sales is reduced, or if it is otherwise narrowed in scope or eliminated, the Company’s business, results of operations and financial condition
could be materially adversely affected.
Failure to obtain or create digital content that appeals to the Company’s customers, or to make such content available on commercially reasonable
terms, could have a material adverse impact on the Company’s business, results of operations and financial condition.
The Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell, or offer subscriptions to, third-party
content, as well as the right to incorporate specific content into the Company’s own services. The licensing or other distribution arrangements for this content can
be for relatively short time periods and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, or at all. Some
third-party content providers and distributors currently or in the future may offer competing products and services, and can take actions to make it difficult or
impossible for the Company to license or otherwise distribute their content. Other content owners, providers or distributors may seek to limit the Company’s
access to, or increase the cost of, such content. The Company may be unable to continue to offer a wide variety of content at commercially reasonable prices
with acceptable usage rules.
The Company also produces its own digital content, which can be costly to produce due to intense and increasing competition for talent, content and
subscribers, and may fail to appeal to the Company’s customers.
Some third-party digital content providers require the Company to provide digital rights management and other security solutions. If requirements change, the
Company may have to develop or license new technology to provide these solutions. There can be no assurance the Company will be able to develop or license
such solutions at a reasonable cost and in a timely manner.
The Company’s success depends largely on the talents and efforts of its team members, the continued service and availability of highly skilled
employees, including key personnel, and the Company’s ability to nurture its distinctive and inclusive culture.
Much of the Company’s future success depends on the talents and efforts of its team members and the continued availability and service of key personnel,
including its Chief Executive Officer, executive team and other highly skilled employees. Experienced personnel in the technology industry are in high demand
and competition for their talents is intense, especially in Silicon Valley, where most of the Company’s key personnel are located. In addition to intense
competition for talent, workforce dynamics are constantly evolving. If the Company does not manage changing workforce dynamics effectively, it could materially
adversely affect the Company’s culture, reputation and operational flexibility.
The Company believes that its distinctive and inclusive culture is a significant driver of its success. If the Company is unable to nurture its culture, it could
materially adversely affect the Company’s ability to recruit and retain the highly skilled employees who are critical to its success, and could otherwise materially
adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company depends on the performance of carriers, wholesalers, retailers and other resellers.
The Company distributes its products and certain of its services through cellular network carriers, wholesalers, retailers and resellers, many of which distribute
products and services from competitors. The Company also sells its products and services and resells third-party products in most of its major markets directly to
consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force.
Some carriers providing cellular network service for the Company’s products offer financing, installment payment plans or subsidies for users’ purchases of the
device. There can be no assurance such offers will be continued at all or in the same amounts.
Apple Inc. | 2023 Form 10-K | 10


The Company has invested and will continue to invest in programs to enhance reseller sales, including staffing selected resellers’ stores with Company
employees and contractors, and improving product placement displays. These programs can require a substantial investment while not assuring return or
incremental sales. The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty
regarding demand for some or all of the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.
The Company’s business and reputation are impacted by information technology system failures and network disruptions.
The Company and its global supply chain are dependent on complex information technology systems and are exposed to information technology system failures
or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses,
physical or electronic break-ins, ransomware or other cybersecurity incidents, or other events or disruptions. System upgrades, redundancy and other continuity
measures may be ineffective or inadequate, and the Company’s or its vendors’ business continuity and disaster recovery planning may not be sufficient for all
eventualities. Such failures or disruptions can adversely impact the Company’s business by, among other things, preventing access to the Company’s online
services, interfering with customer transactions or impeding the manufacturing and shipping of the Company’s products. These events could materially adversely
affect the Company’s business, reputation, results of operations and financial condition.
Losses or unauthorized access to or releases of confidential information, including personal information, could subject the Company to significant
reputational, financial, legal and operational consequences.
The Company’s business requires it to use and store confidential information, including personal information, with respect to the Company’s customers and
employees. The Company devotes significant resources to network and data security, including through the use of encryption and other security measures
intended to protect its systems and data. But these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential
information occur and could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company’s business also requires it to share confidential information with suppliers and other third parties. The Company relies on global suppliers that are
also exposed to ransomware and other malicious attacks that can disrupt business operations. Although the Company takes steps to secure confidential
information that is provided to or accessible by third parties working on the Company’s behalf, such measures are not always effective and losses or
unauthorized access to, or releases of, confidential information occur. Such incidents and other malicious attacks could materially adversely affect the
Company’s business, reputation, results of operations and financial condition.
The Company experiences malicious attacks and other attempts to gain unauthorized access to its systems on a regular basis. These attacks seek to
compromise the confidentiality, integrity or availability of confidential information or disrupt normal business operations, and can, among other things, impair the
Company’s ability to attract and retain customers for its products and services, impact the Company’s stock price, materially damage commercial relationships,
and expose the Company to litigation or government investigations, which could result in penalties, fines or judgments against the Company. Globally, attacks
are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools and techniques that are designed to circumvent
controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders the Company’s ability to identify, investigate and recover from
incidents. In addition, attacks against the Company and its customers can escalate during periods of severe diplomatic or armed conflict.
Although malicious attacks perpetrated to gain access to confidential information, including personal information, affect many companies across various
industries, the Company is at a relatively greater risk of being targeted because of its high profile and the value of the confidential information it creates, owns,
manages, stores and processes.
The Company has implemented systems and processes intended to secure its information technology systems and prevent unauthorized access to or loss of
sensitive data, and mitigate the impact of unauthorized access, including through the use of encryption and authentication technologies. As with all companies,
these security measures may not be sufficient for all eventualities and may be vulnerable to hacking, ransomware attacks, employee error, malfeasance, system
error, faulty password management or other irregularities. For example, third parties can fraudulently induce the Company’s or its vendors’ employees or
customers into disclosing usernames, passwords or other sensitive information, which can, in turn, be used for unauthorized access to the Company’s or its
vendors’ systems and services. To help protect customers and the Company, the Company deploys and makes available technologies like multifactor
authentication, monitors its services and systems for unusual activity and may freeze accounts under suspicious circumstances, which, among other things, can
result in the delay or loss of customer orders or impede customer access to the Company’s products and services.
While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient
to cover all losses or all types of claims that may arise.
Apple Inc. | 2023 Form 10-K | 11


Investment in new business strategies and acquisitions could disrupt the Company’s ongoing business, present risks not originally contemplated
and materially adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company has invested, and in the future may invest, in new business strategies or acquisitions. Such endeavors may involve significant risks and
uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and
regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capital, potential impairment of tangible and
intangible assets, and significant write-offs. Investment and acquisition transactions are exposed to additional risks, including failing to obtain required regulatory
approvals on a timely basis or at all, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise
limit the Company’s ability to fully realize the anticipated benefits of a transaction. These new ventures are inherently risky and may not be successful. The
failure of any significant investment could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company’s retail stores are subject to numerous risks and uncertainties.
The Company’s retail operations are subject to many factors that pose risks and uncertainties and could adversely impact the Company’s business, results of
operations and financial condition, including macroeconomic factors that could have an adverse effect on general retail activity. Other factors include the
Company’s ability to: manage costs associated with retail store construction and operation; manage relationships with existing retail partners; manage costs
associated with fluctuations in the value of retail inventory; and obtain and renew leases in quality retail locations at a reasonable cost.
Legal and Regulatory Compliance Risks
The Company’s business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or
government investigations.
The Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet
been fully resolved, and new matters may arise in the future. In addition, agreements entered into by the Company sometimes include indemnification provisions
which can subject the Company to costs and damages in the event of a claim against an indemnified third party. The number of claims, legal proceedings and
government investigations involving the Company, and the alleged magnitude of such claims, proceedings and government investigations, has generally
increased over time and may continue to increase.
The Company has faced and continues to face a significant number of patent claims relating to its cellular-enabled products, and new claims may arise in the
future, including as a result of new legal or regulatory frameworks. For example, technology and other patent-holding companies frequently assert their patents
and seek royalties and often enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. The Company is
vigorously defending infringement actions in courts in several U.S. jurisdictions, as well as internationally in various countries. The plaintiffs in these actions
frequently seek injunctions and substantial damages.
Regardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming and
disruptive to the Company’s operations. In recognition of these considerations, the Company may enter into agreements or other arrangements to settle litigation
and resolve such challenges. There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur. These
agreements can also significantly increase the Company’s cost of sales and operating expenses and require the Company to change its business practices and
limit the Company’s ability to offer certain products and services.
Except as described in Part I, Item 3 of this Form 10-K under the heading “Legal Proceedings” and in Part II, Item 8 of this Form 10-K in the Notes to
Consolidated Financial Statements in Note 12, “Commitments, Contingencies and Supply Concentrations” under the heading “Contingencies,” in the opinion of
management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual,
concerning loss contingencies for asserted legal and other claims.
The outcome of litigation or government investigations is inherently uncertain. If one or more legal matters were resolved against the Company or an indemnified
third party in a reporting period for amounts above management’s expectations, the Company’s results of operations and financial condition for that reporting
period could be materially adversely affected. Further, such an outcome can result in significant compensatory, punitive or trebled monetary damages,
disgorgement of revenue or profits, remedial corporate measures or injunctive relief against the Company, and has from time to time required, and can in the
future require, the Company to change its business practices and limit the Company’s ability to offer certain products and services, all of which could materially
adversely affect the Company’s business, reputation, results of operations and financial condition.
While the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of
claims that may arise.
Apple Inc. | 2023 Form 10-K | 12


The Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liabilities, increased
costs and other adverse effects on the Company’s business.
The Company’s global operations are subject to complex and changing laws and regulations on subjects, including antitrust; privacy, data security and data
localization; consumer protection; advertising, sales, billing and e-commerce; financial services and technology; product liability; intellectual property ownership
and infringement; digital platforms; machine learning and artificial intelligence; internet, telecommunications and mobile communications; media, television, film
and digital content; availability of third-party software applications and services; labor and employment; anticorruption; import, export and trade; foreign
exchange controls and cash repatriation restrictions; anti–money laundering; foreign ownership and investment; tax; and environmental, health and safety,
including electronic waste, recycling, product design and climate change.
Compliance with these laws and regulations is onerous and expensive. New and changing laws and regulations can adversely affect the Company’s business by
increasing the Company’s costs, limiting the Company’s ability to offer a product, service or feature to customers, imposing changes to the design of the
Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain
and its business. New and changing laws and regulations can also create uncertainty about how such laws and regulations will be interpreted and applied.
These risks and costs may increase as the Company’s products and services are introduced into specialized applications, including health and financial
services. The Company has implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no
assurance the Company’s employees, contractors or agents will not violate such laws and regulations or the Company’s policies and procedures. If the
Company is found to have violated laws and regulations, it could materially adversely affect the Company’s business, reputation, results of operations and
financial condition. Regulatory changes and other actions that materially adversely affect the Company’s business may be announced with little or no advance
notice and the Company may not be able to effectively mitigate all adverse impacts from such measures. For example, the Company is subject to changing
regulations relating to the export and import of its products. Although the Company has programs, policies and procedures in place that are designed to satisfy
regulatory requirements, there can be no assurance that such policies and procedures will be effective in preventing a violation or a claim of a violation. As a
result, the Company’s products could be banned, delayed or prohibited from importation, which could materially adversely affect the Company’s business,
reputation, results of operations and financial condition.
Expectations relating to environmental, social and governance considerations and related reporting obligations expose the Company to potential
liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance
considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion. In
addition, the Company makes statements about its goals and initiatives through its various non-financial reports, information provided on its website, press
statements and other communications. Responding to these environmental, social and governance considerations and implementation of these goals and
initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside the Company’s control.
The Company cannot guarantee that it will achieve its announced environmental, social and governance goals and initiatives. In addition, some stakeholders
may disagree with the Company’s goals and initiatives. Any failure, or perceived failure, by the Company to achieve its goals, further its initiatives, adhere to its
public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied
stakeholder expectations and standards could result in legal and regulatory proceedings against the Company and materially adversely affect the Company’s
business, reputation, results of operations, financial condition and stock price.
The technology industry, including, in some instances, the Company, is subject to intense media, political and regulatory scrutiny, which exposes
the Company to increasing regulation, government investigations, legal actions and penalties.
From time to time, the Company has made changes to its App Store, including actions taken in response to litigation, competition, market conditions and legal
and regulatory requirements. The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the
App Store, such as the EU Digital Markets Act, which the Company is required to comply with by March 2024, or similar laws in other jurisdictions. Changes
have included how developers communicate with consumers outside the App Store regarding alternative purchasing mechanisms. Future changes could also
affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App Store, and how and to what
extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms.
Apple Inc. | 2023 Form 10-K | 13


The Company is also currently subject to antitrust investigations in various jurisdictions around the world, which can result in legal proceedings and claims
against the Company that could, individually or in the aggregate, have a materially adverse impact on the Company’s business, results of operations and
financial condition. For example, the Company is the subject of investigations in Europe and other jurisdictions relating to App Store terms and conditions. If such
investigations result in adverse findings against the Company, the Company could be exposed to significant fines and may be required to make changes to its
App Store business, all of which could materially adversely affect the Company’s business, results of operations and financial condition. The Company is also
subject to litigation relating to the App Store, which has resulted in changes to the Company’s business practices, and may in the future result in further changes.
Further, the Company has commercial relationships with other companies in the technology industry that are or may become subject to investigations and
litigation that, if resolved against those other companies, could materially adversely affect the Company’s commercial relationships with those business partners
and materially adversely affect the Company’s business, results of operations and financial condition. For example, the Company earns revenue from licensing
arrangements with other companies to offer their search services on the Company’s platforms and applications, and certain of these arrangements are currently
subject to government investigations and legal proceedings.
There can be no assurance the Company’s business will not be materially adversely affected, individually or in the aggregate, by the outcomes of such
investigations, litigation or changes to laws and regulations in the future. Changes to the Company’s business practices to comply with new laws and regulations
or in connection with other legal proceedings could negatively impact the reputation of the Company’s products for privacy and security and otherwise adversely
affect the experience for users of the Company’s products and services, and result in harm to the Company’s reputation, loss of competitive advantage, poor
market acceptance, reduced demand for products and services, and lost sales.
The Company’s business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding data protection.
The Company is subject to an increasing number of federal, state and international laws relating to the collection, use, retention, security and transfer of various
types of personal information. In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal information among the
Company and its international subsidiaries. Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional
restrictions or have laws that are pending. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and
changing requirements causes the Company to incur substantial costs and has required and may in the future require the Company to change its business
practices. Noncompliance could result in significant penalties or legal liability.
The Company makes statements about its use and disclosure of personal information through its privacy policy, information provided on its website, press
statements and other privacy notices provided to customers. Any failure by the Company to comply with these public statements or with other federal, state or
international privacy or data protection laws and regulations could result in inquiries or proceedings against the Company by governmental entities or others. In
addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability.
In addition to the risks generally relating to the collection, use, retention, security and transfer of personal information, the Company is also subject to specific
obligations relating to information considered sensitive under applicable laws, such as health data, financial data and biometric data. Health data and financial
data are subject to additional privacy, security and breach notification requirements, and the Company is subject to audit by governmental authorities regarding
the Company’s compliance with these obligations. If the Company fails to adequately comply with these rules and requirements, or if health data or financial data
is handled in a manner not permitted by law or under the Company’s agreements with healthcare or financial institutions, the Company can be subject to
litigation or government investigations, and can be liable for associated investigatory expenses, and can also incur significant fees or fines.
Payment card data is also subject to additional requirements. Under payment card rules and obligations, if cardholder information is potentially compromised,
the Company can be liable for associated investigatory expenses and can also incur significant fees or fines if the Company fails to follow payment card industry
data security standards. The Company could also experience a significant increase in payment card transaction costs or lose the ability to process payment
cards if it fails to follow payment card industry data security standards, which could materially adversely affect the Company’s business, reputation, results of
operations and financial condition.
Apple Inc. | 2023 Form 10-K | 14


Financial Risks
The Company expects its quarterly net sales and results of operations to fluctuate.
The Company’s profit margins vary across its products, services, geographic segments and distribution channels. For example, the gross margins on the
Company’s products and services vary significantly and can change over time. The Company’s gross margins are subject to volatility and downward pressure
due to a variety of factors, including: continued industry-wide global product pricing pressures and product pricing actions that the Company may take in
response to such pressures; increased competition; the Company’s ability to effectively stimulate demand for certain of its products and services; compressed
product life cycles; supply shortages; potential increases in the cost of components, outside manufacturing services, and developing, acquiring and delivering
content for the Company’s services; the Company’s ability to manage product quality and warranty costs effectively; shifts in the mix of products and services, or
in the geographic, currency or channel mix, including to the extent that regulatory changes require the Company to modify its product and service offerings;
fluctuations in foreign exchange rates; inflation and other macroeconomic pressures; and the introduction of new products or services, including new products or
services with higher cost structures. These and other factors could have a materially adverse impact on the Company’s results of operations and financial
condition.
The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday
demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. Further, the Company
generates a significant portion of its net sales from a single product and a decline in demand for that product could significantly impact quarterly net sales. The
Company could also be subject to unexpected developments, such as lower-than-anticipated demand for the Company’s products or services, issues with new
product or service introductions, information technology system failures or network disruptions, or failure of one of the Company’s logistics, components supply,
or manufacturing partners.
The Company’s financial performance is subject to risks associated with changes in the value of the U.S. dollar relative to local currencies.
The Company’s primary exposure to movements in foreign exchange rates relates to non–U.S. dollar–denominated sales, cost of sales and operating expenses
worldwide. Gross margins on the Company’s products in foreign countries and on products that include components obtained from foreign suppliers have in the
past been adversely affected and could in the future be materially adversely affected by foreign exchange rate fluctuations.
The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of the Company’s foreign currency–denominated sales and
earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company’s products. In some circumstances, for
competitive or other reasons, the Company may decide not to raise international pricing to offset the U.S. dollar’s strengthening, which would adversely affect
the U.S. dollar value of the gross margins the Company earns on foreign currency–denominated sales.
Conversely, a strengthening of foreign currencies relative to the U.S. dollar, while generally beneficial to the Company’s foreign currency–denominated sales and
earnings, could cause the Company to reduce international pricing or incur losses on its foreign currency derivative instruments, thereby limiting the benefit.
Additionally, strengthening of foreign currencies may increase the Company’s cost of product components denominated in those currencies, thus adversely
affecting gross margins.
The Company uses derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign
exchange rates. The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable
movements in foreign exchange rates over the limited time the hedges are in place.
The Company is exposed to credit risk and fluctuations in the values of its investment portfolio.
The Company’s investments can be negatively affected by changes in liquidity, credit deterioration, financial results, market and economic conditions, political
risk, sovereign risk, interest rate fluctuations or other factors. As a result, the value and liquidity of the Company’s cash, cash equivalents and marketable
securities may fluctuate substantially. Therefore, although the Company has not realized any significant losses on its cash, cash equivalents and marketable
securities, future fluctuations in their value could result in significant losses and could have a material adverse impact on the Company’s results of operations
and financial condition.
Apple Inc. | 2023 Form 10-K | 15


The Company is exposed to credit risk on its trade accounts receivable, vendor non-trade receivables and prepayments related to long-term supply
agreements, and this risk is heightened during periods when economic conditions worsen.
The Company distributes its products and certain of its services through third-party cellular network carriers, wholesalers, retailers and resellers. The Company
also sells its products and services directly to small and mid-sized businesses and education, enterprise and government customers. A substantial majority of the
Company’s outstanding trade receivables are not covered by collateral, third-party bank support or financing arrangements, or credit insurance, and a significant
portion of the Company’s trade receivables can be concentrated within cellular network carriers or other resellers. The Company’s exposure to credit and
collectibility risk on its trade receivables is higher in certain international markets and its ability to mitigate such risks may be limited. The Company also has
unsecured vendor non-trade receivables resulting from purchases of components by outsourcing partners and other vendors that manufacture subassemblies or
assemble final products for the Company. In addition, the Company has made prepayments associated with long-term supply agreements to secure supply of
inventory components. As of September 30, 2023, the Company’s vendor non-trade receivables and prepayments related to long-term supply agreements were
concentrated among a few individual vendors located primarily in Asia. While the Company has procedures to monitor and limit exposure to credit risk on its
trade and vendor non-trade receivables, as well as long-term prepayments, there can be no assurance such procedures will effectively limit its credit risk and
avoid losses.
The Company is subject to changes in tax rates, the adoption of new U.S. or international tax legislation and exposure to additional tax liabilities.
The Company is subject to taxes in the U.S. and numerous foreign jurisdictions, including Ireland and Singapore, where a number of the Company’s subsidiaries
are organized. Due to economic and political conditions, tax laws and tax rates for income taxes and other non-income taxes in various jurisdictions may be
subject to significant change. For example, the Organisation for Economic Co-operation and Development continues to advance proposals for modernizing
international tax rules, including the introduction of global minimum tax standards. The Company’s effective tax rates are affected by changes in the mix of
earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, and changes
in tax laws or their interpretation. The application of tax laws may be uncertain, require significant judgment and be subject to differing interpretations.
The Company is also subject to the examination of its tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and
governmental bodies. The Company regularly assesses the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its
provision for taxes. There can be no assurance as to the outcome of these examinations. If the Company’s effective tax rates were to increase, or if the ultimate
determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s business, results of operations and
financial condition could be materially adversely affected.
General Risks
The price of the Company’s stock is subject to volatility.
The Company’s stock has experienced substantial price volatility in the past and may continue to do so in the future. Additionally, the Company, the technology
industry and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in
ways that may have been unrelated to these companies’ operating performance. Price volatility may cause the average price at which the Company repurchases
its stock in a given period to exceed the stock’s price at a given point in time. The Company believes the price of its stock should reflect expectations of future
growth and profitability. The Company also believes the price of its stock should reflect expectations that its cash dividend will continue at current levels or grow,
and that its current share repurchase program will be fully consummated. Future dividends are subject to declaration by the Company’s Board of Directors, and
the Company’s share repurchase program does not obligate it to acquire any specific number of shares. If the Company fails to meet expectations related to
future growth, profitability, dividends, share repurchases or other market expectations, the price of the Company’s stock may decline significantly, which could
have a material adverse impact on investor confidence and employee retention.
Item 1B.    Unresolved Staff Comments
None.
Item 1C.    Cybersecurity
Not applicable.
Apple Inc. | 2023 Form 10-K | 16


Item 2.    Properties
The Company’s headquarters is located in Cupertino, California. As of September 30, 2023, the Company owned or leased facilities and land for corporate
functions, R&D, data centers, retail and other purposes at locations throughout the U.S. and in various places outside the U.S. The Company believes its
existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conduct of its business.
Item 3.    Legal Proceedings
Epic Games
Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “District Court”) against the Company alleging
violations of federal and state antitrust laws and California’s unfair competition law based upon the Company’s operation of its App Store. On September 10,
2021, the District Court ruled in favor of the Company with respect to nine out of the ten counts included in Epic’s claim. The District Court found that certain
provisions of the Company’s App Store Review Guidelines violate California’s unfair competition law and issued an injunction enjoining the Company from
prohibiting developers from including in their apps external links that direct customers to purchasing mechanisms other than Apple in-app purchasing. The
injunction applies to apps on the U.S. storefront of the iOS and iPadOS App Store. On April 24, 2023, the U.S. Court of Appeals for the Ninth Circuit (the “Circuit
Court”) affirmed the District Court’s ruling. On June 7, 2023, the Company and Epic filed petitions with the Circuit Court requesting further review of the decision.
On June 30, 2023, the Circuit Court denied both petitions. On July 17, 2023, the Circuit Court granted Apple’s motion to stay enforcement of the injunction
pending appeal to the U.S. Supreme Court. If the U.S. Supreme Court denies Apple’s petition, the stay of the injunction will expire.
Masimo
Masimo Corporation and Cercacor Laboratories, Inc. (together, “Masimo”) filed a complaint before the U.S. International Trade Commission (the “ITC”) alleging
infringement by the Company of five patents relating to the functionality of the blood oxygen feature in Apple Watch Series 6 and 7. In its complaint, Masimo
sought a permanent exclusion order prohibiting importation to the United States of certain Apple Watch models that include blood oxygen sensing functionality.
On October 26, 2023, the ITC entered a limited exclusion order (the “Order”) prohibiting importation and sales in the United States of Apple Watch models with
blood oxygen sensing functionality, which includes Apple Watch Series 9 and Ultra 2. The Order will not go into effect until the end of the administrative review
period, which is currently expected to end on December 25, 2023. The Company intends to appeal the Order and seek a stay pending the appeal.
Other Legal Proceedings
The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. The
Company settled certain matters during the fourth quarter of 2023 that did not individually or in the aggregate have a material impact on the Company’s financial
condition or operating results. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting
period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially
adversely affected.
Item 4.    Mine Safety Disclosures
Not applicable.
Apple Inc. | 2023 Form 10-K | 17


PART II
Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company’s common stock is traded on The Nasdaq Stock Market LLC under the symbol AAPL.
Holders
As of October 20, 2023, there were 23,763 shareholders of record.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity during the three months ended September 30, 2023 was as follows (in millions, except number of shares, which are reflected in
thousands, and per-share amounts):
Periods
Total Number
of Shares
Purchased
Average Price
Paid Per
Share
Total Number of
Shares
Purchased as Part
of Publicly
Announced Plans or
Programs
Approximate Dollar
Value of
Shares That May Yet Be
Purchased
Under the Plans or
Programs 
July 2, 2023 to August 5, 2023:
Open market and privately negotiated purchases
33,864 
191.6233,864August6,2023toSeptember2,2023:August2023ASRs22,08522,085Openmarketandprivatelynegotiatedpurchases30,299
178.99 
30,299 
September 3, 2023 to September 30, 2023:
Open market and privately negotiated purchases
20,347 
176.3120,347Total106,595
74,069 
(1)
As of September 30, 2023, the Company was authorized by the Board of Directors to purchase up to $90 billion of the Company’s common stock under a share
repurchase program announced on May 4, 2023, of which $15.9 billion had been utilized. During the fourth quarter of 2023, the Company also utilized the final
$4.6 billion under its previous repurchase program, which was most recently authorized in April 2022. The 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 Exchange Act.
(2)
In August 2023, the Company entered into new accelerated share repurchase agreements (“ASRs”). Under the terms of the ASRs, two financial institutions
committed to deliver shares of the Company’s common stock during the purchase periods in exchange for up-front payments totaling $5.0 billion. The total
number of shares ultimately delivered under the ASRs, and therefore the average repurchase price paid per share, is determined based on the volume-weighted
average price of the Company’s common stock during the ASRs’ purchase periods, which end in the first quarter of 2024.
(1)
(2)
(2)
(2)
Apple Inc. | 2023 Form 10-K | 18


Company Stock Performance
The following graph shows a comparison of five-year cumulative total shareholder return, calculated on a dividend-reinvested basis, for the Company, the S&P
500 Index and the Dow Jones U.S. Technology Supersector Index. The graph assumes $100 was invested in each of the Company’s common stock, the S&P
500 Index and the Dow Jones U.S. Technology Supersector Index as of the market close on September  28, 2018. Past stock price performance is not
necessarily indicative of future stock price performance.
September
2018
September
2019
September
2020
September
2021
September
2022
September
2023
Apple Inc.
$
100 
98
204 
269
277 
$
317 
S&P 500 Index
$
100 
104
118 
161
136 
160DowJonesU.S.TechnologySupersectorIndex
100 
105
154 
227
164 
$
226 
Item 6.    [Reserved]
Apple Inc. | 2023 Form 10-K | 19


Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this
Form 10-K. This Item generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussions of 2021 items and year-to-
year comparisons between 2022 and 2021 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 24, 2022.
Fiscal Period
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter
every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first quarter of 2023. The Company’s fiscal year
2023 spanned 53 weeks, whereas fiscal years 2022 and 2021 spanned 52 weeks each.
Fiscal Year Highlights
The Company’s total net sales were $383.3 billion and net income was $97.0 billion during 2023.
The Company’s total net sales decreased 3% or $11.0 billion during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar
accounted for more than the entire year-over-year decrease in total net sales, which consisted primarily of lower net sales of Mac and iPhone, partially offset by
higher net sales of Services.
The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2023
included the following:
First Quarter 2023:
•
iPad and iPad Pro;
•
Next-generation Apple TV 4K; and
•
MLS Season Pass, a Major League Soccer subscription streaming service.
Second Quarter 2023:
•
MacBook Pro 14”, MacBook Pro 16” and Mac mini; and
•
Second-generation HomePod.
Third Quarter 2023:
•
MacBook Air 15”, Mac Studio and Mac Pro;
•
Apple Vision Pro™, the Company’s first spatial computer featuring its new visionOS™, expected to be available in early calendar year 2024; and
•
iOS 17, macOS Sonoma, iPadOS 17, tvOS 17 and watchOS 10, updates to the Company’s operating systems.
Fourth Quarter 2023:
•
iPhone 15, iPhone 15 Plus, iPhone 15 Pro and iPhone 15 Pro Max; and
•
Apple Watch Series 9 and Apple Watch Ultra 2.
In May 2023, the Company announced a new share repurchase program of up to 90billionandraiseditsquarterlydividendfrom0.23 to 0.24persharebeginninginMay2023.During2023,theCompanyrepurchased76.6 billion of its common stock and paid dividends and dividend equivalents of $15.0 billion.
Macroeconomic Conditions
Macroeconomic conditions, including inflation, changes in interest rates, and currency fluctuations, have directly and indirectly impacted, and could in the future
materially impact, the Company’s results of operations and financial condition.
Apple Inc. | 2023 Form 10-K | 20


Segment Operating Performance
The following table shows net sales by reportable segment for 2023, 2022 and 2021 (dollars in millions):
2023
Change
2022
Change
2021
Net sales by reportable segment:
Americas
$
162,560 
(4)%
$
169,658 
11 %
$
153,306 
Europe
94,294 
(1)%
95,118 
7 %
89,307 
Greater China
72,559 
(2)%
74,200 
9 %
68,366 
Japan
24,257 
(7)%
25,977 
(9)%
28,482 
Rest of Asia Pacific
29,615 
1 %
29,375 
11 %
26,356 
Total net sales
$
383,285 
(3)%
$
394,328 
8 %
$
365,817 
Americas
Americas net sales decreased 4% or $7.1 billion during 2023 compared to 2022 due to lower net sales of iPhone and Mac, partially offset by higher net sales of
Services.
Europe
Europe net sales decreased 1% or $824 million during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar accounted for
more than the entire year-over-year decrease in Europe net sales, which consisted primarily of lower net sales of Mac and Wearables, Home and Accessories,
partially offset by higher net sales of iPhone and Services.
Greater China
Greater China net sales decreased 2% or $1.6 billion during 2023 compared to 2022. The weakness in the renminbi relative to the U.S. dollar accounted for
more than the entire year-over-year decrease in Greater China net sales, which consisted primarily of lower net sales of Mac and iPhone.
Japan
Japan net sales decreased 7% or $1.7 billion during 2023 compared to 2022. The weakness in the yen relative to the U.S. dollar accounted for more than the
entire year-over-year decrease in Japan net sales, which consisted primarily of lower net sales of iPhone, Wearables, Home and Accessories and Mac.
Rest of Asia Pacific
Rest of Asia Pacific net sales increased 1% or $240 million during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar had a
significantly unfavorable year-over-year impact on Rest of Asia Pacific net sales. The net sales increase consisted of higher net sales of iPhone and Services,
partially offset by lower net sales of Mac and iPad.
Apple Inc. | 2023 Form 10-K | 21


Products and Services Performance
The following table shows net sales by category for 2023, 2022 and 2021 (dollars in millions):
2023
Change
2022
Change
2021
Net sales by category:
iPhone 
$
200,583 
(2)%
$
205,489 
7 %
$
191,973 
Mac 
29,357 
(27)%
40,177 
14 %
35,190 
iPad 
28,300 
(3)%
29,292 
(8)%
31,862 
Wearables, Home and Accessories 
39,845 
(3)%
41,241 
7 %
38,367 
Services 
85,200 
9 %
78,129 
14 %
68,425 
Total net sales
$
383,285 
(3)%
$
394,328 
8 %
$
365,817 
(1)
Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective
product.
(2)
Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales decreased 2% or $4.9 billion during 2023 compared to 2022 due to lower net sales of non-Pro iPhone models, partially offset by higher net
sales of Pro iPhone models.
Mac
Mac net sales decreased 27% or $10.8 billion during 2023 compared to 2022 due primarily to lower net sales of laptops.
iPad
iPad net sales decreased 3% or $1.0 billion during 2023 compared to 2022 due primarily to lower net sales of iPad mini and iPad Air, partially offset by the
combined net sales of iPad 9th and 10th generation.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales decreased 3% or $1.4 billion during 2023 compared to 2022 due primarily to lower net sales of Wearables and
Accessories.
Services
Services net sales increased 9% or 7.1billionduring2023comparedto2022duetohighernetsalesacrossalllinesofbusiness.(1)(1)(1)(1)(2)AppleInc.|2023Form10−K|22GrossMarginProductsandServicesgrossmarginandgrossmarginpercentagefor2023,2022and2021wereasfollows(dollarsinmillions):202320222021Grossmargin:Products
108,803 
114,728
105,126 
Services
60,345 
56,054 
47,710 
Total gross margin
169,148
170,782 
$
152,836 
Gross margin percentage:
Products
36.5 %
36.3 %
35.3 %
Services
70.8 %
71.7 %
69.7 %
Total gross margin percentage
44.1 %
43.3 %
41.8 %
Products Gross Margin
Products gross margin decreased during 2023 compared to 2022 due to the weakness in foreign currencies relative to the U.S. dollar and lower Products
volume, partially offset by cost savings and a different Products mix.
Products gross margin percentage increased during 2023 compared to 2022 due to cost savings and a different Products mix, partially offset by the weakness in
foreign currencies relative to the U.S. dollar and decreased leverage.
Services Gross Margin
Services gross margin increased during 2023 compared to 2022 due primarily to higher Services net sales, partially offset by the weakness in foreign currencies
relative to the U.S. dollar and higher Services costs.
Services gross margin percentage decreased during 2023 compared to 2022 due to higher Services costs and the weakness in foreign currencies relative to the
U.S. dollar, partially offset by a different Services mix.
The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.”
As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.
Operating Expenses
Operating expenses for 2023, 2022 and 2021 were as follows (dollars in millions):
2023
Change
2022
Change
2021
Research and development
$
29,915 
14 %
$
26,251 
20 %
$
21,914 
Percentage of total net sales
8 %
7 %
6 %
Selling, general and administrative
$
24,932 
(1)%
$
25,094 
14 %
$
21,973 
Percentage of total net sales
7 %
6 %
6 %
Total operating expenses
$
54,847 
7 %
$
51,345 
17 %
$
43,887 
Percentage of total net sales
14 %
13 %
12 %
Research and Development
The year-over-year growth in R&D expense in 2023 was driven primarily by increases in headcount-related expenses.
Selling, General and Administrative
Selling, general and administrative expense was relatively flat in 2023 compared to 2022.
Apple Inc. | 2023 Form 10-K | 23


Provision for Income Taxes
Provision for income taxes, effective tax rate and statutory federal income tax rate for 2023, 2022 and 2021 were as follows (dollars in millions):
2023
2022
2021
Provision for income taxes
16,741
19,300 
$
14,527 
Effective tax rate
14.7 %
16.2 %
13.3 %
Statutory federal income tax rate
21 %
21 %
21 %
The Company’s effective tax rate for 2023 and 2022 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign
earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.
The Company’s effective tax rate for 2023 was lower compared to 2022 due primarily to a lower effective tax rate on foreign earnings and the impact of U.S.
foreign tax credit regulations issued by the U.S. Department of the Treasury in 2022, partially offset by lower tax benefits from share-based compensation.
Liquidity and Capital Resources
The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $148.3 billion as of September 30, 2023,
along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return
program over the next 12 months and beyond.
The Company’s material cash requirements include the following contractual obligations:
Debt
As of September 30, 2023, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $106.6 billion (collectively
the “Notes”), with $9.9 billion payable within 12 months. Future interest payments associated with the Notes total 41.1billion,with2.9 billion payable within 12
months.
The Company also issues unsecured short-term promissory notes pursuant to a commercial paper program. As of September 30, 2023, the Company had 6.0billionofcommercialpaperoutstanding,allofwhichwaspayablewithin12months.LeasesTheCompanyhasleasearrangementsforcertainequipmentandfacilities,includingcorporate,datacenter,manufacturingandretailspace.AsofSeptember30,2023,theCompanyhadfixedleasepaymentobligationsof15.8 billion, with $2.0 billion payable within 12 months.
Manufacturing Purchase Obligations
The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of
finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of September 30, 2023, the
Company had manufacturing purchase obligations of $53.1 billion, with $52.9 billion payable within 12 months. The Company’s manufacturing purchase
obligations are primarily noncancelable.
Other Purchase Obligations
The Company’s other purchase obligations primarily consist of noncancelable obligations to acquire capital assets, including assets related to product
manufacturing, and noncancelable obligations related to supplier arrangements, licensed intellectual property and content, and distribution rights. As of
September 30, 2023, the Company had other purchase obligations of $21.9 billion, with $5.6 billion payable within 12 months.
Deemed Repatriation Tax Payable
As of September 30, 2023, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”) was $22.0 billion,
with $6.5 billion expected to be paid within 12 months.
Apple Inc. | 2023 Form 10-K | 24


Capital Return Program
In addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to
acquire a minimum amount of shares. As of September  30, 2023, the Company’s quarterly cash dividend was $0.24 per share. The Company intends to
increase its dividend on an annual basis, subject to declaration by the Board of Directors.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s
discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that
affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this
Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management
bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities.
Uncertain Tax Positions
The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The evaluation of the Company’s uncertain tax positions involves
significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, including the Act and matters related to the
allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given
that the final outcome of these uncertainties will not be different from that which is reflected in the Company’s reserves. Reserves are adjusted considering
changing facts and circumstances, such as the closing of a tax examination. Resolution of these uncertainties in a manner inconsistent with management’s
expectations could have a material impact on the Company’s financial condition and operating results.
Legal and Other Contingencies
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires
significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s
financial condition and operating results.
Apple Inc. | 2023 Form 10-K | 25


Item 7A.    Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to economic risk from interest rates and foreign exchange rates. The Company uses various strategies to manage these risks;
however, they may still impact the Company’s consolidated financial statements.
Interest Rate Risk
The Company is primarily exposed to fluctuations in U.S. interest rates and their impact on the Company’s investment portfolio and term debt. Increases in
interest rates will negatively affect the fair value of the Company’s investment portfolio and increase the interest expense on the Company’s term debt. To protect
against interest rate risk, the Company may use derivative instruments, offset interest rate–sensitive assets and liabilities, or control duration of the investment
and term debt portfolios.
The following table sets forth potential impacts on the Company’s investment portfolio and term debt, including the effects of any associated derivatives, that
would result from a hypothetical increase in relevant interest rates as of September 30, 2023 and September 24, 2022 (dollars in millions):
Interest Rate
Sensitive Instrument
Hypothetical Interest
Rate Increase
Potential Impact
2023
2022
Investment portfolio
100 basis points, all tenors
Decline in fair value
3,089
4,022 
Term debt
100 basis points, all tenors
Increase in annual interest expense
194
201 
Foreign Exchange Rate Risk
The Company’s exposure to foreign exchange rate risk relates primarily to the Company being a net receiver of currencies other than the U.S. dollar. Changes in
exchange rates, and in particular a strengthening of the U.S. dollar, will negatively affect the Company’s net sales and gross margins as expressed in U.S.
dollars. Fluctuations in exchange rates may also affect the fair values of certain of the Company’s assets and liabilities. To protect against foreign exchange rate
risk, the Company may use derivative instruments, offset exposures, or adjust local currency pricing of its products and services. However, the Company may
choose to not hedge certain foreign currency exposures for a variety of reasons, including accounting considerations or prohibitive cost.
The Company applied a value-at-risk (“VAR”) model to its foreign currency derivative positions to assess the potential impact of fluctuations in exchange rates.
The VAR model used a Monte Carlo simulation. The VAR is the maximum expected loss in fair value, for a given confidence interval, to the Company’s foreign
currency derivative positions due to adverse movements in rates. Based on the results of the model, the Company estimates, with 95% confidence, a maximum
one-day loss in fair value of 669millionand1.0 billion as of September 30, 2023 and September 24, 2022, respectively. Changes in the Company’s underlying
foreign currency exposures, which were excluded from the assessment, generally offset changes in the fair values of the Company’s foreign currency
derivatives.
Apple Inc. | 2023 Form 10-K | 26


Item 8.    Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page
Consolidated Statements of Operations for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
28
Consolidated Statements of Comprehensive Income for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
29
Consolidated Balance Sheets as of September 30, 2023 and September 24, 2022
30
Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
31
Consolidated Statements of Cash Flows for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
32
Notes to Consolidated Financial Statements
33
Reports of Independent Registered Public Accounting Firm
49
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission
of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes.
Apple Inc. | 2023 Form 10-K | 27


Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Net sales:
   Products
298,085
316,199 
297,392Services85,20078,12968,425Totalnetsales383,285394,328365,817Costofsales:Products189,282201,471192,266Services24,85522,07520,715Totalcostofsales214,137223,546212,981Grossmargin169,148170,782152,836Operatingexpenses:Researchanddevelopment29,91526,25121,914Selling,generalandadministrative24,93225,09421,973Totaloperatingexpenses54,84751,34543,887Operatingincome114,301119,437108,949Otherincome/(expense),net(565)(334)258Incomebeforeprovisionforincometaxes113,736119,103109,207Provisionforincometaxes16,74119,30014,527Netincome
96,995 
99,803
94,680 
Earnings per share:
Basic
6.16
6.15 
5.67Diluted
6.13 
6.11
5.61 
Shares used in computing earnings per share:
Basic
15,744,231 
16,215,963 
16,701,272 
Diluted
15,812,547 
16,325,819 
16,864,919 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28


Apple Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Net income
96,995
99,803 
94,680Othercomprehensiveincome/(loss):Changeinforeigncurrencytranslation,netoftax(765)(1,511)501Changeinunrealizedgains/lossesonderivativeinstruments,netoftax:Changeinfairvalueofderivativeinstruments3233,21232Adjustmentfornet(gains)/lossesrealizedandincludedinnetincome(1,717)(1,074)1,003Totalchangeinunrealizedgains/lossesonderivativeinstruments(1,394)2,1381,035Changeinunrealizedgains/lossesonmarketabledebtsecurities,netoftax:Changeinfairvalueofmarketabledebtsecurities1,563(12,104)(694)Adjustmentfornet(gains)/lossesrealizedandincludedinnetincome253205(273)Totalchangeinunrealizedgains/lossesonmarketabledebtsecurities1,816(11,899)(967)Totalothercomprehensiveincome/(loss)(343)(11,272)569Totalcomprehensiveincome
96,652 
88,531
95,249 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 29


Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
September 30,
2023
September 24,
2022
ASSETS:
Current assets:
Cash and cash equivalents
29,965
23,646 
Marketable securities
31,590 
24,658 
Accounts receivable, net
29,508 
28,184 
Vendor non-trade receivables
31,477 
32,748 
Inventories
6,331 
4,946 
Other current assets
14,695 
21,223 
Total current assets
143,566 
135,405 
Non-current assets:
Marketable securities
100,544 
120,805 
Property, plant and equipment, net
43,715 
42,117 
Other non-current assets
64,758 
54,428 
Total non-current assets
209,017 
217,350 
Total assets
352,583
352,755 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
62,611
64,115 
Other current liabilities
58,829 
60,845 
Deferred revenue
8,061 
7,912 
Commercial paper
5,985 
9,982 
Term debt
9,822 
11,128 
Total current liabilities
145,308 
153,982 
Non-current liabilities:
Term debt
95,281 
98,959 
Other non-current liabilities
49,848 
49,142 
Total non-current liabilities
145,129 
148,101 
Total liabilities
290,437 
302,083 
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061
and 15,943,425 shares issued and outstanding, respectively
73,812 
64,849 
Accumulated deficit
(214)
(3,068)
Accumulated other comprehensive loss
(11,452)
(11,109)
Total shareholders’ equity
62,146 
50,672 
Total liabilities and shareholders’ equity
$
352,583 
$
352,755 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30


Apple Inc.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In millions, except per-share amounts)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Total shareholders’ equity, beginning balances
$
50,672 
63,090
65,339 
Common stock and additional paid-in capital:
Beginning balances
64,849 
57,365 
50,779 
Common stock issued
1,346 
1,175 
1,105 
Common stock withheld related to net share settlement of equity awards
(3,521)
(2,971)
(2,627)
Share-based compensation
11,138 
9,280 
8,108 
Ending balances
73,812 
64,849 
57,365 
Retained earnings/(Accumulated deficit):
Beginning balances
(3,068)
5,562 
14,966 
Net income
96,995 
99,803 
94,680 
Dividends and dividend equivalents declared
(14,996)
(14,793)
(14,431)
Common stock withheld related to net share settlement of equity awards
(2,099)
(3,454)
(4,151)
Common stock repurchased
(77,046)
(90,186)
(85,502)
Ending balances
(214)
(3,068)
5,562 
Accumulated other comprehensive income/(loss):
Beginning balances
(11,109)
163 
(406)
Other comprehensive income/(loss)
(343)
(11,272)
569 
Ending balances
(11,452)
(11,109)
163 
Total shareholders’ equity, ending balances
62,146
50,672 
63,090DividendsanddividendequivalentsdeclaredpershareorRSU
0.94 
0.90
0.85 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 31


Apple Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Cash, cash equivalents and restricted cash, beginning balances
24,977
35,929 
39,789Operatingactivities:Netincome96,99599,80394,680Adjustmentstoreconcilenetincometocashgeneratedbyoperatingactivities:Depreciationandamortization11,51911,10411,284Share−basedcompensationexpense10,8339,0387,906Other(2,227)1,006(4,921)Changesinoperatingassetsandliabilities:Accountsreceivable,net(1,688)(1,823)(10,125)Vendornon−tradereceivables1,271(7,520)(3,903)Inventories(1,618)1,484(2,642)Othercurrentandnon−currentassets(5,684)(6,499)(8,042)Accountspayable(1,889)9,44812,326Othercurrentandnon−currentliabilities3,0316,1107,475Cashgeneratedbyoperatingactivities110,543122,151104,038Investingactivities:Purchasesofmarketablesecurities(29,513)(76,923)(109,558)Proceedsfrommaturitiesofmarketablesecurities39,68629,91759,023Proceedsfromsalesofmarketablesecurities5,82837,44647,460Paymentsforacquisitionofproperty,plantandequipment(10,959)(10,708)(11,085)Other(1,337)(2,086)(385)Cashgeneratedby/(usedin)investingactivities3,705(22,354)(14,545)Financingactivities:Paymentsfortaxesrelatedtonetsharesettlementofequityawards(5,431)(6,223)(6,556)Paymentsfordividendsanddividendequivalents(15,025)(14,841)(14,467)Repurchasesofcommonstock(77,550)(89,402)(85,971)Proceedsfromissuanceoftermdebt,net5,2285,46520,393Repaymentsoftermdebt(11,151)(9,543)(8,750)Proceedsfrom/(Repaymentsof)commercialpaper,net(3,978)3,9551,022Other(581)(160)976Cashusedinfinancingactivities(108,488)(110,749)(93,353)Increase/(Decrease)incash,cashequivalentsandrestrictedcash5,760(10,952)(3,860)Cash,cashequivalentsandrestrictedcash,endingbalances
30,737 
24,977
35,929 
Supplemental cash flow disclosure:
Cash paid for income taxes, net
18,679
19,573 
25,385Cashpaidforinterest
3,803 
2,865
2,687 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 32


Apple Inc.
Notes to Consolidated Financial Statements
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries. The preparation of these consolidated financial
statements and accompanying notes in conformity with GAAP requires the use of management estimates. Certain prior period amounts in the consolidated
financial statements and accompanying notes have been reclassified to conform to the current period’s presentation.
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter
every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first fiscal quarter of 2023. The Company’s fiscal
year 2023 spanned 53 weeks, whereas fiscal years 2022 and 2021 spanned 52 weeks each. Unless otherwise stated, references to particular years, quarters,
months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Revenue
The Company records revenue net of taxes collected from customers that are remitted to governmental authorities.
Share-Based Compensation
The Company recognizes share-based compensation expense on a straight-line basis for its estimate of equity awards that will ultimately vest.
Cash Equivalents
All highly liquid investments with maturities of three months or less at the date of purchase are treated as cash equivalents.
Marketable Securities
The cost of securities sold is determined using the specific identification method.
Inventories
Inventories are measured using the first-in, first-out method.
Property, Plant and Equipment
Depreciation on property, plant and equipment is recognized on a straight-line basis.
Derivative Instruments
The Company presents derivative assets and liabilities at their gross fair values in the Consolidated Balance Sheets.
Income Taxes
The Company records certain deferred tax assets and liabilities in connection with the minimum tax on certain foreign earnings created by the Act.
Leases
The Company combines and accounts for lease and nonlease components as a single lease component for leases of corporate, data center and retail facilities.
Apple Inc. | 2023 Form 10-K | 33


Note 2 – Revenue
The Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is transferred to its customers.
Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or
services are transferred to its customers. For most of the Company’s Products net sales, control transfers when products are shipped. For the Company’s
Services net sales, control transfers over time as services are delivered. Payment for Products and Services net sales is collected within a short period following
transfer of control or commencement of delivery of services, as applicable.
The Company records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the
Company’s expectations and historical experience.
For arrangements with multiple performance obligations, which represent promises within an arrangement that are distinct, the Company allocates revenue to all
distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). When available, the Company uses observable prices to determine
SSPs. When observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance
obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers
multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, where applicable, prices
charged by the Company for similar offerings, market trends in the pricing for similar offerings, product-specific business objectives and the estimated cost to
provide the performance obligation.
The Company has identified up to three performance obligations regularly included in arrangements involving the sale of iPhone, Mac, iPad and certain other
products. The first performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered
at the time of sale. The second performance obligation is the right to receive certain product-related bundled services, which include iCloud , Siri  and Maps.
The third performance obligation is the right to receive, on a when-and-if-available basis, future unspecified software upgrades relating to the software bundled
with each device. The Company allocates revenue and any related discounts to these performance obligations based on their relative SSPs. Because the
Company lacks observable prices for the undelivered performance obligations, the allocation of revenue is based on the Company’s estimated SSPs. Revenue
allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product
is shipped. Revenue allocated to the product-related bundled services and unspecified software upgrade rights is deferred and recognized on a straight-line
basis over the estimated period they are expected to be provided.
For certain long-term service arrangements, the Company has performance obligations for services it has not yet delivered. For these arrangements, the
Company does not have a right to bill for the undelivered services. The Company has determined that any unbilled consideration relates entirely to the value of
the undelivered services. Accordingly, the Company has not recognized revenue, and does not disclose amounts, related to these undelivered services.
For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue
based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products,
including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the
product. For third-party applications sold through the App Store, the Company does not obtain control of the product before transferring it to the customer.
Therefore, the Company accounts for all third-party application–related sales on a net basis by recognizing in Services net sales only the commission it retains.
®
®
Apple Inc. | 2023 Form 10-K | 34


Net sales disaggregated by significant products and services for 2023, 2022 and 2021 were as follows (in millions):
2023
2022
2021
iPhone 
200,583
205,489 
191,973Mac29,35740,17735,190iPad28,30029,29231,862Wearables,HomeandAccessories39,84541,24138,367Services85,20078,12968,425Totalnetsales
383,285 
394,328
365,817 
(1)
Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective
product.
(2)
Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.
Total net sales include 8.2billionofrevenuerecognizedin2023thatwasincludedindeferredrevenueasofSeptember24,2022,7.5 billion of revenue
recognized in 2022 that was included in deferred revenue as of September  25, 2021, and $6.7 billion of revenue recognized in 2021 that was included in
deferred revenue as of September 26, 2020.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 13, “Segment
Information and Geographic Data” for 2023, 2022 and 2021, except in Greater China, where iPhone revenue represented a moderately higher proportion of net
sales.
As of September 30, 2023 and September 24, 2022, the Company had total deferred revenue of $12.1 billion and $12.4 billion, respectively. As of September 30,
2023, the Company expects 67% of total deferred revenue to be realized in less than a year, 25% within one-to-two years, 7% within two-to-three years and 1%
in greater than three years.
Note 3 – Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for 2023, 2022 and 2021 (net income in millions and shares in thousands):
2023
2022
2021
Numerator:
Net income
$
96,995 
99,803
94,680 
Denominator:
Weighted-average basic shares outstanding
15,744,231 
16,215,963 
16,701,272 
Effect of dilutive share-based awards
68,316 
109,856 
163,647 
Weighted-average diluted shares
15,812,547 
16,325,819 
16,864,919 
Basic earnings per share
6.16
6.15 
5.67Dilutedearningspershare
6.13 
6.11
5.61 
Approximately 24 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for 2023 because their effect would
have been antidilutive.
(1)
(1)
(1)
(1)
(2)
Apple Inc. | 2023 Form 10-K | 35


Note 4 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of September 30, 2023 and
September 24, 2022 (in millions):
2023
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash
28,359
— 
$
— 
$
28,359 
28,359
— 
$
— 
Level 1:
Money market funds
481 
— 
— 
481 
481 
— 
— 
Mutual funds and equity securities
442 
12 
(26)
428 
— 
428 
— 
Subtotal
923 
12 
(26)
909 
481 
428 
— 
Level 2 :
U.S. Treasury securities
19,406 
— 
(1,292)
18,114 
35 
5,468 
12,611 
U.S. agency securities
5,736 
— 
(600)
5,136 
36 
271 
4,829 
Non-U.S. government securities
17,533 
6 
(1,048)
16,491 
— 
11,332 
5,159 
Certificates of deposit and time deposits
1,354 
— 
— 
1,354 
1,034 
320 
— 
Commercial paper
608 
— 
— 
608 
— 
608 
— 
Corporate debt securities
76,840 
6 
(5,956)
70,890 
20 
12,627 
58,243 
Municipal securities
628 
— 
(26)
602 
— 
192 
410 
Mortgage- and asset-backed securities
22,365 
6 
(2,735)
19,636 
— 
344 
19,292 
Subtotal
144,470 
18 
(11,657)
132,831 
1,125 
31,162 
100,544 
Total 
$
173,752 
30
(11,683)
162,099
29,965 
31,590
100,544 
2022
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash
18,546
— 
$
— 
$
18,546 
18,546
— 
$
— 
Level 1:
Money market funds
2,929 
— 
— 
2,929 
2,929 
— 
— 
Mutual funds
274 
— 
(47)
227 
— 
227 
— 
Subtotal
3,203 
— 
(47)
3,156 
2,929 
227 
— 
Level 2 :
U.S. Treasury securities
25,134 
— 
(1,725)
23,409 
338 
5,091 
17,980 
U.S. agency securities
5,823 
— 
(655)
5,168 
— 
240 
4,928 
Non-U.S. government securities
16,948 
2 
(1,201)
15,749 
— 
8,806 
6,943 
Certificates of deposit and time deposits
2,067 
— 
— 
2,067 
1,805 
262 
— 
Commercial paper
718 
— 
— 
718 
28 
690 
— 
Corporate debt securities
87,148 
9 
(7,707)
79,450 
— 
9,023 
70,427 
Municipal securities
921 
— 
(35)
886 
— 
266 
620 
Mortgage- and asset-backed securities
22,553 
— 
(2,593)
19,960 
— 
53 
19,907 
Subtotal
161,312 
11 
(13,916)
147,407 
2,171 
24,431 
120,805 
Total 
$
183,061 
11
(13,963)
169,109
23,646 
24,658
120,805 
(1)
The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments, which generally have counterparties with high credit
ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.
(2)
As of September 30, 2023 and September 24, 2022, total marketable securities included 13.8billionand12.7 billion, respectively, that were restricted from
general use, related to the State Aid Decision (refer to Note 7, “Income Taxes”) and other agreements.
(1)
(2)
(1)
(2)
Apple Inc. | 2023 Form 10-K | 36


The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of September 30, 2023 (in millions):
Due after 1 year through 5 years
74,427Dueafter5yearsthrough10years9,964Dueafter10years16,153Totalfairvalue
100,544 
The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies marketable debt
securities as either current or non-current based solely on each instrument’s underlying contractual maturity date.
Derivative Instruments and Hedging
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.
The Company classifies cash flows related to derivative instruments in the same section of the Consolidated Statements of Cash Flows as the items being
hedged, which are generally classified as operating activities.
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 September 30,
2023, 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 19 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.
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 September 30, 2023 and September 24, 2022 were as follows (in millions):
2023
2022
Derivative instruments designated as accounting hedges:
Foreign exchange contracts
74,730
102,670 
Interest rate contracts
19,375
20,125 
Derivative instruments not designated as accounting hedges:
Foreign exchange contracts
104,777
185,381 
Apple Inc. | 2023 Form 10-K | 37


The gross fair values of the Company’s derivative assets and liabilities as of September 24, 2022 were as follows (in millions):
2022
Fair Value of
Derivatives Designated
as Accounting Hedges
Fair Value of
Derivatives Not Designated
as Accounting Hedges
Total
Fair Value
Derivative assets :
Foreign exchange contracts
4,317
2,819 
7,136Derivativeliabilities:Foreignexchangecontracts
2,205 
2,547
4,752 
Interest rate contracts
1,367
— 
$
1,367 
(1)
Derivative assets are measured using Level 2 fair value inputs and are included in other current assets and other non-current assets in the Consolidated
Balance Sheet.
(2)
Derivative liabilities are measured using Level 2 fair value inputs and are included in other current liabilities and other non-current liabilities in the Consolidated
Balance Sheet.
The derivative assets above represent the Company’s gross credit exposure if all counterparties failed to perform. To mitigate credit risk, the Company generally
uses collateral security arrangements that provide for collateral to be received or posted when the net fair values of certain derivatives fluctuate from
contractually established thresholds. To further limit credit risk, the Company generally uses master netting arrangements with the respective counterparties to
the Company’s derivative contracts, under which the Company is allowed to settle transactions with a single net amount payable by one party to the other. As of
September 24, 2022, the potential effects of these rights of set-off associated with the Company’s derivative contracts, including the effects of collateral, would
be a reduction to both derivative assets and derivative liabilities of $7.8 billion, resulting in a net derivative asset of $412 million.
The carrying amounts of the Company’s hedged items in fair value hedges as of September 30, 2023 and September 24, 2022 were as follows (in millions):
2023
2022
Hedged assets/(liabilities):
Current and non-current marketable securities
$
14,433 
13,378Currentandnon−currenttermdebt
(18,247)
$
(18,739)
Accounts Receivable
Trade Receivables
As of September 24, 2022, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 10%. The Company’s
third-party cellular network carriers accounted for 41% and 44% of total trade receivables as of September 30, 2023 and September 24, 2022, 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 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%. As of September 24, 2022, the Company had two vendors that individually represented 10%
or more of total vendor non-trade receivables, which accounted for 54% and 13%.
(1)
(2)
Apple Inc. | 2023 Form 10-K | 38


Note 5 – Property, Plant and Equipment
The following table shows the Company’s gross property, plant and equipment by major asset class and accumulated depreciation as of September 30, 2023
and September 24, 2022 (in millions):
2023
2022
Land and buildings
$
23,446 
22,126Machinery,equipmentandinternal−usesoftware78,31481,060Leaseholdimprovements12,83911,271Grossproperty,plantandequipment114,599114,457Accumulateddepreciation(70,884)(72,340)Totalproperty,plantandequipment,net
43,715 
42,117Depreciationexpenseonproperty,plantandequipmentwas8.5 billion, 8.7billionand9.5 billion during 2023, 2022 and 2021, respectively.
Note 6 – Consolidated Financial Statement Details
The following tables show the Company’s consolidated financial statement details as of September 30, 2023 and September 24, 2022 (in millions):
Other Non-Current Assets
2023
2022
Deferred tax assets
17,852
15,375 
Other non-current assets
46,906 
39,053 
Total other non-current assets
64,758
54,428 
Other Current Liabilities
2023
2022
Income taxes payable
8,819
6,552 
Other current liabilities
50,010 
54,293 
Total other current liabilities
58,829
60,845 
Other Non-Current Liabilities
2023
2022
Long-term taxes payable
15,457
16,657 
Other non-current liabilities
34,391 
32,485 
Total other non-current liabilities
49,848
49,142 
Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for 2023, 2022 and 2021 (in millions):
2023
2022
2021
Interest and dividend income
3,750
2,825 
2,843Interestexpense(3,933)(2,931)(2,645)Otherincome/(expense),net(382)(228)60Totalotherincome/(expense),net
(565)
(334)
258 
Apple Inc. | 2023 Form 10-K | 39


Note 7 – Income Taxes
Provision for Income Taxes and Effective Tax Rate
The provision for income taxes for 2023, 2022 and 2021, consisted of the following (in millions):
2023
2022
2021
Federal:
Current
9,445
7,890 
8,257Deferred(3,644)(2,265)(7,176)Total5,8015,6251,081State:Current1,5701,5191,620Deferred(49)84(338)Total1,5211,6031,282Foreign:Current8,7508,9969,424Deferred6693,0762,740Total9,41912,07212,164Provisionforincometaxes
16,741 
19,300
14,527 
The foreign provision for income taxes is based on foreign pretax earnings of 72.9billion,71.3 billion and $68.7 billion in 2023, 2022 and 2021, respectively.
A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate (21% in 2023, 2022 and 2021) to
income before provision for income taxes for 2023, 2022 and 2021, is as follows (dollars in millions):
2023
2022
2021
Computed expected tax
$
23,885 
25,012
22,933 
State taxes, net of federal effect
1,124 
1,518 
1,151 
Earnings of foreign subsidiaries
(5,744)
(4,366)
(4,715)
Research and development credit, net
(1,212)
(1,153)
(1,033)
Excess tax benefits from equity awards
(1,120)
(1,871)
(2,137)
Foreign-derived intangible income deduction
— 
(296)
(1,372)
Other
(192)
456 
(300)
Provision for income taxes
16,741
19,300 
$
14,527 
Effective tax rate
14.7 %
16.2 %
13.3 %
Apple Inc. | 2023 Form 10-K | 40


Deferred Tax Assets and Liabilities
As of September 30, 2023 and September 24, 2022, the significant components of the Company’s deferred tax assets and liabilities were (in millions):
2023
2022
Deferred tax assets:
Tax credit carryforwards
$
8,302 
6,962Accruedliabilitiesandotherreserves6,3656,515Capitalizedresearchanddevelopment6,2941,267Deferredrevenue4,5715,742Unrealizedlosses2,4472,913Leaseliabilities2,4212,400Other2,3433,407Totaldeferredtaxassets32,74329,206Less:Valuationallowance(8,374)(7,530)Totaldeferredtaxassets,net24,36921,676Deferredtaxliabilities:Right−of−useassets2,1792,163Depreciation1,9981,582Minimumtaxonforeignearnings1,9401,983Unrealizedgains511942Other490469Totaldeferredtaxliabilities7,1187,139Netdeferredtaxassets
17,251 
14,537AsofSeptember30,2023,theCompanyhad5.2 billion in foreign tax credit carryforwards in Ireland and $3.0 billion in California R&D credit carryforwards,
both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary
differences.
Uncertain Tax Positions
As of September  30, 2023, the total amount of gross unrecognized tax benefits was $19.5 billion, of which $9.5 billion, if recognized, would impact the
Company’s effective tax rate. As of September  24, 2022, the total amount of gross unrecognized tax benefits was $16.8 billion, of which $8.0 billion, if
recognized, would have impacted the Company’s effective tax rate.
The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2023, 2022 and 2021, is as follows (in
millions):
2023
2022
2021
Beginning balances
$
16,758 
15,477
16,475 
Increases related to tax positions taken during a prior year
2,044 
2,284 
816 
Decreases related to tax positions taken during a prior year
(1,463)
(1,982)
(1,402)
Increases related to tax positions taken during the current year
2,628 
1,936 
1,607 
Decreases related to settlements with taxing authorities
(19)
(28)
(1,838)
Decreases related to expiration of the statute of limitations
(494)
(929)
(181)
Ending balances
19,454
16,758 
15,477TheCompanyissubjecttotaxationandfilesincometaxreturnsintheU.S.federaljurisdictionandmanystateandforeignjurisdictions.Taxyearsafter2017fortheU.S.federaljurisdiction,andafter2014incertainmajorforeignjurisdictions,remainsubjecttoexamination.Althoughthetimingofresolutionorclosureofexaminationsisnotcertain,theCompanybelievesitisreasonablypossiblethatitsgrossunrecognizedtaxbenefitscoulddecreaseinthenext12monthsbyasmuchas4.5 billion.
Apple Inc. | 2023 Form 10-K | 41


European Commission State Aid Decision
On August 30, 2016, the European 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 recovery amount was calculated to be €13.1 billion, plus interest of €1.2
billion. 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 European 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 calendar year 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.
On an annual basis, the Company may request approval from the Irish Minister for Finance to reduce the recovery amount for certain taxes paid to other
countries. As of September 30, 2023, the adjusted recovery amount was €12.7 billion, excluding interest. The adjusted recovery amount plus interest is funded
into escrow, where it will remain restricted from general use pending the conclusion of all legal proceedings. Refer to the Cash, Cash Equivalents and
Marketable Securities section of Note 4, “Financial Instruments” for more information.
Note 8 – Leases
The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases
typically have original terms not exceeding 10 years and generally contain multiyear renewal options, some of which are reasonably certain of exercise.
Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the
underlying leased assets. Lease costs associated with fixed payments on the Company’s operating leases were 2.0billion,1.9 billion and $1.7 billion for 2023,
2022 and 2021, respectively. Lease costs associated with variable payments on the Company’s leases were $13.9 billion, 14.9billionand12.9 billion for 2023,
2022 and 2021, respectively.
The Company made 1.9billion,1.8 billion and $1.4 billion of fixed cash payments related to operating leases in 2023, 2022 and 2021, respectively. Noncash
activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.1 billion, 2.8billionand3.3 billion for 2023, 2022 and 2021,
respectively.
The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 30, 2023 and September 24,
2022 (in millions):
Lease-Related Assets and Liabilities
Financial Statement Line Items
2023
2022
Right-of-use assets:
Operating leases
Other non-current assets
10,661
10,417 
Finance leases
Property, plant and equipment, net
1,015 
952 
Total right-of-use assets
11,676
11,369 
Lease liabilities:
Operating leases
Other current liabilities
1,410
1,534 
Other non-current liabilities
10,408 
9,936 
Finance leases
Other current liabilities
165 
129 
Other non-current liabilities
859 
812 
Total lease liabilities
12,842
12,411 
Apple Inc. | 2023 Form 10-K | 42


Lease liability maturities as of September 30, 2023, are as follows (in millions):
Operating
Leases
Finance
Leases
Total
2024
1,719
196 
1,91520251,8751512,02620261,7321201,85220271,351521,40320281,181341,215Thereafter5,9838726,855Totalundiscountedliabilities13,8411,42515,266Less:Imputedinterest(2,023)(401)(2,424)Totalleaseliabilities
11,818 
1,024
12,842 
The weighted-average remaining lease term related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 10.6 years and
10.1 years, respectively. The discount rate related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 3.0% and 2.3%,
respectively. The discount rates related to the Company’s lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the
discount rates implicit in the Company’s leases cannot be readily determined.
As of September 30, 2023, the Company had $544 million of future payments under additional leases, primarily for corporate facilities and retail space, that had
not yet commenced. These leases will commence between 2024 and 2026, with lease terms ranging from 1 year to 21 years.
Note 9 – 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 September 30, 2023 and September 24, 2022, the Company
had $6.0 billion and $10.0 billion of commercial paper outstanding, respectively, with maturities generally less than nine months. The weighted-average interest
rate of the Company’s commercial paper was 5.28% and 2.31% as of September 30, 2023 and September 24, 2022, respectively. The following table provides a
summary of cash flows associated with the issuance and maturities of commercial paper for 2023, 2022 and 2021 (in millions):
2023
2022
2021
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net
$
(1,333)
5,264
(357)
Maturities greater than 90 days:
Proceeds from commercial paper
— 
5,948 
7,946 
Repayments of commercial paper
(2,645)
(7,257)
(6,567)
Proceeds from/(Repayments of) commercial paper, net
(2,645)
(1,309)
1,379 
Total proceeds from/(repayments of) commercial paper, net
(3,978)
3,955 
$
1,022 
Apple Inc. | 2023 Form 10-K | 43


Term Debt
The Company has outstanding Notes, which are senior unsecured obligations with interest payable in arrears. The following table provides a summary of the
Company’s term debt as of September 30, 2023 and September 24, 2022:
Maturities
(calendar year)
2023
2022
Amount
(in millions)
Effective
Interest Rate
Amount
(in millions)
Effective
Interest Rate
2013 – 2022 debt issuances:
Fixed-rate 0.000% – 4.650% notes
2024 – 2062
$
101,322 
0.03% – 6.72%
$
111,824 
0.03% – 4.78%
Third quarter 2023 debt issuance:
Fixed-rate 4.000% – 4.850% notes
2026 – 2053
5,250 
4.04% – 4.88%
— 
Total term debt principal
106,572 
111,824 
Unamortized premium/(discount) and issuance costs, net
(356)
(374)
Hedge accounting fair value adjustments
(1,113)
(1,363)
Total term debt
105,103 
110,087 
Less: Current portion of term debt
(9,822)
(11,128)
Total non-current portion of term debt
$
95,281 
$
98,959 
To manage interest rate risk on certain of its U.S. dollar–denominated fixed-rate notes, the Company uses interest rate swaps to effectively convert the fixed
interest rates to floating interest rates on a portion of these notes. Additionally, to manage foreign exchange rate risk on certain of its foreign currency–
denominated notes, the Company uses cross-currency swaps to effectively convert these notes to U.S. dollar–denominated notes.
The effective interest rates for the Notes include the interest on the Notes, amortization of the discount or premium and, if applicable, adjustments related to
hedging. The Company recognized $3.7 billion, 2.8billionand2.6 billion of interest expense on its term debt for 2023, 2022 and 2021, respectively.
The future principal payments for the Company’s Notes as of September 30, 2023, are as follows (in millions):
2024
9,943202510,775202612,26520279,78620287,800Thereafter56,003Totaltermdebtprincipal
106,572 
As of September  30, 2023 and September  24, 2022, the fair value of the Company’s Notes, based on Level 2 inputs, was 90.8billionand98.8 billion,
respectively.
Note 10 – Shareholders’ Equity
Share Repurchase Program
During 2023, the Company repurchased 471 million shares of its common stock for $76.6 billion, excluding excise tax due under the Inflation Reduction Act of
2022. 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 Exchange Act.
Apple Inc. | 2023 Form 10-K | 44


Shares of Common Stock
The following table shows the changes in shares of common stock for 2023, 2022 and 2021 (in thousands):
2023
2022
2021
Common stock outstanding, beginning balances
15,943,425 
16,426,786 
16,976,763 
Common stock repurchased
(471,419)
(568,589)
(656,340)
Common stock issued, net of shares withheld for employee taxes
78,055 
85,228 
106,363 
Common stock outstanding, ending balances
15,550,061 
15,943,425 
16,426,786 
Note 11 – Share-Based Compensation
2022 Employee Stock Plan
The Apple Inc. 2022 Employee Stock Plan (the “2022 Plan”) is a shareholder-approved plan that provides for broad-based equity grants to employees, including
executive officers, and permits the granting of RSUs, stock grants, performance-based awards, stock options and stock appreciation rights. RSUs granted under
the 2022 Plan generally vest over four years, based on continued employment, and are settled upon vesting in shares of the Company’s common stock on a
one-for-one basis. All RSUs granted under the 2022 Plan have dividend equivalent rights, which entitle holders of RSUs to the same dividend value per share as
holders of common stock. A maximum of approximately 1.3 billion shares were authorized for issuance pursuant to 2022 Plan awards at the time the plan was
approved on March 4, 2022.
2014 Employee Stock Plan
The Apple Inc. 2014 Employee Stock Plan (the “2014 Plan”) is a shareholder-approved plan that provided for broad-based equity grants to employees, including
executive officers. The 2014 Plan permitted the granting of substantially the same types of equity awards with substantially the same terms as the 2022 Plan.
The 2014 Plan also permitted the granting of cash bonus awards. In the third quarter of 2022, the Company terminated the authority to grant new awards under
the 2014 Plan.
Restricted Stock Units
A summary of the Company’s RSU activity and related information for 2023, 2022 and 2021, is as follows:
Number of
RSUs
(in thousands)
Weighted-Average
Grant Date Fair
Value Per RSU
Aggregate
Fair Value
(in millions)
Balance as of September 26, 2020
310,778 
$
51.58 
RSUs granted
89,363 
116.33RSUsvested(145,766)
50.71 
RSUs canceled
(13,948)
68.95BalanceasofSeptember25,2021240,427
75.16 
RSUs granted
91,674 
150.70RSUsvested(115,861)
72.12 
RSUs canceled
(14,739)
99.77BalanceasofSeptember24,2022201,501
109.48 
RSUs granted
88,768 
150.87RSUsvested(101,878)
97.31 
RSUs canceled
(8,144)
127.98BalanceasofSeptember30,2023180,247
135.91 
30,860ThefairvalueasoftherespectivevestingdatesofRSUswas15.9 billion, 18.2billionand19.0 billion for 2023, 2022 and 2021, respectively. The majority of
RSUs that vested in 2023, 2022 and 2021 were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for
the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately 37
million, 41 million and 53 million for 2023, 2022 and 2021, respectively, and were based on the value of the RSUs on their respective vesting dates as
determined by the Company’s closing stock price. Total payments to taxing authorities for employees’ tax obligations were 5.6billion,6.4 billion and 6.8billionin2023,2022and2021,respectively.AppleInc.|2023Form10−K|45Share−BasedCompensationThefollowingtableshowsshare−basedcompensationexpenseandtherelatedincometaxbenefitincludedintheConsolidatedStatementsofOperationsfor2023,2022and2021(inmillions):202320222021Share−basedcompensationexpense
10,833 
9,038
7,906 
Income tax benefit related to share-based compensation expense
(3,421)
(4,002)
(4,056)AsofSeptember30,2023,thetotalunrecognizedcompensationcostrelatedtooutstandingRSUswas18.6 billion, which the Company expects to recognize
over a weighted-average period of 2.5 years.
Note 12 – Commitments, Contingencies and Supply Concentrations
Unconditional Purchase Obligations
The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase
obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, licensed intellectual property and content, and
distribution rights. Future payments under noncancelable unconditional purchase obligations with a remaining term in excess of one year as of September 30,
2023, are as follows (in millions):
2024
4,25820252,67420263,43420271,27720285,878Thereafter3,215Total
20,736 
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The
outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a
material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Concentrations in the Available Sources of Supply of Materials and Product
Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from
single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers,
tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times
subject to industry-wide shortage and significant commodity pricing fluctuations.
The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize
custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the
suppliers’ yields have matured or their manufacturing capacities have increased. The continued availability of these components at acceptable prices, or at all,
may be affected if suppliers decide to concentrate on the production of common components instead of components customized to meet the Company’s
requirements.
Substantially all of the Company’s hardware products are manufactured by outsourcing partners that are located primarily in China mainland, India, Japan, South
Korea, Taiwan and Vietnam.
Apple Inc. | 2023 Form 10-K | 46


Note 13 – Segment Information and Geographic Data
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of the Americas, Europe, Greater China,
Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and
Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia and those Asian countries not included in the
Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is
managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic
region.
The Company evaluates the performance of its reportable segments based on net sales and operating income. Net sales for geographic segments are generally
based on the location of customers and sales through the Company’s retail stores located in those geographic locations. Operating income for each segment
consists of net sales to third parties, related cost of sales, and operating expenses directly attributable to the segment. The information provided to the
Company’s chief operating decision maker for purposes of making decisions and assessing segment performance excludes asset information.
The following table shows information by reportable segment for 2023, 2022 and 2021 (in millions):
2023
2022
2021
Americas:
Net sales
162,560
169,658 
153,306Operatingincome
60,508 
62,683
53,382 
Europe:
Net sales
94,294
95,118 
89,307Operatingincome
36,098 
35,233
32,505 
Greater China:
Net sales
72,559
74,200 
68,366Operatingincome
30,328 
31,153
28,504 
Japan:
Net sales
24,257
25,977 
28,482Operatingincome
11,888 
12,257
12,798 
Rest of Asia Pacific:
Net sales
29,615
29,375 
26,356Operatingincome
12,066 
11,569
9,817 
A reconciliation of the Company’s segment operating income to the Consolidated Statements of Operations for 2023, 2022 and 2021 is as follows (in millions):
2023
2022
2021
Segment operating income
150,888
152,895 
137,006Researchanddevelopmentexpense(29,915)(26,251)(21,914)Othercorporateexpenses,net(6,672)(7,207)(6,143)Totaloperatingincome
114,301 
119,437
108,949 
(1)
Includes corporate marketing expenses, certain share-based compensation expenses, various nonrecurring charges, and other separately managed general
and administrative costs.
(1)
Apple Inc. | 2023 Form 10-K | 47


The U.S. and China were the only countries that accounted for more than 10% of the Company’s net sales in 2023, 2022 and 2021. Net sales for 2023, 2022
and 2021 and long-lived assets as of September 30, 2023 and September 24, 2022 were as follows (in millions):
2023
2022
2021
Net sales:
U.S.
138,573
147,859 
133,803China72,55974,20068,366Othercountries172,153172,269163,648Totalnetsales
383,285 
394,328
365,817 
2023
2022
Long-lived assets:
U.S.
33,276
31,119 
China 
5,778 
7,260 
Other countries
4,661 
3,738 
Total long-lived assets
43,715
42,117 
(1)
China includes Hong Kong and Taiwan.
 (1)
(1)
Apple Inc. | 2023 Form 10-K | 48


Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Apple Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Apple Inc. as of September 30, 2023 and September 24, 2022, the related consolidated
statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended September 30, 2023, and
the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial
position of Apple Inc. at September 30, 2023 and September 24, 2022, and the results of its operations and its cash flows for each of the three years in the
period ended September 30, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), Apple Inc.’s internal
control over financial reporting as of September 30, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 2, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of Apple Inc.’s management. Our responsibility is to express an opinion on Apple Inc.’s financial statements
based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Apple Inc. in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We
believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to
be communicated to the audit committee and that: (1)  relates to accounts or disclosures that are material to the financial statements and (2)  involved our
especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
account or disclosure to which it relates.
Uncertain Tax Positions
Description of the Matter
As discussed in Note 7 to the financial statements, Apple Inc. is subject to taxation and files income tax returns in
the U.S. federal jurisdiction and many state and foreign jurisdictions. As of September 30, 2023, the total amount of
gross unrecognized tax benefits was 19.5billion,ofwhich9.5 billion, if recognized, would impact Apple Inc.’s
effective tax rate. In accounting for some of the uncertain tax positions, Apple Inc. uses significant judgment in the
interpretation and application of complex domestic and international tax laws.
Auditing management’s evaluation of whether an uncertain tax position is more likely than not to be sustained and
the measurement of the benefit of various tax positions can be complex, involves significant judgment, and is based
on interpretations of tax laws and legal rulings.
Apple Inc. | 2023 Form 10-K | 49


How We Addressed the
Matter in Our Audit
We tested controls relating to the evaluation of uncertain tax positions, including controls over management’s
assessment as to whether tax positions are more likely than not to be sustained, management’s process to
measure the benefit of its tax positions, and the development of the related disclosures.
To evaluate Apple Inc.’s assessment of which tax positions are more likely than not to be sustained, our audit
procedures included, among others, reading and evaluating management’s assumptions and analysis, and, as
applicable, Apple Inc.’s communications with taxing authorities, that detailed the basis and technical merits of the
uncertain tax positions. We involved our tax subject matter resources in assessing the technical merits of certain of
Apple Inc.’s tax positions based on our knowledge of relevant tax laws and experience with related taxing
authorities. For certain tax positions, we also received external legal counsel confirmation letters and discussed the
matters with external advisors and Apple Inc. tax personnel. In addition, we evaluated Apple Inc.’s disclosure in
relation to these matters included in Note 7 to the financial statements.
/s/ Ernst & Young LLP
We have served as Apple Inc.’s auditor since 2009.
San Jose, California
November 2, 2023
Apple Inc. | 2023 Form 10-K | 50


Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Apple Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Apple Inc.’s internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”). In our opinion, Apple
Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the consolidated
balance sheets of Apple Inc. as of September 30, 2023 and September 24, 2022, the related consolidated statements of operations, comprehensive income,
shareholders’ equity and cash flows for each of the three years in the period ended September  30, 2023, and the related notes and our report dated
November 2, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
Apple Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on Apple Inc.’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to Apple Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S.
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Jose, California
November 2, 2023
Apple Inc. | 2023 Form 10-K | 51


Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal
financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act
were effective as of September 30, 2023 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is (i)  recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and
(ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure.
Inherent Limitations over Internal Controls
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those
policies and procedures that: 
(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s
assets;
(ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management
and directors; and
(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets
that could have a material effect on the financial statements.
Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or
detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide
absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future
periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act). Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the
criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework). Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of
September 30, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance
with GAAP. The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the Company’s internal control over
financial reporting, which appears in Part II, Item 8 of this Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2023, which were identified in connection with
management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely
to materially affect, the Company’s internal control over financial reporting.
Apple Inc. | 2023 Form 10-K | 52


Item 9B.    Other Information
Insider Trading Arrangements
On August 30, 2023, Deirdre O’Brien, the Company’s Senior Vice President, Retail, and Jeff Williams, the Company’s Chief Operating Officer, each entered into
a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plans provide for the sale of all shares vested
during the duration of the plans pursuant to certain equity awards granted to Ms. O’Brien and Mr. Williams, respectively, excluding any shares withheld by the
Company to satisfy income tax withholding and remittance obligations. Ms. O’Brien’s plan will expire on October 15, 2024, and Mr. Williams’ plan will expire on
December 15, 2024, subject to early termination for certain specified events set forth in the plans.
Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10.    Directors, Executive Officers and Corporate Governance
The information required by this Item will be included in the Company’s definitive proxy statement to be filed with the SEC within 120 days after September 30,
2023, in connection with the solicitation of proxies for the Company’s 2024 annual meeting of shareholders (the “2024 Proxy Statement”), and is incorporated
herein by reference.
Item 11.    Executive Compensation
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Item 13.    Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Item 14.    Principal Accountant Fees and Services
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Apple Inc. | 2023 Form 10-K | 53


PART IV
Item 15.    Exhibit and Financial Statement Schedules
(a) Documents filed as part of this report
(1) All financial statements
Index to Consolidated Financial Statements
Page
Consolidated Statements of Operations for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
28
Consolidated Statements of Comprehensive Income for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
29
Consolidated Balance Sheets as of September 30, 2023 and September 24, 2022
30
Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
31
Consolidated Statements of Cash Flows for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
32
Notes to Consolidated Financial Statements
33
Reports of Independent Registered Public Accounting Firm*
49
* Ernst & Young LLP, PCAOB Firm ID No. 00042.
(2) Financial Statement Schedules
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission
of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this Form 10-K.
(3) Exhibits required by Item 601 of Regulation S-K 
Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
3.1
Restated Articles of Incorporation of the Registrant filed on August 3, 2020.
8-K
3.1
8/7/20
3.2
Amended and Restated Bylaws of the Registrant effective as of August 17, 2022.
8-K
3.2
8/19/22
4.1**
Description of Securities of the Registrant.
4.2
Indenture, dated as of April 29, 2013, between the Registrant and The Bank of New York Mellon
Trust Company, N.A., as Trustee.
S-3
4.1
4/29/13
4.3
Officer’s Certificate of the Registrant, dated as of May 3, 2013, including forms of global notes
representing the Floating Rate Notes due 2016, Floating Rate Notes due 2018, 0.45% Notes due
2016, 1.00% Notes due 2018, 2.40% Notes due 2023 and 3.85% Notes due 2043.
8-K
4.1
5/3/13
4.4
Officer’s Certificate of the Registrant, dated as of May 6, 2014, including forms of global notes
representing the Floating Rate Notes due 2017, Floating Rate Notes due 2019, 1.05% Notes due
2017, 2.10% Notes due 2019, 2.85% Notes due 2021, 3.45% Notes due 2024 and 4.45% Notes
due 2044.
8-K
4.1
5/6/14
4.5
Officer’s Certificate of the Registrant, dated as of November 10, 2014, including forms of global
notes representing the 1.000% Notes due 2022 and 1.625% Notes due 2026.
8-K
4.1
11/10/14
4.6
Officer’s Certificate of the Registrant, dated as of February 9, 2015, including forms of global notes
representing the Floating Rate Notes due 2020, 1.55% Notes due 2020, 2.15% Notes due 2022,
2.50% Notes due 2025 and 3.45% Notes due 2045.
8-K
4.1
2/9/15
4.7
Officer’s Certificate of the Registrant, dated as of May 13, 2015, including forms of global notes
representing the Floating Rate Notes due 2017, Floating Rate Notes due 2020, 0.900% Notes due
2017, 2.000% Notes due 2020, 2.700% Notes due 2022, 3.200% Notes due 2025, and 4.375%
Notes due 2045.
8-K
4.1
5/13/15
4.8
Officer’s Certificate of the Registrant, dated as of July 31, 2015, including forms of global notes
representing the 3.05% Notes due 2029 and 3.60% Notes due 2042.
8-K
4.1
7/31/15
4.9
Officer’s Certificate of the Registrant, dated as of September 17, 2015, including forms of global
notes representing the 1.375% Notes due 2024 and 2.000% Notes due 2027.
8-K
4.1
9/17/15
(1)
Apple Inc. | 2023 Form 10-K | 54


Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
4.10
Officer’s Certificate of the Registrant, dated as of February 23, 2016, including forms of global notes
representing the Floating Rate Notes due 2019, Floating Rate Notes due 2021, 1.300% Notes due
2018, 1.700% Notes due 2019, 2.250% Notes due 2021, 2.850% Notes due 2023, 3.250% Notes
due 2026, 4.500% Notes due 2036 and 4.650% Notes due 2046.
8-K
4.1
2/23/16
4.11
Supplement No. 1 to the Officer’s Certificate of the Registrant, dated as of March 24, 2016.
8-K
4.1
3/24/16
4.12
Officer’s Certificate of the Registrant, dated as of August 4, 2016, including forms of global notes
representing the Floating Rate Notes due 2019, 1.100% Notes due 2019, 1.550% Notes due
2021, 2.450% Notes due 2026 and 3.850% Notes due 2046.
8-K
4.1
8/4/16
4.13
Officer’s Certificate of the Registrant, dated as of February 9, 2017, including forms of global notes
representing the Floating Rate Notes due 2019, Floating Rate Notes due 2020, Floating Rate
Notes due 2022, 1.550% Notes due 2019, 1.900% Notes due 2020, 2.500% Notes due 2022,
3.000% Notes due 2024, 3.350% Notes due 2027 and 4.250% Notes due 2047.
8-K
4.1
2/9/17
4.14
Officer’s Certificate of the Registrant, dated as of May 11, 2017, including forms of global notes
representing the Floating Rate Notes due 2020, Floating Rate Notes due 2022, 1.800% Notes due
2020, 2.300% Notes due 2022, 2.850% Notes due 2024 and 3.200% Notes due 2027.
8-K
4.1
5/11/17
4.15
Officer’s Certificate of the Registrant, dated as of May 24, 2017, including forms of global notes
representing the 0.875% Notes due 2025 and 1.375% Notes due 2029.
8-K
4.1
5/24/17
4.16
Officer’s Certificate of the Registrant, dated as of June 20, 2017, including form of global note
representing the 3.000% Notes due 2027.
8-K
4.1
6/20/17
4.17
Officer’s Certificate of the Registrant, dated as of August 18, 2017, including form of global note
representing the 2.513% Notes due 2024.
8-K
4.1
8/18/17
4.18
Officer’s Certificate of the Registrant, dated as of September 12, 2017, including forms of global
notes representing the 1.500% Notes due 2019, 2.100% Notes due 2022, 2.900% Notes due
2027 and 3.750% Notes due 2047.
8-K
4.1
9/12/17
4.19
Officer’s Certificate of the Registrant, dated as of November 13, 2017, including forms of global
notes representing the 1.800% Notes due 2019, 2.000% Notes due 2020, 2.400% Notes due
2023, 2.750% Notes due 2025, 3.000% Notes due 2027 and 3.750% Notes due 2047.
8-K
4.1
11/13/17
4.20
Indenture, dated as of November 5, 2018, between the Registrant and The Bank of New York Mellon
Trust Company, N.A., as Trustee.
S-3
4.1
11/5/18
4.21
Officer’s Certificate of the Registrant, dated as of September 11, 2019, including forms of global
notes representing the 1.700% Notes due 2022, 1.800% Notes due 2024, 2.050% Notes due
2026, 2.200% Notes due 2029 and 2.950% Notes due 2049.
8-K
4.1
9/11/19
4.22
Officer’s Certificate of the Registrant, dated as of November 15, 2019, including forms of global
notes representing the 0.000% Notes due 2025 and 0.500% Notes due 2031.
8-K
4.1
11/15/19
4.23
Officer’s Certificate of the Registrant, dated as of May 11, 2020, including forms of global notes
representing the 0.750% Notes due 2023, 1.125% Notes due 2025, 1.650% Notes due 2030 and
2.650% Notes due 2050.
8-K
4.1
5/11/20
4.24
Officer’s Certificate of the Registrant, dated as of August 20, 2020, including forms of global notes
representing the 0.550% Notes due 2025, 1.25% Notes due 2030, 2.400% Notes due 2050 and
2.550% Notes due 2060.
8-K
4.1
8/20/20
4.25
Officer’s Certificate of the Registrant, dated as of February 8, 2021, including forms of global notes
representing the  0.700% Notes due 2026, 1.200% Notes due 2028,  1.650% Notes due
2031, 2.375% Notes due 2041, 2.650% Notes due 2051 and 2.800% Notes due 2061.
8-K
4.1
2/8/21
4.26
Officer’s Certificate of the Registrant, dated as of August 5, 2021, including forms of global notes
representing the 1.400% Notes due 2028, 1.700% Notes due 2031, 2.700% Notes due 2051 and
2.850% Notes due 2061.
8-K
4.1
8/5/21
4.27
Indenture, dated as of October 28, 2021, between the Registrant and The Bank of New York Mellon
Trust Company, N.A., as Trustee.
S-3
4.1
10/29/21
4.28
Officer’s Certificate of the Registrant, dated as of August 8, 2022, including forms of global notes
representing the 3.250% Notes due 2029, 3.350% Notes due 2032, 3.950% Notes due 2052 and
4.100% Notes due 2062.
8-K
4.1
8/8/22
Apple Inc. | 2023 Form 10-K | 55


Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
4.29
Officer’s Certificate of the Registrant, dated as of May 10, 2023, including forms of global notes
representing the 4.421% Notes due 2026, 4.000% Notes due 2028, 4.150% Notes due 2030,
4.300% Notes due 2033 and 4.850% Notes due 2053.
8-K
4.1
5/10/23
4.30*
Apple Inc. Deferred Compensation Plan.
S-8
4.1
8/23/18
10.1*
Apple Inc. Employee Stock Purchase Plan, as amended and restated as of March 10, 2015.
8-K
10.1
3/13/15
10.2*
Form of Indemnification Agreement between the Registrant and each director and executive officer
of the Registrant.
10-Q
10.2
6/27/09
10.3*
Apple Inc. Non-Employee Director Stock Plan, as amended November 9, 2021.
10-Q
10.1
12/25/21
10.4*
Apple Inc. 2014 Employee Stock Plan, as amended and restated as of October 1, 2017.
10-K
10.8
9/30/17
10.5*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
September 26, 2017.
10-K
10.20
9/30/17
10.6*
Form of Restricted Stock Unit Award Agreement under Non-Employee Director Stock Plan effective
as of February 13, 2018.
10-Q
10.2
3/31/18
10.7*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
August 21, 2018.
10-K
10.17
9/29/18
10.8*
Form of Performance Award Agreement under 2014 Employee Stock Plan effective as of August 21,
2018.
10-K
10.18
9/29/18
10.9*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
September 29, 2019.
10-K
10.15
9/28/19
10.10*
Form of Performance Award Agreement under 2014 Employee Stock Plan effective as of September
29, 2019.
10-K
10.16
9/28/19
10.11*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
August 18, 2020.
10-K
10.16
9/26/20
10.12*
Form of Performance Award Agreement under 2014 Employee Stock Plan effective as of August 18,
2020.
10-K
10.17
9/26/20
10.13*
Form of CEO Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as
of September 27, 2020.
10-Q
10.1
12/26/20
10.14*
Form of CEO Performance Award Agreement under 2014 Employee Stock Plan effective as of
September 27, 2020.
10-Q
10.2
12/26/20
10.15*
Apple Inc. 2022 Employee Stock Plan.
8-K
10.1
3/4/22
10.16*
Form of Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as of
March 4, 2022.
8-K
10.2
3/4/22
10.17*
Form of Performance Award Agreement under 2022 Employee Stock Plan effective as of March 4,
2022.
8-K
10.3
3/4/22
10.18*
Apple Inc. Executive Cash Incentive Plan.
8-K
10.1
8/19/22
10.19*
Form of CEO Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as
of September 25, 2022.
10-Q
10.1
12/31/22
10.20*
Form of CEO Performance Award Agreement under 2022 Employee Stock Plan effective as of
September 25, 2022.
10-Q
10.2
12/31/22
21.1**
Subsidiaries of the Registrant.
23.1**
Consent of Independent Registered Public Accounting Firm.
24.1**
Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K).
31.1**
Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2**
Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1***
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
101**
Inline XBRL Document Set for the consolidated financial statements and accompanying notes in
Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-
K.
Apple Inc. | 2023 Form 10-K | 56


Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
104**
Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline
XBRL Document Set.
*
Indicates management contract or compensatory plan or arrangement.
**
Filed herewith.
***
Furnished herewith.
(1)
Certain instruments defining the rights of holders of long-term debt securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The
Registrant hereby undertakes to furnish to the SEC, upon request, copies of any such instruments.
Item 16.    Form 10-K Summary
None.
Apple Inc. | 2023 Form 10-K | 57


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: November 2, 2023
Apple Inc.
By:
/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy D. Cook and Luca Maestri,
jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this
Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Name
Title
Date
/s/ Timothy D. Cook
Chief Executive Officer and Director
(Principal Executive Officer)
November 2, 2023
TIMOTHY D. COOK
/s/ Luca Maestri
Senior Vice President, Chief Financial Officer
(Principal Financial Officer)
November 2, 2023
LUCA MAESTRI
/s/ Chris Kondo
Senior Director of Corporate Accounting
(Principal Accounting Officer)
November 2, 2023
CHRIS KONDO
/s/ James A. Bell
Director
November 2, 2023
JAMES A. BELL
/s/ Al Gore
Director
November 2, 2023
AL GORE
/s/ Alex Gorsky
Director
November 2, 2023
ALEX GORSKY
/s/ Andrea Jung
Director
November 2, 2023
ANDREA JUNG
/s/ Arthur D. Levinson
Director and Chair of the Board
November 2, 2023
ARTHUR D. LEVINSON
/s/ Monica Lozano
Director
November 2, 2023
MONICA LOZANO
/s/ Ronald D. Sugar
Director
November 2, 2023
RONALD D. SUGAR
/s/ Susan L. Wagner
Director
November 2, 2023
SUSAN L. WAGNER
Apple Inc. | 2023 Form 10-K | 58


Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of September 30, 2023, Apple Inc. (“Apple” or the “Company”) had ten classes of securities registered under Section 12 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”): (i) Common Stock, $0.00001 par value per share (“Common Stock”); (ii) 1.375% Notes due 2024 (the “2024
Notes”); (iii) 0.000% Notes due 2025 (the “0.000% 2025 Notes”); (iv) 0.875% Notes due 2025 (the “0.875% 2025 Notes”); (v) 1.625% Notes due 2026 (the “2026
Notes”); (vi) 2.000% Notes due 2027 (the “2027 Notes”); (vii) 1.375% Notes due 2029 (the “1.375% 2029 Notes”); (viii) 3.050% Notes due 2029 (the “3.050%
2029 Notes”); (ix) 0.500% Notes due 2031 (the “2031 Notes”); and (x) 3.600% Notes due 2042 (the “2042 Notes,” and together with the 2024 Notes, the 0.000%
2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes, the 3.050% 2029 Notes, and the 2031 Notes, the “Notes”). Each
of the Company’s securities registered under Section 12 of the Exchange Act are listed on The Nasdaq Stock Market LLC.
DESCRIPTION OF COMMON STOCK
The following is a description of the rights of Common Stock and related provisions of the Company’s Restated Articles of Incorporation (the “Articles”)
and Amended and Restated Bylaws (the “Bylaws”) and applicable California law. This description is qualified in its entirety by, and should be read in conjunction
with, the Articles, Bylaws and applicable California law.
Authorized Capital Stock
The Company’s authorized capital stock consists of 50,400,000,000 shares of Common Stock.
Common Stock
    Fully Paid and Nonassessable
    All of the outstanding shares of the Company’s Common Stock are fully paid and nonassessable.
Voting Rights
The holders of shares of Common Stock are entitled to one vote per share on all matters to be voted on by such holders. Holders of shares of Common
Stock are not entitled to cumulative voting rights.
Except as described below or as required by law, all matters to be voted on by shareholders must be approved by the affirmative vote of (i) a majority of
the shares present or represented by proxy and voting and (ii) a majority of the shares required to constitute a quorum.
In an election of directors where the number of nominees exceeds the number of directors to be elected, the candidates receiving the highest number
of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by such shares will be elected.
The Company’s entire Board of Directors or any individual director may be removed without cause by an affirmative vote of a majority of the outstanding
shares entitled to vote, subject to the provisions of the Company’s Bylaws.
Vacancies created by the removal of a director must be filled only by approval of the shareholders, or by the unanimous written consent of all shares
entitled to vote. The shareholders may elect a director at any time to fill a vacancy not filled by the directors, but any such election by written consent, other than
to fill a vacancy created by removal, requires the consent of a majority of the outstanding shares entitled to vote thereon.
An amendment of the Bylaws or the Articles may be adopted by the vote of the majority of the outstanding shares entitled to vote. Any amendment of
the Bylaws specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to a variable board or vice versa
may only be adopted by the shareholders; provided, however, that an amendment of the Bylaws or the Articles reducing the fixed number or the minimum
number of directors to less than five cannot be adopted if the votes cast against its adoption are equal to more than 16 2/3% of the outstanding shares entitled to
vote.


Any shareholders’ meeting may be adjourned from time to time by the vote of a majority of the shares present in person or represented by proxy.
Dividends
The holders of shares of Common Stock are entitled to receive such dividends, if any, as may be declared from time to time by the Company’s Board of
Directors in its discretion from funds legally available therefor.
Right to Receive Liquidation Distributions
Upon liquidation, dissolution or winding-up, the holders of shares of Common Stock are entitled to receive pro rata all assets remaining available for
distribution to holders of such shares.
No Preemptive or Similar Rights
Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect
to such shares of Common Stock.
Anti-Takeover Provisions of the Articles, Bylaws and California Law
Provisions of the Articles and Bylaws may delay or discourage transactions involving an actual or potential change in control of the Company or change
in its management, including transactions in which shareholders might otherwise receive a premium for their shares, or transactions that its shareholders might
otherwise deem to be in their best interests. Among other things, the Articles and Bylaws:
•
provide that, except for a vacancy caused by the removal of a director as provided in the Bylaws, a vacancy on the Company’s Board of Directors
may be filled by a person selected by a majority of the remaining directors then in office, whether or not less than a quorum, or by a sole remaining
director;
•
provide that shareholders seeking to present proposals before a meeting of shareholders or to nominate candidates for election as directors at a
meeting of shareholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a
shareholder’s notice, including with respect to a shareholder’s notice under Rule 14a-19 of the Exchange Act;
•
provide that a shareholder, or group of up to 20 shareholders, that has owned continuously for at least three years shares of Common Stock
representing an aggregate of at least 3% of the Company’s outstanding shares of Common Stock, may nominate and include in the Company’s
proxy materials director nominees constituting up to 20% of the Company’s Board of Directors, provided that the shareholder(s) and nominee(s)
satisfy the requirements in the Bylaws;
•
do not provide for cumulative voting rights for the election of directors; and
•
provide that special meetings of the shareholders may only be called by (i) the Board of Directors, the Chair of the Board of Directors or the Chief
Executive Officer or (ii) one or more holders of shares entitled to cast not less than ten percent (10%) of the votes on the record date established
pursuant to the Company’s Bylaws, provided that the shareholder(s) satisfy requirements in the Bylaws.
In addition, as a California corporation, the Company is subject to the provisions of Section 1203 of the California General Corporation Law, which
requires it to provide a fairness opinion to its shareholders in connection with their consideration of any proposed “interested party” reorganization transaction.
Listing
The Company’s Common Stock is listed on The Nasdaq Stock Market LLC under the trading symbol “AAPL.”
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DESCRIPTION OF DEBT SECURITIES
The following description of the Notes is a summary and does not purport to be complete. This description is qualified in its entirety by reference, as
applicable, to the Indenture, dated as of April 29, 2013, between Apple Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2013
Indenture”) and the Indenture, dated as of November 5, 2018, between Apple Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2018
Indenture,” and together with the 2013 Indenture, the “Indentures”). References in this section to the “Company,” “us,” “we” and “our” are solely to Apple Inc. and
not to any of its subsidiaries, unless the context requires otherwise.
The Notes
Each of the Notes were issued under the applicable Indenture, which provides that debt securities may be issued under such Indenture from time to
time in one or more series. The Indentures and the Notes are governed by, and construed in accordance with, the laws of the State of New York. The Indentures
do not limit the amount of debt securities that we may issue thereunder. We may, without the consent of the holders of the debt securities of any series, issue
additional debt securities ranking equally with, and otherwise similar in all respects to, the debt securities of the series (except for the date of issuance, the date
interest begins to accrue and, in certain circumstances, the first interest payment date) so that those additional debt securities will be consolidated and form a
single series with the debt securities of the series previously offered and sold; provided, however, that any additional debt securities will have a separate ISIN
number unless certain conditions are met.
The 2024 Notes
We issued €1,000,000,000 aggregate principal amount of the 2024 Notes on September 17, 2015. The maturity date of the 2024 Notes is January 17,
2024, and interest at a rate of 1.375% per annum is paid annually on January 17 of each year, beginning on January 17, 2016, and on the maturity date. As of
October 20, 2023, €1,000,000,000 aggregate principal amount of the 2024 Notes was outstanding.
The 0.000% 2025 Notes
We issued €1,000,000,000 aggregate principal amount of the 0.000% 2025 Notes on November 15, 2019. The maturity date of the 0.000% 2025 Notes
is November 15, 2025, and interest at a rate of 0.000% per annum is paid annually on November 15 of each year, beginning on November 15, 2020, and on the
maturity date. As of October 20, 2023, €1,000,000,000 aggregate principal amount of the 0.000% 2025 Notes was outstanding.
The 0.875% 2025 Notes
We issued €1,250,000,000 aggregate principal amount of the 0.875% 2025 Notes on May 24, 2017. The maturity date of the 0.875% 2025 Notes is
May 24, 2025, and interest at a rate of 0.875% per annum is paid annually on May 24 of each year, beginning on May 24, 2018, and on the maturity date. As of
October 20, 2023, €1,250,000,000 aggregate principal amount of the 0.875% 2025 Notes was outstanding.
The 2026 Notes
We issued €1,400,000,000 aggregate principal amount of the 2026 Notes on November 10, 2014. The maturity date of the 2026 Notes is November 10,
2026, and interest at a rate of 1.625% per annum is paid annually on November 10 of each year, beginning on November 10, 2015, and on the maturity date. As
of October 20, 2023, €1,400,000,000 aggregate principal amount of the 2026 Notes was outstanding.
The 2027 Notes
We issued €1,000,000,000 aggregate principal amount of the 2027 Notes on September 17, 2015. The maturity date of the 2027 Notes is September
17, 2027, and interest at a rate of 2.000% per annum is paid annually on September 17 of each year, beginning on September 17, 2016, and on the maturity
date. As of October 20, 2023, €1,000,000,000 aggregate principal amount of the 2027 Notes was outstanding.
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The 1.375% 2029 Notes
We issued €1,250,000,000 aggregate principal amount of the 1.375% 2029 Notes on May 24, 2017. The maturity date of the 1.375% 2029 Notes is
May 24, 2029, and interest at a rate of 1.375% per annum is paid annually on May 24 of each year, beginning on May 24, 2018, and on the maturity date. As of
October 20, 2023, €1,250,000,000 aggregate principal amount of the 1.375% 2029 Notes was outstanding.
The 3.050% 2029 Notes
We issued £750,000,000 aggregate principal amount of the 3.050% 2029 Notes on July 31, 2015. The maturity date of the 3.050% 2029 Notes is July
31, 2029, and interest at a rate of 3.050% per annum is paid semi-annually on January 31 and July 31 of each year, beginning on January 31, 2016, and on the
maturity date. As of October 20, 2023, £750,000,000 aggregate principal amount of the 3.050% 2029 Notes was outstanding.
The 2031 Notes
We issued €1,000,000,000 aggregate principal amount of the 2031 Notes on November 15, 2019. The maturity date of the 2031 Notes is November 15,
2031, and interest at a rate of 0.500% per annum is paid annually on November 15 of each year, beginning on November 15, 2020, and on the maturity date. As
of October 20, 2023, €1,000,000,000 aggregate principal amount of the 2031 Notes was outstanding.
The 2042 Notes
We issued £500,000,000 aggregate principal amount of the 2042 Notes on July 31, 2015. The maturity date of the 2042 Notes is July 31, 2042, and
interest at a rate of 3.600% per annum is paid semi-annually on January 31 and July 31 of each year, beginning on January 31, 2016, and on the maturity date.
As of October 20, 2023, £500,000,000 aggregate principal amount of the 2042 Notes was outstanding.
Ranking
The Notes are our senior unsecured indebtedness and rank equally with each other and with all of our other senior unsecured and unsubordinated
indebtedness from time to time outstanding. However, the Notes are structurally subordinated to any indebtedness and preferred stock, if any, of our subsidiaries
and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. Claims of the creditors of our
subsidiaries generally have priority with respect to the assets and earnings of such subsidiaries over the claims of our creditors, including holders of the Notes.
Accordingly, the Notes are effectively subordinated to creditors, including trade creditors and preferred stockholders, if any, of our subsidiaries. The Indentures
do not restrict our ability or that of our subsidiaries to incur additional indebtedness.
Payment on the Notes
All payments of principal of, the redemption price (if any), and interest and additional amounts (if any) on the 2024 Notes, the 0.000% 2025 Notes, the
0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the 2031 Notes are payable in euro, provided that, if the euro is unavailable
to the Company due to the imposition of exchange controls or other circumstances beyond the Company’s control, or if the euro is no longer being used by the
then member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or
within the international banking community, then all payments in respect of the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes,
the 2027 Notes, the 1.375% 2029 Notes and the 2031 Notes will be made in U.S. dollars, until the euro is again available to the Company or so used. The
amount payable on any date in euro will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on
the second Business Day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the
basis of the most recent U.S. dollar/euro exchange rate published in The Wall Street Journal on or prior to the second Business Day prior to the relevant
payment date. Any payment in respect of the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029
Notes and the 2031 Notes so made in U.S. dollars will not constitute an event of default under such Notes or the applicable Indenture.
4


With respect to the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the
2031 Notes, “Business Day” means any day, other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or
London are authorized or required by law, regulation or executive order to close and (2) on which the Trans-European Automated Real-time Gross Settlement
Express Transfer system (the TARGET2 system), or any successor thereto, is open.
All payments of principal of, the redemption price (if any), and interest and additional amounts (if any) on the 3.050% 2029 Notes and the 2042 Notes
are payable in pounds sterling, or, if the United Kingdom adopts euro as its lawful currency, in euro. If pounds sterling or, in the event the Notes are
redenominated into euro, euro is unavailable to the Company due to the imposition of exchange controls or other circumstances beyond the Company’s control
or, in the event the notes are redenominated into euro, the euro is no longer being used by the then member states of the European Monetary Union that have
adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments
in respect of the 3.050% 2029 Notes and the 2042 Notes will be made in U.S. dollars until the pound sterling or euro, as the case may be, is again available to
the Company or so used. The amount payable on any date in pounds sterling or, in the event such Notes are redenominated into euro, euro will be converted
into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on the second Business Day prior to the relevant payment
date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the most recent U.S. dollar/pounds sterling or, in the
event the Notes are redenominated into euro, the most recent U.S. dollar/euro exchange rate published in The Wall Street Journal on or prior to the second
Business Day prior to the relevant payment date. Any payment in respect of the 3.050% 2029 Notes and the 2042 Notes so made in U.S. dollars will not
constitute an event of default under such Notes or the 2013 Indenture.
With respect to the 3.050% 2029 Notes and the 2042 Notes, “Business Day” means any day which is not a day on which banking institutions in The City
of New York or London or the relevant place of payment are authorized or required by law, regulation or executive order to close.
Payment of Additional Amounts
The terms of the Notes state that all payments of principal and interest in respect of the Notes will be made free and clear of, and without deduction or
withholding for or on account of any present or future taxes, duties, assessments or other governmental charges of whatsoever nature required to be deducted
or withheld by the United States or any political subdivision or taxing authority of or in the United States, unless such withholding or deduction is required by law.
All of the Notes also contain a covenant substantially similar to the following:
The Company will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such additional amounts (“Additional
Amounts”) as are necessary in order that the net payment by the Company or the paying agent of the Company for the applicable Notes (“Paying Agent”) of the
principal of and interest on the Notes to a holder who is not a United States person (as defined below), after withholding or deduction for any present or future
tax, assessment or other governmental charge (“Tax”) imposed by the United States or a taxing authority in the United States, will not be less than the amount
provided in the Notes to be then due and payable; provided, however, that the foregoing obligation to pay Additional Amounts shall not apply:
(1) to any Tax that is imposed by reason of the holder (or the beneficial owner for whose benefit such holder holds the Notes), or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an
estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been engaged in a trade or business in the United States or having or having had a permanent establishment in the United
States;
(b) having a current or former connection with the United States (other than a connection arising solely as a result of the ownership of the Notes,
the receipt of any payment or the enforcement of any rights hereunder), including being or having been a citizen or resident of the United
States;
(c)
being or having been a personal holding company, a passive foreign investment company or a controlled foreign corporation for U.S. federal
income tax purposes or a corporation that has accumulated earnings to avoid U.S. federal income tax;
5


(d) being or having been a “10-percent shareholder” of the Company as defined in Section 871(h)(3) of the Internal Revenue Code of 1986, as
amended (the “Code”);
(e) being a controlled foreign corporation that is related to the Company within the meaning of Section 864(d)(4) of the Code; or
(f)
being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade
or business;
(2) to any holder that is not the sole beneficial owner of the Notes, or a portion of the Notes, or that is a fiduciary, partnership or limited liability
company, but only to the extent that a beneficial owner with respect to the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial
owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the
beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment;
(3) to any Tax that would not have been imposed but for the failure of the holder or any other person to comply with certification, identification or
information reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder or beneficial
owner of the Notes, if compliance is required by statute, by regulation of the United States or any taxing authority therein or by an applicable
income tax treaty to which the United States is a party as a precondition to exemption from such Tax (including, but not limited to, the requirement
to provide Internal Revenue Service Forms W-8BEN, W-8BEN-E, W-8ECI, or any subsequent versions thereof or successor thereto, and any
documentation requirement under an applicable income tax treaty);
(4) to any Tax that is imposed otherwise than by withholding by the Company or a Paying Agent from the payment;
(5) to any Tax that would not have been imposed but for a change in law, regulation, or administrative or judicial interpretation that becomes effective
more than 10 days after the payment becomes due or is duly provided for, whichever occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property or similar Tax;
(7) to any Tax required to be withheld by any paying agent from any payment of principal of or interest on any Note, if such payment can be made
without such withholding by at least one other paying agent;
(8) to any Tax that would not have been imposed but for the presentation by the holder of any Note, where presentation is required, for payment on a
date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for,
whichever occurs later;
(9) to any Tax imposed under Sections 1471 through 1474 of the Code (or any amended or successor provisions), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or
practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code;
or
(10) in the case of any combination of items (1) through (9) above.
The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the Notes. Except as
specifically provided under this heading “—Payment of Additional Amounts,” the Company will not be required to make any payment for any Tax imposed by any
government or a political subdivision or taxing authority of or in any government or political subdivision. As used under “—Payment of Additional Amounts” and
under “—Redemption for Tax Reasons,” the term “United States” means the United States of America (including the states and the District of Columbia and any
political subdivision thereof), and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income
tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the
District of Columbia (other than a partnership that is not treated as a United
6


States person under any applicable Treasury regulations), or any estate or trust the income of which is subject to U.S. federal income taxation regardless of its
source.
Redemption for Tax Reasons
If, as a result of any change in, or amendment to, or, in the case of the 0.000% 2025 Notes and the 2031 Notes, introduction of, the laws (or any
regulations or rulings promulgated under the laws) of the United States (or any political subdivision or taxing authority of or in the United States), or any change
in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is
announced or becomes effective on or after the date of the applicable prospectus supplement, we become, or based upon a written opinion of independent
counsel selected by us, will become obligated to pay additional amounts as described above under the heading “Payments of Additional Amounts” with respect
to a series of the Notes, then we may at our option redeem, in whole, but not in part, in the case of the 2024 Notes, the 2026 Notes, the 2027 Notes, the 3.050%
2029 Notes and the 2042 Notes, the Notes of such series on not less than 30 nor more than 60 days’ prior notice, in the case of the 0.875% 2025 Notes and the
1.375% 2029 Notes, the Notes of such series on not less than 15 nor more than 60 days’ notice, and in the case of the 0.000% 2025 Notes and the 2031 Notes,
the Notes of such series on not less than 10 nor more than 60 days’ prior notice, in each case at a redemption price equal to 100% of their principal amount,
together with interest accrued but unpaid on those Notes to (and, in the case of the 0.000% 2025 Notes and the 2031 Notes, but not including) the date fixed for
redemption.
Optional Redemption
We may redeem the 2024 Notes, the 2026 Notes, the 2027 Notes, the 3.050% 2029 Notes and the 2042 Notes at our option, at any time in whole or
from time to time in part, at a redemption price equal to the greater of:
•
100% of the principal amount of the Notes to be redeemed; or
•
the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption), discounted to the date of redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the
applicable Comparable Government Bond Rate (as defined below), plus 10 basis points in the case of the 2026 Notes, plus 15 basis points in the
case of the 2024 Notes, the 3.050% 2029 Notes and the 2042 Notes and plus 20 basis points in the case of the 2027 Notes.
We may redeem the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 1.375% 2029 Notes and the 2031 Notes at our option, at any time in whole or
from time to time in part, prior to the applicable Par Call Date at a redemption price equal to the greater of:
•
100% of the principal amount of the Notes to be redeemed; or
•
the sum of the present values of the remaining scheduled payments of principal and interest thereon assuming that the Notes matured on the
applicable Par Call Date (not including any portion of such payments of interest accrued as of the date of redemption), discounted to the date of
redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate (as defined below), plus 10
basis points in the case of the 0.000% 2025 Notes, plus 15 basis points in the case of the 0.875% 2025 Notes and the 2031 Notes, and 20 basis
points in the case of the 2029 Notes.
“Par Call Date” means (i) with respect to the 0.000% 2025 Notes, August 15, 2025 (three months prior to the maturity date of the 0.000% 2025 Notes),
(ii) with respect to the 0.875% 2025 Notes, February 24, 2025 (three months prior to the maturity date of the 0.875% 2025 Notes), (iii) with respect to the 1.375%
2029 Notes, February 24, 2029 (three months prior to the maturity date of 1.375% 2029 Notes) and (iv) with respect to the 2031 Notes, August 15, 2031 (three
months prior to the maturity of the 2031 Notes).
If any of the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 1.375% 2029 Notes or the 2031 Notes are redeemed on or after the applicable Par Call
Date, the redemption price for such Notes will equal 100% of the principal amount of the Notes being redeemed.
In each case upon redemption of the Notes, we will pay accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date
of redemption.
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Installments of interest on Notes being redeemed that are due and payable on interest payment dates falling on or prior to a redemption date shall be
payable on the interest payment date to the holders as of the close of business on the relevant regular record date according to the Notes and the applicable
Indenture.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation for the 2024 Notes, the 2026 Notes and the
2027 Notes, at the discretion of an independent investment bank selected by us, a German government bond whose maturity is closest to the maturity of the
Notes being redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other German
government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected
by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation for the 3.050% 2029 Notes and the 2042
Notes, at the discretion of an independent investment bank selected by us, a United Kingdom government bond whose maturity is closest to the maturity of the
Notes being redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other United Kingdom
government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, United Kingdom government bonds
selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation for the 0.000% 2025 Notes, the 0.875%
2025 Notes, the 1.375% 2029 Notes and the 2031 Notes, at the discretion of an independent investment bank selected by us, a German government bond
whose maturity is closest to the applicable Par Call Date of the Notes being redeemed, or if such independent investment bank in its discretion determines that
such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or
market makers in, German government bonds selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond Rate” means the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded
upwards), at which the gross redemption yield on the Notes, if they were to be purchased at such price on the third business day prior to the date fixed for
redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond on the basis of the middle market price of
the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by
us.
Covenants
The Indentures set forth limited covenants that apply to the Notes. However, these covenants do not, among other things:
•
limit the amount of indebtedness or lease obligations that may be incurred by us and our subsidiaries;
•
limit our ability or that of our subsidiaries to issue, assume or guarantee debt secured by liens; or
•
restrict us from paying dividends or making distributions on our capital stock or purchasing or redeeming our capital stock.
Consolidation, Merger and Sale of Assets
The Indentures provide that we may consolidate with or merge with or into any other person, and may sell, transfer, or lease or convey all or
substantially all of our properties and assets to another person; provided that the following conditions are satisfied:
•
we are the continuing entity, or the resulting, surviving or transferee person (the “Successor”) is a person (if such person is not a corporation, then
the Successor will include a corporate co-issuer of the debt securities) organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia and the Successor (if not us) will expressly assume, by supplemental indenture, all of our obligations under
the debt securities and the applicable Indenture and, for each security that by its terms provides for conversion, provide for the right to convert such
security in accordance with its terms;
8


•
immediately after giving effect to such transaction, no default or event of default under the applicable Indenture has occurred and is continuing; and
•
in the case of the 2013 Indenture, the trustee receives from us an officers’ certificate and an opinion of counsel that the transaction and such
supplemental indenture, as the case may be, complies with the applicable provisions of the 2013 Indenture.
If we consolidate or merge with or into any other person or sell, transfer, lease or convey all or substantially all of our properties and assets in
accordance with the Indentures, the Successor will be substituted for us in the Indentures, with the same effect as if it had been an original party to the
Indentures. As a result, the Successor may exercise our rights and powers under the Indentures, and we will be released from all our liabilities and obligations
under the Indentures and under the debt securities.
For purposes of this covenant, “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity.
Events of Default
Each of the following events are defined in the Indentures as an “event of default” (whatever the reason for such event of default and whether or not it
will be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) with respect to the debt securities of any series:
(1)    default in the payment of any installment of interest on any debt securities of such series for 30 days after becoming due;
(2)    default in the payment of principal of or premium, if any, on any debt securities of such series when it becomes due and payable at its stated
maturity, upon optional redemption, upon declaration or otherwise;
(3)    default in the performance, or breach, of any covenant or agreement of ours in the applicable Indenture with respect to the debt securities of such
series (other than a covenant or agreement, a default in the performance of which or a breach of which is elsewhere in the applicable Indenture
specifically dealt with or that has expressly been included in the applicable Indenture solely for the benefit of a series of debt securities other than
such series), which continues for a period of 90 days after written notice to us by the trustee or to us and the trustee by the holders of, in the case
of the 2013 Indenture, at least 25% in aggregate principal amount of the outstanding debt securities of that series, and in the case of the 2018
Indenture, at least 33% in aggregate principal amount of the outstanding debt securities of that series;
(4)    we, pursuant to or within the meaning of the Bankruptcy Law:
•
commence a voluntary case or proceeding;
•
consent to the entry of an order for relief against us in an involuntary case or proceeding;
•
consent to the appointment of a custodian of us or for all or substantially all of our property;
•
make a general assignment for the benefit of our creditors;
•
file a petition in bankruptcy or answer or consent seeking reorganization or relief;
•
consent to the filing of such petition or the appointment of or taking possession by a custodian; or
•
take any comparable action under any foreign laws relating to insolvency;
9


(5)    a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
•
is for relief against us in an involuntary case, or adjudicates us insolvent or bankrupt;
•
appoints a custodian of us or for all or substantially all of our property; or
•
orders the winding-up or liquidation of us (or any similar relief is granted under any foreign laws);
and the order or decree remains unstayed and in effect for 90 days (or, in the case of the 2018 Indenture, 90 consecutive days); or
(6)    any other event of default provided with respect to debt securities of such series occurs.
“Bankruptcy Law” means Title 11, United States Code or any similar federal or state or foreign law for the relief of debtors. “Custodian” means any
custodian, receiver, trustee, assignee, liquidator or other similar official under any Bankruptcy Law.
If an event of default with respect to debt securities of any series (other than an event of default relating to certain events of bankruptcy, insolvency, or
reorganization of us) occurs and is continuing, the trustee by notice to us, or the holders of, in the case of the 2013 Indenture, at least 25% in aggregate principal
amount of the outstanding debt securities of such series, and in the case of the 2018 Indenture, at least 33% in aggregate principal amount of the outstanding
debt securities of such series, by notice to us and the trustee, may, and the trustee at the request of these holders will, declare the principal of and premium, if
any, and accrued and unpaid interest on all the debt securities of such series to be due and payable. Upon such a declaration, such principal, premium and
accrued and unpaid interest will be due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency, or reorganization of
us occurs and is continuing, the principal of and premium, if any, and accrued and unpaid interest on the debt securities of such series will become and be
immediately due and payable without any declaration or other act on the part of the trustee or any holders.
The holders of not less than a majority in aggregate principal amount of the outstanding debt securities of any series may rescind a declaration of
acceleration and its consequences, if we have deposited certain sums with the trustee and all events of default with respect to the debt securities of such series,
other than the non-payment of the principal or interest which have become due solely by such acceleration, have been cured or waived, as provided in the
Indentures.
An event of default for a particular series of debt securities does not necessarily constitute an event of default for any other series of debt securities
issued under the Indentures.
We are required to furnish the trustee annually within 120 days after the end of our fiscal year a statement by one of our officers to the effect that, to the
best knowledge of such officer, we are not in default in the fulfillment of any of our obligations under the applicable Indenture or, if there has been a default in the
fulfillment of any such obligation, specifying each such default and the nature and status thereof.
No holder of any debt securities of any series will have any right to institute any judicial or other proceeding with respect to the applicable Indenture, or
for the appointment of a receiver or trustee, or for any other remedy unless:
(1)    an event of default has occurred and is continuing and such holder has given the trustee prior written notice of such continuing event of default
with respect to the debt securities of such series;
(2)    in the case of the 2013 Indenture, the holders of not less than 25% of the aggregate principal amount of the outstanding debt securities of such
series, and in the case of the 2018 Indenture, the holders of not less than 33% of the aggregate principal amount of the outstanding debt securities
of such series have requested the trustee to institute proceedings in respect of such event of default;
(3)    the trustee has been offered indemnity reasonably satisfactory to it against its costs, expenses and liabilities in complying with such request;
(4)    the trustee has failed to institute proceedings 60 days after the receipt of such notice, request and offer of indemnity; and
10


(5)    no direction inconsistent with such written request has been given for 60 days by the holders of a majority in aggregate principal amount of the
outstanding debt securities of such series.
The holders of a majority in aggregate principal amount of outstanding debt securities of a series will have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy available to the trustee with respect to the debt securities of that series or
exercising any trust or power conferred to the trustee, and to waive certain defaults. Each of the Indentures provides that if an event of default occurs and is
continuing, the trustee will exercise such of its rights and powers under such Indenture, and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of such person’s own affairs. Subject to such provisions, the trustee will be under no
obligation to exercise any of its rights or powers under the applicable Indenture at the request of any of the holders of the debt securities of a series unless they
will have offered to the trustee security or indemnity satisfactory to the trustee against the costs, expenses and liabilities which might be incurred by it in
compliance with such request.
Notwithstanding the foregoing, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of and
premium, if any, and interest on that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement of payment.
Modification and Waivers
Modification and amendments of the Indentures and the Notes may be made by us and the trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding series of Notes affected thereby; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding Note of that series affected thereby:
•
change the stated maturity of the principal of, or installment of interest on, any Note;
•
reduce the principal amount of any Note or reduce the amount of the principal of any Note which would be due and payable upon a declaration of
acceleration of the maturity thereof or reduce the rate of interest on any Note;
•
reduce any premium payable on the redemption of any Note or change the date on which any Note may or must be redeemed (in the case of the
2018 Indenture, it being understood that a change to any notice requirement with respect to such date shall not be deemed to be a change of such
date);
•
change the coin or currency in which the principal of, premium, if any, or interest on any Note is payable;
•
impair the right of any holder to institute suit for the enforcement of any payment on or after the stated maturity of any Note (or, in the case of
redemption, on or after the redemption date);
•
reduce the percentage in principal amount of the outstanding Notes, the consent of whose holders is required in order to take certain actions;
•
reduce the requirements for quorum or voting by holders of Notes in the applicable Indenture or the Note;
•
modify any of the provisions in the applicable Indenture regarding the waiver of past defaults and the waiver of certain covenants by the holders of
Notes except to increase any percentage vote required or to provide that certain other provisions of the applicable Indenture cannot be modified or
waived without the consent of the holder of each Notes affected thereby;
•
make any change that adversely affects the right to convert or exchange any debt security or decreases the conversion or exchange rate or
increases the conversion price of any convertible or exchangeable debt security, unless such decrease or increase is permitted by the terms of the
debt securities; or
•
modify any of the above provisions.
11


We and the trustee may, without the consent of any holders, modify or amend the terms of the Indentures and any series of Notes with respect to the
following:
•
to add to our covenants for the benefit of holders of all or any series of the Notes or to surrender any right or power conferred upon us;
•
to evidence the succession of another person to, and the assumption by the successor of our covenants, agreements and obligations under, the
applicable Indenture pursuant to the covenant described above under the caption “Covenants—Consolidation, Merger and Sale of Assets”;
•
to add any additional events of default for the benefit of holders of all or any series of the Notes;
•
to add one or more guarantees, and in the case of the 2018 Indenture, co-obligors, for the benefit of holders of the Notes;
•
to secure the Notes pursuant to the covenants of the Indenture;
•
to add or appoint a successor or separate trustee or other agent;
•
to provide for the issuance of additional debt securities of any series;
•
to establish the form or terms of the debt securities of any series as permitted by the Indenture;
•
to comply with the rules of any applicable securities depository;
•
to provide for uncertificated Notes in addition to or in place of certificated Notes;
•
in the case of the 2013 Indenture, to add to, change or eliminate any of the provisions of the 2013 Indenture in respect of one or more series of
debt securities; provided that any such addition, change or elimination (a) shall neither (1) apply to any debt security of any series created prior to
the execution of such supplemental indenture and entitled to the benefit of such provision nor (2) modify the rights of the holder of any such debt
security with respect to such provision or (b) shall become effective only when there is no debt security described in clause (a)(1) outstanding;
•
in the case of the 2018 Indenture, to add to, change or eliminate any of the provisions of the 2018 Indenture in respect of one or more series of
debt securities; provided that any such addition, change or elimination shall become effective only when there is no outstanding security of any
series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision and as to which such
supplemental indenture would apply;
•
to cure any ambiguity, omission, defect or inconsistency;
•
to change any other provision; provided that the change does not adversely affect the interests of the holders of debt securities of, in the case of
the 2013 Indenture any series, and in the case of the 2018 Indenture, any outstanding series, in any material respect;
•
to supplement any of the provisions of the applicable Indenture to such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Notes pursuant to the Indenture; provided that any such action shall not adversely affect the interests of the holders of
Notes of such series or any other series of debt securities in any material respect;
•
to comply with the rules or regulations of any securities exchange or automated quotation system on which any of the Notes may be listed or
traded; and
•
to add to, change or eliminate any of the provisions of the applicable Indenture as shall be necessary or desirable in accordance with any
amendments to the Trust Indenture Act of 1939, as amended, and in the case of the 2013 Indenture, provided that such action does not adversely
affect the rights or interests of any holder of debt securities in any material respect.
12


The holders of at least a majority in aggregate principal amount of the outstanding Notes of any series may, on behalf of the holders of all Notes of that
series, waive compliance by us with certain restrictive provisions of the Indentures. The holders of not less than a majority in aggregate principal amount of the
outstanding Notes of a series may, on behalf of the holders of all Notes of that series, waive any past default and its consequences under the applicable
Indenture with respect to the Notes of that series, except a default (1) in the payment of principal or premium, if any, or interest on Notes of that series or (2) in
respect of a covenant or provision of the applicable Indenture that cannot be modified or amended without the consent of the holder of each Note of that series.
Upon any such waiver, such default will cease to exist, and any event of default arising therefrom will be deemed to have been cured, for every purpose of the
Indenture; however, no such waiver will extend to any subsequent or other default or event of default or impair any rights consequent thereon.
Discharge, Defeasance and Covenant Defeasance
We may discharge certain obligations to holders of the Notes of a series that have not already been delivered to the trustee for cancellation and that
either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the
trustee, in trust, funds in U.S. dollars in an amount sufficient to pay the entire indebtedness including, but not limited to, the principal and premium, if any, and
interest to the date of such deposit (if due and payable) or to the maturity thereof or the redemption date of the Notes of that series, as the case may be. We may
direct the trustee to invest such funds in U.S. Treasury securities with a maturity of one year or less or in a money market fund that invests solely in short-term
U.S. Treasury securities.
The Indentures provide that we may elect either (1) to defease and be discharged from any and all obligations with respect to the Notes of a series
(except for, among other things, obligations to register the transfer or exchange of the Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes,
to maintain an office or agency with respect to the Notes and to hold moneys for payment in trust) (“legal defeasance”) or (2) to be released from our obligations
to comply with the restrictive covenants under the applicable Indenture, and any omission to comply with such obligations will not constitute a default or an event
of default with respect to the Notes of a series and clauses (3) and (6) under the caption “Events of Default” above will no longer be applied (“covenant
defeasance”). Legal defeasance or covenant defeasance, as the case may be, will be conditioned upon, among other things, the irrevocable deposit by us with
the trustee, in trust, of an amount in U.S. dollars, or U.S. government obligations (as such term is modified below), or both, applicable to the Notes of that series
which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal or
premium, if any, and interest on the Notes on the scheduled due dates therefor.
If we effect covenant defeasance with respect to the Notes of any series, the amount in U.S. dollars, or U.S. government obligations (as such term is
modified below), or both, on deposit with the trustee will be sufficient, in the opinion of a nationally recognized firm of independent accountants, to pay amounts
due on the Notes of that series at the time of the stated maturity but may not be sufficient to pay amounts due on the Notes of that series at the time of the
acceleration resulting from such event of default. However, we would remain liable to make payment of such amounts due at the time of acceleration.
With respect to the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the
2031 Notes, the term “U.S. government obligations” shall instead mean (x) any security that is (i) a direct obligation of the German government or (ii) an
obligation of a person controlled or supervised by and acting as an agency or instrumentality of the German government the payment of which is fully and
unconditionally guaranteed by the German government or the central bank of the German government, which, in either case (x)(i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) certificates, depositary receipts or other instruments which evidence a direct ownership interest in
obligations described in clause (x)(i) or (x)(ii) above or in any specific principal or interest payments due in respect thereof.
With respect to the 3.050% 2029 Notes and the 2042 Notes, the term “U.S. government obligations” shall instead mean (x) any security that is (i) a
direct obligation of the United Kingdom government or (ii) an obligation of a person controlled or supervised by and acting as an agency or instrumentality of the
United Kingdom government the payment of which is fully and unconditionally guaranteed by the United Kingdom government or the central bank of the United
Kingdom government, which, in either case (x)(i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) certificates, depositary receipts
or other instruments which evidence a direct ownership interest in obligations described in clause (x)(i) or (x)(ii) above or in any specific principal or interest
payments due in respect thereof.
13


We will be required to deliver to the trustee an opinion of counsel that the deposit and related defeasance will not cause the holders and beneficial
owners of the Notes of that series to recognize income, gain or loss for federal income tax purposes. If we elect legal defeasance, that opinion of counsel must
be based upon a ruling from the U.S. Internal Revenue Service or a change in law to that effect.
We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option.
Book-Entry and Settlement
The Notes were issued in book-entry form and are represented by global notes deposited with, or on behalf of, a common depositary on behalf of
Euroclear and Clearstream, and are registered in the name of the common depositary or its nominee. Except as described herein, certificated notes will not be
issued in exchange for beneficial interests in the global notes.
Certificated Notes
Subject to certain conditions, the Notes represented by the global notes are exchangeable for certificated notes in definitive form of like tenor, in
minimum denominations of €100,000 principal amount and integral multiples of €1,000 in excess thereof in the case of the 2024 Notes, the 0.000% 2025 Notes,
the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the 2031 Notes, and in minimum denominations of £100,000 principal
amount and integral multiples of £1,000 in excess thereof in the case of the 3.050% 2029 Notes and the 2042 Notes, if:
1.
the common depositary notifies us that it is unwilling or unable to continue as depositary or if the common depositary ceases to be eligible under
the applicable Indenture and we do not appoint a successor depository within 90 days;
2.    we determine that the Notes will no longer be represented by global securities and execute and deliver to the trustee an order to that effect; or
3.    an event of default with respect to the Notes will have occurred and be continuing.
Any Note that is exchangeable as above is exchangeable for certificated notes issuable in authorized denominations and registered in such names as
the common depositary shall direct. Subject to the foregoing, a global note is not exchangeable, except for a global note of the same aggregate denomination to
be registered in the name of the common depositary or its nominee.
The Trustee for the Notes
The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indentures. We have commercial deposits and custodial arrangements with
The Bank of New York Mellon Trust Company, N.A. and its affiliates (“BNYM”). We may enter into similar or other banking relationships with BNYM in the future
in the normal course of business. In addition, BNYM acts as trustee and as paying agent with respect to other debt securities issued by us, and may do so for
future issuances of debt securities by us as well.
14


Exhibit 21.1
Subsidiaries of
Apple Inc.*
Jurisdiction
of Incorporation
Apple Asia Limited
Hong Kong
Apple Asia LLC
Delaware, U.S.
Apple Canada Inc.
Canada
Apple Computer Trading (Shanghai) Co., Ltd.
China
Apple Distribution International Limited
Ireland
Apple India Private Limited
India
Apple Insurance Company, Inc.
Arizona, U.S.
Apple Japan, Inc.
Japan
Apple Korea Limited
South Korea
Apple Operations International Limited
Ireland
Apple Operations Limited
Ireland
Apple Operations Mexico, S.A. de C.V.
Mexico
Apple Pty Limited
Australia
Apple Sales International Limited
Ireland
Apple South Asia (Thailand) Limited
Thailand
Apple Vietnam Limited Liability Company
Vietnam
Braeburn Capital, Inc.
Nevada, U.S.
iTunes K.K.
Japan
*
Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of other subsidiaries of Apple Inc. are omitted because, considered in the aggregate, they would
not constitute a significant subsidiary as of the end of the year covered by this report.


Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1)
Registration Statement (Form S-3 ASR No. 333-260578) of Apple Inc.,
(2)
Registration Statement (Form S-8 No. 333-264555) pertaining to Apple Inc. Deferred Compensation Plan,
(3)
Registration Statement (Form S-8 No. 333-165214) pertaining to Apple Inc. 2014 Employee Stock Plan and Apple Inc. 2022 Employee Stock Plan,
(4)
Registration Statement (Form S-8 No. 333-195509) pertaining to Apple Inc. 2014 Employee Stock Plan and Apple Inc. 2022 Employee Stock Plan,
(5)
Registration Statement (Form S-8 No. 333-226986) pertaining to Apple Inc. Deferred Compensation Plan,
(6)
Registration Statement (Form S-8 No. 333-203698) pertaining to Apple Inc. Employee Stock Purchase Plan, and
(7)
Registration Statement (Form S-8 No. 333-60455) pertaining to Apple Inc. Non-Employee Director Stock Plan;
of our reports dated November 2, 2023 with respect to the consolidated financial statements of Apple Inc., and the effectiveness of internal control over financial
reporting of Apple Inc., included in this Annual Report on Form 10-K for the year ended September 30, 2023.
/s/ Ernst & Young LLP
San Jose, California
November 2, 2023


Exhibit 31.1
CERTIFICATION
I, Timothy D. Cook, certify that:
1.
I have reviewed this annual report on Form 10-K of Apple Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent
fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant’s internal control over financial reporting; and
5.
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal
control over financial reporting.
Date: November 2, 2023
By:
/s/ Timothy D. Cook
Timothy D. Cook
Chief Executive Officer


Exhibit 31.2
CERTIFICATION
I, Luca Maestri, certify that:
1.
I have reviewed this annual report on Form 10-K of Apple Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent
fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant’s internal control over financial reporting; and
5.
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal
control over financial reporting.
Date: November 2, 2023
By:
/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer


Exhibit 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy D. Cook, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that the Annual Report of Apple Inc. on Form 10-K for the fiscal year ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results
of operations of Apple Inc. at the dates and for the periods indicated.
Date: November 2, 2023
By:
/s/ Timothy D. Cook
Timothy D. Cook
Chief Executive Officer
I, Luca Maestri, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
the Annual Report of Apple Inc. on Form 10-K for the fiscal year ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of
operations of Apple Inc. at the dates and for the periods indicated.
Date: November 2, 2023
By:
/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to Apple Inc. and will be retained by Apple Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.


 
 
 
 
 
SAMSUNG ELECTRONICS CO., LTD. AND ITS SUBSIDIARIES 
 
 
 
Consolidated Financial Statements 
 
 
 
 
December 31, 2023 and 2022 
 
 
  
 
(With Independent Auditors’ Report Thereon) 
 
 


 
Contents 
 
 
 
Page 
 
 
Independent Auditors’ Report 
1 
 
 
Consolidated Statements of Financial Position 
4 
 
 
Consolidated Statements of Profit or Loss 
7 
 
 
Consolidated Statements of Comprehensive Income 
8 
 
 
Consolidated Statements of Changes in Equity 
9 
 
 
Consolidated Statements of Cash Flows 
13 
 
 
Notes to the Consolidated Financial Statements 
15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


152, Teheran-ro, Gangnam-gu, Seoul 06236
(Yeoksam-dong, Gangnam Finance Center 27th Floor)
Republic of Korea
 
 
Independent Auditors’ Report 
 
To the Shareholders and Board of Directors of 
Samsung Electronics Co., Ltd.: 
 
Opinion 
We have audited the consolidated financial statements of Samsung Electronics Co., Ltd. and its subsidiaries (“the Group”), expressed 
in Korean won, which comprise the consolidated statement of financial position as of December 31, 2023, and the consolidated 
statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising 
material accounting policy information and other explanatory information.  
 
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated 
financial position of the Group as of December 31, 2023 and its consolidated financial performance and cash flows for the year 
then ended in accordance with Korean International Financial Reporting Standards (“Korean IFRS”). 
 
Basis for Opinion  
We conducted our audit in accordance with International Standards on Auditing (“ISAs”) and Korean Standards on Auditing (“KSAs”). 
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated 
Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards 
Board for Accountant’s International Code of Ethics for Professional Accountants (including International Independence Standards) 
(“IESBA Code”) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in 
the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA 
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.  
 
Key Audit Matters  
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated 
financial statements as of and for the year ended December 31, 2023. These matters were addressed in the context of our audit of 
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion 
on these matters.  
 
1) Valuation of memory semiconductor inventory at net realizable value  
 
The memory semiconductor products manufactured and sold by the Group’s Device Solutions (DS) division have been affected by 
price erosion in the current financial year due to weak demand caused by macroeconomic uncertainties. As disclosed in Note 2, 
Material Accounting Policies, and Note 3, Material Accounting Estimates and Assumptions, to the consolidated financial statements, 
the Group values its inventories at the lower of cost and net realizable value.  
 
Due to the uncertainty associated with estimating future demand and selling prices, and the complexity of the measurement process 
in estimating net realizable value of the inventories, we believe the potential for error is significant and thus identified the estimation 
of memory semiconductor inventories’ net realizable value as a key audit matter.  
 
The primary audit procedures we performed to address this key audit matter are as follows: 
• 
Evaluating the reasonableness of the Group’s accounting policies and understanding the processes and internal controls 
applied to the valuation of inventories at lower of cost or net realizable value; 
• 
Evaluating the design and testing the operating effectiveness of the internal controls established for the lower of cost or net 
realizable value method of inventory valuation; 
• 
Evaluating the appropriateness of the underlying data used to determine the net realizable value of inventory which includes 
forecast sales price, on a sample basis; 
• 
Evaluating the reasonableness of estimates by retrospectively comparing the estimated sales price and the actual sales price; 
and 
• 
Evaluating reasonableness of inventory valuation by assessing the reasonableness of the assumptions used to determine 
estimates including the forecast sale price and costs associated with sale and checking the mathematical accuracy of inventory 
valuation by performing recalculations.  
 
 


 
 
- 2 - 
 
2) Sales deduction related to sales promotion activities 
 
The Group’s Device eXperience (DX) division performs sales promotion activities, which includes providing price or volume 
discounts and incentives to customers including retail and telecommunication companies, based on explicit or implicit agreements. 
As disclosed in Note 2, Material Accounting Policies, and Note 3, Material Accounting Estimates and Assumptions, of the 
consolidated financial statements, the Group estimates the expected expenditures on sales promotion activities at the time of 
revenue recognition and deducts the amount from revenue.  
 
We identified the amount of sales deductions from promotional activities as a key audit matter because the calculation of sales 
deductions involves significant estimates and judgements by management and is subject to possible bias and the amount is material 
to the consolidated financial statements. 
 
The primary audit procedures we performed to address this key audit matter are as follow: 
• 
Evaluating the Group's accounting policies and understanding the processes and internal controls relating to the applied to 
sales deductions; 
• 
Evaluating the design and testing the operating effectiveness of internal controls over the approval of the sales deduction 
policy; 
• 
Evaluating the design and testing the operating effectiveness of internal controls over the sales deduction estimates and the 
approval of post-settlement adjustments; 
• 
Evaluating the accuracy of the estimates by inspecting, on a sample basis, the documentation supporting sales deductions 
estimates on a sampling basis; and 
• 
Evaluating the accuracy and completeness of sales deductions by comparing, on a sample basis, the period-end estimates to 
amounts settled subsequent to the period-end and by examining relevant documentation. 
  
Other Matters 
The consolidated financial statements of the Group for the year ended December 31, 2022 were audited by another auditor who 
expressed an unmodified opinion on those financial statements on February 15, 2023. 
 
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from 
those generally accepted and applied in other countries. 
 
The accompanying consolidated financial statements as of and for the years ended December 31, 2023 and 2022 have been 
translated into United States dollars solely for the convenience of the reader. We have audited the translation and, in our opinion, 
the consolidated financial statements expressed in Korean won have been translated into dollars on the basis set forth in Note 2.18 
to the consolidated financial statements. 
 
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements 
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with 
Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated 
financial statements that are free from material misstatement, whether due to fraud or error.  
 
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a 
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless 
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.  
 
Those charged with governance are responsible for overseeing the Group’s financial reporting process.  
 
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements  
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from 
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable 
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and KSAs will always 
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, 
individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of 
these consolidated financial statements.  
 


 
 
- 3 - 
As part of an audit in accordance with ISAs and KSAs, we exercise professional judgment and maintain professional skepticism 
throughout the audit. We also:  
• 
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, 
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate 
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for 
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override 
of internal control. 
• 
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in 
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls.  
• 
Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and 
reasonableness of accounting estimates and related disclosures made by management. 
• 
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit 
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on 
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw 
attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are 
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ 
report. However, future events or conditions may cause the Group to cease to continue as a going concern. 
• 
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, 
and whether the consolidated financial statements represent the underlying transactions and events in a manner that 
achieves fair presentation. 
• 
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within 
the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision 
and performance of the group audit. We remain solely responsible for our audit opinion. 
 
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit 
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.  
 
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements 
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear 
on our independence, and where appliable, related safeguards.  
 
From the matters communicated with those charged with governance, we determine those matters that were of most significance 
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe 
these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely 
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of 
doing so would reasonably be expected to outweigh the public interest benefits of such communication. 
 
 
The engagement partner on the audit resulting in this independent auditors’ report is Han, Sang Hyun.  
 
 
 
 
 
 
 
 
 
 
Seoul, Korea 
February 19, 2024 
 
This report is effective as of February 19, 2024. Certain subsequent events or circumstances which may occur between the audit 
report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements 
and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated 
to reflect the impact of such subsequent events or circumstances, if any. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 
 
The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 
 
 
- 4 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
December 31, 
December 31, 
December 31, 
December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Assets 
 
 
 
 
 
Current assets 
 
 
 
 
 
Cash and cash equivalents 
4, 28 
69,080,893 
49,680,710 
52,890,158 
38,036,865 
Short-term financial instruments 
4, 28 
22,690,924 
65,102,886 
17,372,771 
49,844,491 
Short-term financial assets at amortized cost 
4, 28 
608,281 
414,610 
465,716 
317,436 
Short-term financial assets at fair value  
through profit or loss 
4, 6, 28 
27,112 
29,080 
20,758 
22,264 
Trade receivables 
4, 5, 7, 28 
36,647,393 
35,721,563 
28,058,213 
27,349,373 
Non-trade receivables 
4, 7, 28 
6,633,248 
6,149,209 
5,078,590 
4,707,997 
Prepaid expenses  
 
3,366,130 
2,867,823 
2,577,198 
2,195,681 
Inventories 
8 
51,625,874 
52,187,866 
39,526,134 
39,956,410 
Other current assets 
4, 28 
5,038,838 
6,316,834 
3,857,868 
4,836,335 
Assets held-for-sale 
33 
217,864 
- 
166,802 
- 
 
  
195,936,557 
218,470,581 
150,014,208 
167,266,852 
Non-current assets 
 
 
 
 
 
Financial assets at fair value  
through other comprehensive income 
4, 6, 28 
7,481,297 
11,397,012 
5,727,879 
8,725,854 
Financial assets at fair value  
through profit or loss 
4, 6, 28 
1,431,394 
1,405,468 
1,095,913 
1,076,063 
Investments in associates and joint ventures 
9 
11,767,444 
10,893,869 
9,009,466 
8,340,634 
Property, plant and equipment 
10 
187,256,262 
168,045,388 
143,368,344 
128,659,991 
Intangible assets 
11 
22,741,862 
20,217,754 
17,411,771 
15,479,247 
Net defined benefit assets 
14 
4,905,219 
5,851,972 
3,755,565 
4,480,424 
Deferred income tax assets 
25 
10,211,797 
5,101,318 
7,818,422 
3,905,704 
Other non-current assets 
4, 7, 28 
14,174,148 
7,041,145 
10,852,104 
5,390,887 
 
  
259,969,423 
229,953,926 
199,039,464 
176,058,804 
Total assets 
  
455,905,980 
448,424,507 
349,053,672 
343,325,656 
 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 
 
The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 
 
 
- 5 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
December 31, 
December 31, 
December 31, 
December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
Liabilities and Equity 
 
 
 
 
 
Current liabilities 
 
 
 
 
 
Trade payables 
4, 28 
11,319,824 
10,644,686 
8,666,757 
8,149,853 
Short-term borrowings  
4, 5, 12, 28 
7,114,601 
5,147,315 
5,447,127 
3,940,920 
Other payables 
4, 28 
15,324,119 
17,592,366 
11,732,551 
13,469,180 
Advances received 
17 
1,492,602 
1,314,934 
1,142,776 
1,006,748 
Withholdings 
4, 28 
892,441 
1,298,244 
683,276 
993,970 
Accrued expenses 
4, 17, 28 
26,013,273 
29,211,487 
19,916,449 
22,365,087 
Current income tax liabilities 
 
3,358,715 
4,250,397 
2,571,521 
3,254,216 
Current portion of long-term liabilities 
4, 12, 13, 28 
1,308,875 
1,089,162 
1,002,109 
833,891 
Provisions 
15 
6,524,876 
5,844,907 
4,995,618 
4,475,015 
Other current liabilities 
4, 17, 28 
2,308,472 
1,951,354 
1,767,427 
1,494,008 
Liabilities held-for-sale 
33 
61,654 
- 
47,204 
- 
 
  
75,719,452 
78,344,852 
57,972,815 
59,982,888 
  
 
 
 
 
Non-current liabilities 
 
 
 
 
 
Debentures 
4, 13, 28 
537,618 
536,093 
411,615 
410,447 
Long-term borrowings 
4, 12, 28 
3,724,850 
3,560,672 
2,851,844 
2,726,145 
Long-term other payables 
4, 28 
5,488,283 
2,753,305 
4,201,975 
2,108,003 
Net defined benefit liabilities 
14 
456,557 
268,370 
349,552 
205,471 
Deferred income tax liabilities 
25 
620,549 
5,111,332 
475,109 
3,913,371 
Long-term provisions 
15 
2,878,450 
1,928,518 
2,203,817 
1,476,524 
Other non-current liabilities 
4, 17, 28 
2,802,356 
1,171,761 
2,145,558 
897,132 
  
  
16,508,663 
15,330,051 
12,639,470 
11,737,093 
Total liabilities 
  
92,228,115 
93,674,903 
70,612,285 
71,719,981 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 
 
The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 
 
 
- 6 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
December 31, 
December 31, 
December 31, 
December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
Equity attributable to owners of the parent company 
 
 
 
 
Preference shares 
18 
119,467 
119,467 
91,467 
91,467 
Ordinary shares 
18 
778,047 
778,047 
595,693 
595,693 
Share premium 
 
4,403,893 
4,403,893 
3,371,737 
3,371,737 
Retained earnings 
19 
346,652,238 
337,946,407 
265,406,117 
258,740,703 
Other components of equity 
20, 33 
1,280,130 
1,938,328 
980,102 
1,484,036 
  
  
353,233,775 
345,186,142 
270,445,116 
264,283,636 
Non-controlling interests 
31 
10,444,090 
9,563,462 
7,996,271 
7,322,039 
Total equity 
  
363,677,865 
354,749,604 
278,441,387 
271,605,675 
  
 
 
 
 
Total liabilities and equity 
  
455,905,980 
448,424,507 
349,053,672 
343,325,656 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS 
 
 
The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes. 
 
 
- 7 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Revenue 
29 
258,935,494 
302,231,360 
198,247,859 
231,396,319 
Cost of sales 
21 
180,388,580 
190,041,770 
138,110,266 
145,501,003 
Gross profit 
 
78,546,914 
112,189,590 
60,137,593 
85,895,316 
Selling and administrative expenses 
21, 22 
71,979,938 
68,812,960 
55,109,743 
52,685,021 
Operating profit 
29 
6,566,976 
43,376,630 
5,027,850 
33,210,295 
Other non-operating income 
23 
1,180,448 
1,962,071 
903,782 
1,502,213 
Other non-operating expense 
23 
1,083,327 
1,790,176 
829,424 
1,370,606 
Share of net profit of associates and joint ventures 
9 
887,550 
1,090,643 
679,532 
835,025 
Financial income 
24 
16,100,148 
20,828,995 
12,326,699 
15,947,229 
Financial expense 
24 
12,645,530 
19,027,689 
9,681,752 
14,568,101 
Profit before income tax 
 
11,006,265 
46,440,474 
8,426,687 
35,556,055 
Income tax benefit 
25 
(4,480,835) 
(9,213,603) 
(3,430,646) 
(7,054,178) 
Profit for the year 
  
15,487,100 
55,654,077 
11,857,333 
42,610,233 
Profit attributable to 
 
 
 
 
 
Owners of the parent company 
 
14,473,401 
54,730,018 
11,081,218 
41,902,749 
Non-controlling interests 
  
1,013,699 
924,059 
776,115 
707,484 
Earnings per share 
(in Korean won, in US dollars) 
26 
  
  
  
  
- Basic 
 
2,131 
8,057 
1.63 
6.17 
- Diluted 
  
2,131 
8,057 
1.63 
6.17 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 
 
The above consolidated statements of comprehensive income should be read in conjunction with the accompanying notes. 
 
 
- 8 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Profit for the year 
 
15,487,100 
55,654,077 
11,857,333 
42,610,233 
Other comprehensive income  
 
 
 
 
 
Items that will not be reclassified subsequently to  
profit or loss: 
 
 
 
 
 
Gain (loss) on valuation of financial assets at fair 
value through other comprehensive income, net 
of tax 
6, 20 
1,481,091 
(1,969,498) 
1,133,962 
(1,507,900) 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax  
9, 20 
13,150 
(6,318) 
10,068 
(4,837) 
Remeasurement of net defined benefit liabilities 
(assets), net of tax 
14, 20 
(828,298) 
1,153,679 
(634,167) 
883,287 
Items that may be reclassified subsequently to 
 profit or loss: 
 
 
 
 
 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax  
9, 20 
61,962 
(44,192) 
47,440 
(33,835) 
Foreign currency translation differences for 
foreign operations, net of tax 
20 
2,621,479 
4,884,886 
2,007,074 
3,739,998 
Gain (loss) on valuation of cash flow hedge 
derivatives 
20 
927 
(12,893) 
710 
(9,871) 
Other comprehensive income for the year, net of 
tax 
 
3,350,311 
4,005,664 
2,565,087 
3,066,842 
Total comprehensive income for the year 
 
18,837,411 
59,659,741 
14,422,420 
45,677,075 
Comprehensive income attributable to:  
 
 
 
 
 
Owners of the parent company 
 
17,845,661 
58,745,107 
13,663,110 
44,976,807 
Non-controlling interests 
  
991,750 
914,634 
759,310 
700,268 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 9 - 
(In millions of Korean won) 
 
For the year ended December 31, 2022 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2022 
 
119,467 
778,047 
4,403,893 
293,064,763 
(2,128,473) 
296,237,697 
8,662,234 
304,899,931 
Profit for the year 
  
- 
- 
- 
54,730,018 
- 
54,730,018 
924,059 
55,654,077 
Loss on valuation of financial assets at fair value 
through other comprehensive income, net of tax 
6, 20 
- 
- 
- 
(38,937) 
(1,867,530) 
(1,906,467) 
(63,031) 
(1,969,498) 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
(51,848) 
(51,848) 
1,338 
(50,510) 
Foreign currency translation differences for  
foreign operations translation, net of tax 
20 
- 
- 
- 
- 
4,863,930 
4,863,930 
20,956 
4,884,886 
Remeasurement of net defined benefit liabilities, 
net of tax 
14, 20 
- 
- 
- 
- 
1,122,367 
1,122,367 
31,312 
1,153,679 
Loss on valuation of cash flow hedge derivatives 
20 
- 
- 
- 
- 
(12,893) 
(12,893) 
- 
(12,893) 
Total comprehensive income for the year 
  
- 
- 
- 
54,691,081 
4,054,026 
58,745,107 
914,634 
59,659,741 
Dividends declared 
19 
- 
- 
- 
(9,809,437) 
- 
(9,809,437) 
(5,523) 
(9,814,960) 
Capital transaction under common control 
 
- 
- 
- 
- 
- 
- 
(176) 
(176) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
124 
124 
Other 
 
- 
- 
- 
- 
12,775 
12,775 
(7,831) 
4,944 
Total transactions with owners 
  
- 
- 
- 
(9,809,437) 
12,775 
(9,796,662) 
(13,406) 
(9,810,068) 
Balance as of December 31, 2022 
  
119,467 
778,047 
4,403,893 
337,946,407 
1,938,328 
345,186,142 
9,563,462 
354,749,604 
  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 10 - 
 (In thousands of US dollars (Note 2.18)) 
 
For the year ended December 31, 2022 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2022 
 
91,467 
595,693 
3,371,737 
224,378,130 
(1,629,615) 
226,807,412 
6,632,035 
233,439,447 
Profit for the year 
 
- 
- 
- 
41,902,749 
- 
41,902,749 
707,484 
42,610,233 
Loss on valuation of financial assets at fair value 
through other comprehensive income, net of tax 
6, 20 
- 
- 
- 
(29,812) 
(1,429,830) 
(1,459,642) 
(48,258) 
(1,507,900) 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
(39,696) 
(39,696) 
1,024 
(38,672) 
Foreign currency translation differences for foreign 
operations, net of tax 
20 
- 
- 
- 
- 
3,723,953 
3,723,953 
16,045 
3,739,998 
Remeasurement of net defined benefit liabilities, 
net of tax 
14, 20 
- 
- 
- 
- 
859,314 
859,314 
23,973 
883,287 
Loss on valuation of cash flow hedge derivatives 
20 
- 
- 
- 
- 
(9,871) 
(9,871) 
- 
(9,871) 
Total comprehensive income for the year 
 
- 
- 
- 
41,872,937 
3,103,870 
44,976,807 
700,268 
45,677,075 
Dividends declared 
19 
- 
- 
- 
(7,510,364) 
- 
(7,510,364) 
(4,229) 
(7,514,593) 
Capital transaction under common control 
 
- 
- 
- 
- 
- 
- 
(135) 
(135) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
95 
95 
Other 
 
- 
- 
- 
- 
9,781 
9,781 
(5,995) 
3,786 
Total transactions with owners 
 
- 
- 
- 
(7,510,364) 
9,781 
(7,500,583) 
(10,264) 
(7,510,847) 
Balance as of December 31, 2022 
 
91,467 
595,693 
3,371,737 
258,740,703 
1,484,036 
264,283,636 
7,322,039 
271,605,675 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 11 - 
(In millions of Korean won) 
 
For the year ended December 31, 2023 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2023 
 
119,467 
778,047 
4,403,893 
337,946,407 
1,938,328 
345,186,142 
9,563,462 
354,749,604 
Profit for the year 
 
- 
- 
- 
14,473,401 
- 
14,473,401 
1,013,699 
15,487,100 
Gain (loss) on valuation of financial 
assets at fair value through other 
comprehensive income, net of tax 
6, 20 
- 
- 
- 
4,041,867 
(2,554,690) 
1,487,177 
(6,086) 
1,481,091 
Share of other comprehensive income of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
70,157 
70,157 
4,955 
75,112 
Foreign currency translation 
differences for foreign operations, net 
of tax 
20 
- 
- 
- 
- 
2,611,915 
2,611,915 
9,564 
2,621,479 
Remeasurement of net defined benefit  
 assets, net of tax 
14, 20 
- 
- 
- 
- 
(797,916) 
(797,916) 
(30,382) 
(828,298) 
Gain on valuation of cash flow hedge 
derivatives 
20 
- 
- 
- 
- 
927 
927 
- 
927 
Total comprehensive income for the year 
 
- 
- 
- 
18,515,268 
(669,607) 
17,845,661 
991,750 
18,837,411 
Dividends declared 
19 
- 
- 
- 
(9,809,437) 
- 
(9,809,437) 
(101,984) 
(9,911,421) 
Capital transactions under common control 
 
- 
- 
- 
- 
- 
- 
(9,368) 
(9,368) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
230 
230 
Others 
 
- 
- 
- 
- 
11,409 
11,409 
- 
11,409 
Total transactions with owners 
 
- 
- 
- 
(9,809,437) 
11,409 
(9,798,028) 
(111,122) 
(9,909,150) 
Balance as of December 31, 2023 
  
119,467 
778,047 
4,403,893 
346,652,238 
1,280,130 
353,233,775 
10,444,090 
363,677,865 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 12 - 
(In thousands of US dollars (Note 2.18)) 
 
For the year ended December 31, 2023 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2023 
 
91,467 
595,693 
3,371,737 
258,740,703 
1,484,036 
264,283,636 
7,322,039 
271,605,675 
Profit for the year 
 
- 
- 
- 
11,081,218 
- 
11,081,218 
776,115 
11,857,333 
Gain (loss) on valuation of financial 
assets at fair value through other 
comprehensive income, net of tax 
6, 20 
- 
- 
- 
3,094,560 
(1,955,938) 
1,138,622 
(4,660) 
1,133,962 
Share of other comprehensive income of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
53,714 
53,714 
3,794 
57,508 
Foreign currency translation differences 
for foreign operations, net of tax 
20 
- 
- 
- 
- 
1,999,752 
1,999,752 
7,322 
2,007,074 
Remeasurement of net defined benefit 
assets, net of tax 
14, 20 
- 
- 
- 
- 
(610,906) 
(610,906) 
(23,261) 
(634,167) 
Gain on valuation of cash flow hedge 
derivatives 
20 
- 
- 
- 
- 
710 
710 
- 
710 
Total comprehensive income for the year 
 
- 
- 
- 
14,175,778 
(512,668) 
13,663,110 
759,310 
14,422,420 
Dividends declared 
19 
- 
- 
- 
(7,510,364) 
- 
(7,510,364) 
(78,082) 
(7,588,446) 
Capital transactions under common control 
 
- 
- 
- 
- 
- 
- 
(7,172) 
(7,172) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
176 
176 
Others 
 
- 
- 
- 
- 
8,734 
8,734 
- 
8,734 
Total transactions with owners 
  
- 
- 
- 
(7,510,364) 
8,734 
(7,501,630) 
(85,078) 
(7,586,708) 
Balance as of December 31, 2023 
  
91,467 
595,693 
3,371,737 
265,406,117 
980,102 
270,445,116 
7,996,271 
278,441,387 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes. 
 
 
- 13 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Operating activities 
 
 
 
 
 
Profit for the year 
 
15,487,100 
55,654,077 
11,857,333 
42,610,233 
Adjustments 
27 
36,519,534 
33,073,439 
27,960,321 
25,321,899 
Changes in assets and liabilities arising  
from operating activities 
27 
(5,458,745) 
(16,998,948) 
(4,179,359) (13,014,844) 
Cash generated from operations 
 
46,547,889 
71,728,568 
35,638,295 
54,917,288 
Interest received 
 
4,786,010 
2,136,795 
3,664,296 
1,635,987 
Interest paid 
 
(844,691) 
(714,543) 
(646,718) 
(547,073) 
Dividends received 
 
269,169 
529,421 
206,083 
405,339 
Income tax paid 
  
(6,620,950) 
(11,498,895) 
(5,069,175) 
(8,803,859) 
Net cash from operating activities 
  
44,137,427 
62,181,346 
33,792,781 
47,607,682 
  
 
 
 
 
Investing activities 
 
 
 
 
 
Net decrease in short-term financial instruments 
 
39,421,565 
15,214,321 
30,182,192 
11,648,486 
Net decrease (increase) in short-term financial 
assets at amortized cost 
 
(195,616) 
3,050,104 
(149,769) 
2,335,240 
Net decrease in short-term financial assets at  
fair value through profit or loss 
 
2,718 
11,677 
2,081 
8,940 
Disposal of long-term financial instruments 
 
4,565,426 
8,272,909 
3,495,411 
6,333,958 
Acquisition of long-term financial 
instruments 
 
(5,307,770) 
(4,393,754) 
(4,063,769) 
(3,363,974) 
Disposal of financial assets at fair value  
 through other comprehensive income 
 
6,521,568 
496,090 
4,993,085 
379,820 
Acquisition of financial assets at fair value  
through other comprehensive income 
 
(124,488) 
(37,687) 
(95,311) 
(28,854) 
 Disposal of financial assets at fair value through 
profit or loss 
 
63,962 
166,315 
48,971 
127,335 
Acquisition of financial assets at fair value  
 through profit or loss 
 
(130,459) 
(158,244) 
(99,883) 
(121,156) 
 Disposal of investment in associates and joint 
ventures 
 
33,457 
13,233 
25,616 
10,132 
Acquisition of investment in associates and 
joint ventures 
 
(78,690) 
(907,958) 
(60,247) 
(695,157) 
Disposal of property, plant and equipment 
 
98,341 
217,878 
75,292 
166,813 
Acquisition of property, plant and equipment 
 
(57,611,292) 
(49,430,428) 
(44,108,728) (37,845,242) 
Disposal of intangible assets 
 
11,744 
23,462 
8,992 
17,963 
Acquisition of intangible assets 
 
(2,922,875) 
(3,696,304) 
(2,237,830) 
(2,829,988) 
Cash outflow from business combinations 
 
(356,511) 
(31,383) 
(272,954) 
(24,028) 
Cash outflow from other investing activities 
  
(913,897) 
(413,035) 
(699,705) 
(316,230) 
Net cash used in investing activities 
  
(16,922,817) 
(31,602,804) 
(12,956,556) (24,195,942) 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes. 
 
 
- 14 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
       
 
KRW 
KRW 
USD 
USD 
Financing activities 
 
 
 
 
 
Net increase (decrease) in short-term borrowings 
27 
2,145,400 
(8,339,149) 
1,642,575 
(6,384,673) 
Increase in long-term borrowings  
27 
354,712 
271,997 
271,577 
208,248 
Repayment of debentures and long-term borrowings 
27 
(1,219,579) 
(1,508,465) 
(933,742) 
(1,154,921) 
Dividends paid 
 
(9,864,474) 
(9,814,426) 
(7,552,502) 
(7,514,184) 
Net decrease in non-controlling interests 
  
(9,118) 
(6) 
(6,981) 
(4) 
Net cash used in financing activities 
  
(8,593,059) 
(19,390,049) 
(6,579,073) 
(14,845,534) 
  
 
 
 
 
Reclassification to assets held-for-sale 
33 
(14,153) 
- 
(10,836) 
- 
Effect of foreign exchange rate changes  
  
792,785 
(539,198) 
606,977 
(412,822) 
Net increase in cash and cash equivalents 
  
19,400,183 
10,649,295 
14,853,293 
8,153,384 
  
 
 
 
 
Cash and cash equivalents 
 
 
 
 
 
Beginning of the year 
  
49,680,710 
39,031,415 
38,036,865 
29,883,483 
End of the year 
  
69,080,893 
49,680,710 
52,890,158 
38,036,867 
 
 
 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 15 - 
 
As of December 31, 2023 and 2022, and 
For the years ended December 31, 2023 and 2022 
1. General Information 
1.1 Company Overview 
 
Samsung Electronics Co., Ltd. (“SEC”) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares 
on the Korea Stock Exchange in 1975. SEC and its subsidiaries (collectively referred to as the “Company”) operate four 
business divisions: DX, DS, SDC and Harman. DX (Device eXperience) division comprises businesses for digital televisions, 
refrigerators, smartphones and communication systems. DS (Device Solutions) division comprises businesses for memory, 
foundry, and system Large Scale Integration (LSI). SDC includes display panels products. Harman division includes connected 
car systems, audio and visual products, enterprise automation solutions and connected services. SEC is domiciled in the 
Republic of Korea and is located in Suwon, the Republic of Korea. 
 
These consolidated financial statements have been prepared in accordance with Korean International Financial Reporting 
Standards (“Korean IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling company, consolidates its 232 
subsidiaries, including Samsung Display and Samsung Electronics America. The Company also applies the equity method of 
accounting for its 37 associates and joint ventures, including Samsung Electro-Mechanics Co., Ltd. 
 
1.2 Consolidated Subsidiaries  
 
The consolidated subsidiaries as of December 31, 2023 are as follows: 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
America 
Samsung Electronics America, Inc. (SEA) 
Sale of electronic devices 
100.0 
Samsung International, Inc. (SII) 
Manufacture of electronic devices 
100.0 
Samsung Mexicana S.A. de C.V (SAMEX) 
Manufacture of electronic devices 
100.0 
Samsung Electronics Home Appliances America, LLC (SEHA) 
Manufacture of home appliances 
100.0 
Samsung Research America, Inc. (SRA) 
R&D 
100.0 
Samsung Next LLC (SNX) 
Management of overseas subsidiaries 
100.0 
Samsung Next Fund LLC (SNXF) 
Venture capital investment fund 
100.0 
NeuroLogica Corp. 
Manufacture and sale of medical equipment 
100.0 
Samsung HVAC America, LLC 
Sale of air conditioning products 
100.0 
Joyent, Inc. 
Cloud services 
100.0 
SmartThings, Inc. 
Sale of smart home electronics 
100.0 
TeleWorld Solutions, Inc. (TWS) 
Installation of network devices 
100.0 
Samsung Semiconductor, Inc. (SSI) 
Sale of semiconductor and display panels 
100.0 
Samsung Federal, Inc. (SFI) 
R&D 
100.0 
Samsung Austin Semiconductor LLC. (SAS) 
Manufacture of semiconductors 
100.0 
Samsung Oak Holdings, Inc. (SHI) 
Management of overseas subsidiaries 
100.0 
SEMES America, Inc. 
Semiconductor equipment maintenance 
100.0 
Samsung Display America Holdings, Inc. (SDAH) 
Management of overseas subsidiaries 
100.0 
eMagin Corporation 
Development and manufacture of display 
panels 
100.0 
Samsung Electronics Canada, Inc. (SECA) 
Sale of electronic devices 
100.0 
AdGear Technologies Inc. 
Digital advertising platforms 
100.0 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 16 - 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
America 
Samsung Eletronica da Amazonia Ltda. (SEDA) 
Manufacture and sale of electronic devices 
100.0 
Samsung Electronics Mexico S.A. De C.V. (SEM) 
Sale of electronic devices 
100.0 
Samsung Electronics Digital Appliance Mexico, SA de CV (SEDAM) 
Manufacture of home appliances 
100.0 
Samsung Electronics Latinoamerica(Zona Libre), S. A. (SELA) 
Sale of electronic devices 
100.0 
Samsung Electronics Latinoamerica Miami, Inc. (SEMI) 
Sale of electronic devices 
100.0 
Samsung Electronica Colombia S.A. (SAMCOL) 
Sale of electronic devices 
100.0 
Samsung Electronics Argentina S.A. (SEASA) 
Marketing and related services 
100.0 
Samsung Electronics Chile Limitada (SECH) 
Sale of electronic devices 
100.0 
Samsung Electronics Peru S.A.C. (SEPR) 
Sale of electronic devices 
100.0 
Samsung Electronics Venezuela, C.A. (SEVEN) 
Marketing and related services 
100.0 
Samsung Electronics Panama. S.A. (SEPA) 
Consulting 
100.0 
Harman International Industries, Inc. 
Management of overseas subsidiaries 
100.0 
Harman Becker Automotive Systems, Inc. 
Manufacture and sale of audio products, 
R&D 
100.0 
Harman Connected Services, Inc. 
Connected service provider 
100.0 
Harman Connected Services Engineering Corp. 
Connected service provider 
100.0 
Harman da Amazonia Industria Eletronica e Participacoes Ltda. 
Manufacture and sale of audio products 
100.0 
Harman de Mexico, S. de R.L. de C.V. 
Manufacture of audio products 
100.0 
Harman do Brasil Industria Eletronica e Participacoes Ltda. 
Sale of audio products, R&D 
100.0 
Harman Financial Group LLC 
Management company 
100.0 
Harman International Industries Canada Ltd. 
Sale of audio products 
100.0 
Harman International Mexico, S. de R.L. de C.V. 
Sale of audio products 
100.0 
Harman KG Holding, LLC 
Management of overseas subsidiaries 
100.0 
Harman Professional, Inc. 
Sale of audio products, R&D 
100.0 
Roon Labs, LLC. 
Sale of audio products 
100.0 
Beijing Integrated Circuit Industry International Fund, L.P 
Venture capital investment fund 
61.4 
China Materialia New Materials 2016 Limited Partnership 
Venture capital investment fund 
99.0 
 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 17 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
Europe & 
CIS 
Samsung Electronics (UK) Ltd. (SEUK) 
Sale of electronic devices 
100.0 
Samsung Electronics Ltd. (SEL) 
Management of overseas subsidiaries 
100.0 
Samsung Semiconductor Europe Limited (SSEL) 
Sale of semiconductor and display panels 
100.0 
Samsung Electronics GmbH (SEG) 
Sale of electronic devices 
100.0 
Samsung Electronics Holding GmbH (SEHG) 
Management of overseas subsidiaries 
100.0 
Samsung Semiconductor Europe GmbH (SSEG) 
Sale of semiconductor and display panels 
100.0 
Samsung Electronics France S.A.S (SEF) 
Sale of electronic devices 
100.0 
Samsung Electronics Italia S.P.A. (SEI) 
Sale of electronic devices 
100.0 
Samsung Electronics Iberia, S.A. (SESA) 
Sale of electronic devices 
100.0 
Samsung Electronics Portuguesa, Unipessoal, Lda. (SEP) 
Sale of electronic devices 
100.0 
Samsung Electronics Hungarian Private Co. Ltd. (SEH) 
Manufacture and sale of electronic devices 
100.0 
Samsung Electronics Europe Logistics B.V. (SELS) 
Logistics 
100.0 
Samsung Electronics Benelux B.V. (SEBN) 
Sale of electronic devices 
100.0 
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 
Management of overseas subsidiaries 
100.0 
Samsung Electronics Nordic Aktiebolag (SENA) 
Sale of electronic devices 
100.0 
Samsung Electronics Slovakia s.r.o (SESK) 
Manufacture of TV and monitors 
100.0 
Samsung Display Slovakia, s.r.o., v likvidacii (SDSK) 
Toll processing of display panels 
100.0 
Samsung Electronics Polska, SP.Zo.o (SEPOL) 
Sale of electronic devices 
100.0 
Samsung Electronics Poland Manufacturing SP.Zo.o (SEPM) 
Manufacture of home appliances 
100.0 
Samsung Electronics Romania LLC (SEROM) 
Sale of electronic devices 
100.0 
Samsung Electronics Austria GmbH (SEAG) 
Sale of electronic devices 
100.0 
Samsung Electronics Switzerland GmbH (SESG) 
Sale of electronic devices 
100.0 
Samsung Electronics Czech and Slovak s.r.o. (SECZ) 
Sale of electronic devices 
100.0 
Samsung Electronics Baltics SIA (SEB) 
Sale of electronic devices 
100.0 
Samsung Electronics Greece S.M.S.A (SEGR) 
Sale of electronic devices 
100.0 
Samsung Electronics Air Conditioner Europe B.V. (SEACE) 
Sale of air conditioning products 
100.0 
Samsung Nanoradio Design Center (SNDC) 
R&D 
100.0 
Samsung Denmark Research Center ApS (SDRC) 
R&D 
100.0 
Samsung Cambridge Solution Centre Limited (SCSC) 
R&D 
100.0 
SAMSUNG Zhilabs, S.L. 
Development and sale of network solutions 
100.0 
FOODIENT LTD. 
R&D 
100.0 
Samsung Electronics Rus Company LLC (SERC) 
Sale of electronic devices 
100.0 
Samsung Electronics Rus Kaluga LLC (SERK) 
Manufacture of TV 
100.0 
Samsung Electronics Ukraine Company LLC (SEUC) 
Sale of electronic devices 
100.0 
Samsung R&D Institute Ukraine (SRUKR) 
R&D 
100.0 
Samsung Electronics Central Eurasia LLP (SECE) 
Sale of electronic devices 
100.0 
Samsung Electronics Overseas B.V. (SEO) 
Sale of electronic devices 
100.0 
Samsung R&D Institute Rus LLC (SRR) 
R&D 
100.0 
Samsung Electronics Caucasus Co. Ltd (SECC) 
Marketing 
100.0 
Samsung Electronics Uzbekistan Ltd. (SEUZ) 
Marketing 
100.0 
 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 18 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
Europe & 
CIS  
AKG Acoustics GmbH 
Manufacture and sale of audio products 
100.0 
Apostera UA, LLC 
Connected Service Provider 
100.0 
Harman Audio Iberia Espana Sociedad Limitada 
Sale of audio products 
100.0 
Harman Becker Automotive Systems GmbH 
Manufacture and sale of audio products, 
R&D 
100.0 
Harman Becker Automotive Systems Italy S.R.L. 
Sale of audio products 
100.0 
Harman Becker Automotive Systems Manufacturing Kft 
Manufacture of audio products, R&D 
100.0 
Harman Belgium SA 
Sale of audio products 
100.0 
Harman Connected Services AB. 
Connected service provider 
100.0 
Harman Finland Oy 
Connected service provider 
100.0 
Harman Connected Services GmbH 
Connected service provider 
100.0 
Harman Connected Services Poland Sp.zoo 
Connected service provider 
100.0 
Harman Connected Services UK Ltd. 
Connected service provider 
100.0 
Harman Consumer Nederland B.V. 
Sale of audio products 
100.0 
Harman Deutschland GmbH 
Sale of audio products 
100.0 
Harman France SNC 
Sale of audio products 
100.0 
Harman Holding GmbH & Co. KG 
Management company 
100.0 
Harman Hungary Financing Ltd. 
Financing company 
100.0 
Harman Inc. & Co. KG 
Management of overseas subsidiaries 
100.0 
Harman International Estonia OU 
R&D 
100.0 
Harman International Industries Limited 
Sale of audio products, R&D 
100.0 
Harman International Romania SRL 
R&D 
100.0 
Harman Management GmbH 
Management of overseas subsidiaries 
100.0 
Harman Professional Kft 
Manufacture of audio products, R&D 
100.0 
Harman Professional Denmark ApS 
Sale of audio products, R&D 
100.0 
Red Bend Software SAS 
Software design 
100.0 
Studer Professional Audio GmbH 
Sale of audio products, R&D 
100.0 
Harman Connected Services OOO 
Connected service provider 
100.0 
Harman RUS CIS LLC 
Sale of audio products 
100.0 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 19 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)* 
Middle East  
& Africa 
Samsung Gulf Electronics Co., Ltd. (SGE) 
Sale of electronic devices 
100.0 
Samsung Electronics Turkiye (SETK) 
Sale of electronic devices 
100.0 
Samsung Electronics Industry and Commerce Ltd. (SETK-P) 
Manufacture of electronic devices 
100.0 
Samsung Electronics Levant Co., Ltd. (SELV) 
Sale of electronic devices 
100.0 
Samsung Electronics Maghreb Arab (SEMAG) 
Sale of electronic devices 
100.0 
Samsung Electronics Egypt S.A.E (SEEG) 
Manufacture and sale of electronic devices 
100.0 
Samsung Electronics Israel Ltd. (SEIL) 
Marketing 
100.0 
Samsung Electronics Tunisia S.A.R.L (SETN) 
Marketing 
100.0 
Samsung Electronics Pakistan (Private) Ltd. (SEPAK) 
Marketing 
100.0 
Samsung Electronics Saudi Arabia Ltd. (SESAR) 
Sale of electronic devices 
100.0 
Samsung Semiconductor Israel R&D Center, Ltd. (SIRC) 
R&D 
100.0 
Corephotonics Ltd. 
R&D 
100.0 
Samsung Electronics South Africa(Pty) Ltd. (SSA) 
Sale of electronic devices 
100.0 
Samsung Electronics South Africa Production (Pty) Ltd. (SSAP) 
Manufacture of TV and monitors 
100.0 
Samsung Electronics West Africa Ltd. (SEWA) 
Marketing 
100.0 
Samsung Electronics East Africa Ltd. (SEEA) 
Marketing 
100.0 
Global Symphony Technology Group Private Ltd. 
Management of overseas subsidiaries 
100.0 
Harman Connected Services Morocco 
Connected service provider 
100.0 
Harman Industries Holdings Mauritius Ltd. 
Management of overseas subsidiaries 
100.0 
Red Bend Ltd. 
Manufacture of audio products 
100.0 
Asia 
(Excluding 
China) 
Samsung Asia Pte. Ltd. (SAPL) 
Management of overseas subsidiaries 
100.0 
Samsung Electronics Singapore Pte. Ltd. (SESP) 
Sale of electronic devices 
100.0 
Samsung Malaysia Electronics (SME) Sdn. Bhd. (SME) 
Sale of electronic devices 
100.0 
Samsung Electronics Display (M) Sdn. Bhd. (SDMA) 
Manufacture of electronic devices 
100.0 
Samsung Electronics (M) Sdn. Bhd. (SEMA) 
Manufacture of home appliances 
100.0 
Samsung Vina Electronics Co., Ltd. (SAVINA) 
Sale of electronic devices 
100.0 
Samsung Electronics Vietnam Co., Ltd. (SEV) 
Manufacture of electronic devices 
100.0 
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 
Manufacture of communication equipment 
100.0 
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 
Manufacture and sale of electronic devices 
100.0 
Samsung Display Vietnam Co., Ltd. (SDV) 
Manufacture of display panels 
100.0 
DOWOOINSYS VINA COMPANY LIMITED 
Manufacture of display panel components 
100.0 
PT Samsung Electronics Indonesia (SEIN) 
Manufacture and sale of electronic devices 
100.0 
PT Samsung Telecommunications Indonesia (STIN) 
Sale of electronic devices and services 
100.0 
Thai Samsung Electronics Co., Ltd. (TSE) 
Manufacture and sale of electronic devices 
91.8 
Laos Samsung Electronics Sole Co., Ltd (LSE) 
Marketing 
100.0 
Samsung Electronics Philippines Corporation (SEPCO) 
Sale of electronic devices 
100.0 
Samsung Electronics Australia Pty. Ltd. (SEAU) 
Sale of electronic devices 
100.0 
Samsung Electronics New Zealand Limited (SENZ) 
Sale of electronic devices 
100.0 
Samsung India Electronics Private Ltd. (SIEL) 
Manufacture and sale of electronic devices 
100.0 
Red Brick Lane Marketing Solutions Pvt. Ltd. 
Marketing 
100.0 
Samsung Display Noida Private Limited (SDN) 
Manufacture of display panels 
100.0 
Samsung R&D Institute India-Bangalore Private Limited (SRI-Bangalore) 
R&D 
100.0 
Samsung R&D Institute Bangladesh Limited (SRBD) 
R&D 
100.0 
Samsung Nepal Services Pvt. Ltd. (SNSL) 
Service 
100.0 
Samsung Japan Corporation (SJC) 
Sale of semiconductor and display panels 
100.0 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 20 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(
*
) 
Asia 
(Excluding 
China) 
Samsung R&D Institute Japan Co., Ltd. (SRJ) 
R&D 
100.0 
Samsung Electronics Japan Co., Ltd. (SEJ) 
Sale of electronic devices 
100.0 
Harman Connected Services Corp. India Pvt. Ltd. 
Connected service provider 
100.0 
Harman International (India) Private Limited 
Sale of audio products, R&D 
100.0 
Harman International Industries PTY Ltd. 
Management of overseas subsidiaries 
100.0 
Harman International Japan Co., Ltd. 
Sale of audio products, R&D 
100.0 
Harman Singapore Pte. Ltd. 
Sale of audio products 
100.0 
China  
Samsung (CHINA) Investment Co., Ltd. (SCIC) 
Sale of electronic devices 
100.0 
Samsung Electronics Hong Kong Co., Ltd. (SEHK) 
Sale of electronic devices 
100.0 
Samsung Electronics Taiwan Co., Ltd. (SET) 
Sale of electronic devices 
100.0 
Tianjin Samsung Electronics Co., Ltd. (TSEC) 
Manufacture of TV and monitors 
91.2 
Suzhou Samsung Electronics Co., Ltd. (SSEC) 
Manufacture of home appliances 
88.3 
Samsung Suzhou Electronics Export Co., Ltd. (SSEC-E) 
Manufacture of home appliances 
100.0 
Samsung Electronics Suzhou Computer Co., Ltd. (SESC) 
R&D 
100.0 
Tianjin Samsung Telecom Technology Co., Ltd. (TSTC) 
Manufacture of communication equipment 
90.0 
Beijing Samsung Telecom R&D Center (SRC-Beijing) 
R&D 
100.0 
Samsung Electronics China R&D Center (SRC-Nanjing) 
R&D 
100.0 
Samsung Mobile R&D Center China-Guangzhou (SRC-Guangzhou) 
R&D 
100.0 
Samsung R&D Institute China-Shenzhen (SRC-Shenzhen) 
R&D 
100.0 
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 
Sale of semiconductor and display panels 
100.0 
Samsung (China) Semiconductor Co., Ltd. (SCS) 
Manufacture of semiconductors 
100.0 
Samsung SemiConductor Xian Co., Ltd. (SSCX) 
Sale of semiconductor and display panels 
100.0 
Samsung Electronics Suzhou Semiconductor Co., Ltd. (SESS) 
Toll processing of semiconductors 
100.0 
Tianjin Samsung LED Co., Ltd. (TSLED) 
Manufacture of LED 
100.0 
Samsung Semiconductor (China) R&D Co., Ltd. (SSCR) 
R&D 
100.0 
Samsung Display Dongguan Co., Ltd. (SDD) 
Manufacture of display panels 
100.0 
Samsung Display Tianjin Co., Ltd. (SDT) 
Manufacture of display panels 
95.0 
SEMES (XIAN) Co., Ltd. 
Semiconductor/FPD equipment services 
100.0 
Samsung Semiconductor Investment L.P.Ⅰ 
Venture capital investment fund 
99.0 
Harman (China) Technologies Co., Ltd. 
Manufacture of audio products 
100.0 
Harman (Suzhou) Audio and Infotainment Systems Co., Ltd. 
Sale of audio products 
100.0 
Harman Automotive Electronic Systems (Suzhou) Co., Ltd. 
Manufacture of audio products, R&D 
100.0 
Harman Commercial (Shanghai) Co., Ltd. 
Sale of audio products 
100.0 
Harman Connected Services Solutions (Chengdu) Co., Ltd. 
Connected service provider 
100.0 
Harman Holding Limited 
Sale of audio products 
100.0 
Harman International (China) Holdings Co., Ltd. 
Sale of audio products, R&D 
100.0 
Harman Technology (Shenzhen) Co., Ltd. 
Sale of audio products, R&D 
100.0 
 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 21 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(
*
) 
Domestic 
Samsung Display Co., Ltd. 
Manufacture and sale of display panels 
84.8 
SU Materials 
Manufacture of display panel components 
50.0 
STECO Co., Ltd. 
Manufacture of semiconductor components 
70.0 
SEMES Co., Ltd. 
Manufacture and sale of semiconductor/FPD 
91.5 
Samsung Electronics Service Co., Ltd. 
Repair services for electronic devices 
99.3 
Samsung Electronics Service Customer Satisfaction Co., Ltd. 
Call center for repair services for electronic devices 
100.0 
Samsung Electronics Sales Co., Ltd. 
Sale of electronic devices 
100.0 
Samsung Electronics Logitech Co., Ltd. 
General logistics agency 
100.0 
Samsung Medison Co., Ltd. 
Manufacture and sale of medical equipment 
68.5 
Stella Forest of Hope 
Manufacture of food 
100.0 
Mirero System Co., Ltd. 
Development and supply of semiconductor 
process defect and quality control software 
99.9 
Dowooinsys Co., Ltd. 
Manufacture of display panel components 
69.0 
Gf-System Co., Ltd. 
Manufacture of display panel components 
100.0 
Harman International Korea 
Software development and supply 
100.0 
Samsung Venture Capital Union #21 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #22 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #26 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #28 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #29 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #32 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #33 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #37 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #40 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #42 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #43 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #45 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #48 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #52 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #55 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #56 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #57 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #62 
Venture capital investment fund 
99.0 
Growth Type Private Equity Trust Specialized in 
Semiconductors 
Investment in semiconductor industry 
66.7 
System LSI Mutual Benefit Private Equity Trust 
Investment in semiconductor industry 
62.5 
Semiconductor Ecosystem Private Equity Trust 
Investment in semiconductor industry 
66.7 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 22 - 
1.3 Summary of Financial Data of Major Consolidated Subsidiaries 
 
Summary of financial data of major consolidated subsidiaries is as follows:  
 
(1) 2023 
(In millions of Korean won) 
As of December 31, 2023 
For the year ended December 31, 2023 
Major subsidiaries (*1) 
Assets 
Liabilities 
Sales 
Profit (loss)  
for the year 
Samsung Display Co., Ltd. 
65,328,568  
7,266,213  
27,083,336  
8,268,314  
Samsung Electronics America, Inc. (SEA) 
41,926,899  
15,322,780  
39,551,809  
477,338  
Samsung Asia Pte. Ltd. (SAPL) 
22,234,942  
282,614  
- 
14,140,195  
Harman and its subsidiaries (*2) 
17,956,557  
6,009,675  
14,367,766  
896,384  
Samsung Austin Semiconductor LLC. (SAS) 
16,714,945  
7,791,914  
4,109,744  
301,778  
Samsung (China) Semiconductor Co., Ltd. (SCS) 
15,808,283  
870,453  
8,693,788  
877,892  
Samsung Semiconductor, Inc. (SSI) 
12,796,440  
6,276,293  
23,465,031  
136,458  
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 
12,554,481  
3,593,527  
30,639,349  
2,240,480  
Samsung (CHINA) Investment Co., Ltd. (SCIC) 
10,222,557  
8,797,991  
3,148,858  
189,887  
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 
9,660,481  
4,585,806  
- 
103,387  
Samsung India Electronics Private Ltd. (SIEL) 
7,738,259  
3,373,730  
15,216,331  
1,153,256  
Samsung Display Vietnam Co., Ltd. (SDV) 
7,383,485  
1,570,459  
24,200,246  
1,143,824  
Samsung Electronics Vietnam Co., Ltd. (SEV) 
7,301,860  
2,215,062  
20,154,119  
1,476,382  
Samsung Eletronica da Amazonia Ltda. (SEDA) 
5,542,627  
1,587,911  
7,222,304  
333,812  
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 
5,262,086  
4,552,030  
15,649,307  
244,210  
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 
4,043,677  
843,736  
6,152,983  
402,418  
Thai Samsung Electronics Co., Ltd. (TSE) 
3,039,379  
640,512  
4,213,492  
150,510  
Samsung Electronics (UK) Ltd. (SEUK) 
2,902,722  
1,976,067  
5,859,133  
185,113  
SEMES Co., Ltd. 
2,187,919  
659,607  
2,502,143  
58,754  
Samsung Electronics Mexico S.A. De C.V. (SEM) 
2,153,032  
1,038,115  
3,638,080  
148,873  
Samsung Electronics GmbH (SEG) 
2,097,706  
2,033,152  
6,374,670  
(3,157) 
Samsung International, Inc. (SII) 
1,879,442  
383,763  
6,553,383  
141,226  
Samsung Electronics Taiwan Co., Ltd. (SET) 
1,797,627  
1,139,056  
4,108,479  
56,467  
Samsung Electronics Benelux B.V. (SEBN) 
1,794,552  
639,120  
2,833,717  
140,313  
Samsung Electronics Europe Logistics B.V. (SELS) 
1,639,004  
1,443,005  
15,462,852  
4,984  
(*1) Summary of condensed financial information is based on separate financial statements of each subsidiary.  
(*2) Consolidated financial data of an intermediate company, Harman International Industries, Inc. and its subsidiaries. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 23 - 
(2) 2022 
(In millions of Korean won) 
As of December 31, 2022 
For the year ended December 31, 2022 
Major subsidiaries (*1) 
Assets 
Liabilities 
Sales 
Profit (loss)  
for the year 
Samsung Display Co., Ltd. 
57,302,567  
7,282,718  
30,779,405  
4,365,588  
Samsung Electronics America, Inc. (SEA) 
37,883,156  
12,258,315  
46,738,920  
219,670  
Samsung Asia Pte. Ltd. (SAPL) 
26,894,611  
2,678,285  
- 
8,699,679  
Harman and its subsidiaries (*2) 
17,102,324  
6,380,456  
13,211,151  
631,019  
Samsung (China) Semiconductor Co., Ltd. (SCS) 
17,095,000  
2,970,835  
9,679,757  
638,385  
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 
15,718,299  
2,358,140  
36,336,963  
2,721,701  
Samsung (CHINA) Investment Co., Ltd. (SCIC) 
13,830,988  
9,764,636  
2,865,831  
257,878  
Samsung Semiconductor, Inc. (SSI) 
12,199,102  
5,930,369  
43,009,331  
88,467  
Samsung Electronics Vietnam Co., Ltd. (SEV) 
10,931,037  
1,408,387  
23,667,565  
1,646,165  
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 
10,841,515  
6,272,800  
- 
57,997  
Samsung Austin Semiconductor LLC. (SAS) 
9,301,017  
828,494  
3,663,909  
208,879  
Samsung Display Vietnam Co., Ltd. (SDV) 
7,471,680  
1,608,448  
25,773,970  
1,301,926  
Samsung India Electronics Private Ltd. (SIEL) 
6,772,537  
3,571,863  
16,180,492  
508,510  
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 
5,067,891  
2,858,382  
21,370,622  
318,578  
Samsung Eletronica da Amazonia Ltda. (SEDA) 
4,600,508  
1,342,517  
7,485,104  
(38,490) 
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 
3,732,057  
980,448  
6,253,401  
386,119  
Thai Samsung Electronics Co., Ltd. (TSE) 
3,263,473  
486,820  
4,824,734  
168,524  
Samsung Electronics (UK) Ltd. (SEUK) 
2,819,792  
1,708,064  
5,929,357  
243,396  
Samsung Electronics Benelux B.V. (SEBN) 
2,377,730  
597,044  
2,834,008  
25,411  
Samsung Electronics Hungarian Private Co. Ltd. (SEH) 
2,374,317  
452,628  
3,935,745  
199,742  
Samsung Electronics Europe Logistics B.V. (SELS) 
2,194,975  
2,021,491  
15,409,984  
20,347  
Samsung Display Dongguan Co., Ltd. (SDD) 
2,135,132  
265,835  
2,556,608  
111,643  
SEMES Co., Ltd. 
2,065,558  
602,323  
2,889,238  
185,762  
Samsung Electronics GmbH (SEG) 
1,968,273  
1,907,132  
6,567,011  
3,695  
Samsung Electronics Mexico S.A. De C.V. (SEM) 
1,816,895  
996,002  
3,270,016  
110,386  
(*1) Summary of condensed financial information is based on separate financial statements of each subsidiary.  
(*2) Consolidated financial data of an intermediate company, Harman International Industries, Inc. and its subsidiaries. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 24 - 
1.4 Changes in Consolidation Scope  
 
Changes in consolidation scope during the year ended December 31, 2023 are as follows: 
Change 
Area 
Subsidiary 
Description 
Included 
Domestic 
Samsung Venture Capital Union #62 
Establishment 
Semiconductor Ecosystem Private Equity Trust 
Establishment 
America 
Samsung Federal, Inc. (SFI) 
Establishment 
Samsung Display America Holdings, Inc. (SDAH) 
Establishment 
eMagin Corporation 
Acquisition 
Roon Labs, LLC. 
Acquisition 
Excluded 
America 
Dacor Holdings, Inc. 
Merger 
Dacor, Inc. 
Merger 
Europe & CIS 
Red Bend Software Ltd. 
Liquidation 
Harman Finance International GP S.a.r.l 
Liquidation 
Harman Finance International, SCA 
Liquidation 
Harman Automotive UK Limited 
Liquidation 
 
 
2. Material Accounting Policies 
The followings are material accounting policies applied on financial statements. Unless mentioned otherwise, these policies 
are consistent throughout the accounting periods denoted. 
 
2.1 Basis of Presentation 
 
The Company’s financial statements have been written in accordance with the Korean International Financial Reporting 
Standards (“Korean IFRS”). The Korean IFRS refers to standards selected by the Republic of Korea among accounting 
standards and interpretations published by International Accounting Standards Board (IASB). 
 
The Korean IFRS permits application of material accounting estimates on the financial statements and requires management’s 
judgements in applying accounting policies. The areas involving a higher degree of judgment or complexity, or areas where 
assumptions and estimates are material to the financial statements are disclosed in Note 3. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 25 - 
2.2 Changes in Accounting Policies and Disclosures 
 
(A) 
New and amended standards adopted by the Company 
 
The Company applied the following amended standards for the first time for the annual reporting period commencing on 
January 1, 2023: 
 
Amendments to Korean IFRS 1001, Presentation of Financial Statements 
 
The amendments replace the term ‘significant’ accounting policy information with ‘material’ accounting policy and clarify its 
meaning. These amendments do not result in a change in accounting policy but affects the accounting policy information 
disclosed in the consolidated financial statements. In addition, IFRS Practice Statement 2, Making Materiality Judgments has 
been amended to provide guidance on the application of the concept of materiality. The Company has adopted the amendments 
to the standard and discloses the Company’s material accounting policies in Note 2. 
 
Amendments to Korean IFRS 1008, Accounting Policies, Changes in Accounting Estimates and Errors 
 
The amendments clarify how accounting estimates are defined and distinguished from changes in accounting policies. The 
adoption of the amendments does not have a significant impact on the Company’s consolidated financial statements. 
 
Amendments to Korean IFRS 1012, Income Tax 
 
The amendments add to a condition to the initial recognition exemption that the initial recognition exemption does not apply 
to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. The 
adoption of the amendments does not have a significant impact on the Company’s consolidated financial statements. 
 
Amendments to Korean IFRS 1012, Income Tax 
 
The amendments clarify that Korean IFRS 1012, Income Taxes, applies to income taxes arising from tax law enacted or 
substantively enacted to implement the Pillar Two Model Rules issued by the Organization for Economic Co-operation and 
Development (OECD). 
 
However, a temporary exemption from the requirements of Korean IFRS 1012, Income Taxes, has been adopted to allow the 
Company to neither recognize nor disclose deferred tax assets and liabilities relating to Pillar Two income taxes. 
 
(B) 
New and amended standards not yet adopted by the Company 
 
The amended accounting standards that have been issued but not yet effective for the annual reporting period commencing on 
January 1, 2023 which have not been early adopted by the Company are as follows:  
 
Amendments to Korean IFRS 1001, Presentation of Financial Statements 
 
The amendments to Korean-IFRS 1001 clarify that the classification of liabilities as current or non-current should be based 
on rights that are in existence at the end of the reporting period and that the classification is unaffected by management’s 
intentions or expectations about whether an entity will exercise its right to defer settlement of a liability. The amendments also 
introduce a definition of settlement to make clear that settlement includes the transfer to the counterparty of the entity's own 
equity instruments, however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity 
instruments is recognized separately from the liability as an equity component of a compound financial instrument. The 
amendments are applied for annual periods beginning on or after January 1, 2024, with early application permitted. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 26 - 
Amendments to Korean IFRS 1116, Leases 
 
The amendments add requirements for the subsequent measurement of sale-and-leaseback transactions that are accounted for 
as sales in accordance with Korean IFRS 1115, Revenue from Contracts with Customers. The amendments require the seller-
lessee to calculate the ‘lease payments’ or ‘revised lease payments’ in a way that does not result in the seller-lessee recognizing 
any gain or loss for the rights of use that the seller-lessee continues to retain after the lease commences. The amendments are 
effective for annual reporting periods beginning on or after January 1, 2024, with early application permitted. 
 
Amendments to Korean IFRS 1007, Statement of Cash Flows, and 1107, Financial Instruments: Presentation 
 
The amendments add to the disclosure objectives in Korean IFRS 1007, Statement of Cash Flows, that information about 
supplier financing arrangements should be disclosed to enable users of financial statements to assess the impact of those 
arrangements on the Company’s liabilities and cash flows. The amendments also amend Korean IFRS 1107, Financial 
Instruments: Presentation, to add supplier financing arrangements as an example of a requirement to disclose information 
about an entity’s exposure to concentrations of liquidity risk. 
 
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, and include specific 
transitional provisions for the first annual period in which they are applied. Early application is permitted. 
 
 
2.3 Consolidation 
 
The Company prepares its consolidated financial statements in accordance with Korean IFRS 1110, Consolidated Financial 
Statements.  
 
(A) 
Non-controlling interests 
 
Each component of profit or loss and other comprehensive income is attributable to the owners of the parent and the non-
controlling interests, and total comprehensive income is attributable to the owners of the parent and the non-controlling 
interests, even if the non-controlling interests have a negative balance.  
 
(B) 
Elimination of intercompany transactions 
 
Intercompany transactions, balances, income and expenses and unrealized gains and losses (excluding foreign exchange gains 
and losses) are eliminated on consolidation. The Company’s share of unrealized losses on transactions with associates 
accounted for using the equity method are eliminated in the same way as unrealized gains unless there is evidence of 
impairment of the asset.  
 
 
  2.4 Functional and Presentation Currency 
 
(A) 
Functional and presentation currency 
 
The Company measures the items included in the financial statements of each component using the currency of the primary 
economic environment in which each it operates (“functional currency”). The functional currency of the parent company is 
Korean won (KRW) and the consolidated financial statements are presented in Korean won (KRW). 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 27 - 
(B) 
Translation into the presentation currency 
 
The results and financial position of all entities subjected to consolidation that have a functional currency different from the 
parent’s presentation currency are translated into the parent’s presentation currency as follows: 
 
(1) Assets and liabilities are translated at the closing rate at the end of the reporting date. 
(2) Income and expenses in the statement of profit or loss are translated at average exchange rates for the period.  
However, if this average rate is not a reasonable approximation of the cumulative effect of the exchange rates at the 
dates of the transactions, the transactions are translated at the exchange rates at the dates of transactions.  
(3) Exchange differences arising on translation in (1) and (2) above are recognized in other comprehensive income. 
 
 
2.5 Cash and Cash Equivalents 
 
Cash and cash equivalents include cash on hand, deposits held at call with banks, and highly liquid short-term investment 
assets that are readily convertible to known amounts of cash at the date of acquisition and which are subject to an insignificant 
risk of changes in value. 
 
 
2.6 Financial Assets 
 
(A) 
Classification 
 
Financial instruments are classified based on the business model for managing the financial assets and the contractual cash 
flow characteristics of the financial asset. The Company considers the contractual terms of the relevant financial instrument 
and assesses whether the contractual cash flows consist solely of payments of principal and interest on the principal amount 
outstanding. 
 
(B) 
Impairment 
 
The Company assesses the expected credit losses of debt instruments carried at amortized cost or fair value through other 
comprehensive income on a forward-looking basis. However, the Company applies the simplified approach for trade 
receivables, which requires expected credit losses to be recognized over the life of the receivable from initial recognition. 
 
 
2.7 Trade Receivables 
 
Trade receivables are recognized at initial transaction price, unless they contain a significant financing component, and are 
subsequently measured at amortized cost using the effective interest method less any allowance for impairment.  
 
 
2.8 Inventories 
 
The Company determines the unit cost of inventories, except for materials in transit, using the average cost method. The cost 
of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production 
overheads based on normal operating capacity, excluding the cost of idle production equipment and scrapping costs.  
 
The Company measures inventories at the lower of cost and net realizable value. Net realizable value is the estimated selling 
price in the ordinary course of business less the applicable variable selling expenses, and reflects the decrease in selling price, 
the increase in costs to completion, or decrease in value due to excess or obsolete inventory.  
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 28 - 
2.9 Property, Plant and Equipment 
 
Depreciation of property, plant and equipment begins when assets are considered by management to be available for their 
intended use, such as in the production of products. 
 
The Company’s property, plant and equipment is depreciated on a straight-line method over the estimated useful lives of the 
assets, less any residual values. Land is not depreciated. Costs that are directly attributable to the acquisition, construction of 
a qualifying asset, including capitalized interest costs, are depreciated over the estimated useful lives. 
 
The estimated useful lives of property, plant and equipment used by the Company for each asset category are as follows: 
 
 
Estimated useful lives 
Buildings and structures 
15, 30 years 
Machinery and equipment 
5 years 
Other 
5 years 
 
 
2.10 Intangible Assets 
 
Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets of subsidiaries, 
associates and joint ventures, businesses and other entities acquired at the date of acquisition and is recognized as an intangible 
assets in respect of acquisitions of businesses of subsidiaries and as an investment in associates and joint ventures in respect 
of acquisitions of interests in associates and joint ventures.  
 
Intangible assets, other than goodwill, are initially recognized at their historical cost and are subsequently stated at cost less 
accumulated amortization and accumulated impairment losses. 
 
Membership rights are regarded as intangible assets with indefinite useful life and not amortized as there are no foreseeable 
restrictions on their use. However, whenever there is an indication of impairment, such as a decline in the market value of 
membership rights, a reasonable estimate is made to reflect the impairment. Intangible assets with finite useful lives, such as 
patents, trademarks and other intangible assets, are amortized on a straight-line method over their estimated useful lives.  
 
The estimated useful lives of intangible assets used by the Company are as follows: 
 
 
Estimated useful lives 
Patents, trademarks and other intangible assets 
3 - 25 years 
 
 
2.11 Financial Liabilities 
 
The Company classifies financial liabilities into financial liabilities at fair value through profit or loss and other financial 
liabilities and recognizes them on the consolidated statement of financial position when the Company becomes a party to a 
contract, depending on the substance of the contractual terms.  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 29 - 
2.12 Employee Benefits 
 
The Company operates various types of post-employment benefit plans, including defined benefit plans and defined 
contribution plans. The defined benefit liability (asset) recognized in the consolidated statement of financial position in respect 
of defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan 
assets, less any deficit (excess of plan assets over the asset recognition threshold) and is calculated annually by an independent 
actuary using the projected unit credit method.  
 
 
2.13 Income Tax Expense 
 
The Company applies the exemption to the recognition and disclosure of deferred tax assets and liabilities related to the Pillar 
Two Model Rules of OECD. Furthermore, as the relevant legislation will be effective from January 1, 2024, the Company has 
not recognized any current tax expense related to Pillar Two in the fiscal year ended December 31, 2023.  
 
The Company recognizes deferred tax liabilities for taxable temporary differences associated with investments in subsidiaries, 
associates and joint ventures, except where the Company is able to control the timing of the reversal of the temporary 
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are 
recognized for deductible temporary differences arising on these assets only to the extent that it is probable that the temporary 
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences 
can be utilized.  
 
 
2.14 Derivative Instruments  
 
The Company recognizes its rights and obligations under derivative contracts as assets and liabilities at fair value and records 
gains and losses on these contracts in the statement of profit or loss. However, effective portion of changes in the fair value of 
cash flow hedges are deferred in equity.  
 
The Company applies cash flow hedge accounting for hedges of risks including changes in the price of inventories. The 
effective portion of the change in fair value of a derivative that is designated as a cash flow hedge is recognized in other 
comprehensive income, while the ineffective portion is recognized in ‘financial income’ or ‘financial expense’.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 30 - 
2.15 Revenue Recognition 
 
The Company’s revenue primarily represents the fair value of the consideration received or receivable for the sale of goods in 
the ordinary course of the Company’s activities. Revenue is net of value-added tax, returns, sales incentives, discounts and 
others. 
 
(A) 
Identification of performance obligations 
 
The Company is required to transfer control of goods and services under contracts with customers. For the export of products 
and goods under Incoterms Group C terms (such as CIF), the Company recognize the transportation services (including 
insurance) provided after the control of the goods has passed to the customer as a separate performance obligation.  
 
(B) 
Performance obligations satisfied at a point of time 
 
The Company’s revenue is primarily derived from the sale of goods and is recognized when control of the goods passes to 
the customer.  
 
(C) 
Performance obligations satisfied over time 
 
The Company recognizes revenue over time for sales of software, transportation services, installation services, and etc. where 
the customer has direct control over the outcome during the performance of the service.  
 
(D) 
Variable consideration 
 
The Company provides a variety of sales promotions including incentives, promotion and sales allowances. Where these sales 
promotion policies result in variability in the consideration promised to customers, the Company estimates the variable 
consideration using either the expected value or the most likely amount whichever method the Company expects to better 
predict the amount of consideration to which it will be entitled. The estimate of variable consideration is included in transaction 
price only to the extent that it is highly probable that a significant portion of the cumulative revenue already recognized will 
not be reversed. Revenue and contract liabilities are recognized when the related revenue is earned or when the decision to 
pay the variable consideration to the customer is made, whichever is later.  
 
The Company recognizes contract liabilities (refund liabilities) after the sale of products to customers by estimating the return 
rate using the expected value methods based on historical experience. When the customer exercises its right to return the 
product, the Company recognizes the asset as a refund asset and adjusts cost of sales by the amount of the right to collect the 
product from the customer. The right to collect the product is measured by deducting the cost of collecting the product from 
the historical carrying amount of the product.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 31 - 
2.16 Leases 
 
(A) 
Lessee accounting 
 
The Company applies the practical expedient of Korean IFRS 1116, Leases, and does not separate the non-lease elements 
from the lease elements and accounts for the non-lease elements relating to each lease element as a single lease element.  
 
At the commencement date of a lease, the Company recognizes a right-of-use asset (the lease asset) representing the right to 
use the underlying asset and a lease liability representing the obligation to make lease payments. The right-of-use asset is 
presented in the consolidated statement of financial position as ‘property, plant and equipment’ and the lease liability is 
presented as ‘current portion of long-term liabilities’ or ‘long-term borrowings.’ 
 
Lease liabilities are measured at the inception of the lease at the present value of the lease payments outstanding at that date, 
discounted at the Company’s incremental borrowing rate.  
 
For short-term leases (lease terms of 12 months or less at the inception of the lease) and low value assets (underlying assets 
of USD 5,000 or less), lease payments are recognized as expenses on a straight-line basis over the lease term applying the 
simplified practical expedient.  
 
(B) 
Lessor accounting 
 
The Company, as a lessor, determines whether a lease is a finance or an operating lease at the inception of the lease.  
 
Leases that transfer substantially all the risk and rewards of ownership of the leased assets are classified as finance leases and 
all leases other than finance leases are classified as operating leases. Lease income from operating leases is recognized on a 
straight-line basis over the lease term, while initial direct costs incurred during the negotiation and contracting phase of an 
operating lease are added to the carrying amount of the leased asset and expensed over the lease term against the lease income.  
 
 
2.17 Government Grants 
 
Government grants relating to revenues are deferred and recognized in the consolidated statement of profit or loss in the same 
period in which they are matched with revenues or expenses related to the purpose for which the grant was made. Government 
grants received related to the acquisition of assets are treated as deferred income and credited to the consolidated statement of 
profit or loss over the useful lives of the related assets.  
 
 
2.18 Convenience Translation into United States Dollar Amounts 
 
The US dollar amounts provided in the consolidated financial statements represent supplementary information solely for the 
convenience of the reader. All Korean won amounts are expressed in US dollar at the rate of W 1,306.1 to $1, the average 
exchange rate for the year ended December 31, 2023. Such presentation is not in accordance with generally accepted 
accounting principles and should not be construed as a representation that the Korean won amounts shown could be readily 
converted, realized or settled in US dollars at this or any other rate.  
 
 
2.19 Approval of the Consolidated Financial Statements 
 
The consolidated financial statements of the Company were approved by the Board of Directors on January 31, 2024, and may 
be approved as amended at the Annual General Shareholders’ Meetings. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 32 - 
3. Material Accounting Estimates and Assumptions 
 
The Company makes estimates and assumptions concerning the future. Estimates and assumptions are continuously evaluated 
and are based on historical experience and future events that are reasonably foreseeable under the circumstances. These 
estimates may differ from actual results. The estimates and assumptions that have the most significant risk of causing a material 
adjustment to the carrying amounts of assets and liabilities in the next financial year are as follows. 
 
(A) Revenue recognition 
 
The Company recognizes a liability for a product return and a right to the returned goods that are expected to be returned by 
customers following the sale of products to customers. At the point of sale, the Company estimates the return using the 
expected value method based on accumulated experience at the portfolio level and the Company’s revenue is affected by 
changes in the expected return.  
 
Revenue from the sale of goods recognized at the point of transfer of control is the contractual consideration less consideration 
paid to customers in relation to certain sales promotion activities. Based on the historical experience and terms of contracts, 
the Company makes reasonable estimates of the sales deductions which affect the Company’s revenue 
 
(B) Provision for warranty 
 
The Company provides warranties for products sold. At the end of each reporting period, the Company recognizes a provision 
for warranties based on its best estimate of the amount it believes is necessary to provide for future and current warranty 
obligations. These best estimates are based on historical experience.  
 
(C) Fair value of financial instruments  
 
The fair value of financial instruments that are not traded in an active market is determined by using various valuation 
techniques and assumptions based on market conditions prevailing at the end of each reporting period. 
 
(D) Impairment of financial assets 
 
In measuring the allowance for impairment losses on financial assets, the Company make assumptions about the risk of default 
and expected credit rates. In making these assumptions and selecting the inputs for the impairment calculations, the Company 
makes judgment based on past experience and current and forecast of future economic conditions at the reporting date.  
 
(E) Lease 
 
In determining the lease term, the Company considers all relevant facts and circumstances that provide an economic incentive 
to exercise a renewal option, or not to exercise a termination option. The period covered by the renewal option (or the period 
covered by the termination option) is included in the lease term only if it is reasonably certain that the lessee will exercise (or 
not exercise) the renewal option.  
 
The lease term is reassessed when the option is actually exercised (or not exercised) or when the Company becomes committed 
to exercise (or not exercise) the option. The Company only changes its assessment of whether it is reasonably certain the 
renewal option will be exercised (or not) if there is a significant event or change in circumstances within the lessee’s control 
that affects the calculation of the lease term.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 33 - 
(F) Net defined benefit liabilities (assets) 
 
The net defined benefit liabilities (assets) are dependent on a number of factors which are determined using actuarial methods 
based on a number of assumptions. Among the assumptions used to determine the net defined benefit liabilities (assets) is the 
discount rate, and changes in these assumptions will affect the carrying amount of the net defined benefit liability (asset). At 
the end of each year the Company determines an appropriate discount rate, taking into account the interest rates on high-
quality corporate bonds, which represents the interest rate that should be used to determine the present value of the estimated 
future cash outflows expected to be required to settle the net defined benefit liability (asset). Some key assumptions relating 
to the net defined benefit liability (asset) are based on current market conditions.  
 
(G) Impairment of goodwill and intangible assets that have indefinite useful life 
 
The Company tests goodwill and intangible assets with indefinite useful life for impairment annually. The recoverable amount 
of a cash-generating unit or asset, including goodwill, is determined based on a value-in-use calculation. These calculations 
are based on estimates.  
 
(H) Income taxes 
 
Income taxes on the Company’s taxable income are calculated by applying tax laws and decisions of tax authorities in various 
countries, and, therefore, there is uncertainty in determining the final tax effect. The Company has recognized current and 
deferred tax based on its best estimate of the tax consequences expected to be payable in future periods as a result of the 
Company’s operating activities up to the reporting date. However, the actual future final tax liability may not be consistent 
with the related assets and liabilities recognized, and such differences may affect the current and deferred tax assets and 
liabilities when the final tax effect is determined.  
 
The Company is subject to additional income taxes, calculated in accordance with the method prescribed by tax laws, when a 
certain amount is not used for investment, wage growth, etcetera, in a given period. The related tax effect is reflected in the 
measurement of current and deferred income taxes for the period, and the amount of income tax payable by the Company 
depends on the level of investment, wage growth, etcetera in each year, resulting in uncertainty in determining the final tax 
effects.  
 
The Company assesses uncertainty over its tax positions and, if the Company concludes that it is not probably that the tax 
authorities will accept a uncertain tax position, the effect of the uncertainty is recognized in the consolidated financial 
statements for each uncertain tax position using the method that is expected to provide a better estimate of the resolution of 
the uncertainty, which is more likely of the following methods.  
 
(1) Most likely amount: the single most probable amount within a range of possible outcomes. 
(2) Expected value: the sum of the probability-weighted amounts in a range of possible outcomes. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 34 - 
4. Financial Instruments by Category 
 
(A) Categorizations of financial assets and liabilities as of December 31, 2023 and 2022 are as follows: 
 
(1) As of December 31, 2023 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured at fair 
value through 
other 
comprehensive 
income 
Financial assets 
measured at fair 
value through 
profit or loss 
Other 
financial 
 assets(*) 
Total 
 
 
 
 
 
 
Financial assets 
   
 
 
 
Cash and cash equivalents 
69,080,893 
- 
- 
- 
69,080,893 
Short-term financial instruments 
22,690,924 
- 
- 
- 
22,690,924 
Short-term financial assets at 
amortized cost 
608,281 
- 
- 
- 
608,281 
Short-term financial assets at fair 
value through profit or loss 
- 
- 
27,112 
- 
27,112 
Trade receivables 
36,647,393 
- 
- 
- 
36,647,393 
Financial assets at fair value through 
other comprehensive income  
- 
7,481,297 
- 
- 
7,481,297 
Financial assets at fair value through 
profit or loss  
- 
- 
1,431,394 
- 
1,431,394 
Other 
14,294,254 
- 
475,244 
70,777 
14,840,275 
Total 
143,321,745  
7,481,297  
1,933,750  
70,777  
152,807,569  
 
(*) Other financial assets include derivatives designated as hedging instruments. 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at  
amortized cost 
Financial liabilities 
measured at  
fair value through  
profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Trade payables 
11,319,824 
- 
- 
11,319,824 
Short-term borrowings 
504,552 
- 
6,610,049 
7,114,601 
Other payables 
13,996,395 
- 
- 
13,996,395 
Current portion of long-term 
liabilities 
310,436 
- 
998,439 
1,308,875 
Debentures  
537,618 
- 
- 
537,618 
Long-term borrowings 
- 
- 
3,724,850 
3,724,850 
Long-term other payables 
4,907,875 
- 
- 
4,907,875 
Other 
11,330,545 
49,904 
33,559 
11,414,008 
Total 
42,907,245  
49,904  
11,366,897  
54,324,046  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments. 
 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 35 - 
(2) As of December 31, 2022 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured at 
fair value 
through other 
comprehensive 
income 
Financial assets 
measured at fair 
value through 
profit or loss 
Other 
financial  
assets(*) 
Total 
 
 
 
  
 
 
Financial assets 
   
 
 
 
Cash and cash equivalents 
49,680,710 
- 
- 
- 
49,680,710 
Short-term financial instruments 
65,102,886 
- 
- 
- 
65,102,886 
Short-term financial assets at 
amortized cost 
414,610 
- 
- 
- 
414,610 
Short-term financial assets at fair 
value through profit or loss 
- 
- 
29,080 
- 
29,080 
Trade receivables 
35,721,563 
- 
- 
- 
35,721,563 
Financial assets at fair value through 
other comprehensive income  
- 
11,397,012 
- 
- 
11,397,012 
Financial assets at fair value through 
profit or loss  
- 
- 
1,405,468 
- 
1,405,468 
Other 
9,945,209 
- 
334,263 
61,404 
10,340,876 
Total 
160,864,978  
11,397,012  
1,768,811  
61,404  
174,092,205  
 
(*)  Other financial assets include derivatives designated as hedging instruments. 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at 
amortized cost 
Financial liabilities 
measured at  
fair value through 
 profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Trade payables 
10,644,686  
- 
- 
10,644,686  
Short-term borrowings 
1,577,958  
- 
3,569,357  
5,147,315  
Other payables 
16,328,237  
- 
- 
16,328,237  
Current portion of long-term 
liabilities 
215,143  
- 
874,019  
1,089,162  
Debentures  
536,093  
- 
- 
536,093  
Long-term borrowings 
33,846  
- 
3,526,826  
3,560,672  
Long-term other payables 
2,289,236  
- 
- 
2,289,236  
Other 
12,047,761  
334,415  
27,353  
12,409,529  
Total 
43,672,960  
334,415  
7,997,555  
52,004,930  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 36 - 
(B) Net gains or losses on each category of financial assets and liabilities for the years ended December 31, 2023 and 2022 are 
as follows: 
 
(1) 2023 
 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured  
at fair value 
through other 
comprehensive 
income 
Financial assets 
measured  
at fair value 
through 
profit or loss 
Other financial 
assets(*) 
Total 
 
 
 
 
 
 
Financial assets 
 
 
 
 
 
Gain on valuation  
(other comprehensive income) 
- 
1,481,091  
- 
58,290  
1,539,381  
Gain (loss) on valuation/disposal 
(profit or loss) 
(64,758) 
- 
213,308  
436  
148,986  
Reclassification from other 
comprehensive income to profit 
or loss 
- 
- 
- 
1,169  
1,169  
Interest income 
4,357,792  
- 
230  
- 
4,358,022  
Foreign exchange differences  
(profit or loss) 
(98,522) 
- 
- 
- 
(98,522) 
Dividend income 
- 
161,509  
2,694  
- 
164,203  
Impairment/reversal  
(profit or loss) 
(74,594) 
- 
- 
- 
(74,594) 
 
(*) Other financial assets include derivatives designated as hedging instruments. 
 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at 
amortized cost 
Financial liabilities 
measured at  
fair value through 
profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Loss on valuation  
 (other comprehensive income) 
- 
- 
(16,809) 
(16,809) 
Loss on valuation/disposal  
 (profit or loss) 
- 
(116,167) 
(126) 
(116,293) 
Reclassification from  
other comprehensive income  
to profit or loss 
- 
- 
(337) 
(337) 
Interest expense 
(510,865) 
- 
(419,388) 
(930,253) 
Foreign exchange differences  
 (profit or loss) 
162,844  
- 
61,920  
224,764  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 37 - 
(2) 2022 
 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured  
at fair value 
through other 
comprehensive 
income 
Financial assets 
measured  
at fair value 
through 
profit or loss 
Other financial 
assets(*) 
Total 
 
 
 
 
 
 
Financial assets 
 
 
 
 
 
Gain (loss) on valuation  
(other comprehensive 
income) 
- 
(1,969,498) 
- 
53,180  
(1,916,318) 
Gain (loss) on valuation/disposal 
(profit or loss) 
(36,550) 
- 
83,332  
474  
47,256  
Reclassification from other 
comprehensive income to 
profit or loss 
- 
- 
- 
310  
310  
Interest income 
2,720,213  
- 
266  
- 
2,720,479  
Foreign exchange differences  
(profit or loss) 
(822,011) 
- 
- 
- 
(822,011) 
Dividend income 
- 
413,467  
1,134  
- 
414,601  
Impairment/reversal  
(profit or loss) 
(19,124) 
- 
- 
- 
(19,124) 
 
(*) Other financial assets include derivatives designated as hedging instruments. 
 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at 
amortized cost 
Financial liabilities 
measured at 
fair value through 
profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Loss on valuation  
 (other comprehensive loss) 
- 
- 
(10,621) 
(10,621) 
Loss on valuation/disposal  
 (profit or loss) 
- 
(91,056) 
(45) 
(91,101) 
Reclassification from  
other comprehensive income  
to profit or loss 
- 
- 
59  
59  
Interest expense 
(322,529) 
- 
(440,486) 
(763,015) 
Foreign exchange differences  
 (profit or loss) 
574,771  
- 
155,952  
730,723  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 38 - 
5. Transfer of Financial Assets 
 
The Company discounted trade receivables through factoring arrangements with banks during the years ended December 31, 
2023 and 2022. Trade receivables provided as collaterals in factoring transactions have not been derecognized as they do not 
meet the requirements for derecognition of financial assets as the Company retains substantially all the risks and rewards, 
including the recourse in the event of default by the debtor. Financial liabilities recognized in these transactions are classified 
as ‘short-term borrowings’ on the consolidated statement of financial position (refer to Note 12).  
 
The carrying amount of the discounted trade receivables and the associated liabilities as of December 31, 2023 and 2022 are 
as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Carrying amount of the discounted trade receivables (*) 
6,610,049 
3,569,357 
Carrying amount of the associated liabilities 
6,610,049 
3,569,357 
 
(*) Discounted trade receivables includes trade receivables between consolidated entities. 
 
 
6. Financial Assets at Fair Value 
 
(A) 
Details of financial assets at fair value as of December 31, 2023 and 2022 are as follows: 
 
(1) Financial assets at fair value through other comprehensive income 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Non-current  
 
 
Equity instruments 
7,481,297  
11,397,012  
 
(2) Financial assets at fair value through profit or loss 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Current  
 
 
Debt instruments 
27,112  
29,080  
Non-current  
 
 
Equity instruments 
812,358  
773,063  
Debt instruments 
619,036  
632,405  
Subtotal 
1,431,394  
1,405,468  
Total 
1,458,506  
1,434,548  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 39 - 
(B) 
Changes in financial assets at fair value for the years ended December 31, 2023 and 2022 are as follows: 
 
(1) Financial assets at fair value through other comprehensive income 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
11,397,012  
13,965,839  
Acquisition 
124,897  
35,013  
Disposal 
(5,918,616) 
(20,913) 
Fair value valuation gain (loss) 
1,548,022  
(2,636,448) 
Other 
329,982  
53,521  
Balance as of December 31 
7,481,297  
11,397,012  
 
 
(2) Financial assets at fair value through profit or loss 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
1,405,468  
1,525,344  
Acquisition 
146,392  
158,244  
Disposal 
(81,113) 
(80,718) 
Fair value valuation gain (loss) 
(38,110) 
(198,594) 
Other 
(1,243) 
1,192  
Balance as of December 31 
1,431,394  
1,405,468  
 
 
(C) 
Changes in gain (loss) on valuation of financial assets at fair value through other comprehensive income for the years 
ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
3,636,478  
6,222,980  
Fair value valuation gain (loss) 
1,548,022  
(2,636,448) 
Reclassification to retained earnings due to disposals 
(4,935,379) 
49,946  
Balance as of December 31 
249,121  
3,636,478  
Income tax effects on equity 
(54,702) 
(887,369) 
Total 
194,419  
2,749,109  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 40 - 
(D) 
Details of listed equity securities of financial assets at fair value as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won,  
number of shares and percentage) 
December 31, 2023 
December 31, 2022 
Number of 
shares owned 
Percentage of 
ownership(*) (%) 
Acquisition cost 
Carrying amount 
(Market value) 
Carrying amount 
(Market value) 
 
 
 
 
 
 
Samsung Heavy Industries Co., Ltd. 
134,027,281 
15.2 
932,158  
1,038,711  
684,879  
Hotel Shilla Co., Ltd.  
2,004,717 
5.1 
13,957  
131,108  
166,592  
iMarketKorea Inc. 
647,320 
1.9 
324  
5,560  
6,538  
SFA Engineering Corporation 
2,100,000 
5.8 
22,050  
63,840  
132,642  
Wonik Holdings Co., Ltd.  
3,518,342 
4.6 
30,821  
11,857  
11,945  
Wonik IPS Co., Ltd.  
3,701,872 
7.5 
32,428  
125,679  
91,621  
Wacom Co., Ltd. 
8,398,400 
5.3 
62,013  
50,358  
46,750  
Corning Incorporated 
80,000,000 
9.4 
3,980,636  
3,140,978  
3,238,205  
Other 
  
  
561,530  
1,030,123  
5,142,573  
Total 
  
  
5,635,917  
5,598,214  
9,521,745  
(*) Ownership represents the Company’s ownership of the ordinary shares issued by each entity. 
 
 
7. Trade and Non-Trade Receivables 
 
(A) Trade and non-trade receivables as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Trade 
Non-trade 
Trade 
Non-trade 
 
 
 
 
 
Receivables 
37,026,738  
7,474,967  
36,238,032  
7,051,536  
Less: Loss allowance 
(355,456) 
(82,224) 
(312,221) 
(78,101) 
Subtotal 
36,671,282  
7,392,743  
35,925,811  
6,973,435  
Less: Non-current  
(23,889) 
(759,495) 
(204,248) 
(824,226) 
Current  
36,647,393  
6,633,248  
35,721,563  
6,149,209  
 
 
(B) Movements in the loss allowance for receivables for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
2022 
(In millions of Korean won) 
Trade 
Non-trade 
Trade 
Non-trade 
 
 
 
 
 
Balance as of January 1 
312,221  
78,101  
310,880  
72,805  
Bad debt expense (reversal) 
62,964  
(297) 
8,784  
7,312  
Write-off 
(18,875) 
(124) 
(3,557) 
(6,154) 
Other 
(854) 
4,544  
(3,886) 
4,138  
Balance as of December 31 
355,456  
82,224  
312,221  
78,101  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 41 - 
(C) The details of trade and non-trade receivables classified by past due date for the purpose of measuring expected credit 
losses as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Trade 
Non-trade 
Trade 
Non-trade 
 
 
 
 
 
Receivables not past due 
33,633,006  
7,077,413  
33,177,298  
5,890,018  
Past due: 
 
 
 
 
Less than 31 days past due(*) 
2,262,296  
269,390  
2,206,622  
981,889  
31 days to 90 days past due 
478,371  
15,369  
642,859  
52,972  
More than 90 days past due 
653,065  
112,795  
211,253  
126,657  
Subtotal 
3,393,732  
397,554  
3,060,734  
1,161,518  
Total 
37,026,738  
7,474,967  
36,238,032  
7,051,536  
 
(*) The Company does not consider the credit risk of non-trade receivables that are overdue for less than or equal to 31 days has been 
significantly increased.  
 
(D) The maximum exposure to current credit risk is equivalent to the carrying amount of receivables as of December 31, 
2023. The Company has entered into insurance contracts with insurers for its major receivables. 
 
 
8. Inventories 
 
Inventories as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Gross 
amount 
Valuation 
allowance 
Carrying 
amount 
Gross 
amount 
Valuation 
allowance 
Carrying 
amount 
Finished goods 
16,120,367  
(1,567,353) 
14,553,014  
17,526,178  
(1,493,952) 
16,032,226  
Work in process  
26,501,664  
(4,303,216) 
22,198,448  
21,612,965  
(1,535,446) 
20,077,519  
Raw materials and supplies 
15,222,937  
(1,525,583) 
13,697,354  
16,268,974  
(1,289,694) 
14,979,280  
Materials in transit 
1,177,058  
- 
1,177,058  
1,098,841  
- 
1,098,841  
Total 
59,022,026  
(7,396,152) 
51,625,874  
56,506,958  
(4,319,092) 
52,187,866  
 
Inventories recognized as an expense for the year ended December 31, 2023 amount to W 177,539,372 million       
(2022: W 186,396,549 million). The amount includes a loss on the valuation of inventories. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 42 - 
9. Investments in Associates and Joint Ventures 
 
(A) 
Changes in investments in associates and joint ventures for the years ended December 31, 2023 and 2022 are as 
follows: 
 
(In millions of Korean won) 
2023 
2022 
Balance as of January 1 
10,893,869  
8,932,251  
Acquisition 
78,690  
1,006,998  
Disposal 
(33,464) 
(20,894) 
Share of profit 
887,550  
1,090,643  
Other(*) 
(59,201) 
(115,129) 
Balance as of December 31 
11,767,444  
10,893,869  
 
(*) Other consists of dividends, (reversal of) impairment, and reclassification. 
 
(B) 
Major investments in associates and joint ventures as of December 31, 2023 are as follows: 
 
(1) Investments in associates 
 
Investee 
Nature of relationship with associate 
Percentage of 
ownership (%)(*1) 
Principal 
business 
location 
Fiscal 
period-end 
Samsung Electro- 
 Mechanics Co., Ltd. 
Manufacture and supply electronic components 
including passive components, circuit boards, and 
modules 
23.7 
Korea 
December 
Samsung SDS Co., Ltd. 
Provide IT services including computer 
programming, system integration and 
management and logistical services 
22.6 
Korea 
December 
Samsung Biologics Co., Ltd. 
Investment in new business 
31.2 
Korea 
December 
Samsung SDI Co., Ltd.(*2) 
Manufacture and supply electronic parts including 
secondary cell batteries 
19.6 
Korea 
December 
Cheil Worldwide, Inc. 
Advertising agency 
25.2 
Korea 
December 
(*1) Ownership represents the Company’s ownership of the ordinary shares issued by each entity. 
(*2) The Company’s ownership of ordinary shares outstanding is 20.6%. 
 
 
(2) Investments in joint ventures 
 
Investee 
Nature of relationship with joint venture 
Percentage of 
ownership (%)(*1) 
Principal 
business 
location 
Fiscal 
period-end 
Samsung Corning 
 Advanced Glass, LLC 
Manufacture and supply industrial glass products 
50.0 
Korea 
December 
(*1) Ownership represents the Company’s ownership of the ordinary shares issued by each entity. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 43 - 
(C) 
Details of investments in associates and joint ventures as of December 31, 2023 and 2022 are as follows: 
 
(1) Investments in associates 
(In millions of Korean won) 
December 31, 2023 
Investee 
Acquisition cost 
Net asset value of 
equity shares(*) 
Carrying amount 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
359,237 
1,837,925 
1,841,393  
Samsung SDS Co., Ltd. 
147,963 
1,955,699 
1,966,206  
Samsung Biologics Co., Ltd. 
1,424,358 
3,068,636 
3,073,595  
Samsung SDI Co., Ltd. 
1,242,605 
3,726,675 
2,912,564  
Cheil Worldwide, Inc. 
506,162 
368,875 
669,363  
Other 
690,481 
844,645 
1,093,799  
Total 
4,370,806 
11,802,455 
11,556,920  
(*)\ The Company’s portion of net asset value of associates is based on the Company’s percentage of ownership. 
 
(In millions of Korean won) 
December 31, 2022 
Investee 
Acquisition cost 
Net asset value of 
equity shares(*) 
Carrying amount 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
359,237  
1,765,507  
1,764,249  
Samsung SDS Co., Ltd. 
147,963  
1,857,481  
1,870,338  
Samsung Biologics Co., Ltd. 
1,424,358  
2,804,547  
2,808,673  
Samsung SDI Co., Ltd. 
1,242,605  
3,318,875  
2,691,223  
Cheil Worldwide, Inc. 
506,162  
347,510  
649,161  
Other 
645,255  
718,801  
907,333  
Total 
4,325,580  
10,812,721  
10,690,977  
(*) The Company’s portion of net asset value of associates is based on the Company’s percentage of ownership. 
 
 
(2) Investments in joint ventures 
 
(In millions of Korean won) 
December 31, 2023 
Investee 
Acquisition cost 
Net asset value of 
equity shares (*) 
Carrying amount 
 
 
 
 
Samsung Corning Advanced Glass LLC 
215,000  
138,939  
138,938  
Other 
259,994  
72,215  
71,586  
Total 
474,994  
211,154  
210,524  
(*) The Company’s portion of net asset value of joint ventures is based on the Company’s percentage of ownership. 
 
(In millions of Korean won) 
December 31, 2022 
Investee 
Acquisition cost 
Net asset value of 
equity shares (*) 
Carrying amount 
 
 
 
 
Samsung Corning Advanced Glass LLC 
215,000  
137,727  
137,745  
Other 
259,994  
67,632  
65,147  
Total 
474,994  
205,359  
202,892  
(*) The Company’s portion of net asset value of joint ventures is based on the Company’s percentage of ownership. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 44 - 
(D) 
Details of the changes in investments in associates and joint ventures using the equity method are as follows: 
 
(1) For the year ended December 31, 2023 
 
(In millions of Korean won) 
Balance as of 
January 1 
Share of profit 
Share of other 
comprehensive 
income (loss) 
Other(*) 
Balance as of 
December 31 
 
 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
1,764,249  
106,455  
7,844  
(37,155) 
1,841,393  
Samsung SDS Co., Ltd. 
1,870,338  
154,282  
(2,503) 
(55,911) 
1,966,206  
Samsung Biologics Co., Ltd. 
2,808,673  
267,614  
(2,692) 
- 
3,073,595  
Samsung SDI Co., Ltd. 
2,691,223  
214,702  
20,506  
(13,867) 
2,912,564  
Cheil Worldwide, Inc. 
649,161  
53,690  
(94) 
(33,394) 
669,363  
Samsung Corning Advanced Glass LLC 
137,745  
1,336  
(124) 
(19) 
138,938  
Other 
972,480  
89,471  
52,175  
51,259  
1,165,385  
Total 
10,893,869  
887,550  
75,112  
(89,087) 
11,767,444  
(*) Other consists of acquisitions, disposals, dividends, impairment and reclassification. 
 
 
(2) For the year ended December 31, 2022 
 
(In millions of Korean won) 
Balance as of 
January 1 
Share of profit 
Share of other 
comprehensive 
income (loss) 
Other(*) 
Balance as of 
December 31 
 
 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
1,556,386  
242,139  
2,880  
(37,156) 
1,764,249  
Samsung SDS Co., Ltd. 
1,652,155  
241,962  
18,154  
(41,933) 
1,870,338  
Samsung Biologics Co., Ltd. 
1,577,664  
250,028  
(183) 
981,164  
2,808,673  
Samsung SDI Co., Ltd. 
2,529,650  
194,242  
(19,207) 
(13,462) 
2,691,223  
Cheil Worldwide, Inc. 
621,292  
55,476  
1,140  
(28,747) 
649,161  
Samsung Corning Advanced Glass LLC 
135,580  
1,999  
144  
22  
137,745  
Other 
859,524  
104,797  
(53,438) 
61,597  
972,480  
Total 
8,932,251  
1,090,643  
(50,510) 
921,485  
10,893,869  
 
 
(*) Other consists of acquisitions, disposals, dividends, impairment, and reclassification. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 45 - 
(E) 
Summary of the condensed financial information of major associates and joint ventures 
 
(1) Summary of condensed financial information of major associates and dividends received from associates as of 
December 31, 2023 and 2022, and for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
(In millions of Korean won) 
Samsung 
Electro-
Mechanics 
Co., Ltd. 
Samsung 
SDS Co., 
Ltd. 
Samsung 
Biologics 
Co., Ltd. 
Samsung 
SDI Co., 
Ltd. 
Cheil 
Worldwide, 
Inc. 
 
 
 
 
 
  
1. Condensed financial information 
 
 
 
 
 
Condensed statements of financial position: 
 
 
 
 
 
Current assets 
5,208,418  
8,160,300  
5,521,988  
9,187,029  
2,372,420  
Non-current assets 
6,449,453  
4,160,724  
10,524,209  
24,851,831  
517,085  
Current liabilities 
2,900,460  
2,391,861  
4,157,861  
8,518,933  
1,375,034  
Non-current liabilities 
727,087  
953,592  
2,057,844  
5,612,677  
216,707  
Non-controlling interests 
182,613  
317,562  
- 
1,395,877  
11,206  
Condensed statements of comprehensive income: 
Revenue 
8,909,348  
13,276,844  
3,694,589  
22,708,300  
4,138,275  
Profit from continuing operations, net of tax (*1) 
430,839  
693,422  
857,691  
2,009,207  
187,302  
Loss from discontinued operations, net of tax (*1) 
(7,883) 
- 
- 
- 
- 
Other comprehensive income (loss) (*1) 
45,054  
(11,085) 
(11,673) 
85,394  
3,685  
Total comprehensive income(*1) 
468,010  
682,337  
846,018  
2,094,601  
190,987  
2. Reconciliation to the carrying amount of investments in associates 
Net assets (a) 
7,847,711  
8,658,009  
9,830,492 
18,511,373 
1,286,558 
Ownership percentage (b) (*2) 
23.4% 
22.6% 
31.2% 
20.1% 
28.7% 
Net assets of equity shares (a x b) 
1,837,925  
1,955,699  
3,068,636 
3,726,675 
368,875 
Goodwill 
7,081  
26,801  
3,645 
- 
298,779 
Intercompany transactions and other(*3) 
(3,613) 
(16,294) 
1,314 
(814,111) 
 1,709 
Carrying amount of associates 
1,841,393  
1,966,206  
3,073,595 
2,912,564 
669,363 
3. Dividends from associates 
 
 
 
 
 
Dividends 
37,155  
55,911  
- 
13,867  
33,394  
(*1) Profit (loss) attributable to owners of the investee 
(*2) Ownership percentage includes ordinary and preference shares. 
(*3) Consists of uSnrealized gains and losses and other differences. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 46 - 
 
 
2022 
(In millions of Korean won) 
Samsung 
Electro-
Mechanics 
Co., Ltd. 
Samsung SDS 
Co., Ltd. 
Samsung 
Biologics Co., 
Ltd. 
Samsung 
SDI Co., 
Ltd. 
Cheil 
Worldwide, 
Inc. 
 
 
 
 
 
 
1. Condensed financial information 
 
 
 
 
 
Condensed statements of financial position: 
 
 
 
 
 
Current assets 
4,888,319 
8,005,764 
6,457,657 
9,651,702 
2,193,979 
Non-current assets 
6,108,852 
3,946,660 
10,124,394 
20,605,823 
557,466 
Current liabilities 
2,525,123 
2,493,323 
4,181,542 
8,006,939 
1,335,643 
Non-current liabilities 
778,563 
992,132 
3,416,034 
5,033,084 
194,373 
Non-controlling interests 
154,991 
243,777 
- 
731,779 
9,388 
Condensed statements of comprehensive income: 
Revenue 
9,441,276  
17,234,750  
3,001,295  
20,124,070  
4,253,367  
Profit from continuing operations, net of tax (*1) 
1,009,739  
1,099,745  
798,056  
1,952,149  
193,732  
Loss from discontinued operations, net of tax (*1) 
(29,187) 
- 
- 
- 
- 
Other comprehensive income (loss) (*1) 
(2,215) 
80,368  
6,995  
(139,877) 
(1,122) 
Total comprehensive income(*1) 
978,337  
1,180,113  
805,051  
1,812,272  
192,610  
2. Reconciliation to the carrying amount of investments in associates 
Net assets (a) 
7,538,494 
8,223,192 
8,984,475 
16,485,723 
1,212,041 
Ownership percentage (b) (*2) 
23.4% 
22.6% 
31.2% 
20.1% 
28.7% 
Net assets of equity shares (a x b) 
1,765,507  
1,857,481  
2,804,547  
3,318,875  
347,510  
Goodwill 
7,081  
26,801  
3,645  
- 
298,779  
Intercompany transactions and other(*3) 
(8,339) 
(13,944) 
481  
(627,652) 
2,872  
Carrying amount of associates 
1,764,249  
1,870,338  
2,808,673  
2,691,223  
649,161  
3. Dividends from associates 
 
 
 
 
 
Dividends 
37,155 
41,933 
- 
13,463 
28,748 
(*1) Profit (loss) attributable to owners of the investee. 
(*2) Ownership percentage includes ordinary and preference shares. 
(*3) Consists of unrealized gains and losses and other differences. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 47 - 
(2) 
Summary of condensed financial information of major joint ventures and dividends received from joint ventures as 
of December 31, 2023 and 2022, and for the years ended December 31, 2023 and 2022 are as follows: 
 
 
Samsung Corning Advanced Glass, LLC 
(In millions of Korean won) 
2023 
2022 
 
 
 
1. Condensed financial information 
 
 
Condensed statements of financial position: 
 
 
Current assets 
116,372  
170,103  
Non-current assets 
185,100  
125,507  
Current liabilities 
22,684  
19,794  
Non-current liabilities 
911  
363  
Condensed statements of comprehensive income: 
 
 
Revenue 
122,446  
133,634  
Profit from continuing operations, net of tax(*1) 
2,672  
3,998  
Other comprehensive income (loss) (*1) 
- 
288  
Total comprehensive income(*1) 
2,672  
4,286  
2. Reconciliation to the carrying amount of investments in joint ventures 
Net assets (a) 
277,877  
275,453 
Ownership percentage (b) 
50.0% 
50.0% 
Net assets of equity shares (a x b) 
138,939  
137,727 
Intercompany transactions and other(*2) 
(1) 
18  
Carrying amount of joint ventures 
138,938  
137,745 
3. Dividends from joint ventures 
 
 
Dividends 
-     
-     
 
(*1) Profit (loss) attributable to owners of the parent company. 
(*2) Consists of unrealized gains and losses and other differences. 
 
(3) 
Profit (loss) attributable to owners of the parent company from associates and joint ventures which are not individually 
material for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
2022 
(In millions of Korean won) 
Associates 
Joint ventures 
Associates 
Joint ventures 
 
 
 
 
 
Profit from continuing operations 
87,072  
2,399  
102,930  
1,867  
Other comprehensive income (loss) 
50,260  
1,915  
(50,761) 
(2,677) 
Total comprehensive income (loss) 
137,332  
4,314  
52,169  
(810) 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 48 - 
(F) 
Fair value of marketable investments in associates as of December 31, 2023 and 2022 is as follows: 
 
(In millions of Korean won  
and number of shares) 
December 31, 2023 
December 31, 2022 
Number of shares held 
Market value 
Market value 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
17,693,084  
2,710,580  
2,308,947  
Samsung SDS Co., Ltd. 
17,472,110  
2,970,259  
2,149,070  
Samsung Biologics Co., Ltd. 
22,217,309  
16,885,155  
18,240,411  
Samsung SDI Co., Ltd. 
13,462,673  
6,354,382  
7,956,440  
Cheil Worldwide, Inc. 
29,038,075  
552,595  
669,328  
 
(G) Other matters 
On July 12, 2018, the Korea Securities and Futures Commission determined an initial measure following an investigation 
relating to Samsung Biologics Co., Ltd., an associate of the Company, and its accounting for its investment in Samsung 
Bioepis Co., Ltd, a joint venture between Biogen Therapeutics Inc. and Samsung Biologics Co., Ltd. This measure included 
a recommendation to dismiss the director in charge, prosecution charges, and external auditor designation by the regulator, 
on the basis that the Joint Venture Agreement was not disclosed in the notes to the financial statements. On November 14, 
2018, the Korea Securities and Futures Commission determined a second measure which included a penalty of W 8,000 
million, a recommendation to dismiss the CEO, a requirement to restate its financial statements, and further prosecution 
charges.  
 
To prove justification of its accounting treatment, Samsung Biologics Co., Ltd. filed a suit for cancellation of the 
aforementioned measures to the Seoul Administrative Court, which is currently in progress. On September 24, 2021, the 
Seoul Administrative Court announced a decision to cancel the first measure charged by the Korea Securities and Futures 
Commission, and suspended its execution until the final rulings of the appeal. On October 16, 2021, the Korea Securities and 
Futures Commission appealed and the litigation is in progress at Seoul High Court. Samsung Biologics Co., Ltd. also filed 
for suspending the execution of the initial and second measures. On January 22, 2019 and February 19, 2019, the Seoul 
Administrative Court pronounced decisions to suspend the second and initial measure, respectively, until the final rulings. 
The Korea Securities and Futures Commission immediately appealed against the decisions but the appeals were dismissed 
by the Seoul High Court on May 13, 2019 and May 24, 2019, in relation to the second and first measures, respectively. On 
May 23, 2019 and June 10, 2019, the Korea Securities and Futures Commission re-appealed against the dismissals relating 
to the second and first measures, respectively. On September 6, 2019 and October 11, 2019, the Supreme Court of Korea 
dismissed the Korea Securities and Futures Commission’s re-appeal relating to the second and first measures, respectively, 
and confirmed the decision to suspend the execution of these measures. 
 
Although the future outcome of the administrative litigation cannot be estimated, should Samsung Biologics Co., Ltd. be 
required to restate its financial statements to amend its historical accounting treatment relating to its investment in Samsung 
Bioepis Co., Ltd., the Company’s share of profit or loss relating to its equity method investment, the amount of investment 
in associates, and retained earnings, for the years ended December 31, 2015 and onwards, and the profit on disposal of 
investment for the year ended December 31, 2016, may be impacted. Given the timing of completion and the final result of 
the administrative litigation between Samsung Biologics Co., Ltd. and the Korea Securities and Futures Commission is 
uncertain and cannot currently be estimated, it is not possible for the Company to recognize the effects of these proceedings 
in the current period consolidated financial statements. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 49 - 
10. Property, Plant and Equipment 
(A) 
Changes in property, plant and equipment for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Construction in 
progress 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
9,892,167  
40,706,918  
79,714,631  
33,607,564  
4,124,108  
168,045,388  
Acquisition cost 
10,024,569  
67,713,808  
303,000,627  
33,607,564  
13,248,490  
427,595,058  
Accumulated depreciation 
and impairment 
(132,402) 
(27,006,890) 
(223,285,996) 
- 
(9,124,382) 
(259,549,670) 
Acquisitions and capital 
expenditures(*1) 
172,262  
6,498,611  
33,641,691  
13,141,766  
1,462,032  
54,916,362  
Acquisitions through 
business combinations 
- 
18,125  
20,140  
34,698  
165  
73,128  
Depreciation 
(49,367) 
(3,884,333) 
(30,031,617) 
- 
(1,567,094) 
(35,532,411) 
Disposals/scrap 
(25,934) 
(181,700) 
(37,681) 
(256) 
(30,547) 
(276,118) 
Impairment (reversal) 
- 
(30,864) 
(47,044) 
- 
(7,449) 
(85,357) 
Reclassify as held-for-sale 
(6,615) 
(54,318) 
(37,101) 
(6,255) 
(14,100) 
(118,389) 
Other(*2) 
16,864  
165,676  
86,149  
(57,189) 
22,159  
233,659  
Balance as of December 31 
9,999,377  
43,238,115  
83,309,168  
46,720,328  
3,989,274  
187,256,262  
Acquisition cost 
10,157,963  
73,689,951  
328,561,492  
46,720,328  
14,058,654  
473,188,388  
Accumulated depreciation 
 and impairment 
(158,586) 
(30,451,836) 
(245,252,324) 
- 
(10,069,380) 
(285,932,126) 
(*1) Acquisition cost and capital expenditures include amounts reclassified from constructions in progress. Capitalized borrowing costs amount to      
W 204,814 million and the capitalization interest rate used to calculate the capitalized borrowing costs ranged from 3.9%~5.8%. 
(*2) Other includes effects of changes in foreign currency exchange rates. 
 
 
2022 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Construction in 
progress 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
9,830,154  
38,869,440  
79,526,297  
18,009,324  
3,693,324  
149,928,539  
Acquisition cost 
9,943,570  
62,651,459  
274,909,571  
18,009,324  
11,958,070  
377,471,994  
Accumulated depreciation 
and impairment 
(113,416) 
(23,782,019) 
(195,383,274) 
- 
(8,264,746) 
(227,543,455) 
Acquisitions and capital 
expenditures(*1) 
138,925  
5,302,095  
31,010,080  
16,675,741  
2,100,119  
55,226,960  
Depreciation 
(49,516) 
(3,533,917) 
(30,761,685) 
- 
(1,606,980) 
(35,952,098) 
Disposals, scrap 
(57,596) 
(127,935) 
(35,098) 
(193) 
(34,208) 
(255,030) 
Impairment (reversal) 
- 
(2,255) 
(11,815) 
- 
(12,323) 
(26,393) 
Other2 
30,200  
199,490  
(13,148) 
(1,077,308) 
(15,824) 
(876,590) 
Balance as of December 31 
9,892,167  
40,706,918  
79,714,631  
33,607,564  
4,124,108  
168,045,388  
Acquisition cost 
10,024,569  
67,713,808  
303,000,627  
33,607,564  
13,248,490  
427,595,058  
Accumulated depreciation 
 and impairment 
(132,402) 
(27,006,890) 
(223,285,996) 
- 
(9,124,382) 
(259,549,670) 
(*1) Acquisition cost and capital expenditures include amounts reclassified from constructions in progress. Capitalized borrowing costs amount to      
W 41,634 million and the capitalization interest rate used to calculate the capitalized borrowing costs ranged from 2.1~4.1%. 
(*2) Other includes effects of changes in foreign currency exchange rates and effects of the deduction of government grants. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 50 - 
(B) Changes in the right-of-use assets included in the property, plant and equipment for the years ended December 31, 2023 
and 2022 are as follows: 
 
 
2023 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Other 
Total 
 
 
 
 
 
 
Balance as of January 1 
503,203  
3,451,596  
175,151  
787,659  
4,917,609  
Acquisition 
38,677  
1,594,886  
10,058  
158,842  
1,802,463  
Depreciation 
(49,367) 
(871,275) 
(47,174) 
(147,178) 
(1,114,994) 
Cancellation of contracts 
(12,461) 
(174,426) 
(279) 
(6,904) 
(194,070) 
Reclassify as held-for-sale 
(4,305) 
(17) 
- 
(414) 
(4,736) 
Other(*) 
5,863  
33,288  
(182) 
3,791  
42,760  
Balance as of December 31 
481,610  
4,034,052  
137,574  
795,796  
5,449,032  
 
(*) Other includes effects of changes in foreign currency exchange rates. 
 
 
 
2022 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Other 
Total 
 
 
 
 
 
 
Balance as of January 1 
525,954  
2,841,970  
191,059  
391,584  
3,950,567  
Acquisition 
32,632  
1,542,889  
29,098  
507,041  
2,111,660  
Depreciation 
(49,516) 
(823,543) 
(58,000) 
(116,287) 
(1,047,346) 
Cancellation of contracts 
(13,741) 
(111,145) 
(263) 
(4,220) 
(129,369) 
Other(*) 
7,874  
1,425  
13,257  
9,541  
32,097  
Balance as of December 31 
503,203  
3,451,596  
175,151  
787,659  
4,917,609  
 
(*) Other includes effects of changes in foreign currency exchange rates. 
 
 
(C) 
Details of depreciation of property, plant and equipment for the years ended December 31, 2023 and 2022 are as 
follows: 
 
(In millions of Korean won) 
2023 
2022 
Cost of sales 
31,647,926  
32,285,800  
Selling and administrative expenses and other 
3,884,485  
3,666,298  
Total 
35,532,411  
35,952,098  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 51 - 
11. Intangible Assets 
(A) 
Changes in intangible assets for the years ended December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
2023 
Intellectual 
property rights 
Development 
cost 
Membership 
Goodwill 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
4,278,750  
85,018  
253,554  
6,014,422  
9,586,010  
20,217,754  
External acquisitions 
401,561  
- 
6,251  
- 
4,608,488  
5,016,300  
Acquisition through business 
combinations 
3,944  
- 
- 
315,136  
37,758  
356,838  
Amortization 
(276,781) 
(85,018) 
- 
- 
(2,772,349) 
(3,134,148) 
Disposals/scrap 
(41,492) 
- 
(8,656) 
- 
(44) 
(50,192) 
Impairment(reversal) 
(6,265) 
- 
3,738  
- 
(2,900) 
(5,427) 
Reclassify as held-for-sale 
(2) 
- 
- 
(58,455) 
(4,405) 
(62,862) 
Other(*) 
64,851  
- 
1,972  
186,516  
150,260  
403,599  
Balance as of December 31 
4,424,566  
- 
256,859  
6,457,619  
11,602,818  
22,741,862  
 
(*) Other includes the cumulative effect of changes in foreign currency exchange rates and others. 
 
(In millions of Korean won) 
2022 
Intellectual 
property rights 
Development 
cost 
Membership 
Goodwill 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
4,153,236  
236,910  
241,219  
5,844,259  
9,760,620  
20,236,244  
External acquisitions 
299,484  
- 
8,905  
- 
2,375,986  
2,684,375  
Amortization 
(268,070) 
(151,892) 
- 
- 
(2,735,599) 
(3,155,561) 
Disposals/scrap 
(50,979) 
- 
(417) 
- 
(402) 
(51,798) 
Impairment(reversal) 
- 
- 
(509) 
- 
(5,753) 
(6,262) 
Other(*) 
145,079  
- 
4,356  
170,163  
191,158  
510,756  
Balance as of December 31 
4,278,750  
85,018  
253,554  
6,014,422  
9,586,010  
20,217,754  
 
(*) Other includes the cumulative effect of changes in foreign currency exchange rates and others. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 52 - 
(B) Goodwill 
 
Goodwill is allocated to each cash-generating unit. Details of goodwill as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
DX 
1,256,815  
1,249,290 
DS 
164,607  
159,359 
SDC 
343,967  
138,754 
Harman 
4,691,440  
4,466,339 
Other 
790  
680 
Total 
6,457,619  
6,014,422 
 
The Company tests goodwill for impairment annually and the recoverable amount of each cash-generating units is determined 
based on value-in-use calculations. The value-in-use calculation is based on estimates of pre-tax cash flows based on financial 
budgets approved by management for the next five years (or longer if the medium and long-term plans are reasonable, such 
as in new technology business). A constant growth rate assumption (but not exceeding the industry average growth rate) has 
been used to calculate the perpetual cash flows for periods beyond the fiver-year period.  
 
(C) 
Details of amortization of intangible assets for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Cost of sales 
2,197,662  
2,211,481  
Selling and administrative expenses and other 
936,486  
944,080  
Total 
3,134,148  
3,155,561  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 53 - 
12. Borrowings  
(A) Details of the carrying amounts of borrowings as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
Financial institutions 
Interest rates (%) 
as of Dec 31, 2023 
December 31, 2023 
December 31, 2022 
 
 
 
 
 
Short-term borrowings 
 
 
 
 
Collateralized borrowings(*1) 
Woori Bank and others 
0.0~17.3 
6,610,049  
3,569,357  
Non-collateralized borrowings 
Citibank and others 
0.0~62.2 
504,552  
1,577,958  
Total 
  
  
7,114,601  
5,147,315  
 
 
 
 
 
Current portion of long-term borrowings 
 
 
 
Bank borrowings 
BNP and others 
36.1~61.5 
304,082  
208,915  
Lease liabilities(*2) 
CSSD and others 
4.3 
998,439  
874,019  
Total 
  
  
1,302,521  
1,082,934  
 
 
 
 
 
Long-term borrowings 
 
 
 
 
Bank borrowings 
- 
- 
- 
33,846  
Lease liabilities(*2) 
CSSD and others 
4.3 
3,724,850  
3,526,826  
Total 
  
  
3,724,850  
3,560,672  
(*1) Collateralized borrowings are secured by trade receivables. 
(*2) Interest expenses arising from the lease liabilities for the years ended December 31, 2023 and 2022 amount to W 197,202 million and 
W 140,111 million, respectively, which were determined using the weighted average incremental borrowing rate. Short-term lease 
payments and low-valued asset lease payments that are not included in lease liabilities during the years ended December 31, 2023 and 
2022 amount to W 158,395 million and W 211,283 million, respectively.  
 
(B) Maturities of lease liabilities outstanding as of December 31, 2023 are as follows: 
(In millions of Korean won) 
Lease liabilities 
Repayment in 
 
2024 
1,171,751  
2025 
965,266  
2026 
821,551  
2027 
625,811  
2028 and thereafter 
1,822,019  
Total 
5,406,398  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 54 - 
13. Debentures 
 
(A) Details of the carrying amounts of debentures as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
Issue date 
Due date 
Interest rate (%) 
as of Dec 31, 2023 
December 31, 2023 
December 31, 2022 
US dollar denominated 
straight bonds(*1) 
Oct. 2, 1997 
Oct. 1, 2027 
7.7 
25,788  
31,683  
(US 20million)(US 25 million) 
US dollar denominated 
debenture bonds(*2) 
May 11, 2015 
May 15, 2025 
4.2 
515,760  
506,920  
(US 400million)(US 400 million) 
Less: Discounts 
 
 
 
(370) 
(543) 
Add: Premium 
 
 
 
2,794  
4,261  
Less: Current portion 
 
 
 
(6,354) 
(6,228) 
Total 
  
  
  
537,618  
536,093  
(*1) US dollar denominated straight bonds are repaid annually for twenty years after a ten-year grace period from the date of issuance.  
Interest is paid semi-annually in arrears. 
(*2) Harman International Industries, Inc. issued US dollar denominated debenture bonds. These debentures are repaid on the maturity and   
 interest is paid semi-annually in arrears. 
 
(B) Repayment schedule of debentures outstanding as of December 31, 2023 are as follows: 
 
(In millions of Korean won)  
Debentures 
Repayment in 
 
2024 
6,447  
2025 
522,207  
2026 
6,447  
2027 
6,447  
Total 
541,548  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 55 - 
14. Net Defined Benefit Liabilities (Assets) 
 
(A) 
Details of net defined benefit liabilities (assets) recognized in the statements of financial position as of December 31, 
2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Present value of funded defined benefit obligations 
15,403,976  
13,639,460  
Present value of unfunded defined benefit obligations 
319,689  
370,848  
Subtotal 
15,723,665  
14,010,308  
Fair value of plan assets 
(20,172,327) 
(19,593,910) 
Total 
(4,448,662) 
(5,583,602) 
 
 
(B) 
The components of defined benefit costs recognized in profit or loss for the years ended December 31, 2023 and 2022 
are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Current service cost 
1,294,308  
1,365,600  
Net interest income 
(354,220) 
(99,356) 
Past service cost 
4,839  
(253) 
Other 
9,491  
28,713  
Total 
954,418  
1,294,704  
 
The amount recognized as expenses of defined contribution plans for the years ended December 31, 2023 and 2022 are 
W 203,004 million and W 145,395 million, respectively. 
 
 
(C) 
The expenses related to the defined benefit plans recognized in the statements of profit or loss for the years ended  
December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Cost of sales 
378,104  
514,589  
Selling and administrative expenses and other 
576,314  
780,115  
Total 
954,418  
1,294,704  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 56 - 
(D) Changes in the defined benefit obligations for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
14,010,308  
14,658,185  
Current service cost 
1,294,308  
1,365,600  
Interest cost 
805,084  
528,884  
Past service cost 
4,839  
(253) 
Remeasurement: 
 
 
Actuarial gains or losses arising from changes in demographic assumptions 
62,291  
34,917  
Actuarial gains or losses arising from changes in financial assumptions 
266,505  
(2,496,879) 
Other 
123,165  
521,452  
Benefits paid 
(846,457) 
(630,019) 
Other(*) 
3,622  
28,421  
Balance as of December 31 
15,723,665 
14,010,308  
(*) Other includes effects of changes in foreign currency exchange rates and reclassifications as held for sales. 
 
 
(E) Changes in the fair value of plan assets for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
19,593,910  
17,001,891  
Interest income on plan assets 
1,159,304  
628,240  
Remeasurement of plan assets 
(654,005) 
(312,565) 
Contributions by employer 
746,068  
2,741,417  
Benefits paid 
(687,125) 
(498,246) 
Other(*) 
14,175  
33,173  
Balance as of December 31 
20,172,327  
19,593,910  
(*) Other includes effects of changes in foreign currency exchange rates and reclassifications as held for sales. 
 
The reasonable estimate of the employer contributions expected to be paid in 2024 in respect of the defined benefit plans as 
of December 31, 2023 is W 1,757,413 million. 
 
(F) Plan assets as of December 31, 2023 and 2022 consist of the following: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Principal guaranteed fixed income financial instruments and other 
18,178,623 
18,766,006 
Other 
1,993,704 
827,904 
Total 
20,172,327 
19,593,910 
 
Plan assets are mostly invested in instruments which have a quoted price in active markets. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 57 - 
(G) The principal actuarial assumptions as of December 31, 2023 and 2022 are as follows:  
 
 (In percentage) 
December 31, 2023 
December 31, 2022 
 
 
 
Discount rate 
3.9~5.9 
4.3~6.4 
Salary growth rate (including the effects of inflation) 
3.0~6.3 
2.0~6.4 
 
 
(H) The sensitivity analysis of the defined benefit obligations as of December 31, 2023 and 2022 to changes in the principal 
assumptions is as follows: 
 
 
Defined benefit obligations 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Discount rate 
 
 
1% p increase 
14,291,442 
12,920,156 
1% p decrease 
17,385,125 
15,268,164 
Salary growth rate 
 
 
1% p increase 
17,365,127 
15,261,609 
1% p decrease 
14,280,988 
12,900,865 
 
 
(I) The weighted average maturity of the defined benefit obligations is 9.84 years as of December 31, 2023. 
 
 
15. Provisions  
 
Changes in provisions for the year ended December 31, 2023 are as follows: 
(In millions of Korean won) 
Warranty (A) 
Royalty   
expenses (B) 
Long-term 
incentives (C) 
Other 
(D, E) 
Total 
 
 
 
 
 
 
Balance as of January 1 
2,309,726  
1,546,606  
783,263  
3,133,830  
7,773,425  
Charged to profit or loss 
2,456,609  
595,307  
468,745  
2,012,062  
5,532,723  
Payment 
(2,279,281) 
(299,250) 
(261,622) 
(1,125,666) 
(3,965,819) 
Other(*) 
53,158  
(4,611) 
3,365  
11,085  
62,997  
Balance as of December 31 
2,540,212  
1,838,052  
993,751  
4,031,311  
9,403,326  
 (*) Other includes effects of changes in foreign currency exchange rates. 
 
(A) 
The Company accrues warranty provisions for estimated costs of quality assurance, exchanges, repairs, recalls, and 
future services based on historical experience and terms of warranty programs. 
 
(B) 
The Company recognizes provisions for the estimated royalty expenses that are under negotiation with counterparties. 
The timing and amount of payment depend on the settlement of the negotiation. 
 
(C) 
The Company has a long-term incentive plan for its executives based on a three-year management performance criteria 
and recognizes a provision for the estimated incentive cost. 
 
(D) 
The Company records provisions for estimated losses from contracts associated with discontinued products. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 58 - 
(E) 
The Company makes provisions for the emission in excess of the emission rights held by the Company. Details of 
emission rights and liabilities as of December 31, 2023 are as follows: 
 
(1) The amount of emission rights allocated free of charge in the current commitment period and the estimated amount 
of emission as of December 31, 2023 are as follows: 
(In million metric tons) 
December 31, 2023 
Emission rights allocated free of charge(*) 
18.06 
Estimated volume of emission 
17.66 
 (*)As of December 31, 2023, emission rights allocated free of charge for the remainder of the plan period are 32.60 million metric 
tons (2024: 16.30 million metric tons, 2025: 16.30 million metric tons). 
 
(2) Changes in the emission rights for the year ended December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
2023 
2022 
Balance as of January 1 
19,567  
46,073  
Increase 
1,272  
1,872  
Utilization 
(17,702) 
(28,378) 
Balance as of December 31(*) 
3,137  
19,567  
 (*) The quantity of emission rights is 56.25 million metric tons and there is no emission rights provided as provision of collateral  
   as of December 31, 2023.  
 
(3) Changes in emissions liabilities for the year ended December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
2023 
2022 
Balance as of January 1 
32,838  
45,049  
Charged to profit or loss 
(15,210) 
16,167  
Utilization 
(17,491) 
(28,378) 
Balance as of December 31 
137  
32,838  
 
 
16. Commitments and Contingencies 
 
(A) 
Litigation 
 
As of December 31, 2023, the Company is involved in various claims, disputes, and investigations conducted by regulatory 
bodies that arose during the normal course of business with numerous entities. Although the outflow of resources and timing 
of these matters are uncertain, the Company believes the outcome will not have a material impact on the financial position 
of the Company. 
 
(B) Other commitments  
 
(1) As of December 31, 2023, the Company has trade financing agreements, trade notes receivable discounting facilities, 
and loan facilities secured by accounts receivable with 28 financial institutions, including Woori Bank, with a 
combined limit of W 21,762,600 million. In addition, the Company has a trade financing agreement with 23 financial 
institutions, including Shinhan Bank, with a limit of W 15,958,875 million, and loan facilities secured by trade 
receivables with 13 banks, including Woori Bank, with a limit of W 2,149,320 million. 
 
(2) As of December 31, 2023, contractual commitments for the acquisition of property, plant and equipment and 
intangible assets amount to W 9,783,549 million. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 59 - 
17. Contract Liabilities 
 
The Company has recognized contract liabilities related to contracts with customers as follows:  
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Contract liabilities(*) 
13,327,724  
13,255,682  
 
(*) Contract liabilities include advances received, accrued expenses, other current liabilities and others. 
 
The revenue recognized for the year ended December 31, 2023 in relation to the contract liabilities carried forward as of 
January 1, 2023 amounts to W 1,156,619 million. 
 
 
18. Share Capital 
 
As of December 31, 2023, the parent company’s total number of authorized shares is 25,000,000,000 shares (W 100 per share). 
As well as its ordinary shares, the parent company also has non-cumulative preference shares that are eligible for an additional 
1% cash dividend over par value per annum compared to ordinary shares, but without voting rights. The parent company has 
issued 5,969,782,550 shares of ordinary shares and 822,886,700 shares of preference shares as of December 31, 2023, 
excluding the number of retired shares. As of the December 31, 2023, the number of shares outstanding is the same as the 
number of shares aforementioned with no changes during the years ended December 31, 2023 and 2022. Due to the retirement 
of shares, the total par value of the shares issued which excludes the number of retired shares is W 679,267 million (ordinary 
shares of W 596,978 million and preference shares of W 82,289 million), which does not agree with paid-in capital of W 
897,514 million.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 60 - 
19. Retained Earnings 
 
(A) Retained earnings as of December 31, 2023 and 2022 consist of the following: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Discretionary reserve and other 
208,198,003  
192,294,496  
Unappropriated retained earnings 
138,454,235  
145,651,911  
Total 
346,652,238  
337,946,407  
 
 
(B) Details of interim and year-end dividends are as follows:  
 
(1) Interim dividends (Record date: March 31, June 30 and September 30, 2023 and 2022) 
 
(In millions of Korean won and number of shares) 
2023 
2022 
1st Quarter 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary/Preference  
361% 
361% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,062  
297,062  
Total 
2,452,154  
2,452,154  
2nd Quarter 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary/Preference    
361% 
361% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,062  
297,062  
Total 
2,452,154  
2,452,154  
3rd Quarter 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary/Preference   
361% 
361% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,062  
297,062  
Total 
2,452,154  
2,452,154  
 
(2) Year-end dividends (Record date: December 31, 2023 and 2022) 
 
 (In millions of Korean won and number of shares) 
2023 
2022 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary shares 
361% 
361% 
Preference shares 
362% 
362% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,884  
297,884  
Total 
2,452,976  
2,452,976  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 61 - 
20. Other Components of Equity 
Other components of equity as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Gain on valuation of financial assets at fair value through other comprehensive income 
194,419  
2,749,109  
Share of other comprehensive income of associates and joint ventures 
185,144  
114,987  
Foreign currency translation differences for foreign operations 
3,651,112  
1,039,197  
Remeasurement of net defined benefit assets 
(2,849,526) 
(2,051,610) 
Other 
98,981  
86,645  
Total 
1,280,130  
1,938,328  
 
 
21. Expenses by Nature  
 
Expenses by nature for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Changes in finished goods, work in process, and other 
(644,905)  
(10,355,548)  
Raw materials used, merchandise purchased, and other 
96,219,181  
112,591,917  
Wages and salaries 
30,405,245  
30,078,623  
Post-employment benefit 
1,157,422  
1,440,099  
Depreciation 
35,532,411  
35,952,098  
Amortization 
3,134,148  
3,155,561  
Welfare 
6,472,979  
6,091,626  
Utilities 
7,502,408  
6,142,317  
Outsourcing 
7,058,833  
6,597,467  
Advertising 
5,213,896  
6,112,951  
Sales promotion  
6,894,395  
7,110,649  
Other  
53,422,505  
53,936,970  
Total(*) 
252,368,518  
258,854,730  
 
(*) Equal to the sum of cost of sales and selling and administrative expenses in the consolidated statements of profit or loss. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 62 - 
22. Selling and Administrative Expenses 
Selling and administrative expenses for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Selling and administrative expenses 
 
 
Wages and salaries 
8,324,562  
7,763,588  
Post-employment benefit 
299,369  
330,115  
Commissions  
8,753,442  
7,457,896  
Depreciation 
1,649,335  
1,574,757  
Amortization 
688,786  
664,346  
Advertising 
5,213,896  
6,112,951  
Sales promotion  
6,894,395  
7,110,649  
Transportation 
1,721,614  
3,214,301  
Service  
3,968,816  
3,671,913  
Other  
6,125,999  
5,993,246  
Subtotal 
43,640,214  
43,893,762  
Research and development expenses 
 
 
Research and development 
28,339,724  
24,919,198  
Total 
71,979,938  
68,812,960  
 
 
23. Other Non-Operating Income and Expenses 
Details of other non-operating income and expenses for the years ended December 31, 2023 and 2022 are as follows: 
  
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Other non-operating income 
 
 
Dividend income 
164,203  
414,601  
Rental income 
150,273  
140,908  
Gain on disposal of property, plant and equipment 
104,663  
159,123  
Other 
761,309  
1,247,439  
Total 
1,180,448  
1,962,071  
 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Other non-operating expenses 
 
 
Loss on disposal of property, plant and equipment 
85,799  
61,256  
Donations 
243,377  
305,941  
Other 
754,151  
1,422,979  
Total 
1,083,327  
1,790,176  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 63 - 
 
24. Financial Income and Expenses 
 
Details of financial income and expenses for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial income 
 
 
Interest income 
4,358,022  
2,720,479  
Financial assets measured at amortized cost 
4,357,792  
2,720,213  
Financial assets measured at fair value through profit or loss 
230  
266  
Foreign exchange differences 
10,608,661  
16,537,855  
Gain from derivatives 
1,133,465  
1,570,661  
Total 
16,100,148  
20,828,995  
 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial expenses 
 
 
Interest expenses 
930,253  
763,015  
Financial liabilities measured at amortized cost 
510,865  
322,529  
Other financial liabilities 
419,388  
440,486  
Foreign exchange differences 
10,711,058  
16,809,703  
Loss from derivatives 
1,004,219  
1,454,971  
Total 
12,645,530  
19,027,689  
 
The Company recognizes foreign exchange gains and losses arising from foreign currency transactions and translation as 
financial income and expenses. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 64 - 
25. Income Tax Expense 
 
(A) 
Income tax expense for the years ended December 31, 2023 and 2022 consists of the following: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Current taxes 
 
 
Current tax on profits for the year 
5,660,505  
7,391,099  
Adjustments recognized in the current year 
(725,524) 
(501,683) 
Subtotal 
4,934,981  
6,889,416  
Deferred taxes 
 
 
Changes in deferred taxes arising from unused tax credits 
(5,346,657) 
(1,080,068) 
Changes in deferred taxes arising from temporary differences 
(3,061,001) 
(15,407,692) 
Changes in deferred taxes arising from unused tax losses 
(1,041,996) 
160,123  
Other 
33,838  
224,618  
Subtotal 
(9,415,816) 
(16,103,019) 
Income tax expense 
(4,480,835) 
(9,213,603) 
 
 
(B) 
The difference between the income tax expense on the Company’s profit before tax and the theoretical amount computed  
     using the weighted-average tax rate applicable to the profit before tax of each of the Company’ entities is as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Profit before income tax 
11,006,265  
46,440,474  
Tax calculated at weighted average of applicable tax rates(*) 
1,901,195  
13,652,900  
Adjustments: 
 
 
Permanent differences 
219,374 
(2,090,031) 
Temporary differences for which no deferred income tax was recognized 
(12,588)  
769,211  
Tax credits and exemptions 
(6,706,820) 
(5,185,576) 
Results of interest in subsidiaries, etc. 
(389,305) 
(16,186,745) 
Impact of changes in tax rates 
(3,926) 
(376) 
Other 
511,235  
(172,986) 
Subtotal 
(6,382,030) 
(22,866,503) 
Income tax expense 
(4,480,835) 
(9,213,603) 
 
(*) The statutory tax rate is the weighted average of the statutory tax rates applicable to the Company’s year-end profits as of December 
31, 2023 and 2022, which vary by tax jurisdictions. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 65 - 
(C) 
The movement in deferred income tax assets and liabilities for the years ended December 31, 2023 and 2022 are as 
follows: 
 
 
2023 
2022 
(In millions of Korean won) 
Balance  
as of 
 January 1 
Increase 
(Decrease) 
Balance  
as of 
December 31 
Balance  
as of 
January 1 
Increase 
(Decrease) 
Balance  
as of 
December 31 
 
 
 
 
 
 
 
Deferred tax arising from temporary differences 
Revaluation of land 
(898,505) 
(182) 
(898,687) 
(936,822) 
38,317  
(898,505) 
Investments in subsidiaries, associates 
and joint ventures(*1,2) 
(4,960,247) 
57,640  (4,902,607) (20,614,554) 
15,654,307  (4,960,247) 
Accumulated depreciation and other 
(2,566,535) 
682,845  (1,883,690) 
(1,771,793) 
(794,742) 
(2,566,535) 
Accrued income 
39,680  
28,042  
67,722  
6,853  
32,827  
39,680  
Provisions, accrued expenses, and other 
5,219,130  
1,923,486  
7,142,616  
4,560,874  
658,256  
5,219,130  
Foreign currency translation 
185,900  
(12,997) 
172,903  
12,076  
173,824  
185,900  
Asset impairment losses 
234,734  
1,011 
235,745  
258,886  
(24,152) 
234,734  
Other 
(969,702) 
381,157  
(588,545)  
(638,757) 
(330,945) 
(969,702) 
Subtotal 
(3,715,545) 
3,061,002  
(654,543) (19,123,237) 
15,407,692  (3,715,545) 
Deferred tax arising from tax losses  
Unused tax losses  
276,358  
1,041,996  
1,318,354  
436,481  
(160,123) 
276,358  
Deferred tax arising from unused tax credits 
Unused tax credits 
2,746,430  
5,346,657 
8,093,087  
1,666,362  
1,080,068  
2,746,430  
Deferred tax recognized in equity 
Loss (gain) on valuation of financial assets at fair value  
through other comprehensive income and other 
(50,392) 
(156,443)  
(206,835)  (3,155,310) 
3,104,918  
(50,392) 
Remeasurement of net defined benefit assets 
733,135  
308,050  
1,041,185  
1,238,713  
(505,578) 
733,135  
Subtotal 
682,743  
151,607  
834,350  (1,916,597) 
2,599,340  
682,743  
Net deferred tax assets (liabilities) 
(10,014) 
9,601,262 
9,591,248 (18,936,991) 
18,926,997 
(10,014) 
Deferred tax assets 
5,101,318  
5,110,479 
10,211,797 
4,261,214 
840,104  
5,101,318  
Deferred tax liabilities 
(5,111,332) 
4,490,783 
(620,549) (23,198,205) 
18,086,873  (5,111,332) 
 
(*) Deferred tax assets are not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for 
investments in subsidiaries, associates and joint ventures. 
 
 
The Company assessed that it is probable that deferred tax asset will be realized to the extent that the Company’s expected 
average annual taxable losses and tax credits that can be utilized in each accounting period. However, the following temporary 
differences have not been recognized for tax purposes as it is not probable that they will be realized in the future as of December 
31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Unused tax losses 
597,176  
594,798  
Unused tax credits 
118,694  
46,550  
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 66 - 
Expected expiry dates of unused tax losses and credits for which no deferred tax asset is recognized are as follows: 
 
(In millions of Korean won) 
2023 
2024 
2025 
2026 and after 
 
 
 
 
 
Unused tax losses 
37,899  
741  
- 
558,536  
Unused tax credits 
7,163  
-  
110,450  
1,081  
 
 
(D) Details of the period when the deferred tax assets (liabilities) are expected to be recovered (settled) as of December 31, 
2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Deferred tax assets 
 
 
Deferred tax assets to be recovered within 12 months 
9,392,311  
3,249,661  
Deferred tax assets to be recovered after 12 months 
819,486  
1,851,657  
Subtotal 
10,211,797  
5,101,318  
Deferred tax liabilities 
 
 
Deferred tax liabilities to be settled after 12 months 
(620,549) 
(5,111,332) 
Total 
9,591,248  
(10,014) 
 
 
(E) Global minimum top-up tax 
 
The global minimum top-up is a system under which multinational companies with consolidated revenue of €750 million or 
more in at least two of the four preceding financial years are required to pay a substantial amount of tax to the tax authorities 
of the country in which the parent company resides if their effective tax rate in those countries is less than 15%.  
  
The Republic of Korea, where the parent company is domiciled, enacted the Global Minimum Tax Act in 2023, which requires 
the application of the Global Minimum Tax for accounting periods beginning on or after January 1, 2024. 
   
The Company believes that it will be subject to the Global Minimum Tax Act, but as the Global Minimum Tax Act will be 
effective in the Republic of Korea from January 1, 2024, there is no impact on the Company's current income tax expense. In 
addition, the Company has applied the temporary exemption for deferred taxes under Korean IFRS 1012 and has not 
recognized any deferred tax assets or liabilities related to the global minimum tax law and has not disclosed any deferred tax 
information. 
 
As the legislation in the countries where the Company’s subsidiaries are located that are primarily affected by the global 
minimum top-up tax legislation has not been enacted or specific legislation is in the process of being enacted, it is not possible 
to reasonably estimate the impact on the Company as at December 31, 2023. Each of the Company’s subsidiaries is reviewing 
the impact on its financial statements with tax experts in each country. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 67 - 
26. Earnings per Share 
 
(A) 
Basic earnings per share 
 
Basic earnings per share for the years ended December 31, 2023 and 2022 are calculated as follows: 
 
(1) 
Ordinary shares 
 
(In millions of Korean won, thousands of number of shares) 
2023 
2022 
 
 
 
Profit for the year attributable to owners of the parent company 
14,473,401  
54,730,018  
Profit for the year available for ordinary shares 
12,719,321  
48,099,117  
Weighted-average number of ordinary shares outstanding 
5,969,783  
5,969,783  
Basic earnings per ordinary share (in Korean won) 
2,131  
8,057  
 
(2) 
Preference shares 
 
(In millions of Korean won, thousands of number of shares) 
2023 
2022 
 
 
 
Profit for the year attributable to owners of the parent company 
14,473,401  
54,730,018  
Profit for the year available for preference shares 
1,754,080  
6,630,901  
Weighted-average number of preference shares outstanding 
822,887  
822,887  
Basic earnings per preference share (in Korean won) 
2,132  
8,058  
 
 
(B) 
Diluted earnings per share 
 
The Company does not have dilutive potential ordinary shares and as a result, basic earnings per share and diluted earnings 
per share are the same for the years ended December 31, 2023 and 2022. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 68 - 
27. Statements of Cash Flows 
(A) The Company used the indirect method to present cash flows from operating activities. Adjustments and changes in assets 
 and liabilities arising from operating activities for the years ended December 31, 2023 and 2022 are as follows: 
 
- 
Adjustments 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Adjustments: 
 
 
Income tax income 
(4,480,835) 
(9,213,603) 
Financial income 
(6,156,093) 
(5,778,279) 
Financial expenses 
3,076,837  
4,336,254  
Post-employment benefits 
1,157,422  
1,440,099  
Depreciation 
35,532,411  
35,952,098  
Amortization 
3,134,148  
3,155,561  
Bad debt expense 
62,964  
8,784  
Dividend income 
(164,203) 
(414,601) 
Share of profit of associates and joint ventures 
(887,550) 
(1,090,643) 
Gain on disposal of property, plant and equipment 
(104,663) 
(159,123) 
Loss on disposal of property, plant and equipment 
85,799  
61,256  
Loss on valuation of inventories and others 
5,037,579  
4,408,767  
Others 
225,718  
366,869  
Total 
36,519,534  
33,073,439  
 
- 
Changes in assets and liabilities arising from operating activities 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Changes in assets and liabilities : 
 
 
Decrease (increase) in trade receivables 
(90,243) 
7,856,258  
Decrease (increase) in other receivables 
325,894  
(1,524,173) 
Decrease (increase) in prepaid expenses 
(390,636) 
3,506  
Increase in inventories 
(3,206,615) 
(13,311,072) 
Increase (decrease) in trade payables 
318,432  
(5,298,547) 
Increase (decrease) in other payables 
785,534  
(1,443,409) 
Increase in advances received 
138,188  
106,977  
Increase (decrease) in withholdings 
(411,028) 
25,392  
Increase (decrease) in accrued expenses 
(3,704,020) 
919,271  
Increase (decrease) in provisions 
1,566,904  
(34,298) 
Payment of post-employment benefits 
(938,691) 
(707,887) 
Decrease (increase) in plan assets 
100,384  
(2,243,171) 
Other 
47,152  
(1,347,795) 
Total 
(5,458,745) 
(16,998,948) 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 69 - 
(B) 
 Significant non-cash investing and financing transactions for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Valuation of financial assets at fair value through other comprehensive income 
1,548,022  
(2,636,448) 
Valuation of investments in associates and joint ventures 
75,112  
(50,510) 
Reclassification of construction in progress to property, plant and equipment 
39,749,735  
36,047,916  
New lease contracts established 
1,802,463  
2,111,660  
Reclassification of current portion of debentures and long-term borrowings 
1,308,875 
1,089,162 
 
 
(C) Changes in liabilities arising from financing activities for the years ended December 31, 2023 and 2022 are as follows: 
 
(1) 2023 
 
 
As of 
January 1 
Cash flows from 
financing 
activities 
Non-cash transactions 
As of  
December 31 
(In millions of Korean won) 
New lease 
contracts 
Other(*) 
 
 
 
 
 
 
Short-term borrowings 
5,147,315  
2,145,400  
- 
(178,114) 
7,114,601  
Debentures and long-term borrowings 
5,185,927  
(864,867) 
1,497,058  
(246,775) 
5,571,343  
Total 
10,333,242  
1,280,533  
1,497,058  
(424,889) 
12,685,944  
 
(*) Other includes accreted interest and effects of changes in foreign currency exchange rates. 
 
(2) 2022 
 
 
As of 
January 1 
Cash flows from 
financing 
activities 
Non-cash transactions 
As of 
December 31 
(In millions of Korean won) 
New lease 
contracts 
Other(*) 
 
 
 
 
 
 
Short-term borrowings 
13,687,793  
(8,339,149) 
- 
(201,329) 
5,147,315  
Debentures and long-term borrowings 
4,704,356  
(1,236,468) 
2,111,660  
(393,621) 
5,185,927  
Total 
18,392,149  
(9,575,617) 
2,111,660  
(594,950) 
10,333,242  
 
(*) Other includes accreted interest and effects of changes in foreign currency exchange rates.  
 
For the years ended December 31, 2023 and 2022, cash outflows from repayment of the principal of lease liabilities 
(financial activities) amount to W 1,098,944 million and W 998,531 million, respectively, while cash outflows due to 
interest expenses (operating activities) in relation to the lease liabilities amount to W 197,202 million and W 140,111 
million, respectively. 
 
 
(D) The Company recorded cash inflows and outflows from short-term financial instruments with frequent transactions, large 
gross amounts and short-term maturities, as well as from short-term borrowings on a net basis. As of December 31, 2023, 
most of the Company’s cash and cash equivalents consist mainly of bank deposits. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 70 - 
28. Financial Risk Management 
 
The Company manages its financial risks with a focus on minimizing market risk, credit risk, liquidity risk and others arising 
from its operating activities. To this end, the Company closely monitors and responds to each risk factor. 
 
The Company establishes global financial management standards and manages the risks by periodically measuring customer’s 
and counterparties’ financial risk, applying currency hedges, and reviewing cash flows.  
 
The Company also manages foreign exchange risk by monitoring foreign exchange rate fluctuations through local financial 
centers in the major regions (United States, United Kingdom, Singapore, China, Brazil, and Russia), which act as an agent for 
the subsidiaries in each region to manage foreign exchange transactions. In addition, local finance centers in the major regions 
respond to liquidity risk through a regionally integrated financial structure. 
 
The Company’s financial assets subject to financial risk management consist of cash and cash equivalents, short-term financial 
instruments, financial assets at amortized cost, trade receivables and others, while its financial liabilities consist of trade 
payables, borrowings, and others. 
 
(A) 
Market risk 
 
(1) 
Foreign exchange risk  
 
The Company is exposed to foreign exchange risk arising from its global operations through transactions in currencies other 
than its functional currency. The main currencies in which the Company is exposed to foreign exchange risk are the US dollar 
and European Euro. 
 
The Company focuses on minimizing the impact of foreign exchange fluctuation by matching levels of assets and liabilities 
denominated in each foreign currency. To minimize exchange position, the Company’s foreign exchange management 
policy requires normal business transactions, including import and export, as well as financing transactions such as 
depositing and borrowing, to be in local currency or match as closely as possible cash inflows and outflows incurred in the 
respective foreign currencies. This reduces but does not eliminate the foreign exchange risk to which the Company is 
exposed. Moreover, the Company periodically evaluates and monitors the foreign exchange risk to efficiently mitigate such 
risk, and the speculative foreign exchange transactions are strictly prohibited. 
 
As of December 31, 2023 and 2022, the impact on profit or loss (before tax) of a 5% change in exchange rates on the 
Company’s financial assets and financial liabilities denominated in a major foreign currency other than the functional 
currency would be as follows:   
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Increase 
Decrease 
Increase 
Decrease 
 
 
 
 
 
USD 
418,776  
(418,776) 
258,655  
(258,655) 
EUR 
151,740  
(151,740) 
92,546  
(92,546) 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 71 - 
(2) 
Interest rate risk 
 
Interest rate risk for floating interest rate financial instruments can be defined as the risk of changes in the fair value of 
components of the statements of financial position due to changes in the market interest rates, and the risk of changes in the 
future cash flows of interest income and expenses arising from investing and financing activities. The Company’s exposure 
to interest rate risk arises primarily from interest-bearing deposits and floating interest rate debt obligations, and the 
Company manages its exposure to interest rate risk to minimize uncertainty and cost of financing resulting from changes in 
interest rates.  
 
As of December 31, 2023 and 2022, the effect on profit or loss before tax of a 1%p change in interest rates on the Company’s 
variable rate financial assets and liabilities at the reporting date would have been as follows:  
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Increase 
Decrease 
Increase 
Decrease 
 
 
 
 
 
Financial assets 
210,617  
(210,617) 
72,750  
(72,750) 
Financial liabilities 
(6,197) 
6,197  
(8,427) 
8,427  
Net effect 
204,420  
(204,420) 
64,323  
(64,323) 
 
 
(3) 
 Price risk 
 
The Company’s investment portfolio consists of direct and indirect investments in equity instruments classified as financial 
assets at fair value through other comprehensive income and financial assets at fair value through profit or loss, which is in 
line with the Company’s strategy. 
 
As of December 31, 2023 and 2022, price fluctuation of marketable equity securities (listed stocks) by 1% would result in 
changes in other comprehensive income (before income tax) of W 52,510 million and W 92,073 million, respectively, and 
changes in profit before tax of W 3,472 million and W 3,144 million, respectively.  
 
 
(B) 
 Credit risk 
 
Credit risk arises during the normal course of transactions and investing activities where customers or other parties fail to 
discharge an obligation. The Company monitors and sets the customer’s and counterparty’s credit limit on a periodic basis 
based on the customer’s and counterparty’s financial conditions, default history and other factors. Adequate insurance 
coverage is maintained for trade receivables related to trading partners situated in higher risk countries. 
 
Credit risk can arise from transactions with financial institutions including financial instrument transactions such as cash and 
cash equivalents, deposits, and derivative instruments. To minimize such risk, the Company has a policy of transacting only 
with banks that have a strong international credit rating (S&P A and above), and new transactions with financial institutions 
which the Company does not have an existing relationship are subject to the completion of risk assessments prior to 
commencement of transactions. The Company generally enters into financial agreements without restrictions, such as debt 
ratio covenants, provision of collateral and/or repayment of borrowings, and otherwise separate approvals are obtained. 
 
The carrying amount of the Company’s financial assets net of impairment losses is the Company’s maximum exposure to 
credit risk. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 72 - 
(C) 
Liquidity risk  
 
Liquidity risk is the risk that a company will have difficulty in meeting all its financial obligations. The Company’s main 
sources of liquidity are cash generated from operations and funds raised from the capital markets and financial institutions, 
while its main liquidity needs are for investments in production, research and development, working capital and dividends. 
Due to the nature of the Company’s business, which involves large investments, maintaining adequate levels of liquidity is 
critical. The Company maintains and manages adequate liquidity through forecasting periodic cash flows, estimating required 
cash levels, and monitoring inflows and outflows of cash. 
 
The Company has established Cash Pooling by region to respond effectively to liquidity risks, even when individual companies 
within a region are underfunded. Cash Pooling is a system that shares funds between underfunded and overfunded companies, 
minimizing the liquidity risk of individual companies, easing the burden of fund management, and reducing financial costs.  
 
In addition, the Company has secured credit lines for its overseas subsidiaries by means of payment guarantees from the head 
office in the event of large liquidity needs, and, at the end of the period, the Company had investment grade ratings of Aa2 
from Moody’s and AA- from S&P, enabling it to raise funds on the capital market in a timely manner.  
 
As of December 31, 2023 and 2022, the maturity analysis of financial liabilities, based on the remaining period from the 
reporting date to the contractual maturity date, is as follows:  
 
 
December 31, 2023 
(In millions of Korean won) 
Less than 
3 months 
~ 6 months 
~1 year 
1 ~ 5 years 
More than 
5 years 
 
 
 
 
 
 
Financial liabilities 
43,302,421 
589,743 
1,529,785 
7,811,246 
2,337,792 
 
 
December 31, 2022 
(In millions of Korean won) 
Less than 
3 months 
~ 6 months 
~1 year 
1 ~ 5 years 
More than 
5 years 
 
 
 
 
 
 
Financial liabilities 
42,990,570 
733,984 
1,925,448 
5,402,672 
1,562,274 
 
The cash flows included in the maturity classification, based on the remaining period to the contractual maturity date, are 
undiscounted expected cash outflows.  
 
The Company’s derivative financial liabilities of W 44,252 million (December 31, 2022: W 119,061 million) has been 
included within the less than 3 months bucket. These are the Company’s trading portfolio of derivative instruments, on a net 
settlement term, of which the contractual maturities are not essential for understanding its cash flows. These contracts are 
managed on a net fair value basis rather than by the maturity date. Net settled derivatives consist of forwards on currency rates 
used by the Company to manage the exchange rate profile. 
 
Derivatives that are settled on a gross basis by the delivery of underlying items, including derivatives for hedging, will be 
settled within the next 48 months from the end of the reporting period. These derivatives are not included in the table above. 
 
There is no maximum liquidity risk exposure from those other than the above financial liabilities (e.g., payment and 
performance guarantees) as of December 31, 2023. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 73 - 
(D) 
Derivative financial instruments 
 
The Company uses cash flow hedge accounting to hedges of the exposure to changes in the price of inventories. As of 
December 31, 2023, the Company’s derivative financial instruments designated as cash flow hedges are as follows:  
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Assets 
Liabilities 
Assets 
Liabilities 
 
 
 
 
 
Currency forward exchange contracts 
 
 
 
 
Current  
50,018  
15,031  
44,567  
11,035  
Non-current  
19,853  
18,099  
15,703  
15,813  
Total 
69,871  
33,130  
60,270  
26,848  
 
For the years ended December 31, 2023 and 2022, the Company recognizes the gains and losses relating to the effective 
portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges in other comprehensive 
income, which amount to the gain of W 927 million (after tax) and loss of W 12,893 million (after tax), respectively, and 
recognizes the gains relating to the ineffective portion in profit or loss, which amount to the gain of W 1,304 million (before 
tax) and gain of W 611 million (before tax), respectively. For the years ended December 31, 2023 and 2022, gains and losses 
reclassified directly from other comprehensive income to profit or loss amount to the gain of W 6,692 million (after tax) and 
the loss of W 4,602 million (after tax), respectively, and the gains reclassified from other comprehensive income to the carrying 
amount of inventory amount to the gain of W 51,614 million (after tax) and the gain of W 55,856 million (after tax), 
respectively. 
 
 
(E) 
Capital risk management  
 
The purpose of capital management is to maintain a sound capital structure and protect the Company’s ability to continue to 
provide benefits to its shareholders and stakeholders as a going concern. The Company monitors capital on the basis of credit 
ratings and debt ratio.  
 
The debt ratio as of December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Total liabilities 
92,228,115  
93,674,903  
Total equity 
363,677,865 
354,749,604 
Debt ratio 
25.4% 
26.4% 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 74 - 
(F) 
Fair value measurement 
 
(1) 
Carrying amounts and fair value of financial instruments by category as of December 31, 2023 and 2022 are as 
follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Carrying amount 
Fair value 
Carrying amount 
Fair value 
Financial assets 
 
 
 
 
Cash and cash equivalents 
69,080,893  
(*1) 
49,680,710  
(*1) 
Short-term financial instruments 
22,690,924  
(*1) 
65,102,886  
(*1) 
Short-term financial assets at amortized cost  
608,281  
(*1) 
414,610  
(*1) 
Short-term financial assets at fair value  
through profit or loss 
27,112  
27,112 
29,080  
29,080 
Trade receivables 
36,647,393  
(*1) 
35,721,563  
(*1) 
Financial assets at fair value through  
other comprehensive income 
7,481,297  
7,481,297 
11,397,012  
11,397,012 
Financial assets at fair value through  
profit or loss 
1,431,394  
1,431,394 
1,405,468  
1,405,468 
Other(*2) 
14,840,275  
546,021 
10,340,876  
395,667 
Total financial assets 
152,807,569  
  
174,092,205  
  
Financial liabilities 
 
 
 
 
Trade payables 
11,319,824  
(*1) 
10,644,686  
(*1) 
Short-term borrowings 
7,114,601  
(*1) 
5,147,315  
(*1) 
Other payables 
13,996,395  
(*1) 
16,328,237  
(*1) 
Current portion of long-term liabilities 
1,308,875  
6,757 
1,089,162  
6,580 
 - Long-term borrowing 
1,302,521  
(*1)(*3) 
1,082,934  
(*1)(*3) 
 - Debentures 
6,354  
6,757 
6,228  
6,580 
Debentures  
537,618  
529,254 
536,093  
521,129 
Long-term borrowings 
3,724,850  
(*1)(*3) 
3,560,672  
(*1)(*3) 
Long-term other payables 
4,907,875  
(*1) 
2,289,236  
(*1) 
Other(*2) 
11,414,008  
83,463 
12,409,529  
361,768 
Total financial liabilities 
54,324,046  
  
52,004,930    
 
(*1) Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures. 
(*2) Assets measured at the cost of W 14,294,254 million and W 9,945,209 million as at December 31, 2023 and 2022, respectively, and 
liabilities measured at the cost of W 11,330,545 million and W 12,047,761 million as at December 31, 2023 and 2022, respectively, are excluded 
as their carrying amounts are a reasonable estimation of fair value. 
(*3) Lease liabilities, classified under the current portion of long-term liabilities and long-term borrowings, are excluded from the fair value 
disclosures in accordance with Korean IFRS 1107. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 75 - 
(2) 
Fair value hierarchy classifications of the financial instruments that are measured at or only disclosed their fair value 
as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
(In millions of Korean won) 
Level 1 
Level 2 
Level 3 
Total balance 
Assets 
 
 
 
 
Short-term financial assets at fair value 
through profit or loss 
- 
27,112  
- 
27,112  
Financial assets at fair value through 
other comprehensive income 
5,250,993  
- 
2,230,304  
7,481,297  
Financial assets at fair value through 
profit or loss 
347,221  
- 
1,084,173  
1,431,394  
Other 
- 
130,364  
415,657  
546,021  
Liabilities 
 
 
 
 
Current portion of debentures 
- 
6,757  
- 
6,757  
Debentures 
- 
529,254  
- 
529,254  
Other 
- 
83,463  
- 
83,463  
 
 
December 31, 2022 
(In millions of Korean won) 
Level 1 
Level 2 
Level 3 
Total balance 
Assets 
 
 
 
 
Short-term financial assets at fair value 
through profit or loss 
- 
29,080  
- 
29,080  
Financial assets at fair value through 
other comprehensive income 
9,207,295  
- 
2,189,717  
11,397,012  
Financial assets at fair value through 
profit or loss 
314,449  
- 
1,091,019  
1,405,468  
Other 
- 
373,176  
22,491  
395,667  
Liabilities 
 
 
 
 
Current portion of debentures 
- 
6,580  
- 
6,580  
Debentures 
- 
521,129  
- 
521,129  
Other 
- 
354,364  
7,404  
361,768  
 
The levels of the fair value hierarchy and its application to financial assets and liabilities are described below. 
 
ㆍ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities 
ㆍ Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either 
directly or indirectly 
ㆍ Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) 
 
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A 
market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry 
group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions 
on an arm’s length basis. These instruments are included in Level 1. The instruments included in Level 1 are listed equity 
investments, most of which are classified as financial assets at fair value through other comprehensive income. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 76 - 
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. 
These valuation techniques maximize the use of observable market data where available and rely as little as possible on 
entity-specific estimates. If all significant inputs required to measure the fair value of an instrument are observable, the 
instrument is included in Level 2. 
 
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3. 
 
The Company performs the fair value measurements required for financial reporting purposes, including Level 3 fair values, 
and discusses valuation processes and results in line with the financial reporting timelines. The Company’s policy is to 
recognize transfers between levels at the end of the reporting period if corresponding events or changes in circumstances 
have occurred. 
 
Specific valuation techniques used to value financial instruments include: 
 
ㆍ Quoted market prices or dealer quotes for similar instruments 
ㆍThe fair value of forward foreign exchange contracts is determined using forward exchange rates at the reporting date, 
with the resulting value discounted to present value 
 
Other techniques, such as discounted cash flow analysis, binomial distribution model, etcetera, are used to determine fair 
value for the remaining financial instruments. For trade and other receivables that are classified as current assets, the book 
value approximates a reasonable estimate of fair value. 
 
(3) 
Valuation technique and the inputs 
 
The Company utilizes a present value technique to discount future cash flows using proper interest rates for corporate bonds, 
government and public bonds, and bank debentures that are classified as Level 2 in the fair value hierarchy.   
 
The following table presents the valuation technique and the inputs used for major financial instruments classified as Level 
3 as of December 31, 2023. 
 
(In millions of Korean won and percentage)  
Classification 
Fair 
value 
Valuation technique 
Level 3 inputs 
Input range 
(Weighted average) 
Financial assets at fair value through other comprehensive income 
Samsung Venture Investment 
32,286 
Discounted cash flow 
Permanent growth rate 
1.0% 
Weighted average cost of capital 
17.1% 
MiCo Ceramics Co., Ltd. 
33,973 
Discounted cash flow 
Permanent growth rate 
0.0% 
Weighted average cost of capital 
15.8% 
TCL China Star Optoelectronics 
Technology Co. Ltd. (CSOT) 
1,286,007 
Discounted cash flow 
Permanent growth rate 
0.0% 
Weighted average cost of capital 
10.6% 
China Star Optoelectronics 
Semiconductor Display 
Technology Ltd (CSOSDT) 
226,531 
Discounted cash flow 
Permanent growth rate 
0.0% 
Weighted average cost of capital 
10.6% 
Others 
Call option on equity instruments 
393,235 
Binomial model 
Risk-free discount rate 
3.2% 
Price volatility 
69.5% 
Put option on equity instruments 
22,422 
Binomial model 
Risk-free discount rate 
3.9%~5.2%, 2.2% 
Price volatility 
22.7%, 24.4% 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 77 - 
(4) 
Changes in Level 3 instruments for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial assets 
 
 
Balance as of January 1 
3,303,227  
3,430,214  
Acquisitions 
207,023  
207,730  
Disposals 
(124,477) 
(207,252) 
Amount recognized in profit or loss 
297,680  
73,782  
Amount recognized in other comprehensive income 
46,725  
(197,830) 
Other 
(44) 
(3,417) 
Balance as of December 31 
3,730,134  
3,303,227  
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial Liabilities 
 
 
Balance as of January 1 
7,404  
5,438  
Amount recognized in profit or loss 
619  
1,966  
Other 
(8,023) 
- 
Balance as of December 31 
- 
7,404  
 
 
(5) 
Sensitivity analysis for recurring fair value measurements categorized within Level 3 
 
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value of 
financial instruments which are affected by the unobservable parameters, using a statistical technique. When the fair value 
is affected by more than two input parameters, the amounts represent the most favorable or unfavorable. 
 
The results of the sensitivity analysis for effect on income or loss before tax from changes in inputs for major financial 
instruments which are categorized within Level 3 and subject to sensitivity analysis are as follows: 
 
(In millions of Korean won) 
Favorable changes 
Unfavorable changes 
Classification 
Profit or loss 
Equity 
Profit or loss 
Equity 
Financial assets at fair value through 
other comprehensive income(*1) 
- 
161,758  
- 
(111,678) 
Other (*2) 
101,749  
- 
(101,696) 
- 
 
(*1) For equity securities, changes in fair value are calculated with the correlation between the growth rate (-1.0%~1.0%) and the discount 
rate, which are significant unobservable inputs. 
(*2) Changes in fair value were calculated based on the correlation between underlying asset price (20%) and price volatility (10%), which 
are significant unobservable inputs. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 78 - 
29. Segment Information 
 
(A) 
Operating segment information 
 
The chief operating decision-maker has been identified as the Management Committee. The Company determines operating 
segments based on the segment information reported to the Management Committee. The Management Committee reviews 
the operating profits of each operating segment in order to evaluate the performance and to make strategic decisions regarding 
the allocation of resources to each segment. 
 
Revenue consists mostly of product sales. The operating segments are product-based and are identified based on the internal 
organization and revenue streams. As of the reporting date, the operating segments are comprised of DX, DS, SDC, Harman, 
and others. 
 
The segment information including depreciation, amortization and operating profits is prepared after adjusting intercompany 
transactions. Total assets and liabilities of each operating segment are excluded from the disclosure as these have not been 
provided regularly to the Management Committee. 
 
(1) For the year ended December 31, 2023 
 
(In millions of Korean won) 
DX 
DS 
SDC 
Harman 
Intercompany 
reconciliations 
Total(*) 
 
 
 
 
 
 
 
Revenue 
169,992,337  
66,594,471  
30,975,373  
14,388,454  (23,015,141)  258,935,494  
Depreciation 
2,524,199  
29,371,056  
3,108,935  
327,572  
 -  
35,532,411  
Amortization 
1,721,938  
754,901  
222,045  
200,896  
 -  
3,134,148  
Operating profit 
14,384,705  (14,879,458)  
5,566,478  
1,173,702  
 -  
6,566,976  
(*) Other operating segments are not separately disclosed. 
 
Revenue by major product for the year ended December 31, 2022 are as follows: 
 
(In millions of Korean won) 
TV, monitor, and 
other 
Smartphone and 
other 
Memory 
Display panels 
Total(*) 
 
 
 
 
 
 
Revenue 
30,375,193  
108,632,515  
44,125,386  
30,975,373  
258,935,494  
(*) Other products are not separately disclosed. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 79 - 
(2) For the year ended December 31, 2022 
 
(In millions of Korean won)  
DX 
DS 
SDC 
Harman 
Intercompany 
reconciliations 
Total(*) 
 
 
 
 
 
 
 
Revenue 
182,489,720  
98,455,270  
34,382,619  
13,213,694  (26,309,943)  302,231,360  
Depreciation 
2,520,708  
28,196,959  
4,768,498  
331,342  
 -  
35,952,098  
Amortization 
1,678,572  
809,270  
237,182  
211,549  
 -  
3,155,561  
Operating profit 
12,746,074  
23,815,810  
5,952,973  
880,548  
 -  
43,376,630  
(*) Other operating segments are not separately disclosed. 
 
Revenue by major product for the year ended December 31, 2022 are as follows: 
 
(In millions of Korean won) 
TV, monitor, and 
other 
Smartphone and 
other 
Memory 
Display panels 
Total(*) 
 
 
 
 
 
 
Revenue 
33,279,488  
115,425,375  
68,534,930  
34,382,619  
302,231,360  
(*) Other products are not separately disclosed. 
 
 
(B) 
Regional information 
 
The regional information provided to the Management Committee for the reportable segments as of and for the years ended 
December 31, 2023 and 2022 are as follows: 
 
(1) 
As of and for the year ended December 31, 2023 
 
(In millions of Korean won) 
Korea 
America 
Europe 
Asia 
and Africa 
China 
Intercompany 
elimination 
Consolidated 
 
 
 
 
 
 
 
 
Revenue 
45,599,419  
92,136,669  
48,108,965  
44,814,355  
28,276,086  
- 
258,935,494  
Non-current assets(*) 
163,312,301  
20,346,775  
6,288,864  
8,737,541  
12,191,879  
(879,236) 
209,998,124  
 
 
(*) Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets. 
 
(2) 
As of and for the year ended December 31, 2022 
 
(In millions of Korean won) 
Korea 
America 
Europe 
Asia 
and Africa 
China 
Intercompany 
elimination 
Consolidated 
 
 
 
 
 
 
 
 
Revenue 
48,654,656  
118,974,561  
50,283,975  
48,692,399  
35,625,769  
- 
302,231,360  
Non-current assets(*) 
144,936,912  
14,022,225  
5,839,813  
9,056,272  
15,338,153  
(930,233) 
188,263,142  
 
(*) Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 80 - 
30. Related Party Transactions 
(A) 
Sale and purchase transactions 
Sale and purchase transactions with related parties for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
(In millions of 
Korean won) 
Name of company(*1) 
Sales 
Disposal of 
non-current 
assets 
Purchases 
Purchase of 
non-current 
assets 
Associates and 
joint ventures 
Samsung SDS Co., Ltd. 
202,810  
- 
1,984,263  
291,120  
Samsung Electro-Mechanics Co., Ltd. 
69,782  
- 
1,113,058  
60  
Samsung SDI Co., Ltd. 
110,025  
- 
754,792  
31,750  
Cheil Worldwide Inc. 
38,930  
- 
948,677  
4,900  
Other 
1,023,702  
- 
12,540,601  
168,977  
Total  
1,445,249  
- 
17,341,391  
496,807  
Other related 
parties 
Samsung C&T Co., Ltd. 
49,366  
70  
270,079  
6,149,229  
Other 
582,978  
- 
1,675,564  
4,686,787  
Total  
632,344  
70  
1,945,643  
10,836,016  
Other(*2) 
Samsung Engineering Co., Ltd. 
1,358  
- 
35,482  
2,837,309  
S-1 
9,720  
- 
527,232  
40,327  
Other 
239,223  
- 
1,251,775  
612,481  
Total  
250,301  
- 
1,814,489  
3,490,117  
 
(*1) Transactions with separate entities that are related parties of the Company.  
(*2) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 
 
 
2022 
(In millions of 
Korean won) 
Name of company(*1) 
Sales 
Disposal of 
non-current 
assets 
Purchases 
Purchase of 
non-current 
assets 
Associates and 
joint ventures 
Samsung SDS Co., Ltd. 
214,105  
- 
1,865,588  
378,770  
Samsung Electro-Mechanics Co., Ltd. 
62,274  
767  
1,401,483  
120  
Samsung SDI Co., Ltd. 
82,062  
- 
803,556  
24,926  
Cheil Worldwide Inc. 
31,782  
- 
964,096  
361  
Other 
1,353,769  
- 
15,158,969  
125,053  
Total  
1,743,992  
767  
20,193,692  
529,230  
Other related 
parties 
Samsung C&T Co., Ltd. 
51,447  
- 
433,100  
7,423,404  
Other 
345,901  
188  
1,595,487  
1,910,813  
Total  
397,348  
188  
2,028,587  
9,334,217  
Other(*2) 
Samsung Engineering Co., Ltd. 
1,666  
- 
53,793  
3,249,254  
S-1 
13,634  
- 
510,311  
54,069  
Other 
166,052  
- 
550,757  
746,749  
Total  
181,352  
- 
1,114,861  
4,050,072  
 
(*1) Transactions with separate entities that are related parties of the Company.  
(*2) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 81 - 
(B) 
Balances of receivables and payables 
 
Balances of receivables and payables arising from the sales and purchases of goods and services as of December 31, 2023 
and 2022 are as follows: 
 
 
 
December 31, 2023 
(In millions of Korean won) 
Name of company(*1) 
Receivables 
Payables(*2) 
Associates and  
joint ventures 
Samsung SDS Co., Ltd. 
84,747  
458,723  
Samsung Electro-Mechanics Co., Ltd. 
1,894  
138,405  
Samsung SDI Co., Ltd. 
117,690  
92,854  
Cheil Worldwide Inc. 
137  
440,414  
Other 
310,708  
1,268,131  
Total  
515,176  
2,398,527  
Other related parties 
Samsung C&T Co., Ltd. 
213,538  
1,955,976  
Other 
23,155  
318,355  
Total  
236,693  
2,274,331  
Other(*3) 
Samsung Engineering Co., Ltd. 
305  
807,098  
S-1 
1,289  
49,955  
Other 
16,096  
390,073  
Total  
17,690  
1,247,126  
(*1) Balances due from and to separate entities that are related parties of the Company. 
(*2) Payables and others include lease liabilities. 
(*3) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 
 
 
December 31, 2022 
(In millions of Korean won) 
Name of company(*1) 
Receivables 
Payables(*2) 
Associates and  
joint ventures 
Samsung SDS Co., Ltd. 
49,792  
512,022  
Samsung Electro-Mechanics Co., Ltd. 
385  
133,952  
Samsung SDI Co., Ltd. 
121,605  
92,452  
Cheil Worldwide Inc. 
223  
453,545  
Other 
371,575  
1,236,017  
Total  
543,580  
2,427,987  
Other related parties 
Samsung C&T Co., Ltd. 
217,818  
2,783,240  
Other 
20,830  
250,103  
Total  
238,648  
3,033,343  
Other(*3) 
Samsung Engineering Co., Ltd. 
331  
1,251,039  
S-1 
3,839  
73,102  
Other 
15,647  
545,684  
Total  
19,817  
1,869,825  
(*1) Balances due from and to separate entities that are related parties of the Company. 
(*2) Payables and others include lease liabilities. 
(*3) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 82 - 
(C) 
For the years ended December 31, 2023 and 2022, the Company invested W 78,690 million and W 907,958 million, 
respectively, in associates and joint ventures. In addition, the Company has made capital recovery of W 33,457 million 
and W 13,087 million from its investments in associates and joint ventures during the year ended December 31, 2023 
and 2022, respectively. 
 
(D) 
For the years ended December 31, 2023 and 2022, the Company declared dividend of W 1,650,995 million and W 
1,663,149 million, respectively, to related parties. In addition, for the years ended December 31, 2023 and 2022, the 
Company declared dividends of W 128,232 million and W 128,232 million, respectively, to the entities that are not 
related parties of the Company in accordance with Korean IFRS 1024, but belong to the same conglomerate according 
to the Monopoly Regulation and Fair Trade Act. As of December 31, 2023 and 2022, there are no dividends payable to 
related parties. 
 
(E) 
For the years ended December 31, 2023 and 2022, the Company entered into lease agreements with its related parties 
amounting to W 3,791 million and W 25,243 million, respectively, and the lease payments made to the related parties 
were W 25,443 million and W 22,607 million, respectively. 
 
(F) 
Key management compensation 
 
The compensation paid or payable to key management (executive directors) for their services for the years ended December 
31, 2023 and 2022 consists of: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Short-term employee benefits 
14,073  
14,768  
Post-employment benefits 
557  
612  
Other long-term employee benefits 
7,834  
5,434  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 83 - 
31. Information for Non-Controlling Interests 
(A) Changes in non-controlling interests 
 
The profit or loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are 
material to the Company for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
2023 
2022 
 
 
 
Percentage of non-controlling interests 
15.2% 
15.2% 
Balance as of January 1 
8,853,712  
8,028,555  
Profit for the year 
941,786  
853,290  
Dividends 
(43,646) 
(3,947) 
Other 
(24,178) 
(24,186) 
Balance as of December 31 
9,727,674  
8,853,712  
 
 
(B) The summarized financial information for the subsidiary with non-controlling interests that are material to the Company 
before the intercompany eliminations for the years ended December 31, 2023 and 2022 are as follows: 
 
(1) Summarized consolidated statements of financial position  
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
December 31, 2023 
December 31, 2022 
 
 
 
Current assets 
24,721,411  
42,082,412 
Non-current assets 
46,413,723  
23,070,658 
Current liabilities 
5,821,885  
6,294,310 
Non-current liabilities 
1,485,250  
1,220,097 
Equity attributable to: 
63,827,999  
57,638,663 
Owners of the parent company 
63,769,776  
57,552,528 
Non-controlling interests 
58,223  
86,135 
 
 
(2) Summarized consolidated statements of comprehensive income 
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
2023 
2022 
 
 
 
Sales 
30,950,579  
34,298,283  
Profit for the year 
6,331,238  
6,614,496  
Other comprehensive loss 
(108,689) 
(67,942) 
Total comprehensive income attributable to: 
6,222,549  
6,546,554  
Owners of the parent company 
6,217,248  
6,539,633  
Non-controlling interests 
5,301  
6,921  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 84 - 
(3) Summarized consolidated statements of cash flows 
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
2023 
2022 
 
 
 
Cash flows from operating activities 
9,244,331  
11,395,827  
Cash flows from investing activities 
(3,931,091) 
(8,654,933) 
Cash flows from financing activities 
(277,515) 
(1,146,117) 
Reclassify as held-for-sale 
(14,153) 
- 
Effect of exchange rate changes on cash and cash equivalents 
(1,534) 
(44,426) 
Increase in cash and cash equivalents 
5,020,038  
1,550,351  
Cash and cash equivalents at beginning of the year 
2,309,210  
758,859  
Cash and cash equivalents at end of year 
7,329,248  
2,309,210  
 
 
32. Business Combinations 
 
To enhance the competitiveness of Micro-Display, Samsung Display America Holdings, Inc., the Company's subsidiary, 
acquired 100% of the equity shares of eMagin Corporation on October 18, 2023. 
 
(1) Overview of the acquired company 
 
 
Name of the acquired company 
eMagin Corporation 
Headquarters location 
New York, USA 
Representative director 
Andrew G. Sculley Jr. 
Industry 
Development and manufacture of display panels 
 
(2) Purchase price allocation 
(In millions of Korean won) 
Amount 
I. Consideration transferred 
 
Cash and cash equivalents 
295,291 
Fair value of additional consideration transferred 
15,164 
Total consideration transferred 
310,455 
II. Identifiable assets and liabilities 
 
Cash and cash equivalents 
4,473 
Trade and other receivables 
13,033 
Inventory 
13,753 
Property, plant and equipment 
77,500 
Intangible assets 
15,580 
Other assets 
1,691 
Trade and other payables 
(22,370) 
Other liabilities 
(69,653) 
Total net identifiable assets 
34,007 
III. Goodwill (I - II) 
276,448 
 
Assuming that eMagin Corporation had been consolidated from January 1, 2023, eMagin Corporation’s revenue and net loss 
for the year ended December 31, 2023, would have been W 27,781 million and W 36,021 million, respectively. Revenue and 
net loss for the period contributed by eMagin Corporation since consolidation amounted to W 4,684 million and W 6,847 
million, respectively. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 85 - 
33. Assets and Liabilities Held-for-Sale 
 
During the year ended December 31, 2023, the Company’s management decided to sell its 56.8% ownership in Dowooinsys 
Co., Ltd. to three parties, including New Power Plasma Co., Ltd. The sale and purchase agreement was signed on December 
7, 2023, and the sale was completed on January 31, 2024.  
 
(1) Details of assets and liabilities classified as held-for-sale as of December 31, 2023 are as follows: 
(In millions of Korean won) 
December 31, 2023 
Assets held-for-sale 
 
Cash and cash equivalents 
14,153 
Trade receivables 
1,316 
Inventories 
4,697 
Other current assets 
13,134 
Property, plant and equipment and intangible assets 
181,251 
Other non-current assets 
3,313 
Total 
217,864 
Liabilities held-for-sale 
 
Current liabilities 
27,608 
Non-current liabilities 
34,046 
Total 
61,654 
 
(2) Details of accumulated other comprehensive income attributable to assets held-for-sale are as follows: 
(In millions of Korean won) 
December 31, 2023 
Foreign currency translation, net of tax 
(217)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 001-36743
Apple Inc.
(Exact name of Registrant as specified in its charter)
California
94-2404110
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
One Apple Park Way
Cupertino, California
95014
(Address of principal executive offices)
(Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
AAPL
The Nasdaq Stock Market LLC
1.375% Notes due 2024
—
The Nasdaq Stock Market LLC
0.000% Notes due 2025
—
The Nasdaq Stock Market LLC
0.875% Notes due 2025
—
The Nasdaq Stock Market LLC
1.625% Notes due 2026
—
The Nasdaq Stock Market LLC
2.000% Notes due 2027
—
The Nasdaq Stock Market LLC
1.375% Notes due 2029
—
The Nasdaq Stock Market LLC
3.050% Notes due 2029
—
The Nasdaq Stock Market LLC
0.500% Notes due 2031
—
The Nasdaq Stock Market LLC
3.600% Notes due 2042
—
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes  ☒     No  ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes  ☐     No  ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  ☒     No  ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Yes  ☒     No  ☐


Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes  ☐     No  ☒
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of March 31, 2023, the last business day of the Registrant’s most recently
completed second fiscal quarter, was approximately $2,591,165,000,000. Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of
the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive officers and directors as affiliates is not
necessarily a conclusive determination for any other purposes.
15,552,752,000 shares of common stock were issued and outstanding as of October 20, 2023.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s definitive proxy statement relating to its 2024 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form
10-K where indicated. The Registrant’s definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to
which this report relates.


Apple Inc.
Form 10-K
For the Fiscal Year Ended September 30, 2023
TABLE OF CONTENTS
Page
Part I
Item 1.
Business
1
Item 1A.
Risk Factors
5
Item 1B.
Unresolved Staff Comments
16
Item 1C.
Cybersecurity
16
Item 2.
Properties
17
Item 3.
Legal Proceedings
17
Item 4.
Mine Safety Disclosures
17
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
18
Item 6.
[Reserved]
19
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
20
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
26
Item 8.
Financial Statements and Supplementary Data
27
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
52
Item 9A.
Controls and Procedures
52
Item 9B.
Other Information
53
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
53
Part III
Item 10.
Directors, Executive Officers and Corporate Governance
53
Item 11.
Executive Compensation
53
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
53
Item 13.
Certain Relationships and Related Transactions, and Director Independence
53
Item 14.
Principal Accountant Fees and Services
53
Part IV
Item 15.
Exhibit and Financial Statement Schedules
54
Item 16.
Form 10-K Summary
57


This Annual Report on Form 10-K (“Form 10-K”) contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995,
that involve risks and uncertainties. Many of the forward-looking statements are located in Part I, Item 1 of this Form 10-K under the heading “Business” and Part
II, Item 7 of this Form 10-K under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking
statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical
or current fact. For example, statements in this Form 10-K regarding the potential future impact of macroeconomic conditions on the Company’s business and
results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of
future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might
cause such differences include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” The Company
assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Unless otherwise stated, all information presented herein is based on the Company’s fiscal calendar, and references to particular years, quarters, months or
periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Each of the terms the
“Company” and “Apple” as used herein refers collectively to Apple Inc. and its wholly owned subsidiaries, unless otherwise stated.
PART I
Item 1.    Business
Company Background
The Company designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related
services. The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September.
Products
iPhone
iPhone  is the Company’s line of smartphones based on its iOS operating system. The iPhone line includes iPhone 15 Pro, iPhone 15, iPhone 14, iPhone 13
and iPhone SE .
Mac
Mac  is the Company’s line of personal computers based on its macOS  operating system. The Mac line includes laptops MacBook Air  and MacBook Pro , as
well as desktops iMac , Mac mini , Mac Studio  and Mac Pro .
iPad
iPad  is the Company’s line of multipurpose tablets based on its iPadOS  operating system. The iPad line includes iPad Pro , iPad Air , iPad and iPad mini .
Wearables, Home and Accessories
Wearables includes smartwatches and wireless headphones. The Company’s line of smartwatches, based on its watchOS  operating system, includes Apple
Watch Ultra™ 2, Apple Watch  Series 9 and Apple Watch SE . The Company’s line of wireless headphones includes AirPods , AirPods Pro , AirPods Max™
and Beats  products.
Home includes Apple TV , the Company’s media streaming and gaming device based on its tvOS  operating system, and HomePod  and HomePod mini ,
high-fidelity wireless smart speakers.
Accessories includes Apple-branded and third-party accessories.
®
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Apple Inc. | 2023 Form 10-K | 1


Services
Advertising
The Company’s advertising services include third-party licensing arrangements and the Company’s own advertising platforms.
AppleCare
The Company offers a portfolio of fee-based service and support products under the AppleCare  brand. The offerings provide priority access to Apple technical
support, access to the global Apple authorized service network for repair and replacement services, and in many cases additional coverage for instances of
accidental damage or theft and loss, depending on the country and type of product.
Cloud Services
The Company’s cloud services store and keep customers’ content up-to-date and available across multiple Apple devices and Windows personal computers.
Digital Content
The Company operates various platforms, including the App Store , that allow customers to discover and download applications and digital content, such as
books, music, video, games and podcasts.
The Company also offers digital content through subscription-based services, including Apple Arcade , a game subscription service; Apple Fitness+
, a
personalized fitness service; Apple Music , which offers users a curated listening experience with on-demand radio stations; Apple News+ , a subscription news
and magazine service; and Apple TV+ , which offers exclusive original content and live sports.
Payment Services
The Company offers payment services, including Apple Card , a co-branded credit card, and Apple Pay , a cashless payment service.
Segments
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of the Americas, Europe, Greater China,
Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and
Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia and those Asian countries not included in the
Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is
managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic
region.
Markets and Distribution
The Company’s customers are primarily in the consumer, small and mid-sized business, education, enterprise and government markets. The Company sells its
products and resells third-party products in most of its major markets directly to customers through its retail and online stores and its direct sales force. The
Company also employs a variety of indirect distribution channels, such as third-party cellular network carriers, wholesalers, retailers and resellers. During 2023,
the Company’s net sales through its direct and indirect distribution channels accounted for 37% and 63%, respectively, of total net sales.
Competition
The markets for the Company’s products and services are highly competitive, and are characterized by aggressive price competition and resulting downward
pressure on gross margins, frequent introduction of new products and services, short product life cycles, evolving industry standards, continual improvement in
product price and performance characteristics, rapid adoption of technological advancements by competitors, and price sensitivity on the part of consumers and
businesses. Many of the Company’s competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating the
Company’s products and infringing on its intellectual property.
®
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SM
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Apple Inc. | 2023 Form 10-K | 2


The Company’s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and
technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system,
numerous software applications and related services. Principal competitive factors important to the Company include price, product and service features
(including security features), relative price and performance, product and service quality and reliability, design innovation, a strong third-party software and
accessories ecosystem, marketing and distribution capability, service and support, and corporate reputation.
The Company is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables and accessories, and services.
The Company faces substantial competition in these markets from companies that have significant technical, marketing, distribution and other resources, as well
as established hardware, software, and service offerings with large customer bases. In addition, some of the Company’s competitors have broader product lines,
lower-priced products and a larger installed base of active devices. Competition has been particularly intense as competitors have aggressively cut prices and
lowered product margins. Certain competitors have the resources, experience or cost structures to provide products at little or no profit or even at a loss. The
Company’s services compete with business models that provide content to users for free and use illegitimate means to obtain third-party digital content and
applications. The Company faces significant competition as competitors imitate the Company’s product features and applications within their products, or
collaborate to offer integrated solutions that are more competitive than those they currently offer.
Supply of Components
Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from
single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers,
tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times
subject to industry-wide shortage and significant commodity pricing fluctuations.
The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize
custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the
suppliers’ yields have matured or their manufacturing capacities have increased. The continued availability of these components at acceptable prices, or at all,
may be affected if suppliers decide to concentrate on the production of common components instead of components customized to meet the Company’s
requirements.
The Company has entered into agreements for the supply of many components; however, there can be no guarantee that the Company will be able to extend or
renew these agreements on similar terms, or at all.
Research and Development
Because the industries in which the Company competes are characterized by rapid technological advances, the Company’s ability to compete successfully
depends heavily upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. The Company
continues to develop new technologies to enhance existing products and services, and to expand the range of its offerings through research and development
(“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology.
Intellectual Property
The Company currently holds a broad collection of intellectual property rights relating to certain aspects of its hardware devices, accessories, software and
services. This includes patents, designs, copyrights, trademarks and other forms of intellectual property rights in the U.S. and various foreign countries. Although
the Company believes the ownership of such intellectual property rights is an important factor in differentiating its business and that its success does depend in
part on such ownership, the Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel.
The Company regularly files patent, design, copyright and trademark applications to protect innovations arising from its research, development, design and
marketing, and is currently pursuing thousands of applications around the world. Over time, the Company has accumulated a large portfolio of issued and
registered intellectual property rights around the world. No single intellectual property right is solely responsible for protecting the Company’s products and
services. The Company believes the duration of its intellectual property rights is adequate relative to the expected lives of its products and services.
In addition to Company-owned intellectual property, many of the Company’s products and services are designed to include intellectual property owned by third
parties. It may be necessary in the future to seek or renew licenses relating to various aspects of the Company’s products, processes and services. While the
Company has generally been able to obtain such licenses on commercially reasonable terms in the past, there is no guarantee that such licenses could be
obtained in the future on reasonable terms or at all.
Apple Inc. | 2023 Form 10-K | 3


Business Seasonality and Product Introductions
The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday
demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. The timing of product
introductions can also impact the Company’s net sales to its indirect distribution channels as these channels are filled with new inventory following a product
launch, and channel inventory of an older product often declines as the launch of a newer product approaches. Net sales can also be affected when consumers
and distributors anticipate a product introduction.
Human Capital
The Company believes it has a talented, motivated and dedicated team, and works to create an inclusive, safe and supportive environment for all of its team
members. As of September 30, 2023, the Company had approximately 161,000 full-time equivalent employees.
Workplace Practices and Policies
The Company is an equal opportunity employer committed to inclusion and diversity and to providing a workplace free of harassment or discrimination.
Compensation and Benefits
The Company believes that compensation should be competitive and equitable, and should enable employees to share in the Company’s success. The
Company recognizes its people are most likely to thrive when they have the resources to meet their needs and the time and support to succeed in their
professional and personal lives. In support of this, the Company offers a wide variety of benefits for employees around the world and invests in tools and
resources that are designed to support employees’ individual growth and development.
Inclusion and Diversity
The Company is committed to its vision to build and sustain a more inclusive workforce that is representative of the communities it serves. The Company
continues to work to increase diverse representation at every level, foster an inclusive culture, and support equitable pay and access to opportunity for all
employees.
Engagement
The Company believes that open and honest communication among team members, managers and leaders helps create an open, collaborative work
environment where everyone can contribute, grow and succeed. Team members are encouraged to come to their managers with questions, feedback or
concerns, and the Company conducts surveys that gauge employee sentiment in areas like career development, manager performance and inclusivity.
Health and Safety
The Company is committed to protecting its team members everywhere it operates. The Company identifies potential workplace risks in order to develop
measures to mitigate possible hazards. The Company supports employees with general safety, security and crisis management training, and by putting specific
programs in place for those working in potentially high-hazard environments. Additionally, the Company works to protect the safety and security of its team
members, visitors and customers through its global security team.
Available Information
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to
Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the U.S. Securities and Exchange
Commission (the “SEC”). Such reports and other information filed by the Company with the SEC are available free of charge at investor.apple.com/investor-
relations/sec-filings/default.aspx when such reports are available on the SEC’s website. The Company periodically provides certain information for investors on
its corporate website, www.apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial
performance, information on environmental, social and governance matters, and details related to the Company’s annual meeting of shareholders. The
information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing. Further, the Company’s references to website
URLs are intended to be inactive textual references only.
Apple Inc. | 2023 Form 10-K | 4


Item 1A.    Risk Factors
The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known
or unknown, including those described below. When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of
operations, financial condition and stock price can be materially and adversely affected.
Because of the following factors, as well as other factors affecting the Company’s results of operations and financial condition, past financial performance should
not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
This discussion of risk factors contains forward-looking statements.
This section should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the
consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
Macroeconomic and Industry Risks
The Company’s operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can
materially adversely affect the Company’s business, results of operations and financial condition.
The Company has international operations with sales outside the U.S. representing a majority of the Company’s total net sales. In addition, the Company’s
global supply chain is large and complex and a majority of the Company’s supplier facilities, including manufacturing and assembly sites, are located outside the
U.S. As a result, the Company’s operations and performance depend significantly on global and regional economic conditions.
Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency
fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for the Company’s products and services. In
addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility,
declines in income or asset values, and other economic factors.
In addition to an adverse impact on demand for the Company’s products and services, uncertainty about, or a decline in, global or regional economic conditions
can have a significant impact on the Company’s suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel
partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.
Adverse economic conditions can also lead to increased credit and collectibility risk on the Company’s trade receivables; the failure of derivative counterparties
and other financial institutions; limitations on the Company’s ability to issue new debt; reduced liquidity; and declines in the fair values of the Company’s financial
instruments. These and other impacts can materially adversely affect the Company’s business, results of operations, financial condition and stock price.
The Company’s business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health
issues, industrial accidents and other business interruptions.
Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business
interruptions can harm or disrupt international commerce and the global economy, and could have a material adverse effect on the Company and its customers,
suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners.
Apple Inc. | 2023 Form 10-K | 5


The Company has a large, global business with sales outside the U.S. representing a majority of the Company’s total net sales, and the Company believes that it
generally benefits from growth in international trade. Substantially all of the Company’s manufacturing is performed in whole or in part by outsourcing partners
located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam. Restrictions on international trade, such as tariffs and other controls on
imports or exports of goods, technology or data, can materially adversely affect the Company’s operations and supply chain and limit the Company’s ability to
offer and distribute its products and services to customers. The impact can be particularly significant if these restrictive measures apply to countries and regions
where the Company derives a significant portion of its revenues and/or has significant supply chain operations. Restrictive measures can require the Company
to take various actions, including changing suppliers, restructuring business relationships, and ceasing to offer third-party applications on its platforms. Changing
the Company’s operations in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the
Company’s operations. Such restrictions can be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse
impacts from such measures. For example, tensions between governments, including the U.S. and China, have in the past led to tariffs and other restrictions
being imposed on the Company’s business. If disputes and conflicts further escalate in the future, actions by governments in response could be significantly
more severe and restrictive and could materially adversely affect the Company’s business. Political uncertainty surrounding trade and other international
disputes could also have a negative effect on consumer confidence and spending, which could adversely affect the Company’s business.
Many of the Company’s operations and facilities, as well as critical business operations of the Company’s suppliers and contract manufacturers, are in locations
that are prone to earthquakes and other natural disasters. In addition, such operations and facilities are subject to the risk of interruption by fire, power
shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks,
labor disputes, public health issues, including pandemics such as the COVID-19 pandemic, and other events beyond the Company’s control. Global climate
change is resulting in certain types of natural disasters, such as droughts, floods, hurricanes and wildfires, occurring more frequently or with more intense
effects. Such events can make it difficult or impossible for the Company to manufacture and deliver products to its customers, create delays and inefficiencies in
the Company’s supply and manufacturing chain, and result in slowdowns and outages to the Company’s service offerings, and negatively impact consumer
spending and demand in affected areas. Following an interruption to its business, the Company can require substantial recovery time, experience significant
expenditures to resume operations, and lose significant sales. Because the Company relies on single or limited sources for the supply and manufacture of many
critical components, a business interruption affecting such sources would exacerbate any negative consequences to the Company.
The Company’s operations are also subject to the risks of industrial accidents at its suppliers and contract manufacturers. While the Company’s suppliers are
required to maintain safe working environments and operations, an industrial accident could occur and could result in serious injuries or loss of life, disruption to
the Company’s business, and harm to the Company’s reputation. Major public health issues, including pandemics such as the COVID-19 pandemic, have
adversely affected, and could in the future materially adversely affect, the Company due to their impact on the global economy and demand for consumer
products; the imposition of protective public safety measures, such as stringent employee travel restrictions and limitations on freight services and the movement
of products between regions; and disruptions in the Company’s operations, supply chain and sales and distribution channels, resulting in interruptions to the
supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.
While the Company maintains insurance coverage for certain types of losses, such insurance coverage may be insufficient to cover all losses that may arise.
Global markets for the Company’s products and services are highly competitive and subject to rapid technological change, and the Company may be
unable to compete effectively in these markets.
The Company’s products and services are offered in highly competitive global markets characterized by aggressive price competition and resulting downward
pressure on gross margins, frequent introduction of new products and services, short product life cycles, evolving industry standards, continual improvement in
product price and performance characteristics, rapid adoption of technological advancements by competitors, and price sensitivity on the part of consumers and
businesses.
The Company’s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and
technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system,
numerous software applications and related services. As a result, the Company must make significant investments in R&D. There can be no assurance these
investments will achieve expected returns, and the Company may not be able to develop and market new products and services successfully.
Apple Inc. | 2023 Form 10-K | 6


The Company currently holds a significant number of patents, trademarks and copyrights and has registered, and applied to register, additional patents,
trademarks and copyrights. In contrast, many of the Company’s competitors seek to compete primarily through aggressive pricing and very low cost structures,
and by imitating the Company’s products and infringing on its intellectual property. Effective intellectual property protection is not consistently available in every
country in which the Company operates. If the Company is unable to continue to develop and sell innovative new products with attractive margins or if
competitors infringe on the Company’s intellectual property, the Company’s ability to maintain a competitive advantage could be materially adversely affected.
The Company has a minority market share in the global smartphone, personal computer and tablet markets. The Company faces substantial competition in
these markets from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software and digital
content supplier relationships. In addition, some of the Company’s competitors have broader product lines, lower-priced products and a larger installed base of
active devices. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have
the resources, experience or cost structures to provide products at little or no profit or even at a loss. Some of the markets in which the Company competes have
from time to time experienced little to no growth or contracted overall.
Additionally, the Company faces significant competition as competitors imitate the Company’s product features and applications within their products or
collaborate to offer solutions that are more competitive than those they currently offer. The Company also expects competition to intensify as competitors imitate
the Company’s approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions.
The Company’s services also face substantial competition, including from companies that have significant resources and experience and have established
service offerings with large customer bases. The Company competes with business models that provide content to users for free. The Company also competes
with illegitimate means to obtain third-party digital content and applications.
The Company’s business, results of operations and financial condition depend substantially on the Company’s ability to continually improve its products and
services to maintain their functional and design advantages. There can be no assurance the Company will be able to continue to provide products and services
that compete effectively.
Business Risks
To remain competitive and stimulate customer demand, the Company must successfully manage frequent introductions and transitions of products
and services.
Due to the highly volatile and competitive nature of the markets and industries in which the Company competes, the Company must continually introduce new
products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products and
services, and successfully manage the transition to these new and upgraded products and services. The success of new product and service introductions
depends on a number of factors, including timely and successful development, market acceptance, the Company’s ability to manage the risks associated with
new technologies and production ramp-up issues, the availability of application software for the Company’s products, the effective management of purchase
commitments and inventory levels in line with anticipated product demand, the availability of products in appropriate quantities and at expected costs to meet
anticipated demand, and the risk that new products and services may have quality or other defects or deficiencies. There can be no assurance the Company will
successfully manage future introductions and transitions of products and services.
The Company depends on component and product manufacturing and logistical services provided by outsourcing partners, many of which are
located outside of the U.S.
Substantially all of the Company’s manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan,
South Korea, Taiwan and Vietnam, and a significant concentration of this manufacturing is currently performed by a small number of outsourcing partners, often
in single locations. Changes or additions to the Company’s supply chain require considerable time and resources and involve significant risks and uncertainties.
The Company has also outsourced much of its transportation and logistics management. While these arrangements can lower operating costs, they also reduce
the Company’s direct control over production and distribution. Such diminished control has from time to time and may in the future have an adverse effect on the
quality or quantity of products manufactured or services provided, or adversely affect the Company’s flexibility to respond to changing conditions. Although
arrangements with these partners may contain provisions for product defect expense reimbursement, the Company generally remains responsible to the
consumer for warranty and out-of-warranty service in the event of product defects and experiences unanticipated product defect liabilities from time to time.
While the Company relies on its partners to adhere to its supplier code of conduct, violations of the supplier code of conduct occur from time to time and can
materially adversely affect the Company’s business, reputation, results of operations and financial condition.
Apple Inc. | 2023 Form 10-K | 7


The Company relies on single-source outsourcing partners in the U.S., Asia and Europe to supply and manufacture many components, and on outsourcing
partners primarily located in Asia, for final assembly of substantially all of the Company’s hardware products. Any failure of these partners to perform can have a
negative impact on the Company’s cost or supply of components or finished goods. In addition, manufacturing or logistics in these locations or transit to final
destinations can be disrupted for a variety of reasons, including natural and man-made disasters, information technology system failures, commercial disputes,
armed conflict, economic, business, labor, environmental, public health or political issues, or international trade disputes.
The Company has invested in manufacturing process equipment, much of which is held at certain of its outsourcing partners, and has made prepayments to
certain of its suppliers associated with long-term supply agreements. While these arrangements help ensure the supply of components and finished goods, if
these outsourcing partners or suppliers experience severe financial problems or other disruptions in their business, such continued supply can be reduced or
terminated, and the recoverability of manufacturing process equipment or prepayments can be negatively impacted.
Future operating results depend upon the Company’s ability to obtain components in sufficient quantities on commercially reasonable terms.
Because the Company currently obtains certain components from single or limited sources, the Company is subject to significant supply and pricing risks. Many
components, including those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing
fluctuations that can materially adversely affect the Company’s business, results of operations and financial condition. For example, the global semiconductor
industry has in the past experienced high demand and shortages of supply, which adversely affected the Company’s ability to obtain sufficient quantities of
components and products on commercially reasonable terms or at all. Such disruptions could occur in the future. While the Company has entered into
agreements for the supply of many components, there can be no assurance the Company will be able to extend or renew these agreements on similar terms, or
at all. Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular
industry, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms or at all. The effects of global or
regional economic conditions on the Company’s suppliers, described in “The Company’s operations and performance depend significantly on global and regional
economic conditions and adverse economic conditions can materially adversely affect the Company’s business, results of operations and financial condition,”
above, can also affect the Company’s ability to obtain components. Therefore, the Company remains subject to significant risks of supply shortages and price
increases that can materially adversely affect its business, results of operations and financial condition.
The Company’s new products often utilize custom components available from only one source. When a component or product uses new technologies, initial
capacity constraints may exist until the suppliers’ yields have matured or their manufacturing capacities have increased. The continued availability of these
components at acceptable prices, or at all, can be affected for any number of reasons, including if suppliers decide to concentrate on the production of common
components instead of components customized to meet the Company’s requirements. When the Company’s supply of components for a new or existing product
has been delayed or constrained, or when an outsourcing partner has delayed shipments of completed products to the Company, the Company’s business,
results of operations and financial condition have been adversely affected and future delays or constraints could materially adversely affect the Company’s
business, results of operations and financial condition. The Company’s business and financial performance could also be materially adversely affected
depending on the time required to obtain sufficient quantities from the source, or to identify and obtain sufficient quantities from an alternative source.
The Company’s products and services may be affected from time to time by design and manufacturing defects that could materially adversely affect
the Company’s business and result in harm to the Company’s reputation.
The Company offers complex hardware and software products and services that can be affected by design and manufacturing defects. Sophisticated operating
system software and applications, such as those offered by the Company, often have issues that can unexpectedly interfere with the intended operation of
hardware or software products and services. Defects can also exist in components and products the Company purchases from third parties. Component defects
could make the Company’s products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase as the
Company’s products are introduced into specialized applications, including health. In addition, the Company’s service offerings can have quality issues and from
time to time experience outages, service slowdowns or errors. As a result, from time to time the Company’s services have not performed as anticipated and may
not meet customer expectations. There can be no assurance the Company will be able to detect and fix all issues and defects in the hardware, software and
services it offers. Failure to do so can result in widespread technical and performance issues affecting the Company’s products and services. In addition, the
Company can be exposed to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or
intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can also adversely affect the
experience for users of the Company’s products and services, and result in harm to the Company’s reputation, loss of competitive advantage, poor market
acceptance, reduced demand for products and services, delay in new product and service introductions and lost sales.
Apple Inc. | 2023 Form 10-K | 8


The Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation
risk.
The Company records a write-down for product and component inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds
net realizable value. The Company also accrues necessary cancellation fee reserves for orders of excess products and components. The Company reviews
long-lived assets, including capital assets held at its suppliers’ facilities and inventory prepayments, for impairment whenever events or circumstances indicate
the assets may not be recoverable. If the Company determines that an impairment has occurred, it records a write-down equal to the amount by which the
carrying value of the asset exceeds its fair value. Although the Company believes its inventory, capital assets, inventory prepayments and other assets and
purchase commitments are currently recoverable, there can be no assurance the Company will not incur write-downs, fees, impairments and other charges
given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.
The Company orders components for its products and builds inventory in advance of product announcements and shipments. Manufacturing purchase
obligations cover the Company’s forecasted component and manufacturing requirements, typically for periods up to 150 days. Because the Company’s markets
are volatile, competitive and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or
insufficient amounts of components or products, or not fully utilize firm purchase commitments.
The Company relies on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms or
at all.
The Company’s products and services are designed to include intellectual property owned by third parties, which requires licenses from those third parties. In
addition, because of technological changes in the industries in which the Company currently competes or in the future may compete, current extensive patent
coverage and the rapid rate of issuance of new patents, the Company’s products and services can unknowingly infringe existing patents or intellectual property
rights of others. From time to time, the Company has been notified that it may be infringing certain patents or other intellectual property rights of third parties.
Based on experience and industry practice, the Company believes licenses to such third-party intellectual property can generally be obtained on commercially
reasonable terms. However, there can be no assurance the necessary licenses can be obtained on commercially reasonable terms or at all. Failure to obtain the
right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, can preclude the Company from selling certain
products or services, or otherwise have a material adverse impact on the Company’s business, results of operations and financial condition.
The Company’s future performance depends in part on support from third-party software developers.
The Company believes decisions by customers to purchase its hardware products depend in part on the availability of third-party software applications and
services. There can be no assurance third-party developers will continue to develop and maintain software applications and services for the Company’s
products. If third-party software applications and services cease to be developed and maintained for the Company’s products, customers may choose not to buy
the Company’s products.
The Company believes the availability of third-party software applications and services for its products depends in part on the developers’ perception and
analysis of the relative benefits of developing, maintaining and upgrading such software and services for the Company’s products compared to competitors’
platforms, such as Android for smartphones and tablets, Windows for personal computers and tablets, and PlayStation, Nintendo and Xbox for gaming platforms.
This analysis may be based on factors such as the market position of the Company and its products, the anticipated revenue that may be generated, expected
future growth of product sales, and the costs of developing such applications and services.
The Company’s minority market share in the global smartphone, personal computer and tablet markets can make developers less inclined to develop or upgrade
software for the Company’s products and more inclined to devote their resources to developing and upgrading software for competitors’ products with larger
market share. When developers focus their efforts on these competing platforms, the availability and quality of applications for the Company’s devices can suffer.
The Company relies on the continued availability and development of compelling and innovative software applications for its products. The Company’s products
and operating systems are subject to rapid technological change, and when third-party developers are unable to or choose not to keep up with this pace of
change, their applications can fail to take advantage of these changes to deliver improved customer experiences, can operate incorrectly, and can result in
dissatisfied customers and lower customer demand for the Company’s products.
Apple Inc. | 2023 Form 10-K | 9


The Company distributes third-party applications for its products through the App Store. For the vast majority of applications, developers keep all of the revenue
they generate on the App Store. The Company retains a commission from sales of applications and sales of digital services or goods initiated within an
application. From time to time, the Company has made changes to its App Store, including actions taken in response to competition, market conditions and legal
and regulatory requirements. The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the
App Store, such as the European Union (“EU”) Digital Markets Act, which the Company is required to comply with by March 2024. The Company is also subject
to litigation and investigations relating to the App Store, which have resulted in changes to the Company’s business practices, and may in the future result in
further changes. Changes have included how developers communicate with consumers outside the App Store regarding alternative purchasing mechanisms.
Future changes could also affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App
Store, and how and to what extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms. This
could reduce the volume of sales, and the commission that the Company earns on those sales, would decrease. If the rate of the commission that the Company
retains on such sales is reduced, or if it is otherwise narrowed in scope or eliminated, the Company’s business, results of operations and financial condition
could be materially adversely affected.
Failure to obtain or create digital content that appeals to the Company’s customers, or to make such content available on commercially reasonable
terms, could have a material adverse impact on the Company’s business, results of operations and financial condition.
The Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell, or offer subscriptions to, third-party
content, as well as the right to incorporate specific content into the Company’s own services. The licensing or other distribution arrangements for this content can
be for relatively short time periods and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, or at all. Some
third-party content providers and distributors currently or in the future may offer competing products and services, and can take actions to make it difficult or
impossible for the Company to license or otherwise distribute their content. Other content owners, providers or distributors may seek to limit the Company’s
access to, or increase the cost of, such content. The Company may be unable to continue to offer a wide variety of content at commercially reasonable prices
with acceptable usage rules.
The Company also produces its own digital content, which can be costly to produce due to intense and increasing competition for talent, content and
subscribers, and may fail to appeal to the Company’s customers.
Some third-party digital content providers require the Company to provide digital rights management and other security solutions. If requirements change, the
Company may have to develop or license new technology to provide these solutions. There can be no assurance the Company will be able to develop or license
such solutions at a reasonable cost and in a timely manner.
The Company’s success depends largely on the talents and efforts of its team members, the continued service and availability of highly skilled
employees, including key personnel, and the Company’s ability to nurture its distinctive and inclusive culture.
Much of the Company’s future success depends on the talents and efforts of its team members and the continued availability and service of key personnel,
including its Chief Executive Officer, executive team and other highly skilled employees. Experienced personnel in the technology industry are in high demand
and competition for their talents is intense, especially in Silicon Valley, where most of the Company’s key personnel are located. In addition to intense
competition for talent, workforce dynamics are constantly evolving. If the Company does not manage changing workforce dynamics effectively, it could materially
adversely affect the Company’s culture, reputation and operational flexibility.
The Company believes that its distinctive and inclusive culture is a significant driver of its success. If the Company is unable to nurture its culture, it could
materially adversely affect the Company’s ability to recruit and retain the highly skilled employees who are critical to its success, and could otherwise materially
adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company depends on the performance of carriers, wholesalers, retailers and other resellers.
The Company distributes its products and certain of its services through cellular network carriers, wholesalers, retailers and resellers, many of which distribute
products and services from competitors. The Company also sells its products and services and resells third-party products in most of its major markets directly to
consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force.
Some carriers providing cellular network service for the Company’s products offer financing, installment payment plans or subsidies for users’ purchases of the
device. There can be no assurance such offers will be continued at all or in the same amounts.
Apple Inc. | 2023 Form 10-K | 10


The Company has invested and will continue to invest in programs to enhance reseller sales, including staffing selected resellers’ stores with Company
employees and contractors, and improving product placement displays. These programs can require a substantial investment while not assuring return or
incremental sales. The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty
regarding demand for some or all of the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.
The Company’s business and reputation are impacted by information technology system failures and network disruptions.
The Company and its global supply chain are dependent on complex information technology systems and are exposed to information technology system failures
or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses,
physical or electronic break-ins, ransomware or other cybersecurity incidents, or other events or disruptions. System upgrades, redundancy and other continuity
measures may be ineffective or inadequate, and the Company’s or its vendors’ business continuity and disaster recovery planning may not be sufficient for all
eventualities. Such failures or disruptions can adversely impact the Company’s business by, among other things, preventing access to the Company’s online
services, interfering with customer transactions or impeding the manufacturing and shipping of the Company’s products. These events could materially adversely
affect the Company’s business, reputation, results of operations and financial condition.
Losses or unauthorized access to or releases of confidential information, including personal information, could subject the Company to significant
reputational, financial, legal and operational consequences.
The Company’s business requires it to use and store confidential information, including personal information, with respect to the Company’s customers and
employees. The Company devotes significant resources to network and data security, including through the use of encryption and other security measures
intended to protect its systems and data. But these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential
information occur and could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company’s business also requires it to share confidential information with suppliers and other third parties. The Company relies on global suppliers that are
also exposed to ransomware and other malicious attacks that can disrupt business operations. Although the Company takes steps to secure confidential
information that is provided to or accessible by third parties working on the Company’s behalf, such measures are not always effective and losses or
unauthorized access to, or releases of, confidential information occur. Such incidents and other malicious attacks could materially adversely affect the
Company’s business, reputation, results of operations and financial condition.
The Company experiences malicious attacks and other attempts to gain unauthorized access to its systems on a regular basis. These attacks seek to
compromise the confidentiality, integrity or availability of confidential information or disrupt normal business operations, and can, among other things, impair the
Company’s ability to attract and retain customers for its products and services, impact the Company’s stock price, materially damage commercial relationships,
and expose the Company to litigation or government investigations, which could result in penalties, fines or judgments against the Company. Globally, attacks
are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools and techniques that are designed to circumvent
controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders the Company’s ability to identify, investigate and recover from
incidents. In addition, attacks against the Company and its customers can escalate during periods of severe diplomatic or armed conflict.
Although malicious attacks perpetrated to gain access to confidential information, including personal information, affect many companies across various
industries, the Company is at a relatively greater risk of being targeted because of its high profile and the value of the confidential information it creates, owns,
manages, stores and processes.
The Company has implemented systems and processes intended to secure its information technology systems and prevent unauthorized access to or loss of
sensitive data, and mitigate the impact of unauthorized access, including through the use of encryption and authentication technologies. As with all companies,
these security measures may not be sufficient for all eventualities and may be vulnerable to hacking, ransomware attacks, employee error, malfeasance, system
error, faulty password management or other irregularities. For example, third parties can fraudulently induce the Company’s or its vendors’ employees or
customers into disclosing usernames, passwords or other sensitive information, which can, in turn, be used for unauthorized access to the Company’s or its
vendors’ systems and services. To help protect customers and the Company, the Company deploys and makes available technologies like multifactor
authentication, monitors its services and systems for unusual activity and may freeze accounts under suspicious circumstances, which, among other things, can
result in the delay or loss of customer orders or impede customer access to the Company’s products and services.
While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient
to cover all losses or all types of claims that may arise.
Apple Inc. | 2023 Form 10-K | 11


Investment in new business strategies and acquisitions could disrupt the Company’s ongoing business, present risks not originally contemplated
and materially adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company has invested, and in the future may invest, in new business strategies or acquisitions. Such endeavors may involve significant risks and
uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and
regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capital, potential impairment of tangible and
intangible assets, and significant write-offs. Investment and acquisition transactions are exposed to additional risks, including failing to obtain required regulatory
approvals on a timely basis or at all, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise
limit the Company’s ability to fully realize the anticipated benefits of a transaction. These new ventures are inherently risky and may not be successful. The
failure of any significant investment could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
The Company’s retail stores are subject to numerous risks and uncertainties.
The Company’s retail operations are subject to many factors that pose risks and uncertainties and could adversely impact the Company’s business, results of
operations and financial condition, including macroeconomic factors that could have an adverse effect on general retail activity. Other factors include the
Company’s ability to: manage costs associated with retail store construction and operation; manage relationships with existing retail partners; manage costs
associated with fluctuations in the value of retail inventory; and obtain and renew leases in quality retail locations at a reasonable cost.
Legal and Regulatory Compliance Risks
The Company’s business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or
government investigations.
The Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet
been fully resolved, and new matters may arise in the future. In addition, agreements entered into by the Company sometimes include indemnification provisions
which can subject the Company to costs and damages in the event of a claim against an indemnified third party. The number of claims, legal proceedings and
government investigations involving the Company, and the alleged magnitude of such claims, proceedings and government investigations, has generally
increased over time and may continue to increase.
The Company has faced and continues to face a significant number of patent claims relating to its cellular-enabled products, and new claims may arise in the
future, including as a result of new legal or regulatory frameworks. For example, technology and other patent-holding companies frequently assert their patents
and seek royalties and often enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. The Company is
vigorously defending infringement actions in courts in several U.S. jurisdictions, as well as internationally in various countries. The plaintiffs in these actions
frequently seek injunctions and substantial damages.
Regardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming and
disruptive to the Company’s operations. In recognition of these considerations, the Company may enter into agreements or other arrangements to settle litigation
and resolve such challenges. There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur. These
agreements can also significantly increase the Company’s cost of sales and operating expenses and require the Company to change its business practices and
limit the Company’s ability to offer certain products and services.
Except as described in Part I, Item 3 of this Form 10-K under the heading “Legal Proceedings” and in Part II, Item 8 of this Form 10-K in the Notes to
Consolidated Financial Statements in Note 12, “Commitments, Contingencies and Supply Concentrations” under the heading “Contingencies,” in the opinion of
management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual,
concerning loss contingencies for asserted legal and other claims.
The outcome of litigation or government investigations is inherently uncertain. If one or more legal matters were resolved against the Company or an indemnified
third party in a reporting period for amounts above management’s expectations, the Company’s results of operations and financial condition for that reporting
period could be materially adversely affected. Further, such an outcome can result in significant compensatory, punitive or trebled monetary damages,
disgorgement of revenue or profits, remedial corporate measures or injunctive relief against the Company, and has from time to time required, and can in the
future require, the Company to change its business practices and limit the Company’s ability to offer certain products and services, all of which could materially
adversely affect the Company’s business, reputation, results of operations and financial condition.
While the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of
claims that may arise.
Apple Inc. | 2023 Form 10-K | 12


The Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liabilities, increased
costs and other adverse effects on the Company’s business.
The Company’s global operations are subject to complex and changing laws and regulations on subjects, including antitrust; privacy, data security and data
localization; consumer protection; advertising, sales, billing and e-commerce; financial services and technology; product liability; intellectual property ownership
and infringement; digital platforms; machine learning and artificial intelligence; internet, telecommunications and mobile communications; media, television, film
and digital content; availability of third-party software applications and services; labor and employment; anticorruption; import, export and trade; foreign
exchange controls and cash repatriation restrictions; anti–money laundering; foreign ownership and investment; tax; and environmental, health and safety,
including electronic waste, recycling, product design and climate change.
Compliance with these laws and regulations is onerous and expensive. New and changing laws and regulations can adversely affect the Company’s business by
increasing the Company’s costs, limiting the Company’s ability to offer a product, service or feature to customers, imposing changes to the design of the
Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain
and its business. New and changing laws and regulations can also create uncertainty about how such laws and regulations will be interpreted and applied.
These risks and costs may increase as the Company’s products and services are introduced into specialized applications, including health and financial
services. The Company has implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no
assurance the Company’s employees, contractors or agents will not violate such laws and regulations or the Company’s policies and procedures. If the
Company is found to have violated laws and regulations, it could materially adversely affect the Company’s business, reputation, results of operations and
financial condition. Regulatory changes and other actions that materially adversely affect the Company’s business may be announced with little or no advance
notice and the Company may not be able to effectively mitigate all adverse impacts from such measures. For example, the Company is subject to changing
regulations relating to the export and import of its products. Although the Company has programs, policies and procedures in place that are designed to satisfy
regulatory requirements, there can be no assurance that such policies and procedures will be effective in preventing a violation or a claim of a violation. As a
result, the Company’s products could be banned, delayed or prohibited from importation, which could materially adversely affect the Company’s business,
reputation, results of operations and financial condition.
Expectations relating to environmental, social and governance considerations and related reporting obligations expose the Company to potential
liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance
considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion. In
addition, the Company makes statements about its goals and initiatives through its various non-financial reports, information provided on its website, press
statements and other communications. Responding to these environmental, social and governance considerations and implementation of these goals and
initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside the Company’s control.
The Company cannot guarantee that it will achieve its announced environmental, social and governance goals and initiatives. In addition, some stakeholders
may disagree with the Company’s goals and initiatives. Any failure, or perceived failure, by the Company to achieve its goals, further its initiatives, adhere to its
public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied
stakeholder expectations and standards could result in legal and regulatory proceedings against the Company and materially adversely affect the Company’s
business, reputation, results of operations, financial condition and stock price.
The technology industry, including, in some instances, the Company, is subject to intense media, political and regulatory scrutiny, which exposes
the Company to increasing regulation, government investigations, legal actions and penalties.
From time to time, the Company has made changes to its App Store, including actions taken in response to litigation, competition, market conditions and legal
and regulatory requirements. The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the
App Store, such as the EU Digital Markets Act, which the Company is required to comply with by March 2024, or similar laws in other jurisdictions. Changes
have included how developers communicate with consumers outside the App Store regarding alternative purchasing mechanisms. Future changes could also
affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App Store, and how and to what
extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms.
Apple Inc. | 2023 Form 10-K | 13


The Company is also currently subject to antitrust investigations in various jurisdictions around the world, which can result in legal proceedings and claims
against the Company that could, individually or in the aggregate, have a materially adverse impact on the Company’s business, results of operations and
financial condition. For example, the Company is the subject of investigations in Europe and other jurisdictions relating to App Store terms and conditions. If such
investigations result in adverse findings against the Company, the Company could be exposed to significant fines and may be required to make changes to its
App Store business, all of which could materially adversely affect the Company’s business, results of operations and financial condition. The Company is also
subject to litigation relating to the App Store, which has resulted in changes to the Company’s business practices, and may in the future result in further changes.
Further, the Company has commercial relationships with other companies in the technology industry that are or may become subject to investigations and
litigation that, if resolved against those other companies, could materially adversely affect the Company’s commercial relationships with those business partners
and materially adversely affect the Company’s business, results of operations and financial condition. For example, the Company earns revenue from licensing
arrangements with other companies to offer their search services on the Company’s platforms and applications, and certain of these arrangements are currently
subject to government investigations and legal proceedings.
There can be no assurance the Company’s business will not be materially adversely affected, individually or in the aggregate, by the outcomes of such
investigations, litigation or changes to laws and regulations in the future. Changes to the Company’s business practices to comply with new laws and regulations
or in connection with other legal proceedings could negatively impact the reputation of the Company’s products for privacy and security and otherwise adversely
affect the experience for users of the Company’s products and services, and result in harm to the Company’s reputation, loss of competitive advantage, poor
market acceptance, reduced demand for products and services, and lost sales.
The Company’s business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding data protection.
The Company is subject to an increasing number of federal, state and international laws relating to the collection, use, retention, security and transfer of various
types of personal information. In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal information among the
Company and its international subsidiaries. Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional
restrictions or have laws that are pending. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and
changing requirements causes the Company to incur substantial costs and has required and may in the future require the Company to change its business
practices. Noncompliance could result in significant penalties or legal liability.
The Company makes statements about its use and disclosure of personal information through its privacy policy, information provided on its website, press
statements and other privacy notices provided to customers. Any failure by the Company to comply with these public statements or with other federal, state or
international privacy or data protection laws and regulations could result in inquiries or proceedings against the Company by governmental entities or others. In
addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability.
In addition to the risks generally relating to the collection, use, retention, security and transfer of personal information, the Company is also subject to specific
obligations relating to information considered sensitive under applicable laws, such as health data, financial data and biometric data. Health data and financial
data are subject to additional privacy, security and breach notification requirements, and the Company is subject to audit by governmental authorities regarding
the Company’s compliance with these obligations. If the Company fails to adequately comply with these rules and requirements, or if health data or financial data
is handled in a manner not permitted by law or under the Company’s agreements with healthcare or financial institutions, the Company can be subject to
litigation or government investigations, and can be liable for associated investigatory expenses, and can also incur significant fees or fines.
Payment card data is also subject to additional requirements. Under payment card rules and obligations, if cardholder information is potentially compromised,
the Company can be liable for associated investigatory expenses and can also incur significant fees or fines if the Company fails to follow payment card industry
data security standards. The Company could also experience a significant increase in payment card transaction costs or lose the ability to process payment
cards if it fails to follow payment card industry data security standards, which could materially adversely affect the Company’s business, reputation, results of
operations and financial condition.
Apple Inc. | 2023 Form 10-K | 14


Financial Risks
The Company expects its quarterly net sales and results of operations to fluctuate.
The Company’s profit margins vary across its products, services, geographic segments and distribution channels. For example, the gross margins on the
Company’s products and services vary significantly and can change over time. The Company’s gross margins are subject to volatility and downward pressure
due to a variety of factors, including: continued industry-wide global product pricing pressures and product pricing actions that the Company may take in
response to such pressures; increased competition; the Company’s ability to effectively stimulate demand for certain of its products and services; compressed
product life cycles; supply shortages; potential increases in the cost of components, outside manufacturing services, and developing, acquiring and delivering
content for the Company’s services; the Company’s ability to manage product quality and warranty costs effectively; shifts in the mix of products and services, or
in the geographic, currency or channel mix, including to the extent that regulatory changes require the Company to modify its product and service offerings;
fluctuations in foreign exchange rates; inflation and other macroeconomic pressures; and the introduction of new products or services, including new products or
services with higher cost structures. These and other factors could have a materially adverse impact on the Company’s results of operations and financial
condition.
The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday
demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. Further, the Company
generates a significant portion of its net sales from a single product and a decline in demand for that product could significantly impact quarterly net sales. The
Company could also be subject to unexpected developments, such as lower-than-anticipated demand for the Company’s products or services, issues with new
product or service introductions, information technology system failures or network disruptions, or failure of one of the Company’s logistics, components supply,
or manufacturing partners.
The Company’s financial performance is subject to risks associated with changes in the value of the U.S. dollar relative to local currencies.
The Company’s primary exposure to movements in foreign exchange rates relates to non–U.S. dollar–denominated sales, cost of sales and operating expenses
worldwide. Gross margins on the Company’s products in foreign countries and on products that include components obtained from foreign suppliers have in the
past been adversely affected and could in the future be materially adversely affected by foreign exchange rate fluctuations.
The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of the Company’s foreign currency–denominated sales and
earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company’s products. In some circumstances, for
competitive or other reasons, the Company may decide not to raise international pricing to offset the U.S. dollar’s strengthening, which would adversely affect
the U.S. dollar value of the gross margins the Company earns on foreign currency–denominated sales.
Conversely, a strengthening of foreign currencies relative to the U.S. dollar, while generally beneficial to the Company’s foreign currency–denominated sales and
earnings, could cause the Company to reduce international pricing or incur losses on its foreign currency derivative instruments, thereby limiting the benefit.
Additionally, strengthening of foreign currencies may increase the Company’s cost of product components denominated in those currencies, thus adversely
affecting gross margins.
The Company uses derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign
exchange rates. The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable
movements in foreign exchange rates over the limited time the hedges are in place.
The Company is exposed to credit risk and fluctuations in the values of its investment portfolio.
The Company’s investments can be negatively affected by changes in liquidity, credit deterioration, financial results, market and economic conditions, political
risk, sovereign risk, interest rate fluctuations or other factors. As a result, the value and liquidity of the Company’s cash, cash equivalents and marketable
securities may fluctuate substantially. Therefore, although the Company has not realized any significant losses on its cash, cash equivalents and marketable
securities, future fluctuations in their value could result in significant losses and could have a material adverse impact on the Company’s results of operations
and financial condition.
Apple Inc. | 2023 Form 10-K | 15


The Company is exposed to credit risk on its trade accounts receivable, vendor non-trade receivables and prepayments related to long-term supply
agreements, and this risk is heightened during periods when economic conditions worsen.
The Company distributes its products and certain of its services through third-party cellular network carriers, wholesalers, retailers and resellers. The Company
also sells its products and services directly to small and mid-sized businesses and education, enterprise and government customers. A substantial majority of the
Company’s outstanding trade receivables are not covered by collateral, third-party bank support or financing arrangements, or credit insurance, and a significant
portion of the Company’s trade receivables can be concentrated within cellular network carriers or other resellers. The Company’s exposure to credit and
collectibility risk on its trade receivables is higher in certain international markets and its ability to mitigate such risks may be limited. The Company also has
unsecured vendor non-trade receivables resulting from purchases of components by outsourcing partners and other vendors that manufacture subassemblies or
assemble final products for the Company. In addition, the Company has made prepayments associated with long-term supply agreements to secure supply of
inventory components. As of September 30, 2023, the Company’s vendor non-trade receivables and prepayments related to long-term supply agreements were
concentrated among a few individual vendors located primarily in Asia. While the Company has procedures to monitor and limit exposure to credit risk on its
trade and vendor non-trade receivables, as well as long-term prepayments, there can be no assurance such procedures will effectively limit its credit risk and
avoid losses.
The Company is subject to changes in tax rates, the adoption of new U.S. or international tax legislation and exposure to additional tax liabilities.
The Company is subject to taxes in the U.S. and numerous foreign jurisdictions, including Ireland and Singapore, where a number of the Company’s subsidiaries
are organized. Due to economic and political conditions, tax laws and tax rates for income taxes and other non-income taxes in various jurisdictions may be
subject to significant change. For example, the Organisation for Economic Co-operation and Development continues to advance proposals for modernizing
international tax rules, including the introduction of global minimum tax standards. The Company’s effective tax rates are affected by changes in the mix of
earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, and changes
in tax laws or their interpretation. The application of tax laws may be uncertain, require significant judgment and be subject to differing interpretations.
The Company is also subject to the examination of its tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and
governmental bodies. The Company regularly assesses the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its
provision for taxes. There can be no assurance as to the outcome of these examinations. If the Company’s effective tax rates were to increase, or if the ultimate
determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s business, results of operations and
financial condition could be materially adversely affected.
General Risks
The price of the Company’s stock is subject to volatility.
The Company’s stock has experienced substantial price volatility in the past and may continue to do so in the future. Additionally, the Company, the technology
industry and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in
ways that may have been unrelated to these companies’ operating performance. Price volatility may cause the average price at which the Company repurchases
its stock in a given period to exceed the stock’s price at a given point in time. The Company believes the price of its stock should reflect expectations of future
growth and profitability. The Company also believes the price of its stock should reflect expectations that its cash dividend will continue at current levels or grow,
and that its current share repurchase program will be fully consummated. Future dividends are subject to declaration by the Company’s Board of Directors, and
the Company’s share repurchase program does not obligate it to acquire any specific number of shares. If the Company fails to meet expectations related to
future growth, profitability, dividends, share repurchases or other market expectations, the price of the Company’s stock may decline significantly, which could
have a material adverse impact on investor confidence and employee retention.
Item 1B.    Unresolved Staff Comments
None.
Item 1C.    Cybersecurity
Not applicable.
Apple Inc. | 2023 Form 10-K | 16


Item 2.    Properties
The Company’s headquarters is located in Cupertino, California. As of September 30, 2023, the Company owned or leased facilities and land for corporate
functions, R&D, data centers, retail and other purposes at locations throughout the U.S. and in various places outside the U.S. The Company believes its
existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conduct of its business.
Item 3.    Legal Proceedings
Epic Games
Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “District Court”) against the Company alleging
violations of federal and state antitrust laws and California’s unfair competition law based upon the Company’s operation of its App Store. On September 10,
2021, the District Court ruled in favor of the Company with respect to nine out of the ten counts included in Epic’s claim. The District Court found that certain
provisions of the Company’s App Store Review Guidelines violate California’s unfair competition law and issued an injunction enjoining the Company from
prohibiting developers from including in their apps external links that direct customers to purchasing mechanisms other than Apple in-app purchasing. The
injunction applies to apps on the U.S. storefront of the iOS and iPadOS App Store. On April 24, 2023, the U.S. Court of Appeals for the Ninth Circuit (the “Circuit
Court”) affirmed the District Court’s ruling. On June 7, 2023, the Company and Epic filed petitions with the Circuit Court requesting further review of the decision.
On June 30, 2023, the Circuit Court denied both petitions. On July 17, 2023, the Circuit Court granted Apple’s motion to stay enforcement of the injunction
pending appeal to the U.S. Supreme Court. If the U.S. Supreme Court denies Apple’s petition, the stay of the injunction will expire.
Masimo
Masimo Corporation and Cercacor Laboratories, Inc. (together, “Masimo”) filed a complaint before the U.S. International Trade Commission (the “ITC”) alleging
infringement by the Company of five patents relating to the functionality of the blood oxygen feature in Apple Watch Series 6 and 7. In its complaint, Masimo
sought a permanent exclusion order prohibiting importation to the United States of certain Apple Watch models that include blood oxygen sensing functionality.
On October 26, 2023, the ITC entered a limited exclusion order (the “Order”) prohibiting importation and sales in the United States of Apple Watch models with
blood oxygen sensing functionality, which includes Apple Watch Series 9 and Ultra 2. The Order will not go into effect until the end of the administrative review
period, which is currently expected to end on December 25, 2023. The Company intends to appeal the Order and seek a stay pending the appeal.
Other Legal Proceedings
The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. The
Company settled certain matters during the fourth quarter of 2023 that did not individually or in the aggregate have a material impact on the Company’s financial
condition or operating results. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting
period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially
adversely affected.
Item 4.    Mine Safety Disclosures
Not applicable.
Apple Inc. | 2023 Form 10-K | 17


PART II
Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company’s common stock is traded on The Nasdaq Stock Market LLC under the symbol AAPL.
Holders
As of October 20, 2023, there were 23,763 shareholders of record.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity during the three months ended September 30, 2023 was as follows (in millions, except number of shares, which are reflected in
thousands, and per-share amounts):
Periods
Total Number
of Shares
Purchased
Average Price
Paid Per
Share
Total Number of
Shares
Purchased as Part
of Publicly
Announced Plans or
Programs
Approximate Dollar
Value of
Shares That May Yet Be
Purchased
Under the Plans or
Programs 
July 2, 2023 to August 5, 2023:
Open market and privately negotiated purchases
33,864 
$
191.62 
33,864 
August 6, 2023 to September 2, 2023:
August 2023 ASRs
22,085 
22,085 
Open market and privately negotiated purchases
30,299 
$
178.99 
30,299 
September 3, 2023 to September 30, 2023:
Open market and privately negotiated purchases
20,347 
$
176.31 
20,347 
Total
106,595 
$
74,069 
(1)
As of September 30, 2023, the Company was authorized by the Board of Directors to purchase up to $90 billion of the Company’s common stock under a share
repurchase program announced on May 4, 2023, of which $15.9 billion had been utilized. During the fourth quarter of 2023, the Company also utilized the final
$4.6 billion under its previous repurchase program, which was most recently authorized in April 2022. The 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 Exchange Act.
(2)
In August 2023, the Company entered into new accelerated share repurchase agreements (“ASRs”). Under the terms of the ASRs, two financial institutions
committed to deliver shares of the Company’s common stock during the purchase periods in exchange for up-front payments totaling $5.0 billion. The total
number of shares ultimately delivered under the ASRs, and therefore the average repurchase price paid per share, is determined based on the volume-weighted
average price of the Company’s common stock during the ASRs’ purchase periods, which end in the first quarter of 2024.
(1)
(2)
(2)
(2)
Apple Inc. | 2023 Form 10-K | 18


Company Stock Performance
The following graph shows a comparison of five-year cumulative total shareholder return, calculated on a dividend-reinvested basis, for the Company, the S&P
500 Index and the Dow Jones U.S. Technology Supersector Index. The graph assumes $100 was invested in each of the Company’s common stock, the S&P
500 Index and the Dow Jones U.S. Technology Supersector Index as of the market close on September  28, 2018. Past stock price performance is not
necessarily indicative of future stock price performance.
September
2018
September
2019
September
2020
September
2021
September
2022
September
2023
Apple Inc.
$
100 
$
98 
$
204 
$
269 
$
277 
$
317 
S&P 500 Index
$
100 
$
104 
$
118 
$
161 
$
136 
$
160 
Dow Jones U.S. Technology Supersector Index
$
100 
$
105 
$
154 
$
227 
$
164 
$
226 
Item 6.    [Reserved]
Apple Inc. | 2023 Form 10-K | 19


Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this
Form 10-K. This Item generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussions of 2021 items and year-to-
year comparisons between 2022 and 2021 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 24, 2022.
Fiscal Period
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter
every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first quarter of 2023. The Company’s fiscal year
2023 spanned 53 weeks, whereas fiscal years 2022 and 2021 spanned 52 weeks each.
Fiscal Year Highlights
The Company’s total net sales were $383.3 billion and net income was $97.0 billion during 2023.
The Company’s total net sales decreased 3% or $11.0 billion during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar
accounted for more than the entire year-over-year decrease in total net sales, which consisted primarily of lower net sales of Mac and iPhone, partially offset by
higher net sales of Services.
The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2023
included the following:
First Quarter 2023:
•
iPad and iPad Pro;
•
Next-generation Apple TV 4K; and
•
MLS Season Pass, a Major League Soccer subscription streaming service.
Second Quarter 2023:
•
MacBook Pro 14”, MacBook Pro 16” and Mac mini; and
•
Second-generation HomePod.
Third Quarter 2023:
•
MacBook Air 15”, Mac Studio and Mac Pro;
•
Apple Vision Pro™, the Company’s first spatial computer featuring its new visionOS™, expected to be available in early calendar year 2024; and
•
iOS 17, macOS Sonoma, iPadOS 17, tvOS 17 and watchOS 10, updates to the Company’s operating systems.
Fourth Quarter 2023:
•
iPhone 15, iPhone 15 Plus, iPhone 15 Pro and iPhone 15 Pro Max; and
•
Apple Watch Series 9 and Apple Watch Ultra 2.
In May 2023, the Company announced a new share repurchase program of up to $90 billion and raised its quarterly dividend from $0.23 to $0.24 per share
beginning in May 2023. During 2023, the Company repurchased $76.6 billion of its common stock and paid dividends and dividend equivalents of $15.0 billion.
Macroeconomic Conditions
Macroeconomic conditions, including inflation, changes in interest rates, and currency fluctuations, have directly and indirectly impacted, and could in the future
materially impact, the Company’s results of operations and financial condition.
Apple Inc. | 2023 Form 10-K | 20


Segment Operating Performance
The following table shows net sales by reportable segment for 2023, 2022 and 2021 (dollars in millions):
2023
Change
2022
Change
2021
Net sales by reportable segment:
Americas
$
162,560 
(4)%
$
169,658 
11 %
$
153,306 
Europe
94,294 
(1)%
95,118 
7 %
89,307 
Greater China
72,559 
(2)%
74,200 
9 %
68,366 
Japan
24,257 
(7)%
25,977 
(9)%
28,482 
Rest of Asia Pacific
29,615 
1 %
29,375 
11 %
26,356 
Total net sales
$
383,285 
(3)%
$
394,328 
8 %
$
365,817 
Americas
Americas net sales decreased 4% or $7.1 billion during 2023 compared to 2022 due to lower net sales of iPhone and Mac, partially offset by higher net sales of
Services.
Europe
Europe net sales decreased 1% or $824 million during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar accounted for
more than the entire year-over-year decrease in Europe net sales, which consisted primarily of lower net sales of Mac and Wearables, Home and Accessories,
partially offset by higher net sales of iPhone and Services.
Greater China
Greater China net sales decreased 2% or $1.6 billion during 2023 compared to 2022. The weakness in the renminbi relative to the U.S. dollar accounted for
more than the entire year-over-year decrease in Greater China net sales, which consisted primarily of lower net sales of Mac and iPhone.
Japan
Japan net sales decreased 7% or $1.7 billion during 2023 compared to 2022. The weakness in the yen relative to the U.S. dollar accounted for more than the
entire year-over-year decrease in Japan net sales, which consisted primarily of lower net sales of iPhone, Wearables, Home and Accessories and Mac.
Rest of Asia Pacific
Rest of Asia Pacific net sales increased 1% or $240 million during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar had a
significantly unfavorable year-over-year impact on Rest of Asia Pacific net sales. The net sales increase consisted of higher net sales of iPhone and Services,
partially offset by lower net sales of Mac and iPad.
Apple Inc. | 2023 Form 10-K | 21


Products and Services Performance
The following table shows net sales by category for 2023, 2022 and 2021 (dollars in millions):
2023
Change
2022
Change
2021
Net sales by category:
iPhone 
$
200,583 
(2)%
$
205,489 
7 %
$
191,973 
Mac 
29,357 
(27)%
40,177 
14 %
35,190 
iPad 
28,300 
(3)%
29,292 
(8)%
31,862 
Wearables, Home and Accessories 
39,845 
(3)%
41,241 
7 %
38,367 
Services 
85,200 
9 %
78,129 
14 %
68,425 
Total net sales
$
383,285 
(3)%
$
394,328 
8 %
$
365,817 
(1)
Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective
product.
(2)
Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales decreased 2% or $4.9 billion during 2023 compared to 2022 due to lower net sales of non-Pro iPhone models, partially offset by higher net
sales of Pro iPhone models.
Mac
Mac net sales decreased 27% or $10.8 billion during 2023 compared to 2022 due primarily to lower net sales of laptops.
iPad
iPad net sales decreased 3% or $1.0 billion during 2023 compared to 2022 due primarily to lower net sales of iPad mini and iPad Air, partially offset by the
combined net sales of iPad 9th and 10th generation.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales decreased 3% or $1.4 billion during 2023 compared to 2022 due primarily to lower net sales of Wearables and
Accessories.
Services
Services net sales increased 9% or $7.1 billion during 2023 compared to 2022 due to higher net sales across all lines of business.
(1)
(1)
(1)
(1)
(2)
Apple Inc. | 2023 Form 10-K | 22


Gross Margin
Products and Services gross margin and gross margin percentage for 2023, 2022 and 2021 were as follows (dollars in millions):
2023
2022
2021
Gross margin:
Products
$
108,803 
$
114,728 
$
105,126 
Services
60,345 
56,054 
47,710 
Total gross margin
$
169,148 
$
170,782 
$
152,836 
Gross margin percentage:
Products
36.5 %
36.3 %
35.3 %
Services
70.8 %
71.7 %
69.7 %
Total gross margin percentage
44.1 %
43.3 %
41.8 %
Products Gross Margin
Products gross margin decreased during 2023 compared to 2022 due to the weakness in foreign currencies relative to the U.S. dollar and lower Products
volume, partially offset by cost savings and a different Products mix.
Products gross margin percentage increased during 2023 compared to 2022 due to cost savings and a different Products mix, partially offset by the weakness in
foreign currencies relative to the U.S. dollar and decreased leverage.
Services Gross Margin
Services gross margin increased during 2023 compared to 2022 due primarily to higher Services net sales, partially offset by the weakness in foreign currencies
relative to the U.S. dollar and higher Services costs.
Services gross margin percentage decreased during 2023 compared to 2022 due to higher Services costs and the weakness in foreign currencies relative to the
U.S. dollar, partially offset by a different Services mix.
The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.”
As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.
Operating Expenses
Operating expenses for 2023, 2022 and 2021 were as follows (dollars in millions):
2023
Change
2022
Change
2021
Research and development
$
29,915 
14 %
$
26,251 
20 %
$
21,914 
Percentage of total net sales
8 %
7 %
6 %
Selling, general and administrative
$
24,932 
(1)%
$
25,094 
14 %
$
21,973 
Percentage of total net sales
7 %
6 %
6 %
Total operating expenses
$
54,847 
7 %
$
51,345 
17 %
$
43,887 
Percentage of total net sales
14 %
13 %
12 %
Research and Development
The year-over-year growth in R&D expense in 2023 was driven primarily by increases in headcount-related expenses.
Selling, General and Administrative
Selling, general and administrative expense was relatively flat in 2023 compared to 2022.
Apple Inc. | 2023 Form 10-K | 23


Provision for Income Taxes
Provision for income taxes, effective tax rate and statutory federal income tax rate for 2023, 2022 and 2021 were as follows (dollars in millions):
2023
2022
2021
Provision for income taxes
$
16,741 
$
19,300 
$
14,527 
Effective tax rate
14.7 %
16.2 %
13.3 %
Statutory federal income tax rate
21 %
21 %
21 %
The Company’s effective tax rate for 2023 and 2022 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign
earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.
The Company’s effective tax rate for 2023 was lower compared to 2022 due primarily to a lower effective tax rate on foreign earnings and the impact of U.S.
foreign tax credit regulations issued by the U.S. Department of the Treasury in 2022, partially offset by lower tax benefits from share-based compensation.
Liquidity and Capital Resources
The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $148.3 billion as of September 30, 2023,
along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return
program over the next 12 months and beyond.
The Company’s material cash requirements include the following contractual obligations:
Debt
As of September 30, 2023, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $106.6 billion (collectively
the “Notes”), with $9.9 billion payable within 12 months. Future interest payments associated with the Notes total $41.1 billion, with $2.9 billion payable within 12
months.
The Company also issues unsecured short-term promissory notes pursuant to a commercial paper program. As of September 30, 2023, the Company had $6.0
billion of commercial paper outstanding, all of which was payable within 12 months.
Leases
The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. As of
September 30, 2023, the Company had fixed lease payment obligations of $15.8 billion, with $2.0 billion payable within 12 months.
Manufacturing Purchase Obligations
The Company utilizes several outsourcing partners to manufacture subassemblies for the Company’s products and to perform final assembly and testing of
finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of September 30, 2023, the
Company had manufacturing purchase obligations of $53.1 billion, with $52.9 billion payable within 12 months. The Company’s manufacturing purchase
obligations are primarily noncancelable.
Other Purchase Obligations
The Company’s other purchase obligations primarily consist of noncancelable obligations to acquire capital assets, including assets related to product
manufacturing, and noncancelable obligations related to supplier arrangements, licensed intellectual property and content, and distribution rights. As of
September 30, 2023, the Company had other purchase obligations of $21.9 billion, with $5.6 billion payable within 12 months.
Deemed Repatriation Tax Payable
As of September 30, 2023, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”) was $22.0 billion,
with $6.5 billion expected to be paid within 12 months.
Apple Inc. | 2023 Form 10-K | 24


Capital Return Program
In addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to
acquire a minimum amount of shares. As of September  30, 2023, the Company’s quarterly cash dividend was $0.24 per share. The Company intends to
increase its dividend on an annual basis, subject to declaration by the Board of Directors.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s
discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that
affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this
Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management
bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities.
Uncertain Tax Positions
The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The evaluation of the Company’s uncertain tax positions involves
significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, including the Act and matters related to the
allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given
that the final outcome of these uncertainties will not be different from that which is reflected in the Company’s reserves. Reserves are adjusted considering
changing facts and circumstances, such as the closing of a tax examination. Resolution of these uncertainties in a manner inconsistent with management’s
expectations could have a material impact on the Company’s financial condition and operating results.
Legal and Other Contingencies
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires
significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s
financial condition and operating results.
Apple Inc. | 2023 Form 10-K | 25


Item 7A.    Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to economic risk from interest rates and foreign exchange rates. The Company uses various strategies to manage these risks;
however, they may still impact the Company’s consolidated financial statements.
Interest Rate Risk
The Company is primarily exposed to fluctuations in U.S. interest rates and their impact on the Company’s investment portfolio and term debt. Increases in
interest rates will negatively affect the fair value of the Company’s investment portfolio and increase the interest expense on the Company’s term debt. To protect
against interest rate risk, the Company may use derivative instruments, offset interest rate–sensitive assets and liabilities, or control duration of the investment
and term debt portfolios.
The following table sets forth potential impacts on the Company’s investment portfolio and term debt, including the effects of any associated derivatives, that
would result from a hypothetical increase in relevant interest rates as of September 30, 2023 and September 24, 2022 (dollars in millions):
Interest Rate
Sensitive Instrument
Hypothetical Interest
Rate Increase
Potential Impact
2023
2022
Investment portfolio
100 basis points, all tenors
Decline in fair value
$
3,089 
$
4,022 
Term debt
100 basis points, all tenors
Increase in annual interest expense
$
194 
$
201 
Foreign Exchange Rate Risk
The Company’s exposure to foreign exchange rate risk relates primarily to the Company being a net receiver of currencies other than the U.S. dollar. Changes in
exchange rates, and in particular a strengthening of the U.S. dollar, will negatively affect the Company’s net sales and gross margins as expressed in U.S.
dollars. Fluctuations in exchange rates may also affect the fair values of certain of the Company’s assets and liabilities. To protect against foreign exchange rate
risk, the Company may use derivative instruments, offset exposures, or adjust local currency pricing of its products and services. However, the Company may
choose to not hedge certain foreign currency exposures for a variety of reasons, including accounting considerations or prohibitive cost.
The Company applied a value-at-risk (“VAR”) model to its foreign currency derivative positions to assess the potential impact of fluctuations in exchange rates.
The VAR model used a Monte Carlo simulation. The VAR is the maximum expected loss in fair value, for a given confidence interval, to the Company’s foreign
currency derivative positions due to adverse movements in rates. Based on the results of the model, the Company estimates, with 95% confidence, a maximum
one-day loss in fair value of $669 million and $1.0 billion as of September 30, 2023 and September 24, 2022, respectively. Changes in the Company’s underlying
foreign currency exposures, which were excluded from the assessment, generally offset changes in the fair values of the Company’s foreign currency
derivatives.
Apple Inc. | 2023 Form 10-K | 26


Item 8.    Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page
Consolidated Statements of Operations for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
28
Consolidated Statements of Comprehensive Income for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
29
Consolidated Balance Sheets as of September 30, 2023 and September 24, 2022
30
Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
31
Consolidated Statements of Cash Flows for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
32
Notes to Consolidated Financial Statements
33
Reports of Independent Registered Public Accounting Firm
49
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission
of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes.
Apple Inc. | 2023 Form 10-K | 27


Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Net sales:
   Products
$
298,085 
$
316,199 
$
297,392 
   Services
85,200 
78,129 
68,425 
Total net sales
383,285 
394,328 
365,817 
Cost of sales:
   Products
189,282 
201,471 
192,266 
   Services
24,855 
22,075 
20,715 
Total cost of sales
214,137 
223,546 
212,981 
Gross margin
169,148 
170,782 
152,836 
Operating expenses:
Research and development
29,915 
26,251 
21,914 
Selling, general and administrative
24,932 
25,094 
21,973 
Total operating expenses
54,847 
51,345 
43,887 
Operating income
114,301 
119,437 
108,949 
Other income/(expense), net
(565)
(334)
258 
Income before provision for income taxes
113,736 
119,103 
109,207 
Provision for income taxes
16,741 
19,300 
14,527 
Net income
$
96,995 
$
99,803 
$
94,680 
Earnings per share:
Basic
$
6.16 
$
6.15 
$
5.67 
Diluted
$
6.13 
$
6.11 
$
5.61 
Shares used in computing earnings per share:
Basic
15,744,231 
16,215,963 
16,701,272 
Diluted
15,812,547 
16,325,819 
16,864,919 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28


Apple Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Net income
$
96,995 
$
99,803 
$
94,680 
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax
(765)
(1,511)
501 
Change in unrealized gains/losses on derivative instruments, net of tax:
Change in fair value of derivative instruments
323 
3,212 
32 
Adjustment for net (gains)/losses realized and included in net income
(1,717)
(1,074)
1,003 
Total change in unrealized gains/losses on derivative instruments
(1,394)
2,138 
1,035 
Change in unrealized gains/losses on marketable debt securities, net of tax:
Change in fair value of marketable debt securities
1,563 
(12,104)
(694)
Adjustment for net (gains)/losses realized and included in net income
253 
205 
(273)
Total change in unrealized gains/losses on marketable debt securities
1,816 
(11,899)
(967)
Total other comprehensive income/(loss)
(343)
(11,272)
569 
Total comprehensive income
$
96,652 
$
88,531 
$
95,249 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 29


Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
September 30,
2023
September 24,
2022
ASSETS:
Current assets:
Cash and cash equivalents
$
29,965 
$
23,646 
Marketable securities
31,590 
24,658 
Accounts receivable, net
29,508 
28,184 
Vendor non-trade receivables
31,477 
32,748 
Inventories
6,331 
4,946 
Other current assets
14,695 
21,223 
Total current assets
143,566 
135,405 
Non-current assets:
Marketable securities
100,544 
120,805 
Property, plant and equipment, net
43,715 
42,117 
Other non-current assets
64,758 
54,428 
Total non-current assets
209,017 
217,350 
Total assets
$
352,583 
$
352,755 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
$
62,611 
$
64,115 
Other current liabilities
58,829 
60,845 
Deferred revenue
8,061 
7,912 
Commercial paper
5,985 
9,982 
Term debt
9,822 
11,128 
Total current liabilities
145,308 
153,982 
Non-current liabilities:
Term debt
95,281 
98,959 
Other non-current liabilities
49,848 
49,142 
Total non-current liabilities
145,129 
148,101 
Total liabilities
290,437 
302,083 
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061
and 15,943,425 shares issued and outstanding, respectively
73,812 
64,849 
Accumulated deficit
(214)
(3,068)
Accumulated other comprehensive loss
(11,452)
(11,109)
Total shareholders’ equity
62,146 
50,672 
Total liabilities and shareholders’ equity
$
352,583 
$
352,755 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30


Apple Inc.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In millions, except per-share amounts)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Total shareholders’ equity, beginning balances
$
50,672 
$
63,090 
$
65,339 
Common stock and additional paid-in capital:
Beginning balances
64,849 
57,365 
50,779 
Common stock issued
1,346 
1,175 
1,105 
Common stock withheld related to net share settlement of equity awards
(3,521)
(2,971)
(2,627)
Share-based compensation
11,138 
9,280 
8,108 
Ending balances
73,812 
64,849 
57,365 
Retained earnings/(Accumulated deficit):
Beginning balances
(3,068)
5,562 
14,966 
Net income
96,995 
99,803 
94,680 
Dividends and dividend equivalents declared
(14,996)
(14,793)
(14,431)
Common stock withheld related to net share settlement of equity awards
(2,099)
(3,454)
(4,151)
Common stock repurchased
(77,046)
(90,186)
(85,502)
Ending balances
(214)
(3,068)
5,562 
Accumulated other comprehensive income/(loss):
Beginning balances
(11,109)
163 
(406)
Other comprehensive income/(loss)
(343)
(11,272)
569 
Ending balances
(11,452)
(11,109)
163 
Total shareholders’ equity, ending balances
$
62,146 
$
50,672 
$
63,090 
Dividends and dividend equivalents declared per share or RSU
$
0.94 
$
0.90 
$
0.85 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 31


Apple Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years ended
September 30,
2023
September 24,
2022
September 25,
2021
Cash, cash equivalents and restricted cash, beginning balances
$
24,977 
$
35,929 
$
39,789 
Operating activities:
Net income
96,995 
99,803 
94,680 
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization
11,519 
11,104 
11,284 
Share-based compensation expense
10,833 
9,038 
7,906 
Other
(2,227)
1,006 
(4,921)
Changes in operating assets and liabilities:
Accounts receivable, net
(1,688)
(1,823)
(10,125)
Vendor non-trade receivables
1,271 
(7,520)
(3,903)
Inventories
(1,618)
1,484 
(2,642)
Other current and non-current assets
(5,684)
(6,499)
(8,042)
Accounts payable
(1,889)
9,448 
12,326 
Other current and non-current liabilities
3,031 
6,110 
7,475 
Cash generated by operating activities
110,543 
122,151 
104,038 
Investing activities:
Purchases of marketable securities
(29,513)
(76,923)
(109,558)
Proceeds from maturities of marketable securities
39,686 
29,917 
59,023 
Proceeds from sales of marketable securities
5,828 
37,446 
47,460 
Payments for acquisition of property, plant and equipment
(10,959)
(10,708)
(11,085)
Other
(1,337)
(2,086)
(385)
Cash generated by/(used in) investing activities
3,705 
(22,354)
(14,545)
Financing activities:
Payments for taxes related to net share settlement of equity awards
(5,431)
(6,223)
(6,556)
Payments for dividends and dividend equivalents
(15,025)
(14,841)
(14,467)
Repurchases of common stock
(77,550)
(89,402)
(85,971)
Proceeds from issuance of term debt, net
5,228 
5,465 
20,393 
Repayments of term debt
(11,151)
(9,543)
(8,750)
Proceeds from/(Repayments of) commercial paper, net
(3,978)
3,955 
1,022 
Other
(581)
(160)
976 
Cash used in financing activities
(108,488)
(110,749)
(93,353)
Increase/(Decrease) in cash, cash equivalents and restricted cash
5,760 
(10,952)
(3,860)
Cash, cash equivalents and restricted cash, ending balances
$
30,737 
$
24,977 
$
35,929 
Supplemental cash flow disclosure:
Cash paid for income taxes, net
$
18,679 
$
19,573 
$
25,385 
Cash paid for interest
$
3,803 
$
2,865 
$
2,687 
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 32


Apple Inc.
Notes to Consolidated Financial Statements
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries. The preparation of these consolidated financial
statements and accompanying notes in conformity with GAAP requires the use of management estimates. Certain prior period amounts in the consolidated
financial statements and accompanying notes have been reclassified to conform to the current period’s presentation.
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter
every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first fiscal quarter of 2023. The Company’s fiscal
year 2023 spanned 53 weeks, whereas fiscal years 2022 and 2021 spanned 52 weeks each. Unless otherwise stated, references to particular years, quarters,
months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Revenue
The Company records revenue net of taxes collected from customers that are remitted to governmental authorities.
Share-Based Compensation
The Company recognizes share-based compensation expense on a straight-line basis for its estimate of equity awards that will ultimately vest.
Cash Equivalents
All highly liquid investments with maturities of three months or less at the date of purchase are treated as cash equivalents.
Marketable Securities
The cost of securities sold is determined using the specific identification method.
Inventories
Inventories are measured using the first-in, first-out method.
Property, Plant and Equipment
Depreciation on property, plant and equipment is recognized on a straight-line basis.
Derivative Instruments
The Company presents derivative assets and liabilities at their gross fair values in the Consolidated Balance Sheets.
Income Taxes
The Company records certain deferred tax assets and liabilities in connection with the minimum tax on certain foreign earnings created by the Act.
Leases
The Company combines and accounts for lease and nonlease components as a single lease component for leases of corporate, data center and retail facilities.
Apple Inc. | 2023 Form 10-K | 33


Note 2 – Revenue
The Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is transferred to its customers.
Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or
services are transferred to its customers. For most of the Company’s Products net sales, control transfers when products are shipped. For the Company’s
Services net sales, control transfers over time as services are delivered. Payment for Products and Services net sales is collected within a short period following
transfer of control or commencement of delivery of services, as applicable.
The Company records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the
Company’s expectations and historical experience.
For arrangements with multiple performance obligations, which represent promises within an arrangement that are distinct, the Company allocates revenue to all
distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). When available, the Company uses observable prices to determine
SSPs. When observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance
obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers
multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, where applicable, prices
charged by the Company for similar offerings, market trends in the pricing for similar offerings, product-specific business objectives and the estimated cost to
provide the performance obligation.
The Company has identified up to three performance obligations regularly included in arrangements involving the sale of iPhone, Mac, iPad and certain other
products. The first performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered
at the time of sale. The second performance obligation is the right to receive certain product-related bundled services, which include iCloud , Siri  and Maps.
The third performance obligation is the right to receive, on a when-and-if-available basis, future unspecified software upgrades relating to the software bundled
with each device. The Company allocates revenue and any related discounts to these performance obligations based on their relative SSPs. Because the
Company lacks observable prices for the undelivered performance obligations, the allocation of revenue is based on the Company’s estimated SSPs. Revenue
allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product
is shipped. Revenue allocated to the product-related bundled services and unspecified software upgrade rights is deferred and recognized on a straight-line
basis over the estimated period they are expected to be provided.
For certain long-term service arrangements, the Company has performance obligations for services it has not yet delivered. For these arrangements, the
Company does not have a right to bill for the undelivered services. The Company has determined that any unbilled consideration relates entirely to the value of
the undelivered services. Accordingly, the Company has not recognized revenue, and does not disclose amounts, related to these undelivered services.
For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue
based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products,
including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the
product. For third-party applications sold through the App Store, the Company does not obtain control of the product before transferring it to the customer.
Therefore, the Company accounts for all third-party application–related sales on a net basis by recognizing in Services net sales only the commission it retains.
®
®
Apple Inc. | 2023 Form 10-K | 34


Net sales disaggregated by significant products and services for 2023, 2022 and 2021 were as follows (in millions):
2023
2022
2021
iPhone 
$
200,583 
$
205,489 
$
191,973 
Mac 
29,357 
40,177 
35,190 
iPad 
28,300 
29,292 
31,862 
Wearables, Home and Accessories 
39,845 
41,241 
38,367 
Services 
85,200 
78,129 
68,425 
Total net sales
$
383,285 
$
394,328 
$
365,817 
(1)
Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective
product.
(2)
Services net sales include amortization of the deferred value of services bundled in the sales price of certain products.
Total net sales include $8.2 billion of revenue recognized in 2023 that was included in deferred revenue as of September 24, 2022, $7.5 billion of revenue
recognized in 2022 that was included in deferred revenue as of September  25, 2021, and $6.7 billion of revenue recognized in 2021 that was included in
deferred revenue as of September 26, 2020.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 13, “Segment
Information and Geographic Data” for 2023, 2022 and 2021, except in Greater China, where iPhone revenue represented a moderately higher proportion of net
sales.
As of September 30, 2023 and September 24, 2022, the Company had total deferred revenue of $12.1 billion and $12.4 billion, respectively. As of September 30,
2023, the Company expects 67% of total deferred revenue to be realized in less than a year, 25% within one-to-two years, 7% within two-to-three years and 1%
in greater than three years.
Note 3 – Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for 2023, 2022 and 2021 (net income in millions and shares in thousands):
2023
2022
2021
Numerator:
Net income
$
96,995 
$
99,803 
$
94,680 
Denominator:
Weighted-average basic shares outstanding
15,744,231 
16,215,963 
16,701,272 
Effect of dilutive share-based awards
68,316 
109,856 
163,647 
Weighted-average diluted shares
15,812,547 
16,325,819 
16,864,919 
Basic earnings per share
$
6.16 
$
6.15 
$
5.67 
Diluted earnings per share
$
6.13 
$
6.11 
$
5.61 
Approximately 24 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for 2023 because their effect would
have been antidilutive.
(1)
(1)
(1)
(1)
(2)
Apple Inc. | 2023 Form 10-K | 35


Note 4 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of September 30, 2023 and
September 24, 2022 (in millions):
2023
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash
$
28,359 
$
— 
$
— 
$
28,359 
$
28,359 
$
— 
$
— 
Level 1:
Money market funds
481 
— 
— 
481 
481 
— 
— 
Mutual funds and equity securities
442 
12 
(26)
428 
— 
428 
— 
Subtotal
923 
12 
(26)
909 
481 
428 
— 
Level 2 :
U.S. Treasury securities
19,406 
— 
(1,292)
18,114 
35 
5,468 
12,611 
U.S. agency securities
5,736 
— 
(600)
5,136 
36 
271 
4,829 
Non-U.S. government securities
17,533 
6 
(1,048)
16,491 
— 
11,332 
5,159 
Certificates of deposit and time deposits
1,354 
— 
— 
1,354 
1,034 
320 
— 
Commercial paper
608 
— 
— 
608 
— 
608 
— 
Corporate debt securities
76,840 
6 
(5,956)
70,890 
20 
12,627 
58,243 
Municipal securities
628 
— 
(26)
602 
— 
192 
410 
Mortgage- and asset-backed securities
22,365 
6 
(2,735)
19,636 
— 
344 
19,292 
Subtotal
144,470 
18 
(11,657)
132,831 
1,125 
31,162 
100,544 
Total 
$
173,752 
$
30 
$
(11,683)
$
162,099 
$
29,965 
$
31,590 
$
100,544 
2022
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash
$
18,546 
$
— 
$
— 
$
18,546 
$
18,546 
$
— 
$
— 
Level 1:
Money market funds
2,929 
— 
— 
2,929 
2,929 
— 
— 
Mutual funds
274 
— 
(47)
227 
— 
227 
— 
Subtotal
3,203 
— 
(47)
3,156 
2,929 
227 
— 
Level 2 :
U.S. Treasury securities
25,134 
— 
(1,725)
23,409 
338 
5,091 
17,980 
U.S. agency securities
5,823 
— 
(655)
5,168 
— 
240 
4,928 
Non-U.S. government securities
16,948 
2 
(1,201)
15,749 
— 
8,806 
6,943 
Certificates of deposit and time deposits
2,067 
— 
— 
2,067 
1,805 
262 
— 
Commercial paper
718 
— 
— 
718 
28 
690 
— 
Corporate debt securities
87,148 
9 
(7,707)
79,450 
— 
9,023 
70,427 
Municipal securities
921 
— 
(35)
886 
— 
266 
620 
Mortgage- and asset-backed securities
22,553 
— 
(2,593)
19,960 
— 
53 
19,907 
Subtotal
161,312 
11 
(13,916)
147,407 
2,171 
24,431 
120,805 
Total 
$
183,061 
$
11 
$
(13,963)
$
169,109 
$
23,646 
$
24,658 
$
120,805 
(1)
The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments, which generally have counterparties with high credit
ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.
(2)
As of September 30, 2023 and September 24, 2022, total marketable securities included $13.8 billion and $12.7 billion, respectively, that were restricted from
general use, related to the State Aid Decision (refer to Note 7, “Income Taxes”) and other agreements.
(1)
(2)
(1)
(2)
Apple Inc. | 2023 Form 10-K | 36


The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of September 30, 2023 (in millions):
Due after 1 year through 5 years
$
74,427 
Due after 5 years through 10 years
9,964 
Due after 10 years
16,153 
Total fair value
$
100,544 
The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies marketable debt
securities as either current or non-current based solely on each instrument’s underlying contractual maturity date.
Derivative Instruments and Hedging
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.
The Company classifies cash flows related to derivative instruments in the same section of the Consolidated Statements of Cash Flows as the items being
hedged, which are generally classified as operating activities.
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 September 30,
2023, 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 19 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.
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 September 30, 2023 and September 24, 2022 were as follows (in millions):
2023
2022
Derivative instruments designated as accounting hedges:
Foreign exchange contracts
$
74,730 
$
102,670 
Interest rate contracts
$
19,375 
$
20,125 
Derivative instruments not designated as accounting hedges:
Foreign exchange contracts
$
104,777 
$
185,381 
Apple Inc. | 2023 Form 10-K | 37


The gross fair values of the Company’s derivative assets and liabilities as of September 24, 2022 were as follows (in millions):
2022
Fair Value of
Derivatives Designated
as Accounting Hedges
Fair Value of
Derivatives Not Designated
as Accounting Hedges
Total
Fair Value
Derivative assets :
Foreign exchange contracts
$
4,317 
$
2,819 
$
7,136 
Derivative liabilities :
Foreign exchange contracts
$
2,205 
$
2,547 
$
4,752 
Interest rate contracts
$
1,367 
$
— 
$
1,367 
(1)
Derivative assets are measured using Level 2 fair value inputs and are included in other current assets and other non-current assets in the Consolidated
Balance Sheet.
(2)
Derivative liabilities are measured using Level 2 fair value inputs and are included in other current liabilities and other non-current liabilities in the Consolidated
Balance Sheet.
The derivative assets above represent the Company’s gross credit exposure if all counterparties failed to perform. To mitigate credit risk, the Company generally
uses collateral security arrangements that provide for collateral to be received or posted when the net fair values of certain derivatives fluctuate from
contractually established thresholds. To further limit credit risk, the Company generally uses master netting arrangements with the respective counterparties to
the Company’s derivative contracts, under which the Company is allowed to settle transactions with a single net amount payable by one party to the other. As of
September 24, 2022, the potential effects of these rights of set-off associated with the Company’s derivative contracts, including the effects of collateral, would
be a reduction to both derivative assets and derivative liabilities of $7.8 billion, resulting in a net derivative asset of $412 million.
The carrying amounts of the Company’s hedged items in fair value hedges as of September 30, 2023 and September 24, 2022 were as follows (in millions):
2023
2022
Hedged assets/(liabilities):
Current and non-current marketable securities
$
14,433 
$
13,378 
Current and non-current term debt
$
(18,247)
$
(18,739)
Accounts Receivable
Trade Receivables
As of September 24, 2022, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 10%. The Company’s
third-party cellular network carriers accounted for 41% and 44% of total trade receivables as of September 30, 2023 and September 24, 2022, 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 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%. As of September 24, 2022, the Company had two vendors that individually represented 10%
or more of total vendor non-trade receivables, which accounted for 54% and 13%.
(1)
(2)
Apple Inc. | 2023 Form 10-K | 38


Note 5 – Property, Plant and Equipment
The following table shows the Company’s gross property, plant and equipment by major asset class and accumulated depreciation as of September 30, 2023
and September 24, 2022 (in millions):
2023
2022
Land and buildings
$
23,446 
$
22,126 
Machinery, equipment and internal-use software
78,314 
81,060 
Leasehold improvements
12,839 
11,271 
Gross property, plant and equipment
114,599 
114,457 
Accumulated depreciation
(70,884)
(72,340)
Total property, plant and equipment, net
$
43,715 
$
42,117 
Depreciation expense on property, plant and equipment was $8.5 billion, $8.7 billion and $9.5 billion during 2023, 2022 and 2021, respectively.
Note 6 – Consolidated Financial Statement Details
The following tables show the Company’s consolidated financial statement details as of September 30, 2023 and September 24, 2022 (in millions):
Other Non-Current Assets
2023
2022
Deferred tax assets
$
17,852 
$
15,375 
Other non-current assets
46,906 
39,053 
Total other non-current assets
$
64,758 
$
54,428 
Other Current Liabilities
2023
2022
Income taxes payable
$
8,819 
$
6,552 
Other current liabilities
50,010 
54,293 
Total other current liabilities
$
58,829 
$
60,845 
Other Non-Current Liabilities
2023
2022
Long-term taxes payable
$
15,457 
$
16,657 
Other non-current liabilities
34,391 
32,485 
Total other non-current liabilities
$
49,848 
$
49,142 
Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for 2023, 2022 and 2021 (in millions):
2023
2022
2021
Interest and dividend income
$
3,750 
$
2,825 
$
2,843 
Interest expense
(3,933)
(2,931)
(2,645)
Other income/(expense), net
(382)
(228)
60 
Total other income/(expense), net
$
(565)
$
(334)
$
258 
Apple Inc. | 2023 Form 10-K | 39


Note 7 – Income Taxes
Provision for Income Taxes and Effective Tax Rate
The provision for income taxes for 2023, 2022 and 2021, consisted of the following (in millions):
2023
2022
2021
Federal:
Current
$
9,445 
$
7,890 
$
8,257 
Deferred
(3,644)
(2,265)
(7,176)
Total
5,801 
5,625 
1,081 
State:
Current
1,570 
1,519 
1,620 
Deferred
(49)
84 
(338)
Total
1,521 
1,603 
1,282 
Foreign:
Current
8,750 
8,996 
9,424 
Deferred
669 
3,076 
2,740 
Total
9,419 
12,072 
12,164 
Provision for income taxes
$
16,741 
$
19,300 
$
14,527 
The foreign provision for income taxes is based on foreign pretax earnings of $72.9 billion, $71.3 billion and $68.7 billion in 2023, 2022 and 2021, respectively.
A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate (21% in 2023, 2022 and 2021) to
income before provision for income taxes for 2023, 2022 and 2021, is as follows (dollars in millions):
2023
2022
2021
Computed expected tax
$
23,885 
$
25,012 
$
22,933 
State taxes, net of federal effect
1,124 
1,518 
1,151 
Earnings of foreign subsidiaries
(5,744)
(4,366)
(4,715)
Research and development credit, net
(1,212)
(1,153)
(1,033)
Excess tax benefits from equity awards
(1,120)
(1,871)
(2,137)
Foreign-derived intangible income deduction
— 
(296)
(1,372)
Other
(192)
456 
(300)
Provision for income taxes
$
16,741 
$
19,300 
$
14,527 
Effective tax rate
14.7 %
16.2 %
13.3 %
Apple Inc. | 2023 Form 10-K | 40


Deferred Tax Assets and Liabilities
As of September 30, 2023 and September 24, 2022, the significant components of the Company’s deferred tax assets and liabilities were (in millions):
2023
2022
Deferred tax assets:
Tax credit carryforwards
$
8,302 
$
6,962 
Accrued liabilities and other reserves
6,365 
6,515 
Capitalized research and development
6,294 
1,267 
Deferred revenue
4,571 
5,742 
Unrealized losses
2,447 
2,913 
Lease liabilities
2,421 
2,400 
Other
2,343 
3,407 
Total deferred tax assets
32,743 
29,206 
Less: Valuation allowance
(8,374)
(7,530)
Total deferred tax assets, net
24,369 
21,676 
Deferred tax liabilities:
Right-of-use assets
2,179 
2,163 
Depreciation
1,998 
1,582 
Minimum tax on foreign earnings
1,940 
1,983 
Unrealized gains
511 
942 
Other
490 
469 
Total deferred tax liabilities
7,118 
7,139 
Net deferred tax assets
$
17,251 
$
14,537 
As of September 30, 2023, the Company had $5.2 billion in foreign tax credit carryforwards in Ireland and $3.0 billion in California R&D credit carryforwards,
both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary
differences.
Uncertain Tax Positions
As of September  30, 2023, the total amount of gross unrecognized tax benefits was $19.5 billion, of which $9.5 billion, if recognized, would impact the
Company’s effective tax rate. As of September  24, 2022, the total amount of gross unrecognized tax benefits was $16.8 billion, of which $8.0 billion, if
recognized, would have impacted the Company’s effective tax rate.
The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2023, 2022 and 2021, is as follows (in
millions):
2023
2022
2021
Beginning balances
$
16,758 
$
15,477 
$
16,475 
Increases related to tax positions taken during a prior year
2,044 
2,284 
816 
Decreases related to tax positions taken during a prior year
(1,463)
(1,982)
(1,402)
Increases related to tax positions taken during the current year
2,628 
1,936 
1,607 
Decreases related to settlements with taxing authorities
(19)
(28)
(1,838)
Decreases related to expiration of the statute of limitations
(494)
(929)
(181)
Ending balances
$
19,454 
$
16,758 
$
15,477 
The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. Tax years after 2017 for
the U.S. federal jurisdiction, and after 2014 in certain major foreign jurisdictions, remain subject to examination. Although the timing of resolution or closure of
examinations is not certain, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease in the next 12 months by as
much as $4.5 billion.
Apple Inc. | 2023 Form 10-K | 41


European Commission State Aid Decision
On August 30, 2016, the European 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 recovery amount was calculated to be €13.1 billion, plus interest of €1.2
billion. 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 European 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 calendar year 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.
On an annual basis, the Company may request approval from the Irish Minister for Finance to reduce the recovery amount for certain taxes paid to other
countries. As of September 30, 2023, the adjusted recovery amount was €12.7 billion, excluding interest. The adjusted recovery amount plus interest is funded
into escrow, where it will remain restricted from general use pending the conclusion of all legal proceedings. Refer to the Cash, Cash Equivalents and
Marketable Securities section of Note 4, “Financial Instruments” for more information.
Note 8 – Leases
The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases
typically have original terms not exceeding 10 years and generally contain multiyear renewal options, some of which are reasonably certain of exercise.
Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the
underlying leased assets. Lease costs associated with fixed payments on the Company’s operating leases were $2.0 billion, $1.9 billion and $1.7 billion for 2023,
2022 and 2021, respectively. Lease costs associated with variable payments on the Company’s leases were $13.9 billion, $14.9 billion and $12.9 billion for 2023,
2022 and 2021, respectively.
The Company made $1.9 billion, $1.8 billion and $1.4 billion of fixed cash payments related to operating leases in 2023, 2022 and 2021, respectively. Noncash
activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.1 billion, $2.8 billion and $3.3 billion for 2023, 2022 and 2021,
respectively.
The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 30, 2023 and September 24,
2022 (in millions):
Lease-Related Assets and Liabilities
Financial Statement Line Items
2023
2022
Right-of-use assets:
Operating leases
Other non-current assets
$
10,661 
$
10,417 
Finance leases
Property, plant and equipment, net
1,015 
952 
Total right-of-use assets
$
11,676 
$
11,369 
Lease liabilities:
Operating leases
Other current liabilities
$
1,410 
$
1,534 
Other non-current liabilities
10,408 
9,936 
Finance leases
Other current liabilities
165 
129 
Other non-current liabilities
859 
812 
Total lease liabilities
$
12,842 
$
12,411 
Apple Inc. | 2023 Form 10-K | 42


Lease liability maturities as of September 30, 2023, are as follows (in millions):
Operating
Leases
Finance
Leases
Total
2024
$
1,719 
$
196 
$
1,915 
2025
1,875 
151 
2,026 
2026
1,732 
120 
1,852 
2027
1,351 
52 
1,403 
2028
1,181 
34 
1,215 
Thereafter
5,983 
872 
6,855 
Total undiscounted liabilities
13,841 
1,425 
15,266 
Less: Imputed interest
(2,023)
(401)
(2,424)
Total lease liabilities
$
11,818 
$
1,024 
$
12,842 
The weighted-average remaining lease term related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 10.6 years and
10.1 years, respectively. The discount rate related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 3.0% and 2.3%,
respectively. The discount rates related to the Company’s lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the
discount rates implicit in the Company’s leases cannot be readily determined.
As of September 30, 2023, the Company had $544 million of future payments under additional leases, primarily for corporate facilities and retail space, that had
not yet commenced. These leases will commence between 2024 and 2026, with lease terms ranging from 1 year to 21 years.
Note 9 – 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 September 30, 2023 and September 24, 2022, the Company
had $6.0 billion and $10.0 billion of commercial paper outstanding, respectively, with maturities generally less than nine months. The weighted-average interest
rate of the Company’s commercial paper was 5.28% and 2.31% as of September 30, 2023 and September 24, 2022, respectively. The following table provides a
summary of cash flows associated with the issuance and maturities of commercial paper for 2023, 2022 and 2021 (in millions):
2023
2022
2021
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net
$
(1,333)
$
5,264 
$
(357)
Maturities greater than 90 days:
Proceeds from commercial paper
— 
5,948 
7,946 
Repayments of commercial paper
(2,645)
(7,257)
(6,567)
Proceeds from/(Repayments of) commercial paper, net
(2,645)
(1,309)
1,379 
Total proceeds from/(repayments of) commercial paper, net
$
(3,978)
$
3,955 
$
1,022 
Apple Inc. | 2023 Form 10-K | 43


Term Debt
The Company has outstanding Notes, which are senior unsecured obligations with interest payable in arrears. The following table provides a summary of the
Company’s term debt as of September 30, 2023 and September 24, 2022:
Maturities
(calendar year)
2023
2022
Amount
(in millions)
Effective
Interest Rate
Amount
(in millions)
Effective
Interest Rate
2013 – 2022 debt issuances:
Fixed-rate 0.000% – 4.650% notes
2024 – 2062
$
101,322 
0.03% – 6.72%
$
111,824 
0.03% – 4.78%
Third quarter 2023 debt issuance:
Fixed-rate 4.000% – 4.850% notes
2026 – 2053
5,250 
4.04% – 4.88%
— 
Total term debt principal
106,572 
111,824 
Unamortized premium/(discount) and issuance costs, net
(356)
(374)
Hedge accounting fair value adjustments
(1,113)
(1,363)
Total term debt
105,103 
110,087 
Less: Current portion of term debt
(9,822)
(11,128)
Total non-current portion of term debt
$
95,281 
$
98,959 
To manage interest rate risk on certain of its U.S. dollar–denominated fixed-rate notes, the Company uses interest rate swaps to effectively convert the fixed
interest rates to floating interest rates on a portion of these notes. Additionally, to manage foreign exchange rate risk on certain of its foreign currency–
denominated notes, the Company uses cross-currency swaps to effectively convert these notes to U.S. dollar–denominated notes.
The effective interest rates for the Notes include the interest on the Notes, amortization of the discount or premium and, if applicable, adjustments related to
hedging. The Company recognized $3.7 billion, $2.8 billion and $2.6 billion of interest expense on its term debt for 2023, 2022 and 2021, respectively.
The future principal payments for the Company’s Notes as of September 30, 2023, are as follows (in millions):
2024
$
9,943 
2025
10,775 
2026
12,265 
2027
9,786 
2028
7,800 
Thereafter
56,003 
Total term debt principal
$
106,572 
As of September  30, 2023 and September  24, 2022, the fair value of the Company’s Notes, based on Level 2 inputs, was $90.8 billion and $98.8 billion,
respectively.
Note 10 – Shareholders’ Equity
Share Repurchase Program
During 2023, the Company repurchased 471 million shares of its common stock for $76.6 billion, excluding excise tax due under the Inflation Reduction Act of
2022. 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 Exchange Act.
Apple Inc. | 2023 Form 10-K | 44


Shares of Common Stock
The following table shows the changes in shares of common stock for 2023, 2022 and 2021 (in thousands):
2023
2022
2021
Common stock outstanding, beginning balances
15,943,425 
16,426,786 
16,976,763 
Common stock repurchased
(471,419)
(568,589)
(656,340)
Common stock issued, net of shares withheld for employee taxes
78,055 
85,228 
106,363 
Common stock outstanding, ending balances
15,550,061 
15,943,425 
16,426,786 
Note 11 – Share-Based Compensation
2022 Employee Stock Plan
The Apple Inc. 2022 Employee Stock Plan (the “2022 Plan”) is a shareholder-approved plan that provides for broad-based equity grants to employees, including
executive officers, and permits the granting of RSUs, stock grants, performance-based awards, stock options and stock appreciation rights. RSUs granted under
the 2022 Plan generally vest over four years, based on continued employment, and are settled upon vesting in shares of the Company’s common stock on a
one-for-one basis. All RSUs granted under the 2022 Plan have dividend equivalent rights, which entitle holders of RSUs to the same dividend value per share as
holders of common stock. A maximum of approximately 1.3 billion shares were authorized for issuance pursuant to 2022 Plan awards at the time the plan was
approved on March 4, 2022.
2014 Employee Stock Plan
The Apple Inc. 2014 Employee Stock Plan (the “2014 Plan”) is a shareholder-approved plan that provided for broad-based equity grants to employees, including
executive officers. The 2014 Plan permitted the granting of substantially the same types of equity awards with substantially the same terms as the 2022 Plan.
The 2014 Plan also permitted the granting of cash bonus awards. In the third quarter of 2022, the Company terminated the authority to grant new awards under
the 2014 Plan.
Restricted Stock Units
A summary of the Company’s RSU activity and related information for 2023, 2022 and 2021, is as follows:
Number of
RSUs
(in thousands)
Weighted-Average
Grant Date Fair
Value Per RSU
Aggregate
Fair Value
(in millions)
Balance as of September 26, 2020
310,778 
$
51.58 
RSUs granted
89,363 
$
116.33 
RSUs vested
(145,766)
$
50.71 
RSUs canceled
(13,948)
$
68.95 
Balance as of September 25, 2021
240,427 
$
75.16 
RSUs granted
91,674 
$
150.70 
RSUs vested
(115,861)
$
72.12 
RSUs canceled
(14,739)
$
99.77 
Balance as of September 24, 2022
201,501 
$
109.48 
RSUs granted
88,768 
$
150.87 
RSUs vested
(101,878)
$
97.31 
RSUs canceled
(8,144)
$
127.98 
Balance as of September 30, 2023
180,247 
$
135.91 
$
30,860 
The fair value as of the respective vesting dates of RSUs was $15.9 billion, $18.2 billion and $19.0 billion for 2023, 2022 and 2021, respectively. The majority of
RSUs that vested in 2023, 2022 and 2021 were net share settled such that the Company withheld shares with a value equivalent to the employees’ obligation for
the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately 37
million, 41 million and 53 million for 2023, 2022 and 2021, respectively, and were based on the value of the RSUs on their respective vesting dates as
determined by the Company’s closing stock price. Total payments to taxing authorities for employees’ tax obligations were $5.6 billion, $6.4 billion and $6.8
billion in 2023, 2022 and 2021, respectively.
Apple Inc. | 2023 Form 10-K | 45


Share-Based Compensation
The following table shows share-based compensation expense and the related income tax benefit included in the Consolidated Statements of Operations for
2023, 2022 and 2021 (in millions):
2023
2022
2021
Share-based compensation expense
$
10,833 
$
9,038 
$
7,906 
Income tax benefit related to share-based compensation expense
$
(3,421)
$
(4,002)
$
(4,056)
As of September 30, 2023, the total unrecognized compensation cost related to outstanding RSUs was $18.6 billion, which the Company expects to recognize
over a weighted-average period of 2.5 years.
Note 12 – Commitments, Contingencies and Supply Concentrations
Unconditional Purchase Obligations
The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase
obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, licensed intellectual property and content, and
distribution rights. Future payments under noncancelable unconditional purchase obligations with a remaining term in excess of one year as of September 30,
2023, are as follows (in millions):
2024
$
4,258 
2025
2,674 
2026
3,434 
2027
1,277 
2028
5,878 
Thereafter
3,215 
Total
$
20,736 
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The
outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a
material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Concentrations in the Available Sources of Supply of Materials and Product
Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from
single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers,
tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times
subject to industry-wide shortage and significant commodity pricing fluctuations.
The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize
custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the
suppliers’ yields have matured or their manufacturing capacities have increased. The continued availability of these components at acceptable prices, or at all,
may be affected if suppliers decide to concentrate on the production of common components instead of components customized to meet the Company’s
requirements.
Substantially all of the Company’s hardware products are manufactured by outsourcing partners that are located primarily in China mainland, India, Japan, South
Korea, Taiwan and Vietnam.
Apple Inc. | 2023 Form 10-K | 46


Note 13 – Segment Information and Geographic Data
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of the Americas, Europe, Greater China,
Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and
Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia and those Asian countries not included in the
Company’s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is
managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic
region.
The Company evaluates the performance of its reportable segments based on net sales and operating income. Net sales for geographic segments are generally
based on the location of customers and sales through the Company’s retail stores located in those geographic locations. Operating income for each segment
consists of net sales to third parties, related cost of sales, and operating expenses directly attributable to the segment. The information provided to the
Company’s chief operating decision maker for purposes of making decisions and assessing segment performance excludes asset information.
The following table shows information by reportable segment for 2023, 2022 and 2021 (in millions):
2023
2022
2021
Americas:
Net sales
$
162,560 
$
169,658 
$
153,306 
Operating income
$
60,508 
$
62,683 
$
53,382 
Europe:
Net sales
$
94,294 
$
95,118 
$
89,307 
Operating income
$
36,098 
$
35,233 
$
32,505 
Greater China:
Net sales
$
72,559 
$
74,200 
$
68,366 
Operating income
$
30,328 
$
31,153 
$
28,504 
Japan:
Net sales
$
24,257 
$
25,977 
$
28,482 
Operating income
$
11,888 
$
12,257 
$
12,798 
Rest of Asia Pacific:
Net sales
$
29,615 
$
29,375 
$
26,356 
Operating income
$
12,066 
$
11,569 
$
9,817 
A reconciliation of the Company’s segment operating income to the Consolidated Statements of Operations for 2023, 2022 and 2021 is as follows (in millions):
2023
2022
2021
Segment operating income
$
150,888 
$
152,895 
$
137,006 
Research and development expense
(29,915)
(26,251)
(21,914)
Other corporate expenses, net 
(6,672)
(7,207)
(6,143)
Total operating income
$
114,301 
$
119,437 
$
108,949 
(1)
Includes corporate marketing expenses, certain share-based compensation expenses, various nonrecurring charges, and other separately managed general
and administrative costs.
(1)
Apple Inc. | 2023 Form 10-K | 47


The U.S. and China were the only countries that accounted for more than 10% of the Company’s net sales in 2023, 2022 and 2021. Net sales for 2023, 2022
and 2021 and long-lived assets as of September 30, 2023 and September 24, 2022 were as follows (in millions):
2023
2022
2021
Net sales:
U.S.
$
138,573 
$
147,859 
$
133,803 
China
72,559 
74,200 
68,366 
Other countries
172,153 
172,269 
163,648 
Total net sales
$
383,285 
$
394,328 
$
365,817 
2023
2022
Long-lived assets:
U.S.
$
33,276 
$
31,119 
China 
5,778 
7,260 
Other countries
4,661 
3,738 
Total long-lived assets
$
43,715 
$
42,117 
(1)
China includes Hong Kong and Taiwan.
 (1)
(1)
Apple Inc. | 2023 Form 10-K | 48


Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Apple Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Apple Inc. as of September 30, 2023 and September 24, 2022, the related consolidated
statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended September 30, 2023, and
the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial
position of Apple Inc. at September 30, 2023 and September 24, 2022, and the results of its operations and its cash flows for each of the three years in the
period ended September 30, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), Apple Inc.’s internal
control over financial reporting as of September 30, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 2, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of Apple Inc.’s management. Our responsibility is to express an opinion on Apple Inc.’s financial statements
based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Apple Inc. in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We
believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to
be communicated to the audit committee and that: (1)  relates to accounts or disclosures that are material to the financial statements and (2)  involved our
especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
account or disclosure to which it relates.
Uncertain Tax Positions
Description of the Matter
As discussed in Note 7 to the financial statements, Apple Inc. is subject to taxation and files income tax returns in
the U.S. federal jurisdiction and many state and foreign jurisdictions. As of September 30, 2023, the total amount of
gross unrecognized tax benefits was $19.5 billion, of which $9.5 billion, if recognized, would impact Apple Inc.’s
effective tax rate. In accounting for some of the uncertain tax positions, Apple Inc. uses significant judgment in the
interpretation and application of complex domestic and international tax laws.
Auditing management’s evaluation of whether an uncertain tax position is more likely than not to be sustained and
the measurement of the benefit of various tax positions can be complex, involves significant judgment, and is based
on interpretations of tax laws and legal rulings.
Apple Inc. | 2023 Form 10-K | 49


How We Addressed the
Matter in Our Audit
We tested controls relating to the evaluation of uncertain tax positions, including controls over management’s
assessment as to whether tax positions are more likely than not to be sustained, management’s process to
measure the benefit of its tax positions, and the development of the related disclosures.
To evaluate Apple Inc.’s assessment of which tax positions are more likely than not to be sustained, our audit
procedures included, among others, reading and evaluating management’s assumptions and analysis, and, as
applicable, Apple Inc.’s communications with taxing authorities, that detailed the basis and technical merits of the
uncertain tax positions. We involved our tax subject matter resources in assessing the technical merits of certain of
Apple Inc.’s tax positions based on our knowledge of relevant tax laws and experience with related taxing
authorities. For certain tax positions, we also received external legal counsel confirmation letters and discussed the
matters with external advisors and Apple Inc. tax personnel. In addition, we evaluated Apple Inc.’s disclosure in
relation to these matters included in Note 7 to the financial statements.
/s/ Ernst & Young LLP
We have served as Apple Inc.’s auditor since 2009.
San Jose, California
November 2, 2023
Apple Inc. | 2023 Form 10-K | 50


Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Apple Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Apple Inc.’s internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”). In our opinion, Apple
Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the consolidated
balance sheets of Apple Inc. as of September 30, 2023 and September 24, 2022, the related consolidated statements of operations, comprehensive income,
shareholders’ equity and cash flows for each of the three years in the period ended September  30, 2023, and the related notes and our report dated
November 2, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
Apple Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on Apple Inc.’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to Apple Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S.
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Jose, California
November 2, 2023
Apple Inc. | 2023 Form 10-K | 51


Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal
financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act
were effective as of September 30, 2023 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is (i)  recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and
(ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure.
Inherent Limitations over Internal Controls
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those
policies and procedures that: 
(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s
assets;
(ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management
and directors; and
(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets
that could have a material effect on the financial statements.
Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or
detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide
absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future
periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act). Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the
criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework). Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of
September 30, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance
with GAAP. The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the Company’s internal control over
financial reporting, which appears in Part II, Item 8 of this Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2023, which were identified in connection with
management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely
to materially affect, the Company’s internal control over financial reporting.
Apple Inc. | 2023 Form 10-K | 52


Item 9B.    Other Information
Insider Trading Arrangements
On August 30, 2023, Deirdre O’Brien, the Company’s Senior Vice President, Retail, and Jeff Williams, the Company’s Chief Operating Officer, each entered into
a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plans provide for the sale of all shares vested
during the duration of the plans pursuant to certain equity awards granted to Ms. O’Brien and Mr. Williams, respectively, excluding any shares withheld by the
Company to satisfy income tax withholding and remittance obligations. Ms. O’Brien’s plan will expire on October 15, 2024, and Mr. Williams’ plan will expire on
December 15, 2024, subject to early termination for certain specified events set forth in the plans.
Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10.    Directors, Executive Officers and Corporate Governance
The information required by this Item will be included in the Company’s definitive proxy statement to be filed with the SEC within 120 days after September 30,
2023, in connection with the solicitation of proxies for the Company’s 2024 annual meeting of shareholders (the “2024 Proxy Statement”), and is incorporated
herein by reference.
Item 11.    Executive Compensation
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Item 13.    Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Item 14.    Principal Accountant Fees and Services
The information required by this Item will be included in the 2024 Proxy Statement, and is incorporated herein by reference.
Apple Inc. | 2023 Form 10-K | 53


PART IV
Item 15.    Exhibit and Financial Statement Schedules
(a) Documents filed as part of this report
(1) All financial statements
Index to Consolidated Financial Statements
Page
Consolidated Statements of Operations for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
28
Consolidated Statements of Comprehensive Income for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
29
Consolidated Balance Sheets as of September 30, 2023 and September 24, 2022
30
Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
31
Consolidated Statements of Cash Flows for the years ended September 30, 2023, September 24, 2022 and September 25, 2021
32
Notes to Consolidated Financial Statements
33
Reports of Independent Registered Public Accounting Firm*
49
* Ernst & Young LLP, PCAOB Firm ID No. 00042.
(2) Financial Statement Schedules
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission
of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this Form 10-K.
(3) Exhibits required by Item 601 of Regulation S-K 
Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
3.1
Restated Articles of Incorporation of the Registrant filed on August 3, 2020.
8-K
3.1
8/7/20
3.2
Amended and Restated Bylaws of the Registrant effective as of August 17, 2022.
8-K
3.2
8/19/22
4.1**
Description of Securities of the Registrant.
4.2
Indenture, dated as of April 29, 2013, between the Registrant and The Bank of New York Mellon
Trust Company, N.A., as Trustee.
S-3
4.1
4/29/13
4.3
Officer’s Certificate of the Registrant, dated as of May 3, 2013, including forms of global notes
representing the Floating Rate Notes due 2016, Floating Rate Notes due 2018, 0.45% Notes due
2016, 1.00% Notes due 2018, 2.40% Notes due 2023 and 3.85% Notes due 2043.
8-K
4.1
5/3/13
4.4
Officer’s Certificate of the Registrant, dated as of May 6, 2014, including forms of global notes
representing the Floating Rate Notes due 2017, Floating Rate Notes due 2019, 1.05% Notes due
2017, 2.10% Notes due 2019, 2.85% Notes due 2021, 3.45% Notes due 2024 and 4.45% Notes
due 2044.
8-K
4.1
5/6/14
4.5
Officer’s Certificate of the Registrant, dated as of November 10, 2014, including forms of global
notes representing the 1.000% Notes due 2022 and 1.625% Notes due 2026.
8-K
4.1
11/10/14
4.6
Officer’s Certificate of the Registrant, dated as of February 9, 2015, including forms of global notes
representing the Floating Rate Notes due 2020, 1.55% Notes due 2020, 2.15% Notes due 2022,
2.50% Notes due 2025 and 3.45% Notes due 2045.
8-K
4.1
2/9/15
4.7
Officer’s Certificate of the Registrant, dated as of May 13, 2015, including forms of global notes
representing the Floating Rate Notes due 2017, Floating Rate Notes due 2020, 0.900% Notes due
2017, 2.000% Notes due 2020, 2.700% Notes due 2022, 3.200% Notes due 2025, and 4.375%
Notes due 2045.
8-K
4.1
5/13/15
4.8
Officer’s Certificate of the Registrant, dated as of July 31, 2015, including forms of global notes
representing the 3.05% Notes due 2029 and 3.60% Notes due 2042.
8-K
4.1
7/31/15
4.9
Officer’s Certificate of the Registrant, dated as of September 17, 2015, including forms of global
notes representing the 1.375% Notes due 2024 and 2.000% Notes due 2027.
8-K
4.1
9/17/15
(1)
Apple Inc. | 2023 Form 10-K | 54


Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
4.10
Officer’s Certificate of the Registrant, dated as of February 23, 2016, including forms of global notes
representing the Floating Rate Notes due 2019, Floating Rate Notes due 2021, 1.300% Notes due
2018, 1.700% Notes due 2019, 2.250% Notes due 2021, 2.850% Notes due 2023, 3.250% Notes
due 2026, 4.500% Notes due 2036 and 4.650% Notes due 2046.
8-K
4.1
2/23/16
4.11
Supplement No. 1 to the Officer’s Certificate of the Registrant, dated as of March 24, 2016.
8-K
4.1
3/24/16
4.12
Officer’s Certificate of the Registrant, dated as of August 4, 2016, including forms of global notes
representing the Floating Rate Notes due 2019, 1.100% Notes due 2019, 1.550% Notes due
2021, 2.450% Notes due 2026 and 3.850% Notes due 2046.
8-K
4.1
8/4/16
4.13
Officer’s Certificate of the Registrant, dated as of February 9, 2017, including forms of global notes
representing the Floating Rate Notes due 2019, Floating Rate Notes due 2020, Floating Rate
Notes due 2022, 1.550% Notes due 2019, 1.900% Notes due 2020, 2.500% Notes due 2022,
3.000% Notes due 2024, 3.350% Notes due 2027 and 4.250% Notes due 2047.
8-K
4.1
2/9/17
4.14
Officer’s Certificate of the Registrant, dated as of May 11, 2017, including forms of global notes
representing the Floating Rate Notes due 2020, Floating Rate Notes due 2022, 1.800% Notes due
2020, 2.300% Notes due 2022, 2.850% Notes due 2024 and 3.200% Notes due 2027.
8-K
4.1
5/11/17
4.15
Officer’s Certificate of the Registrant, dated as of May 24, 2017, including forms of global notes
representing the 0.875% Notes due 2025 and 1.375% Notes due 2029.
8-K
4.1
5/24/17
4.16
Officer’s Certificate of the Registrant, dated as of June 20, 2017, including form of global note
representing the 3.000% Notes due 2027.
8-K
4.1
6/20/17
4.17
Officer’s Certificate of the Registrant, dated as of August 18, 2017, including form of global note
representing the 2.513% Notes due 2024.
8-K
4.1
8/18/17
4.18
Officer’s Certificate of the Registrant, dated as of September 12, 2017, including forms of global
notes representing the 1.500% Notes due 2019, 2.100% Notes due 2022, 2.900% Notes due
2027 and 3.750% Notes due 2047.
8-K
4.1
9/12/17
4.19
Officer’s Certificate of the Registrant, dated as of November 13, 2017, including forms of global
notes representing the 1.800% Notes due 2019, 2.000% Notes due 2020, 2.400% Notes due
2023, 2.750% Notes due 2025, 3.000% Notes due 2027 and 3.750% Notes due 2047.
8-K
4.1
11/13/17
4.20
Indenture, dated as of November 5, 2018, between the Registrant and The Bank of New York Mellon
Trust Company, N.A., as Trustee.
S-3
4.1
11/5/18
4.21
Officer’s Certificate of the Registrant, dated as of September 11, 2019, including forms of global
notes representing the 1.700% Notes due 2022, 1.800% Notes due 2024, 2.050% Notes due
2026, 2.200% Notes due 2029 and 2.950% Notes due 2049.
8-K
4.1
9/11/19
4.22
Officer’s Certificate of the Registrant, dated as of November 15, 2019, including forms of global
notes representing the 0.000% Notes due 2025 and 0.500% Notes due 2031.
8-K
4.1
11/15/19
4.23
Officer’s Certificate of the Registrant, dated as of May 11, 2020, including forms of global notes
representing the 0.750% Notes due 2023, 1.125% Notes due 2025, 1.650% Notes due 2030 and
2.650% Notes due 2050.
8-K
4.1
5/11/20
4.24
Officer’s Certificate of the Registrant, dated as of August 20, 2020, including forms of global notes
representing the 0.550% Notes due 2025, 1.25% Notes due 2030, 2.400% Notes due 2050 and
2.550% Notes due 2060.
8-K
4.1
8/20/20
4.25
Officer’s Certificate of the Registrant, dated as of February 8, 2021, including forms of global notes
representing the  0.700% Notes due 2026, 1.200% Notes due 2028,  1.650% Notes due
2031, 2.375% Notes due 2041, 2.650% Notes due 2051 and 2.800% Notes due 2061.
8-K
4.1
2/8/21
4.26
Officer’s Certificate of the Registrant, dated as of August 5, 2021, including forms of global notes
representing the 1.400% Notes due 2028, 1.700% Notes due 2031, 2.700% Notes due 2051 and
2.850% Notes due 2061.
8-K
4.1
8/5/21
4.27
Indenture, dated as of October 28, 2021, between the Registrant and The Bank of New York Mellon
Trust Company, N.A., as Trustee.
S-3
4.1
10/29/21
4.28
Officer’s Certificate of the Registrant, dated as of August 8, 2022, including forms of global notes
representing the 3.250% Notes due 2029, 3.350% Notes due 2032, 3.950% Notes due 2052 and
4.100% Notes due 2062.
8-K
4.1
8/8/22
Apple Inc. | 2023 Form 10-K | 55


Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
4.29
Officer’s Certificate of the Registrant, dated as of May 10, 2023, including forms of global notes
representing the 4.421% Notes due 2026, 4.000% Notes due 2028, 4.150% Notes due 2030,
4.300% Notes due 2033 and 4.850% Notes due 2053.
8-K
4.1
5/10/23
4.30*
Apple Inc. Deferred Compensation Plan.
S-8
4.1
8/23/18
10.1*
Apple Inc. Employee Stock Purchase Plan, as amended and restated as of March 10, 2015.
8-K
10.1
3/13/15
10.2*
Form of Indemnification Agreement between the Registrant and each director and executive officer
of the Registrant.
10-Q
10.2
6/27/09
10.3*
Apple Inc. Non-Employee Director Stock Plan, as amended November 9, 2021.
10-Q
10.1
12/25/21
10.4*
Apple Inc. 2014 Employee Stock Plan, as amended and restated as of October 1, 2017.
10-K
10.8
9/30/17
10.5*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
September 26, 2017.
10-K
10.20
9/30/17
10.6*
Form of Restricted Stock Unit Award Agreement under Non-Employee Director Stock Plan effective
as of February 13, 2018.
10-Q
10.2
3/31/18
10.7*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
August 21, 2018.
10-K
10.17
9/29/18
10.8*
Form of Performance Award Agreement under 2014 Employee Stock Plan effective as of August 21,
2018.
10-K
10.18
9/29/18
10.9*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
September 29, 2019.
10-K
10.15
9/28/19
10.10*
Form of Performance Award Agreement under 2014 Employee Stock Plan effective as of September
29, 2019.
10-K
10.16
9/28/19
10.11*
Form of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of
August 18, 2020.
10-K
10.16
9/26/20
10.12*
Form of Performance Award Agreement under 2014 Employee Stock Plan effective as of August 18,
2020.
10-K
10.17
9/26/20
10.13*
Form of CEO Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as
of September 27, 2020.
10-Q
10.1
12/26/20
10.14*
Form of CEO Performance Award Agreement under 2014 Employee Stock Plan effective as of
September 27, 2020.
10-Q
10.2
12/26/20
10.15*
Apple Inc. 2022 Employee Stock Plan.
8-K
10.1
3/4/22
10.16*
Form of Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as of
March 4, 2022.
8-K
10.2
3/4/22
10.17*
Form of Performance Award Agreement under 2022 Employee Stock Plan effective as of March 4,
2022.
8-K
10.3
3/4/22
10.18*
Apple Inc. Executive Cash Incentive Plan.
8-K
10.1
8/19/22
10.19*
Form of CEO Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as
of September 25, 2022.
10-Q
10.1
12/31/22
10.20*
Form of CEO Performance Award Agreement under 2022 Employee Stock Plan effective as of
September 25, 2022.
10-Q
10.2
12/31/22
21.1**
Subsidiaries of the Registrant.
23.1**
Consent of Independent Registered Public Accounting Firm.
24.1**
Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K).
31.1**
Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2**
Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1***
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
101**
Inline XBRL Document Set for the consolidated financial statements and accompanying notes in
Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-
K.
Apple Inc. | 2023 Form 10-K | 56


Incorporated by Reference
Exhibit Number
Exhibit Description
Form
Exhibit
Filing Date/
Period End
Date
104**
Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline
XBRL Document Set.
*
Indicates management contract or compensatory plan or arrangement.
**
Filed herewith.
***
Furnished herewith.
(1)
Certain instruments defining the rights of holders of long-term debt securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The
Registrant hereby undertakes to furnish to the SEC, upon request, copies of any such instruments.
Item 16.    Form 10-K Summary
None.
Apple Inc. | 2023 Form 10-K | 57


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: November 2, 2023
Apple Inc.
By:
/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy D. Cook and Luca Maestri,
jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this
Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Name
Title
Date
/s/ Timothy D. Cook
Chief Executive Officer and Director
(Principal Executive Officer)
November 2, 2023
TIMOTHY D. COOK
/s/ Luca Maestri
Senior Vice President, Chief Financial Officer
(Principal Financial Officer)
November 2, 2023
LUCA MAESTRI
/s/ Chris Kondo
Senior Director of Corporate Accounting
(Principal Accounting Officer)
November 2, 2023
CHRIS KONDO
/s/ James A. Bell
Director
November 2, 2023
JAMES A. BELL
/s/ Al Gore
Director
November 2, 2023
AL GORE
/s/ Alex Gorsky
Director
November 2, 2023
ALEX GORSKY
/s/ Andrea Jung
Director
November 2, 2023
ANDREA JUNG
/s/ Arthur D. Levinson
Director and Chair of the Board
November 2, 2023
ARTHUR D. LEVINSON
/s/ Monica Lozano
Director
November 2, 2023
MONICA LOZANO
/s/ Ronald D. Sugar
Director
November 2, 2023
RONALD D. SUGAR
/s/ Susan L. Wagner
Director
November 2, 2023
SUSAN L. WAGNER
Apple Inc. | 2023 Form 10-K | 58


Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of September 30, 2023, Apple Inc. (“Apple” or the “Company”) had ten classes of securities registered under Section 12 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”): (i) Common Stock, $0.00001 par value per share (“Common Stock”); (ii) 1.375% Notes due 2024 (the “2024
Notes”); (iii) 0.000% Notes due 2025 (the “0.000% 2025 Notes”); (iv) 0.875% Notes due 2025 (the “0.875% 2025 Notes”); (v) 1.625% Notes due 2026 (the “2026
Notes”); (vi) 2.000% Notes due 2027 (the “2027 Notes”); (vii) 1.375% Notes due 2029 (the “1.375% 2029 Notes”); (viii) 3.050% Notes due 2029 (the “3.050%
2029 Notes”); (ix) 0.500% Notes due 2031 (the “2031 Notes”); and (x) 3.600% Notes due 2042 (the “2042 Notes,” and together with the 2024 Notes, the 0.000%
2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes, the 3.050% 2029 Notes, and the 2031 Notes, the “Notes”). Each
of the Company’s securities registered under Section 12 of the Exchange Act are listed on The Nasdaq Stock Market LLC.
DESCRIPTION OF COMMON STOCK
The following is a description of the rights of Common Stock and related provisions of the Company’s Restated Articles of Incorporation (the “Articles”)
and Amended and Restated Bylaws (the “Bylaws”) and applicable California law. This description is qualified in its entirety by, and should be read in conjunction
with, the Articles, Bylaws and applicable California law.
Authorized Capital Stock
The Company’s authorized capital stock consists of 50,400,000,000 shares of Common Stock.
Common Stock
    Fully Paid and Nonassessable
    All of the outstanding shares of the Company’s Common Stock are fully paid and nonassessable.
Voting Rights
The holders of shares of Common Stock are entitled to one vote per share on all matters to be voted on by such holders. Holders of shares of Common
Stock are not entitled to cumulative voting rights.
Except as described below or as required by law, all matters to be voted on by shareholders must be approved by the affirmative vote of (i) a majority of
the shares present or represented by proxy and voting and (ii) a majority of the shares required to constitute a quorum.
In an election of directors where the number of nominees exceeds the number of directors to be elected, the candidates receiving the highest number
of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by such shares will be elected.
The Company’s entire Board of Directors or any individual director may be removed without cause by an affirmative vote of a majority of the outstanding
shares entitled to vote, subject to the provisions of the Company’s Bylaws.
Vacancies created by the removal of a director must be filled only by approval of the shareholders, or by the unanimous written consent of all shares
entitled to vote. The shareholders may elect a director at any time to fill a vacancy not filled by the directors, but any such election by written consent, other than
to fill a vacancy created by removal, requires the consent of a majority of the outstanding shares entitled to vote thereon.
An amendment of the Bylaws or the Articles may be adopted by the vote of the majority of the outstanding shares entitled to vote. Any amendment of
the Bylaws specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to a variable board or vice versa
may only be adopted by the shareholders; provided, however, that an amendment of the Bylaws or the Articles reducing the fixed number or the minimum
number of directors to less than five cannot be adopted if the votes cast against its adoption are equal to more than 16 2/3% of the outstanding shares entitled to
vote.


Any shareholders’ meeting may be adjourned from time to time by the vote of a majority of the shares present in person or represented by proxy.
Dividends
The holders of shares of Common Stock are entitled to receive such dividends, if any, as may be declared from time to time by the Company’s Board of
Directors in its discretion from funds legally available therefor.
Right to Receive Liquidation Distributions
Upon liquidation, dissolution or winding-up, the holders of shares of Common Stock are entitled to receive pro rata all assets remaining available for
distribution to holders of such shares.
No Preemptive or Similar Rights
Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect
to such shares of Common Stock.
Anti-Takeover Provisions of the Articles, Bylaws and California Law
Provisions of the Articles and Bylaws may delay or discourage transactions involving an actual or potential change in control of the Company or change
in its management, including transactions in which shareholders might otherwise receive a premium for their shares, or transactions that its shareholders might
otherwise deem to be in their best interests. Among other things, the Articles and Bylaws:
•
provide that, except for a vacancy caused by the removal of a director as provided in the Bylaws, a vacancy on the Company’s Board of Directors
may be filled by a person selected by a majority of the remaining directors then in office, whether or not less than a quorum, or by a sole remaining
director;
•
provide that shareholders seeking to present proposals before a meeting of shareholders or to nominate candidates for election as directors at a
meeting of shareholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a
shareholder’s notice, including with respect to a shareholder’s notice under Rule 14a-19 of the Exchange Act;
•
provide that a shareholder, or group of up to 20 shareholders, that has owned continuously for at least three years shares of Common Stock
representing an aggregate of at least 3% of the Company’s outstanding shares of Common Stock, may nominate and include in the Company’s
proxy materials director nominees constituting up to 20% of the Company’s Board of Directors, provided that the shareholder(s) and nominee(s)
satisfy the requirements in the Bylaws;
•
do not provide for cumulative voting rights for the election of directors; and
•
provide that special meetings of the shareholders may only be called by (i) the Board of Directors, the Chair of the Board of Directors or the Chief
Executive Officer or (ii) one or more holders of shares entitled to cast not less than ten percent (10%) of the votes on the record date established
pursuant to the Company’s Bylaws, provided that the shareholder(s) satisfy requirements in the Bylaws.
In addition, as a California corporation, the Company is subject to the provisions of Section 1203 of the California General Corporation Law, which
requires it to provide a fairness opinion to its shareholders in connection with their consideration of any proposed “interested party” reorganization transaction.
Listing
The Company’s Common Stock is listed on The Nasdaq Stock Market LLC under the trading symbol “AAPL.”
2


DESCRIPTION OF DEBT SECURITIES
The following description of the Notes is a summary and does not purport to be complete. This description is qualified in its entirety by reference, as
applicable, to the Indenture, dated as of April 29, 2013, between Apple Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2013
Indenture”) and the Indenture, dated as of November 5, 2018, between Apple Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2018
Indenture,” and together with the 2013 Indenture, the “Indentures”). References in this section to the “Company,” “us,” “we” and “our” are solely to Apple Inc. and
not to any of its subsidiaries, unless the context requires otherwise.
The Notes
Each of the Notes were issued under the applicable Indenture, which provides that debt securities may be issued under such Indenture from time to
time in one or more series. The Indentures and the Notes are governed by, and construed in accordance with, the laws of the State of New York. The Indentures
do not limit the amount of debt securities that we may issue thereunder. We may, without the consent of the holders of the debt securities of any series, issue
additional debt securities ranking equally with, and otherwise similar in all respects to, the debt securities of the series (except for the date of issuance, the date
interest begins to accrue and, in certain circumstances, the first interest payment date) so that those additional debt securities will be consolidated and form a
single series with the debt securities of the series previously offered and sold; provided, however, that any additional debt securities will have a separate ISIN
number unless certain conditions are met.
The 2024 Notes
We issued €1,000,000,000 aggregate principal amount of the 2024 Notes on September 17, 2015. The maturity date of the 2024 Notes is January 17,
2024, and interest at a rate of 1.375% per annum is paid annually on January 17 of each year, beginning on January 17, 2016, and on the maturity date. As of
October 20, 2023, €1,000,000,000 aggregate principal amount of the 2024 Notes was outstanding.
The 0.000% 2025 Notes
We issued €1,000,000,000 aggregate principal amount of the 0.000% 2025 Notes on November 15, 2019. The maturity date of the 0.000% 2025 Notes
is November 15, 2025, and interest at a rate of 0.000% per annum is paid annually on November 15 of each year, beginning on November 15, 2020, and on the
maturity date. As of October 20, 2023, €1,000,000,000 aggregate principal amount of the 0.000% 2025 Notes was outstanding.
The 0.875% 2025 Notes
We issued €1,250,000,000 aggregate principal amount of the 0.875% 2025 Notes on May 24, 2017. The maturity date of the 0.875% 2025 Notes is
May 24, 2025, and interest at a rate of 0.875% per annum is paid annually on May 24 of each year, beginning on May 24, 2018, and on the maturity date. As of
October 20, 2023, €1,250,000,000 aggregate principal amount of the 0.875% 2025 Notes was outstanding.
The 2026 Notes
We issued €1,400,000,000 aggregate principal amount of the 2026 Notes on November 10, 2014. The maturity date of the 2026 Notes is November 10,
2026, and interest at a rate of 1.625% per annum is paid annually on November 10 of each year, beginning on November 10, 2015, and on the maturity date. As
of October 20, 2023, €1,400,000,000 aggregate principal amount of the 2026 Notes was outstanding.
The 2027 Notes
We issued €1,000,000,000 aggregate principal amount of the 2027 Notes on September 17, 2015. The maturity date of the 2027 Notes is September
17, 2027, and interest at a rate of 2.000% per annum is paid annually on September 17 of each year, beginning on September 17, 2016, and on the maturity
date. As of October 20, 2023, €1,000,000,000 aggregate principal amount of the 2027 Notes was outstanding.
3


The 1.375% 2029 Notes
We issued €1,250,000,000 aggregate principal amount of the 1.375% 2029 Notes on May 24, 2017. The maturity date of the 1.375% 2029 Notes is
May 24, 2029, and interest at a rate of 1.375% per annum is paid annually on May 24 of each year, beginning on May 24, 2018, and on the maturity date. As of
October 20, 2023, €1,250,000,000 aggregate principal amount of the 1.375% 2029 Notes was outstanding.
The 3.050% 2029 Notes
We issued £750,000,000 aggregate principal amount of the 3.050% 2029 Notes on July 31, 2015. The maturity date of the 3.050% 2029 Notes is July
31, 2029, and interest at a rate of 3.050% per annum is paid semi-annually on January 31 and July 31 of each year, beginning on January 31, 2016, and on the
maturity date. As of October 20, 2023, £750,000,000 aggregate principal amount of the 3.050% 2029 Notes was outstanding.
The 2031 Notes
We issued €1,000,000,000 aggregate principal amount of the 2031 Notes on November 15, 2019. The maturity date of the 2031 Notes is November 15,
2031, and interest at a rate of 0.500% per annum is paid annually on November 15 of each year, beginning on November 15, 2020, and on the maturity date. As
of October 20, 2023, €1,000,000,000 aggregate principal amount of the 2031 Notes was outstanding.
The 2042 Notes
We issued £500,000,000 aggregate principal amount of the 2042 Notes on July 31, 2015. The maturity date of the 2042 Notes is July 31, 2042, and
interest at a rate of 3.600% per annum is paid semi-annually on January 31 and July 31 of each year, beginning on January 31, 2016, and on the maturity date.
As of October 20, 2023, £500,000,000 aggregate principal amount of the 2042 Notes was outstanding.
Ranking
The Notes are our senior unsecured indebtedness and rank equally with each other and with all of our other senior unsecured and unsubordinated
indebtedness from time to time outstanding. However, the Notes are structurally subordinated to any indebtedness and preferred stock, if any, of our subsidiaries
and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. Claims of the creditors of our
subsidiaries generally have priority with respect to the assets and earnings of such subsidiaries over the claims of our creditors, including holders of the Notes.
Accordingly, the Notes are effectively subordinated to creditors, including trade creditors and preferred stockholders, if any, of our subsidiaries. The Indentures
do not restrict our ability or that of our subsidiaries to incur additional indebtedness.
Payment on the Notes
All payments of principal of, the redemption price (if any), and interest and additional amounts (if any) on the 2024 Notes, the 0.000% 2025 Notes, the
0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the 2031 Notes are payable in euro, provided that, if the euro is unavailable
to the Company due to the imposition of exchange controls or other circumstances beyond the Company’s control, or if the euro is no longer being used by the
then member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or
within the international banking community, then all payments in respect of the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes,
the 2027 Notes, the 1.375% 2029 Notes and the 2031 Notes will be made in U.S. dollars, until the euro is again available to the Company or so used. The
amount payable on any date in euro will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on
the second Business Day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the
basis of the most recent U.S. dollar/euro exchange rate published in The Wall Street Journal on or prior to the second Business Day prior to the relevant
payment date. Any payment in respect of the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029
Notes and the 2031 Notes so made in U.S. dollars will not constitute an event of default under such Notes or the applicable Indenture.
4


With respect to the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the
2031 Notes, “Business Day” means any day, other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or
London are authorized or required by law, regulation or executive order to close and (2) on which the Trans-European Automated Real-time Gross Settlement
Express Transfer system (the TARGET2 system), or any successor thereto, is open.
All payments of principal of, the redemption price (if any), and interest and additional amounts (if any) on the 3.050% 2029 Notes and the 2042 Notes
are payable in pounds sterling, or, if the United Kingdom adopts euro as its lawful currency, in euro. If pounds sterling or, in the event the Notes are
redenominated into euro, euro is unavailable to the Company due to the imposition of exchange controls or other circumstances beyond the Company’s control
or, in the event the notes are redenominated into euro, the euro is no longer being used by the then member states of the European Monetary Union that have
adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments
in respect of the 3.050% 2029 Notes and the 2042 Notes will be made in U.S. dollars until the pound sterling or euro, as the case may be, is again available to
the Company or so used. The amount payable on any date in pounds sterling or, in the event such Notes are redenominated into euro, euro will be converted
into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on the second Business Day prior to the relevant payment
date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the most recent U.S. dollar/pounds sterling or, in the
event the Notes are redenominated into euro, the most recent U.S. dollar/euro exchange rate published in The Wall Street Journal on or prior to the second
Business Day prior to the relevant payment date. Any payment in respect of the 3.050% 2029 Notes and the 2042 Notes so made in U.S. dollars will not
constitute an event of default under such Notes or the 2013 Indenture.
With respect to the 3.050% 2029 Notes and the 2042 Notes, “Business Day” means any day which is not a day on which banking institutions in The City
of New York or London or the relevant place of payment are authorized or required by law, regulation or executive order to close.
Payment of Additional Amounts
The terms of the Notes state that all payments of principal and interest in respect of the Notes will be made free and clear of, and without deduction or
withholding for or on account of any present or future taxes, duties, assessments or other governmental charges of whatsoever nature required to be deducted
or withheld by the United States or any political subdivision or taxing authority of or in the United States, unless such withholding or deduction is required by law.
All of the Notes also contain a covenant substantially similar to the following:
The Company will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such additional amounts (“Additional
Amounts”) as are necessary in order that the net payment by the Company or the paying agent of the Company for the applicable Notes (“Paying Agent”) of the
principal of and interest on the Notes to a holder who is not a United States person (as defined below), after withholding or deduction for any present or future
tax, assessment or other governmental charge (“Tax”) imposed by the United States or a taxing authority in the United States, will not be less than the amount
provided in the Notes to be then due and payable; provided, however, that the foregoing obligation to pay Additional Amounts shall not apply:
(1) to any Tax that is imposed by reason of the holder (or the beneficial owner for whose benefit such holder holds the Notes), or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an
estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been engaged in a trade or business in the United States or having or having had a permanent establishment in the United
States;
(b) having a current or former connection with the United States (other than a connection arising solely as a result of the ownership of the Notes,
the receipt of any payment or the enforcement of any rights hereunder), including being or having been a citizen or resident of the United
States;
(c)
being or having been a personal holding company, a passive foreign investment company or a controlled foreign corporation for U.S. federal
income tax purposes or a corporation that has accumulated earnings to avoid U.S. federal income tax;
5


(d) being or having been a “10-percent shareholder” of the Company as defined in Section 871(h)(3) of the Internal Revenue Code of 1986, as
amended (the “Code”);
(e) being a controlled foreign corporation that is related to the Company within the meaning of Section 864(d)(4) of the Code; or
(f)
being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade
or business;
(2) to any holder that is not the sole beneficial owner of the Notes, or a portion of the Notes, or that is a fiduciary, partnership or limited liability
company, but only to the extent that a beneficial owner with respect to the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial
owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the
beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment;
(3) to any Tax that would not have been imposed but for the failure of the holder or any other person to comply with certification, identification or
information reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder or beneficial
owner of the Notes, if compliance is required by statute, by regulation of the United States or any taxing authority therein or by an applicable
income tax treaty to which the United States is a party as a precondition to exemption from such Tax (including, but not limited to, the requirement
to provide Internal Revenue Service Forms W-8BEN, W-8BEN-E, W-8ECI, or any subsequent versions thereof or successor thereto, and any
documentation requirement under an applicable income tax treaty);
(4) to any Tax that is imposed otherwise than by withholding by the Company or a Paying Agent from the payment;
(5) to any Tax that would not have been imposed but for a change in law, regulation, or administrative or judicial interpretation that becomes effective
more than 10 days after the payment becomes due or is duly provided for, whichever occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property or similar Tax;
(7) to any Tax required to be withheld by any paying agent from any payment of principal of or interest on any Note, if such payment can be made
without such withholding by at least one other paying agent;
(8) to any Tax that would not have been imposed but for the presentation by the holder of any Note, where presentation is required, for payment on a
date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for,
whichever occurs later;
(9) to any Tax imposed under Sections 1471 through 1474 of the Code (or any amended or successor provisions), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or
practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code;
or
(10) in the case of any combination of items (1) through (9) above.
The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the Notes. Except as
specifically provided under this heading “—Payment of Additional Amounts,” the Company will not be required to make any payment for any Tax imposed by any
government or a political subdivision or taxing authority of or in any government or political subdivision. As used under “—Payment of Additional Amounts” and
under “—Redemption for Tax Reasons,” the term “United States” means the United States of America (including the states and the District of Columbia and any
political subdivision thereof), and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income
tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the
District of Columbia (other than a partnership that is not treated as a United
6


States person under any applicable Treasury regulations), or any estate or trust the income of which is subject to U.S. federal income taxation regardless of its
source.
Redemption for Tax Reasons
If, as a result of any change in, or amendment to, or, in the case of the 0.000% 2025 Notes and the 2031 Notes, introduction of, the laws (or any
regulations or rulings promulgated under the laws) of the United States (or any political subdivision or taxing authority of or in the United States), or any change
in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is
announced or becomes effective on or after the date of the applicable prospectus supplement, we become, or based upon a written opinion of independent
counsel selected by us, will become obligated to pay additional amounts as described above under the heading “Payments of Additional Amounts” with respect
to a series of the Notes, then we may at our option redeem, in whole, but not in part, in the case of the 2024 Notes, the 2026 Notes, the 2027 Notes, the 3.050%
2029 Notes and the 2042 Notes, the Notes of such series on not less than 30 nor more than 60 days’ prior notice, in the case of the 0.875% 2025 Notes and the
1.375% 2029 Notes, the Notes of such series on not less than 15 nor more than 60 days’ notice, and in the case of the 0.000% 2025 Notes and the 2031 Notes,
the Notes of such series on not less than 10 nor more than 60 days’ prior notice, in each case at a redemption price equal to 100% of their principal amount,
together with interest accrued but unpaid on those Notes to (and, in the case of the 0.000% 2025 Notes and the 2031 Notes, but not including) the date fixed for
redemption.
Optional Redemption
We may redeem the 2024 Notes, the 2026 Notes, the 2027 Notes, the 3.050% 2029 Notes and the 2042 Notes at our option, at any time in whole or
from time to time in part, at a redemption price equal to the greater of:
•
100% of the principal amount of the Notes to be redeemed; or
•
the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption), discounted to the date of redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the
applicable Comparable Government Bond Rate (as defined below), plus 10 basis points in the case of the 2026 Notes, plus 15 basis points in the
case of the 2024 Notes, the 3.050% 2029 Notes and the 2042 Notes and plus 20 basis points in the case of the 2027 Notes.
We may redeem the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 1.375% 2029 Notes and the 2031 Notes at our option, at any time in whole or
from time to time in part, prior to the applicable Par Call Date at a redemption price equal to the greater of:
•
100% of the principal amount of the Notes to be redeemed; or
•
the sum of the present values of the remaining scheduled payments of principal and interest thereon assuming that the Notes matured on the
applicable Par Call Date (not including any portion of such payments of interest accrued as of the date of redemption), discounted to the date of
redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate (as defined below), plus 10
basis points in the case of the 0.000% 2025 Notes, plus 15 basis points in the case of the 0.875% 2025 Notes and the 2031 Notes, and 20 basis
points in the case of the 2029 Notes.
“Par Call Date” means (i) with respect to the 0.000% 2025 Notes, August 15, 2025 (three months prior to the maturity date of the 0.000% 2025 Notes),
(ii) with respect to the 0.875% 2025 Notes, February 24, 2025 (three months prior to the maturity date of the 0.875% 2025 Notes), (iii) with respect to the 1.375%
2029 Notes, February 24, 2029 (three months prior to the maturity date of 1.375% 2029 Notes) and (iv) with respect to the 2031 Notes, August 15, 2031 (three
months prior to the maturity of the 2031 Notes).
If any of the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 1.375% 2029 Notes or the 2031 Notes are redeemed on or after the applicable Par Call
Date, the redemption price for such Notes will equal 100% of the principal amount of the Notes being redeemed.
In each case upon redemption of the Notes, we will pay accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date
of redemption.
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Installments of interest on Notes being redeemed that are due and payable on interest payment dates falling on or prior to a redemption date shall be
payable on the interest payment date to the holders as of the close of business on the relevant regular record date according to the Notes and the applicable
Indenture.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation for the 2024 Notes, the 2026 Notes and the
2027 Notes, at the discretion of an independent investment bank selected by us, a German government bond whose maturity is closest to the maturity of the
Notes being redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other German
government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected
by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation for the 3.050% 2029 Notes and the 2042
Notes, at the discretion of an independent investment bank selected by us, a United Kingdom government bond whose maturity is closest to the maturity of the
Notes being redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other United Kingdom
government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, United Kingdom government bonds
selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation for the 0.000% 2025 Notes, the 0.875%
2025 Notes, the 1.375% 2029 Notes and the 2031 Notes, at the discretion of an independent investment bank selected by us, a German government bond
whose maturity is closest to the applicable Par Call Date of the Notes being redeemed, or if such independent investment bank in its discretion determines that
such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or
market makers in, German government bonds selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond Rate” means the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded
upwards), at which the gross redemption yield on the Notes, if they were to be purchased at such price on the third business day prior to the date fixed for
redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond on the basis of the middle market price of
the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by
us.
Covenants
The Indentures set forth limited covenants that apply to the Notes. However, these covenants do not, among other things:
•
limit the amount of indebtedness or lease obligations that may be incurred by us and our subsidiaries;
•
limit our ability or that of our subsidiaries to issue, assume or guarantee debt secured by liens; or
•
restrict us from paying dividends or making distributions on our capital stock or purchasing or redeeming our capital stock.
Consolidation, Merger and Sale of Assets
The Indentures provide that we may consolidate with or merge with or into any other person, and may sell, transfer, or lease or convey all or
substantially all of our properties and assets to another person; provided that the following conditions are satisfied:
•
we are the continuing entity, or the resulting, surviving or transferee person (the “Successor”) is a person (if such person is not a corporation, then
the Successor will include a corporate co-issuer of the debt securities) organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia and the Successor (if not us) will expressly assume, by supplemental indenture, all of our obligations under
the debt securities and the applicable Indenture and, for each security that by its terms provides for conversion, provide for the right to convert such
security in accordance with its terms;
8


•
immediately after giving effect to such transaction, no default or event of default under the applicable Indenture has occurred and is continuing; and
•
in the case of the 2013 Indenture, the trustee receives from us an officers’ certificate and an opinion of counsel that the transaction and such
supplemental indenture, as the case may be, complies with the applicable provisions of the 2013 Indenture.
If we consolidate or merge with or into any other person or sell, transfer, lease or convey all or substantially all of our properties and assets in
accordance with the Indentures, the Successor will be substituted for us in the Indentures, with the same effect as if it had been an original party to the
Indentures. As a result, the Successor may exercise our rights and powers under the Indentures, and we will be released from all our liabilities and obligations
under the Indentures and under the debt securities.
For purposes of this covenant, “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity.
Events of Default
Each of the following events are defined in the Indentures as an “event of default” (whatever the reason for such event of default and whether or not it
will be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) with respect to the debt securities of any series:
(1)    default in the payment of any installment of interest on any debt securities of such series for 30 days after becoming due;
(2)    default in the payment of principal of or premium, if any, on any debt securities of such series when it becomes due and payable at its stated
maturity, upon optional redemption, upon declaration or otherwise;
(3)    default in the performance, or breach, of any covenant or agreement of ours in the applicable Indenture with respect to the debt securities of such
series (other than a covenant or agreement, a default in the performance of which or a breach of which is elsewhere in the applicable Indenture
specifically dealt with or that has expressly been included in the applicable Indenture solely for the benefit of a series of debt securities other than
such series), which continues for a period of 90 days after written notice to us by the trustee or to us and the trustee by the holders of, in the case
of the 2013 Indenture, at least 25% in aggregate principal amount of the outstanding debt securities of that series, and in the case of the 2018
Indenture, at least 33% in aggregate principal amount of the outstanding debt securities of that series;
(4)    we, pursuant to or within the meaning of the Bankruptcy Law:
•
commence a voluntary case or proceeding;
•
consent to the entry of an order for relief against us in an involuntary case or proceeding;
•
consent to the appointment of a custodian of us or for all or substantially all of our property;
•
make a general assignment for the benefit of our creditors;
•
file a petition in bankruptcy or answer or consent seeking reorganization or relief;
•
consent to the filing of such petition or the appointment of or taking possession by a custodian; or
•
take any comparable action under any foreign laws relating to insolvency;
9


(5)    a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
•
is for relief against us in an involuntary case, or adjudicates us insolvent or bankrupt;
•
appoints a custodian of us or for all or substantially all of our property; or
•
orders the winding-up or liquidation of us (or any similar relief is granted under any foreign laws);
and the order or decree remains unstayed and in effect for 90 days (or, in the case of the 2018 Indenture, 90 consecutive days); or
(6)    any other event of default provided with respect to debt securities of such series occurs.
“Bankruptcy Law” means Title 11, United States Code or any similar federal or state or foreign law for the relief of debtors. “Custodian” means any
custodian, receiver, trustee, assignee, liquidator or other similar official under any Bankruptcy Law.
If an event of default with respect to debt securities of any series (other than an event of default relating to certain events of bankruptcy, insolvency, or
reorganization of us) occurs and is continuing, the trustee by notice to us, or the holders of, in the case of the 2013 Indenture, at least 25% in aggregate principal
amount of the outstanding debt securities of such series, and in the case of the 2018 Indenture, at least 33% in aggregate principal amount of the outstanding
debt securities of such series, by notice to us and the trustee, may, and the trustee at the request of these holders will, declare the principal of and premium, if
any, and accrued and unpaid interest on all the debt securities of such series to be due and payable. Upon such a declaration, such principal, premium and
accrued and unpaid interest will be due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency, or reorganization of
us occurs and is continuing, the principal of and premium, if any, and accrued and unpaid interest on the debt securities of such series will become and be
immediately due and payable without any declaration or other act on the part of the trustee or any holders.
The holders of not less than a majority in aggregate principal amount of the outstanding debt securities of any series may rescind a declaration of
acceleration and its consequences, if we have deposited certain sums with the trustee and all events of default with respect to the debt securities of such series,
other than the non-payment of the principal or interest which have become due solely by such acceleration, have been cured or waived, as provided in the
Indentures.
An event of default for a particular series of debt securities does not necessarily constitute an event of default for any other series of debt securities
issued under the Indentures.
We are required to furnish the trustee annually within 120 days after the end of our fiscal year a statement by one of our officers to the effect that, to the
best knowledge of such officer, we are not in default in the fulfillment of any of our obligations under the applicable Indenture or, if there has been a default in the
fulfillment of any such obligation, specifying each such default and the nature and status thereof.
No holder of any debt securities of any series will have any right to institute any judicial or other proceeding with respect to the applicable Indenture, or
for the appointment of a receiver or trustee, or for any other remedy unless:
(1)    an event of default has occurred and is continuing and such holder has given the trustee prior written notice of such continuing event of default
with respect to the debt securities of such series;
(2)    in the case of the 2013 Indenture, the holders of not less than 25% of the aggregate principal amount of the outstanding debt securities of such
series, and in the case of the 2018 Indenture, the holders of not less than 33% of the aggregate principal amount of the outstanding debt securities
of such series have requested the trustee to institute proceedings in respect of such event of default;
(3)    the trustee has been offered indemnity reasonably satisfactory to it against its costs, expenses and liabilities in complying with such request;
(4)    the trustee has failed to institute proceedings 60 days after the receipt of such notice, request and offer of indemnity; and
10


(5)    no direction inconsistent with such written request has been given for 60 days by the holders of a majority in aggregate principal amount of the
outstanding debt securities of such series.
The holders of a majority in aggregate principal amount of outstanding debt securities of a series will have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy available to the trustee with respect to the debt securities of that series or
exercising any trust or power conferred to the trustee, and to waive certain defaults. Each of the Indentures provides that if an event of default occurs and is
continuing, the trustee will exercise such of its rights and powers under such Indenture, and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of such person’s own affairs. Subject to such provisions, the trustee will be under no
obligation to exercise any of its rights or powers under the applicable Indenture at the request of any of the holders of the debt securities of a series unless they
will have offered to the trustee security or indemnity satisfactory to the trustee against the costs, expenses and liabilities which might be incurred by it in
compliance with such request.
Notwithstanding the foregoing, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of and
premium, if any, and interest on that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement of payment.
Modification and Waivers
Modification and amendments of the Indentures and the Notes may be made by us and the trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding series of Notes affected thereby; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding Note of that series affected thereby:
•
change the stated maturity of the principal of, or installment of interest on, any Note;
•
reduce the principal amount of any Note or reduce the amount of the principal of any Note which would be due and payable upon a declaration of
acceleration of the maturity thereof or reduce the rate of interest on any Note;
•
reduce any premium payable on the redemption of any Note or change the date on which any Note may or must be redeemed (in the case of the
2018 Indenture, it being understood that a change to any notice requirement with respect to such date shall not be deemed to be a change of such
date);
•
change the coin or currency in which the principal of, premium, if any, or interest on any Note is payable;
•
impair the right of any holder to institute suit for the enforcement of any payment on or after the stated maturity of any Note (or, in the case of
redemption, on or after the redemption date);
•
reduce the percentage in principal amount of the outstanding Notes, the consent of whose holders is required in order to take certain actions;
•
reduce the requirements for quorum or voting by holders of Notes in the applicable Indenture or the Note;
•
modify any of the provisions in the applicable Indenture regarding the waiver of past defaults and the waiver of certain covenants by the holders of
Notes except to increase any percentage vote required or to provide that certain other provisions of the applicable Indenture cannot be modified or
waived without the consent of the holder of each Notes affected thereby;
•
make any change that adversely affects the right to convert or exchange any debt security or decreases the conversion or exchange rate or
increases the conversion price of any convertible or exchangeable debt security, unless such decrease or increase is permitted by the terms of the
debt securities; or
•
modify any of the above provisions.
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We and the trustee may, without the consent of any holders, modify or amend the terms of the Indentures and any series of Notes with respect to the
following:
•
to add to our covenants for the benefit of holders of all or any series of the Notes or to surrender any right or power conferred upon us;
•
to evidence the succession of another person to, and the assumption by the successor of our covenants, agreements and obligations under, the
applicable Indenture pursuant to the covenant described above under the caption “Covenants—Consolidation, Merger and Sale of Assets”;
•
to add any additional events of default for the benefit of holders of all or any series of the Notes;
•
to add one or more guarantees, and in the case of the 2018 Indenture, co-obligors, for the benefit of holders of the Notes;
•
to secure the Notes pursuant to the covenants of the Indenture;
•
to add or appoint a successor or separate trustee or other agent;
•
to provide for the issuance of additional debt securities of any series;
•
to establish the form or terms of the debt securities of any series as permitted by the Indenture;
•
to comply with the rules of any applicable securities depository;
•
to provide for uncertificated Notes in addition to or in place of certificated Notes;
•
in the case of the 2013 Indenture, to add to, change or eliminate any of the provisions of the 2013 Indenture in respect of one or more series of
debt securities; provided that any such addition, change or elimination (a) shall neither (1) apply to any debt security of any series created prior to
the execution of such supplemental indenture and entitled to the benefit of such provision nor (2) modify the rights of the holder of any such debt
security with respect to such provision or (b) shall become effective only when there is no debt security described in clause (a)(1) outstanding;
•
in the case of the 2018 Indenture, to add to, change or eliminate any of the provisions of the 2018 Indenture in respect of one or more series of
debt securities; provided that any such addition, change or elimination shall become effective only when there is no outstanding security of any
series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision and as to which such
supplemental indenture would apply;
•
to cure any ambiguity, omission, defect or inconsistency;
•
to change any other provision; provided that the change does not adversely affect the interests of the holders of debt securities of, in the case of
the 2013 Indenture any series, and in the case of the 2018 Indenture, any outstanding series, in any material respect;
•
to supplement any of the provisions of the applicable Indenture to such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Notes pursuant to the Indenture; provided that any such action shall not adversely affect the interests of the holders of
Notes of such series or any other series of debt securities in any material respect;
•
to comply with the rules or regulations of any securities exchange or automated quotation system on which any of the Notes may be listed or
traded; and
•
to add to, change or eliminate any of the provisions of the applicable Indenture as shall be necessary or desirable in accordance with any
amendments to the Trust Indenture Act of 1939, as amended, and in the case of the 2013 Indenture, provided that such action does not adversely
affect the rights or interests of any holder of debt securities in any material respect.
12


The holders of at least a majority in aggregate principal amount of the outstanding Notes of any series may, on behalf of the holders of all Notes of that
series, waive compliance by us with certain restrictive provisions of the Indentures. The holders of not less than a majority in aggregate principal amount of the
outstanding Notes of a series may, on behalf of the holders of all Notes of that series, waive any past default and its consequences under the applicable
Indenture with respect to the Notes of that series, except a default (1) in the payment of principal or premium, if any, or interest on Notes of that series or (2) in
respect of a covenant or provision of the applicable Indenture that cannot be modified or amended without the consent of the holder of each Note of that series.
Upon any such waiver, such default will cease to exist, and any event of default arising therefrom will be deemed to have been cured, for every purpose of the
Indenture; however, no such waiver will extend to any subsequent or other default or event of default or impair any rights consequent thereon.
Discharge, Defeasance and Covenant Defeasance
We may discharge certain obligations to holders of the Notes of a series that have not already been delivered to the trustee for cancellation and that
either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the
trustee, in trust, funds in U.S. dollars in an amount sufficient to pay the entire indebtedness including, but not limited to, the principal and premium, if any, and
interest to the date of such deposit (if due and payable) or to the maturity thereof or the redemption date of the Notes of that series, as the case may be. We may
direct the trustee to invest such funds in U.S. Treasury securities with a maturity of one year or less or in a money market fund that invests solely in short-term
U.S. Treasury securities.
The Indentures provide that we may elect either (1) to defease and be discharged from any and all obligations with respect to the Notes of a series
(except for, among other things, obligations to register the transfer or exchange of the Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes,
to maintain an office or agency with respect to the Notes and to hold moneys for payment in trust) (“legal defeasance”) or (2) to be released from our obligations
to comply with the restrictive covenants under the applicable Indenture, and any omission to comply with such obligations will not constitute a default or an event
of default with respect to the Notes of a series and clauses (3) and (6) under the caption “Events of Default” above will no longer be applied (“covenant
defeasance”). Legal defeasance or covenant defeasance, as the case may be, will be conditioned upon, among other things, the irrevocable deposit by us with
the trustee, in trust, of an amount in U.S. dollars, or U.S. government obligations (as such term is modified below), or both, applicable to the Notes of that series
which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal or
premium, if any, and interest on the Notes on the scheduled due dates therefor.
If we effect covenant defeasance with respect to the Notes of any series, the amount in U.S. dollars, or U.S. government obligations (as such term is
modified below), or both, on deposit with the trustee will be sufficient, in the opinion of a nationally recognized firm of independent accountants, to pay amounts
due on the Notes of that series at the time of the stated maturity but may not be sufficient to pay amounts due on the Notes of that series at the time of the
acceleration resulting from such event of default. However, we would remain liable to make payment of such amounts due at the time of acceleration.
With respect to the 2024 Notes, the 0.000% 2025 Notes, the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the
2031 Notes, the term “U.S. government obligations” shall instead mean (x) any security that is (i) a direct obligation of the German government or (ii) an
obligation of a person controlled or supervised by and acting as an agency or instrumentality of the German government the payment of which is fully and
unconditionally guaranteed by the German government or the central bank of the German government, which, in either case (x)(i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) certificates, depositary receipts or other instruments which evidence a direct ownership interest in
obligations described in clause (x)(i) or (x)(ii) above or in any specific principal or interest payments due in respect thereof.
With respect to the 3.050% 2029 Notes and the 2042 Notes, the term “U.S. government obligations” shall instead mean (x) any security that is (i) a
direct obligation of the United Kingdom government or (ii) an obligation of a person controlled or supervised by and acting as an agency or instrumentality of the
United Kingdom government the payment of which is fully and unconditionally guaranteed by the United Kingdom government or the central bank of the United
Kingdom government, which, in either case (x)(i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) certificates, depositary receipts
or other instruments which evidence a direct ownership interest in obligations described in clause (x)(i) or (x)(ii) above or in any specific principal or interest
payments due in respect thereof.
13


We will be required to deliver to the trustee an opinion of counsel that the deposit and related defeasance will not cause the holders and beneficial
owners of the Notes of that series to recognize income, gain or loss for federal income tax purposes. If we elect legal defeasance, that opinion of counsel must
be based upon a ruling from the U.S. Internal Revenue Service or a change in law to that effect.
We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option.
Book-Entry and Settlement
The Notes were issued in book-entry form and are represented by global notes deposited with, or on behalf of, a common depositary on behalf of
Euroclear and Clearstream, and are registered in the name of the common depositary or its nominee. Except as described herein, certificated notes will not be
issued in exchange for beneficial interests in the global notes.
Certificated Notes
Subject to certain conditions, the Notes represented by the global notes are exchangeable for certificated notes in definitive form of like tenor, in
minimum denominations of €100,000 principal amount and integral multiples of €1,000 in excess thereof in the case of the 2024 Notes, the 0.000% 2025 Notes,
the 0.875% 2025 Notes, the 2026 Notes, the 2027 Notes, the 1.375% 2029 Notes and the 2031 Notes, and in minimum denominations of £100,000 principal
amount and integral multiples of £1,000 in excess thereof in the case of the 3.050% 2029 Notes and the 2042 Notes, if:
1.
the common depositary notifies us that it is unwilling or unable to continue as depositary or if the common depositary ceases to be eligible under
the applicable Indenture and we do not appoint a successor depository within 90 days;
2.    we determine that the Notes will no longer be represented by global securities and execute and deliver to the trustee an order to that effect; or
3.    an event of default with respect to the Notes will have occurred and be continuing.
Any Note that is exchangeable as above is exchangeable for certificated notes issuable in authorized denominations and registered in such names as
the common depositary shall direct. Subject to the foregoing, a global note is not exchangeable, except for a global note of the same aggregate denomination to
be registered in the name of the common depositary or its nominee.
The Trustee for the Notes
The Bank of New York Mellon Trust Company, N.A. is the trustee under the Indentures. We have commercial deposits and custodial arrangements with
The Bank of New York Mellon Trust Company, N.A. and its affiliates (“BNYM”). We may enter into similar or other banking relationships with BNYM in the future
in the normal course of business. In addition, BNYM acts as trustee and as paying agent with respect to other debt securities issued by us, and may do so for
future issuances of debt securities by us as well.
14


Exhibit 21.1
Subsidiaries of
Apple Inc.*
Jurisdiction
of Incorporation
Apple Asia Limited
Hong Kong
Apple Asia LLC
Delaware, U.S.
Apple Canada Inc.
Canada
Apple Computer Trading (Shanghai) Co., Ltd.
China
Apple Distribution International Limited
Ireland
Apple India Private Limited
India
Apple Insurance Company, Inc.
Arizona, U.S.
Apple Japan, Inc.
Japan
Apple Korea Limited
South Korea
Apple Operations International Limited
Ireland
Apple Operations Limited
Ireland
Apple Operations Mexico, S.A. de C.V.
Mexico
Apple Pty Limited
Australia
Apple Sales International Limited
Ireland
Apple South Asia (Thailand) Limited
Thailand
Apple Vietnam Limited Liability Company
Vietnam
Braeburn Capital, Inc.
Nevada, U.S.
iTunes K.K.
Japan
*
Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of other subsidiaries of Apple Inc. are omitted because, considered in the aggregate, they would
not constitute a significant subsidiary as of the end of the year covered by this report.


Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1)
Registration Statement (Form S-3 ASR No. 333-260578) of Apple Inc.,
(2)
Registration Statement (Form S-8 No. 333-264555) pertaining to Apple Inc. Deferred Compensation Plan,
(3)
Registration Statement (Form S-8 No. 333-165214) pertaining to Apple Inc. 2014 Employee Stock Plan and Apple Inc. 2022 Employee Stock Plan,
(4)
Registration Statement (Form S-8 No. 333-195509) pertaining to Apple Inc. 2014 Employee Stock Plan and Apple Inc. 2022 Employee Stock Plan,
(5)
Registration Statement (Form S-8 No. 333-226986) pertaining to Apple Inc. Deferred Compensation Plan,
(6)
Registration Statement (Form S-8 No. 333-203698) pertaining to Apple Inc. Employee Stock Purchase Plan, and
(7)
Registration Statement (Form S-8 No. 333-60455) pertaining to Apple Inc. Non-Employee Director Stock Plan;
of our reports dated November 2, 2023 with respect to the consolidated financial statements of Apple Inc., and the effectiveness of internal control over financial
reporting of Apple Inc., included in this Annual Report on Form 10-K for the year ended September 30, 2023.
/s/ Ernst & Young LLP
San Jose, California
November 2, 2023


Exhibit 31.1
CERTIFICATION
I, Timothy D. Cook, certify that:
1.
I have reviewed this annual report on Form 10-K of Apple Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent
fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant’s internal control over financial reporting; and
5.
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal
control over financial reporting.
Date: November 2, 2023
By:
/s/ Timothy D. Cook
Timothy D. Cook
Chief Executive Officer


Exhibit 31.2
CERTIFICATION
I, Luca Maestri, certify that:
1.
I have reviewed this annual report on Form 10-K of Apple Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent
fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant’s internal control over financial reporting; and
5.
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal
control over financial reporting.
Date: November 2, 2023
By:
/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer


Exhibit 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy D. Cook, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that the Annual Report of Apple Inc. on Form 10-K for the fiscal year ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results
of operations of Apple Inc. at the dates and for the periods indicated.
Date: November 2, 2023
By:
/s/ Timothy D. Cook
Timothy D. Cook
Chief Executive Officer
I, Luca Maestri, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
the Annual Report of Apple Inc. on Form 10-K for the fiscal year ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of
operations of Apple Inc. at the dates and for the periods indicated.
Date: November 2, 2023
By:
/s/ Luca Maestri
Luca Maestri
Senior Vice President,
Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to Apple Inc. and will be retained by Apple Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.


 
 
 
 
 
SAMSUNG ELECTRONICS CO., LTD. AND ITS SUBSIDIARIES 
 
 
 
Consolidated Financial Statements 
 
 
 
 
December 31, 2023 and 2022 
 
 
  
 
(With Independent Auditors’ Report Thereon) 
 
 


 
Contents 
 
 
 
Page 
 
 
Independent Auditors’ Report 
1 
 
 
Consolidated Statements of Financial Position 
4 
 
 
Consolidated Statements of Profit or Loss 
7 
 
 
Consolidated Statements of Comprehensive Income 
8 
 
 
Consolidated Statements of Changes in Equity 
9 
 
 
Consolidated Statements of Cash Flows 
13 
 
 
Notes to the Consolidated Financial Statements 
15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


152, Teheran-ro, Gangnam-gu, Seoul 06236
(Yeoksam-dong, Gangnam Finance Center 27th Floor)
Republic of Korea
 
 
Independent Auditors’ Report 
 
To the Shareholders and Board of Directors of 
Samsung Electronics Co., Ltd.: 
 
Opinion 
We have audited the consolidated financial statements of Samsung Electronics Co., Ltd. and its subsidiaries (“the Group”), expressed 
in Korean won, which comprise the consolidated statement of financial position as of December 31, 2023, and the consolidated 
statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising 
material accounting policy information and other explanatory information.  
 
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated 
financial position of the Group as of December 31, 2023 and its consolidated financial performance and cash flows for the year 
then ended in accordance with Korean International Financial Reporting Standards (“Korean IFRS”). 
 
Basis for Opinion  
We conducted our audit in accordance with International Standards on Auditing (“ISAs”) and Korean Standards on Auditing (“KSAs”). 
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated 
Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards 
Board for Accountant’s International Code of Ethics for Professional Accountants (including International Independence Standards) 
(“IESBA Code”) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in 
the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA 
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.  
 
Key Audit Matters  
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated 
financial statements as of and for the year ended December 31, 2023. These matters were addressed in the context of our audit of 
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion 
on these matters.  
 
1) Valuation of memory semiconductor inventory at net realizable value  
 
The memory semiconductor products manufactured and sold by the Group’s Device Solutions (DS) division have been affected by 
price erosion in the current financial year due to weak demand caused by macroeconomic uncertainties. As disclosed in Note 2, 
Material Accounting Policies, and Note 3, Material Accounting Estimates and Assumptions, to the consolidated financial statements, 
the Group values its inventories at the lower of cost and net realizable value.  
 
Due to the uncertainty associated with estimating future demand and selling prices, and the complexity of the measurement process 
in estimating net realizable value of the inventories, we believe the potential for error is significant and thus identified the estimation 
of memory semiconductor inventories’ net realizable value as a key audit matter.  
 
The primary audit procedures we performed to address this key audit matter are as follows: 
• 
Evaluating the reasonableness of the Group’s accounting policies and understanding the processes and internal controls 
applied to the valuation of inventories at lower of cost or net realizable value; 
• 
Evaluating the design and testing the operating effectiveness of the internal controls established for the lower of cost or net 
realizable value method of inventory valuation; 
• 
Evaluating the appropriateness of the underlying data used to determine the net realizable value of inventory which includes 
forecast sales price, on a sample basis; 
• 
Evaluating the reasonableness of estimates by retrospectively comparing the estimated sales price and the actual sales price; 
and 
• 
Evaluating reasonableness of inventory valuation by assessing the reasonableness of the assumptions used to determine 
estimates including the forecast sale price and costs associated with sale and checking the mathematical accuracy of inventory 
valuation by performing recalculations.  
 
 


 
 
- 2 - 
 
2) Sales deduction related to sales promotion activities 
 
The Group’s Device eXperience (DX) division performs sales promotion activities, which includes providing price or volume 
discounts and incentives to customers including retail and telecommunication companies, based on explicit or implicit agreements. 
As disclosed in Note 2, Material Accounting Policies, and Note 3, Material Accounting Estimates and Assumptions, of the 
consolidated financial statements, the Group estimates the expected expenditures on sales promotion activities at the time of 
revenue recognition and deducts the amount from revenue.  
 
We identified the amount of sales deductions from promotional activities as a key audit matter because the calculation of sales 
deductions involves significant estimates and judgements by management and is subject to possible bias and the amount is material 
to the consolidated financial statements. 
 
The primary audit procedures we performed to address this key audit matter are as follow: 
• 
Evaluating the Group's accounting policies and understanding the processes and internal controls relating to the applied to 
sales deductions; 
• 
Evaluating the design and testing the operating effectiveness of internal controls over the approval of the sales deduction 
policy; 
• 
Evaluating the design and testing the operating effectiveness of internal controls over the sales deduction estimates and the 
approval of post-settlement adjustments; 
• 
Evaluating the accuracy of the estimates by inspecting, on a sample basis, the documentation supporting sales deductions 
estimates on a sampling basis; and 
• 
Evaluating the accuracy and completeness of sales deductions by comparing, on a sample basis, the period-end estimates to 
amounts settled subsequent to the period-end and by examining relevant documentation. 
  
Other Matters 
The consolidated financial statements of the Group for the year ended December 31, 2022 were audited by another auditor who 
expressed an unmodified opinion on those financial statements on February 15, 2023. 
 
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from 
those generally accepted and applied in other countries. 
 
The accompanying consolidated financial statements as of and for the years ended December 31, 2023 and 2022 have been 
translated into United States dollars solely for the convenience of the reader. We have audited the translation and, in our opinion, 
the consolidated financial statements expressed in Korean won have been translated into dollars on the basis set forth in Note 2.18 
to the consolidated financial statements. 
 
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements 
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with 
Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated 
financial statements that are free from material misstatement, whether due to fraud or error.  
 
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a 
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless 
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.  
 
Those charged with governance are responsible for overseeing the Group’s financial reporting process.  
 
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements  
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from 
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable 
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and KSAs will always 
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, 
individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of 
these consolidated financial statements.  
 


 
 
- 3 - 
As part of an audit in accordance with ISAs and KSAs, we exercise professional judgment and maintain professional skepticism 
throughout the audit. We also:  
• 
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, 
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate 
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for 
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override 
of internal control. 
• 
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in 
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls.  
• 
Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and 
reasonableness of accounting estimates and related disclosures made by management. 
• 
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit 
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on 
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw 
attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are 
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ 
report. However, future events or conditions may cause the Group to cease to continue as a going concern. 
• 
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, 
and whether the consolidated financial statements represent the underlying transactions and events in a manner that 
achieves fair presentation. 
• 
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within 
the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision 
and performance of the group audit. We remain solely responsible for our audit opinion. 
 
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit 
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.  
 
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements 
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear 
on our independence, and where appliable, related safeguards.  
 
From the matters communicated with those charged with governance, we determine those matters that were of most significance 
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe 
these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely 
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of 
doing so would reasonably be expected to outweigh the public interest benefits of such communication. 
 
 
The engagement partner on the audit resulting in this independent auditors’ report is Han, Sang Hyun.  
 
 
 
 
 
 
 
 
 
 
Seoul, Korea 
February 19, 2024 
 
This report is effective as of February 19, 2024. Certain subsequent events or circumstances which may occur between the audit 
report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements 
and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated 
to reflect the impact of such subsequent events or circumstances, if any. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 
 
The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 
 
 
- 4 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
December 31, 
December 31, 
December 31, 
December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Assets 
 
 
 
 
 
Current assets 
 
 
 
 
 
Cash and cash equivalents 
4, 28 
69,080,893 
49,680,710 
52,890,158 
38,036,865 
Short-term financial instruments 
4, 28 
22,690,924 
65,102,886 
17,372,771 
49,844,491 
Short-term financial assets at amortized cost 
4, 28 
608,281 
414,610 
465,716 
317,436 
Short-term financial assets at fair value  
through profit or loss 
4, 6, 28 
27,112 
29,080 
20,758 
22,264 
Trade receivables 
4, 5, 7, 28 
36,647,393 
35,721,563 
28,058,213 
27,349,373 
Non-trade receivables 
4, 7, 28 
6,633,248 
6,149,209 
5,078,590 
4,707,997 
Prepaid expenses  
 
3,366,130 
2,867,823 
2,577,198 
2,195,681 
Inventories 
8 
51,625,874 
52,187,866 
39,526,134 
39,956,410 
Other current assets 
4, 28 
5,038,838 
6,316,834 
3,857,868 
4,836,335 
Assets held-for-sale 
33 
217,864 
- 
166,802 
- 
 
  
195,936,557 
218,470,581 
150,014,208 
167,266,852 
Non-current assets 
 
 
 
 
 
Financial assets at fair value  
through other comprehensive income 
4, 6, 28 
7,481,297 
11,397,012 
5,727,879 
8,725,854 
Financial assets at fair value  
through profit or loss 
4, 6, 28 
1,431,394 
1,405,468 
1,095,913 
1,076,063 
Investments in associates and joint ventures 
9 
11,767,444 
10,893,869 
9,009,466 
8,340,634 
Property, plant and equipment 
10 
187,256,262 
168,045,388 
143,368,344 
128,659,991 
Intangible assets 
11 
22,741,862 
20,217,754 
17,411,771 
15,479,247 
Net defined benefit assets 
14 
4,905,219 
5,851,972 
3,755,565 
4,480,424 
Deferred income tax assets 
25 
10,211,797 
5,101,318 
7,818,422 
3,905,704 
Other non-current assets 
4, 7, 28 
14,174,148 
7,041,145 
10,852,104 
5,390,887 
 
  
259,969,423 
229,953,926 
199,039,464 
176,058,804 
Total assets 
  
455,905,980 
448,424,507 
349,053,672 
343,325,656 
 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 
 
The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 
 
 
- 5 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
December 31, 
December 31, 
December 31, 
December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
Liabilities and Equity 
 
 
 
 
 
Current liabilities 
 
 
 
 
 
Trade payables 
4, 28 
11,319,824 
10,644,686 
8,666,757 
8,149,853 
Short-term borrowings  
4, 5, 12, 28 
7,114,601 
5,147,315 
5,447,127 
3,940,920 
Other payables 
4, 28 
15,324,119 
17,592,366 
11,732,551 
13,469,180 
Advances received 
17 
1,492,602 
1,314,934 
1,142,776 
1,006,748 
Withholdings 
4, 28 
892,441 
1,298,244 
683,276 
993,970 
Accrued expenses 
4, 17, 28 
26,013,273 
29,211,487 
19,916,449 
22,365,087 
Current income tax liabilities 
 
3,358,715 
4,250,397 
2,571,521 
3,254,216 
Current portion of long-term liabilities 
4, 12, 13, 28 
1,308,875 
1,089,162 
1,002,109 
833,891 
Provisions 
15 
6,524,876 
5,844,907 
4,995,618 
4,475,015 
Other current liabilities 
4, 17, 28 
2,308,472 
1,951,354 
1,767,427 
1,494,008 
Liabilities held-for-sale 
33 
61,654 
- 
47,204 
- 
 
  
75,719,452 
78,344,852 
57,972,815 
59,982,888 
  
 
 
 
 
Non-current liabilities 
 
 
 
 
 
Debentures 
4, 13, 28 
537,618 
536,093 
411,615 
410,447 
Long-term borrowings 
4, 12, 28 
3,724,850 
3,560,672 
2,851,844 
2,726,145 
Long-term other payables 
4, 28 
5,488,283 
2,753,305 
4,201,975 
2,108,003 
Net defined benefit liabilities 
14 
456,557 
268,370 
349,552 
205,471 
Deferred income tax liabilities 
25 
620,549 
5,111,332 
475,109 
3,913,371 
Long-term provisions 
15 
2,878,450 
1,928,518 
2,203,817 
1,476,524 
Other non-current liabilities 
4, 17, 28 
2,802,356 
1,171,761 
2,145,558 
897,132 
  
  
16,508,663 
15,330,051 
12,639,470 
11,737,093 
Total liabilities 
  
92,228,115 
93,674,903 
70,612,285 
71,719,981 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
 
 
The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 
 
 
- 6 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
December 31, 
December 31, 
December 31, 
December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
Equity attributable to owners of the parent company 
 
 
 
 
Preference shares 
18 
119,467 
119,467 
91,467 
91,467 
Ordinary shares 
18 
778,047 
778,047 
595,693 
595,693 
Share premium 
 
4,403,893 
4,403,893 
3,371,737 
3,371,737 
Retained earnings 
19 
346,652,238 
337,946,407 
265,406,117 
258,740,703 
Other components of equity 
20, 33 
1,280,130 
1,938,328 
980,102 
1,484,036 
  
  
353,233,775 
345,186,142 
270,445,116 
264,283,636 
Non-controlling interests 
31 
10,444,090 
9,563,462 
7,996,271 
7,322,039 
Total equity 
  
363,677,865 
354,749,604 
278,441,387 
271,605,675 
  
 
 
 
 
Total liabilities and equity 
  
455,905,980 
448,424,507 
349,053,672 
343,325,656 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS 
 
 
The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes. 
 
 
- 7 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Revenue 
29 
258,935,494 
302,231,360 
198,247,859 
231,396,319 
Cost of sales 
21 
180,388,580 
190,041,770 
138,110,266 
145,501,003 
Gross profit 
 
78,546,914 
112,189,590 
60,137,593 
85,895,316 
Selling and administrative expenses 
21, 22 
71,979,938 
68,812,960 
55,109,743 
52,685,021 
Operating profit 
29 
6,566,976 
43,376,630 
5,027,850 
33,210,295 
Other non-operating income 
23 
1,180,448 
1,962,071 
903,782 
1,502,213 
Other non-operating expense 
23 
1,083,327 
1,790,176 
829,424 
1,370,606 
Share of net profit of associates and joint ventures 
9 
887,550 
1,090,643 
679,532 
835,025 
Financial income 
24 
16,100,148 
20,828,995 
12,326,699 
15,947,229 
Financial expense 
24 
12,645,530 
19,027,689 
9,681,752 
14,568,101 
Profit before income tax 
 
11,006,265 
46,440,474 
8,426,687 
35,556,055 
Income tax benefit 
25 
(4,480,835) 
(9,213,603) 
(3,430,646) 
(7,054,178) 
Profit for the year 
  
15,487,100 
55,654,077 
11,857,333 
42,610,233 
Profit attributable to 
 
 
 
 
 
Owners of the parent company 
 
14,473,401 
54,730,018 
11,081,218 
41,902,749 
Non-controlling interests 
  
1,013,699 
924,059 
776,115 
707,484 
Earnings per share 
(in Korean won, in US dollars) 
26 
  
  
  
  
- Basic 
 
2,131 
8,057 
1.63 
6.17 
- Diluted 
  
2,131 
8,057 
1.63 
6.17 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 
 
The above consolidated statements of comprehensive income should be read in conjunction with the accompanying notes. 
 
 
- 8 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Profit for the year 
 
15,487,100 
55,654,077 
11,857,333 
42,610,233 
Other comprehensive income  
 
 
 
 
 
Items that will not be reclassified subsequently to  
profit or loss: 
 
 
 
 
 
Gain (loss) on valuation of financial assets at fair 
value through other comprehensive income, net 
of tax 
6, 20 
1,481,091 
(1,969,498) 
1,133,962 
(1,507,900) 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax  
9, 20 
13,150 
(6,318) 
10,068 
(4,837) 
Remeasurement of net defined benefit liabilities 
(assets), net of tax 
14, 20 
(828,298) 
1,153,679 
(634,167) 
883,287 
Items that may be reclassified subsequently to 
 profit or loss: 
 
 
 
 
 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax  
9, 20 
61,962 
(44,192) 
47,440 
(33,835) 
Foreign currency translation differences for 
foreign operations, net of tax 
20 
2,621,479 
4,884,886 
2,007,074 
3,739,998 
Gain (loss) on valuation of cash flow hedge 
derivatives 
20 
927 
(12,893) 
710 
(9,871) 
Other comprehensive income for the year, net of 
tax 
 
3,350,311 
4,005,664 
2,565,087 
3,066,842 
Total comprehensive income for the year 
 
18,837,411 
59,659,741 
14,422,420 
45,677,075 
Comprehensive income attributable to:  
 
 
 
 
 
Owners of the parent company 
 
17,845,661 
58,745,107 
13,663,110 
44,976,807 
Non-controlling interests 
  
991,750 
914,634 
759,310 
700,268 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 9 - 
(In millions of Korean won) 
 
For the year ended December 31, 2022 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2022 
 
119,467 
778,047 
4,403,893 
293,064,763 
(2,128,473) 
296,237,697 
8,662,234 
304,899,931 
Profit for the year 
  
- 
- 
- 
54,730,018 
- 
54,730,018 
924,059 
55,654,077 
Loss on valuation of financial assets at fair value 
through other comprehensive income, net of tax 
6, 20 
- 
- 
- 
(38,937) 
(1,867,530) 
(1,906,467) 
(63,031) 
(1,969,498) 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
(51,848) 
(51,848) 
1,338 
(50,510) 
Foreign currency translation differences for  
foreign operations translation, net of tax 
20 
- 
- 
- 
- 
4,863,930 
4,863,930 
20,956 
4,884,886 
Remeasurement of net defined benefit liabilities, 
net of tax 
14, 20 
- 
- 
- 
- 
1,122,367 
1,122,367 
31,312 
1,153,679 
Loss on valuation of cash flow hedge derivatives 
20 
- 
- 
- 
- 
(12,893) 
(12,893) 
- 
(12,893) 
Total comprehensive income for the year 
  
- 
- 
- 
54,691,081 
4,054,026 
58,745,107 
914,634 
59,659,741 
Dividends declared 
19 
- 
- 
- 
(9,809,437) 
- 
(9,809,437) 
(5,523) 
(9,814,960) 
Capital transaction under common control 
 
- 
- 
- 
- 
- 
- 
(176) 
(176) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
124 
124 
Other 
 
- 
- 
- 
- 
12,775 
12,775 
(7,831) 
4,944 
Total transactions with owners 
  
- 
- 
- 
(9,809,437) 
12,775 
(9,796,662) 
(13,406) 
(9,810,068) 
Balance as of December 31, 2022 
  
119,467 
778,047 
4,403,893 
337,946,407 
1,938,328 
345,186,142 
9,563,462 
354,749,604 
  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 10 - 
 (In thousands of US dollars (Note 2.18)) 
 
For the year ended December 31, 2022 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2022 
 
91,467 
595,693 
3,371,737 
224,378,130 
(1,629,615) 
226,807,412 
6,632,035 
233,439,447 
Profit for the year 
 
- 
- 
- 
41,902,749 
- 
41,902,749 
707,484 
42,610,233 
Loss on valuation of financial assets at fair value 
through other comprehensive income, net of tax 
6, 20 
- 
- 
- 
(29,812) 
(1,429,830) 
(1,459,642) 
(48,258) 
(1,507,900) 
Share of other comprehensive income (loss) of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
(39,696) 
(39,696) 
1,024 
(38,672) 
Foreign currency translation differences for foreign 
operations, net of tax 
20 
- 
- 
- 
- 
3,723,953 
3,723,953 
16,045 
3,739,998 
Remeasurement of net defined benefit liabilities, 
net of tax 
14, 20 
- 
- 
- 
- 
859,314 
859,314 
23,973 
883,287 
Loss on valuation of cash flow hedge derivatives 
20 
- 
- 
- 
- 
(9,871) 
(9,871) 
- 
(9,871) 
Total comprehensive income for the year 
 
- 
- 
- 
41,872,937 
3,103,870 
44,976,807 
700,268 
45,677,075 
Dividends declared 
19 
- 
- 
- 
(7,510,364) 
- 
(7,510,364) 
(4,229) 
(7,514,593) 
Capital transaction under common control 
 
- 
- 
- 
- 
- 
- 
(135) 
(135) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
95 
95 
Other 
 
- 
- 
- 
- 
9,781 
9,781 
(5,995) 
3,786 
Total transactions with owners 
 
- 
- 
- 
(7,510,364) 
9,781 
(7,500,583) 
(10,264) 
(7,510,847) 
Balance as of December 31, 2022 
 
91,467 
595,693 
3,371,737 
258,740,703 
1,484,036 
264,283,636 
7,322,039 
271,605,675 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 11 - 
(In millions of Korean won) 
 
For the year ended December 31, 2023 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2023 
 
119,467 
778,047 
4,403,893 
337,946,407 
1,938,328 
345,186,142 
9,563,462 
354,749,604 
Profit for the year 
 
- 
- 
- 
14,473,401 
- 
14,473,401 
1,013,699 
15,487,100 
Gain (loss) on valuation of financial 
assets at fair value through other 
comprehensive income, net of tax 
6, 20 
- 
- 
- 
4,041,867 
(2,554,690) 
1,487,177 
(6,086) 
1,481,091 
Share of other comprehensive income of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
70,157 
70,157 
4,955 
75,112 
Foreign currency translation 
differences for foreign operations, net 
of tax 
20 
- 
- 
- 
- 
2,611,915 
2,611,915 
9,564 
2,621,479 
Remeasurement of net defined benefit  
 assets, net of tax 
14, 20 
- 
- 
- 
- 
(797,916) 
(797,916) 
(30,382) 
(828,298) 
Gain on valuation of cash flow hedge 
derivatives 
20 
- 
- 
- 
- 
927 
927 
- 
927 
Total comprehensive income for the year 
 
- 
- 
- 
18,515,268 
(669,607) 
17,845,661 
991,750 
18,837,411 
Dividends declared 
19 
- 
- 
- 
(9,809,437) 
- 
(9,809,437) 
(101,984) 
(9,911,421) 
Capital transactions under common control 
 
- 
- 
- 
- 
- 
- 
(9,368) 
(9,368) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
230 
230 
Others 
 
- 
- 
- 
- 
11,409 
11,409 
- 
11,409 
Total transactions with owners 
 
- 
- 
- 
(9,809,437) 
11,409 
(9,798,028) 
(111,122) 
(9,909,150) 
Balance as of December 31, 2023 
  
119,467 
778,047 
4,403,893 
346,652,238 
1,280,130 
353,233,775 
10,444,090 
363,677,865 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
 
 
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes. 
 
 
- 12 - 
(In thousands of US dollars (Note 2.18)) 
 
For the year ended December 31, 2023 
Notes 
Preference 
shares 
Ordinary 
shares 
Share 
premium 
Retained 
earnings 
Other 
components 
of equity 
Equity 
attributable 
to owners of 
the parent 
company 
Non-
controlling 
interests 
Total 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2023 
 
91,467 
595,693 
3,371,737 
258,740,703 
1,484,036 
264,283,636 
7,322,039 
271,605,675 
Profit for the year 
 
- 
- 
- 
11,081,218 
- 
11,081,218 
776,115 
11,857,333 
Gain (loss) on valuation of financial 
assets at fair value through other 
comprehensive income, net of tax 
6, 20 
- 
- 
- 
3,094,560 
(1,955,938) 
1,138,622 
(4,660) 
1,133,962 
Share of other comprehensive income of 
associates and joint ventures, net of tax 
9, 20 
- 
- 
- 
- 
53,714 
53,714 
3,794 
57,508 
Foreign currency translation differences 
for foreign operations, net of tax 
20 
- 
- 
- 
- 
1,999,752 
1,999,752 
7,322 
2,007,074 
Remeasurement of net defined benefit 
assets, net of tax 
14, 20 
- 
- 
- 
- 
(610,906) 
(610,906) 
(23,261) 
(634,167) 
Gain on valuation of cash flow hedge 
derivatives 
20 
- 
- 
- 
- 
710 
710 
- 
710 
Total comprehensive income for the year 
 
- 
- 
- 
14,175,778 
(512,668) 
13,663,110 
759,310 
14,422,420 
Dividends declared 
19 
- 
- 
- 
(7,510,364) 
- 
(7,510,364) 
(78,082) 
(7,588,446) 
Capital transactions under common control 
 
- 
- 
- 
- 
- 
- 
(7,172) 
(7,172) 
Changes in consolidated entities 
 
- 
- 
- 
- 
- 
- 
176 
176 
Others 
 
- 
- 
- 
- 
8,734 
8,734 
- 
8,734 
Total transactions with owners 
  
- 
- 
- 
(7,510,364) 
8,734 
(7,501,630) 
(85,078) 
(7,586,708) 
Balance as of December 31, 2023 
  
91,467 
595,693 
3,371,737 
265,406,117 
980,102 
270,445,116 
7,996,271 
278,441,387 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes. 
 
 
- 13 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
 
 
KRW 
KRW 
USD 
USD 
 
 
 
 
 
 
Operating activities 
 
 
 
 
 
Profit for the year 
 
15,487,100 
55,654,077 
11,857,333 
42,610,233 
Adjustments 
27 
36,519,534 
33,073,439 
27,960,321 
25,321,899 
Changes in assets and liabilities arising  
from operating activities 
27 
(5,458,745) 
(16,998,948) 
(4,179,359) (13,014,844) 
Cash generated from operations 
 
46,547,889 
71,728,568 
35,638,295 
54,917,288 
Interest received 
 
4,786,010 
2,136,795 
3,664,296 
1,635,987 
Interest paid 
 
(844,691) 
(714,543) 
(646,718) 
(547,073) 
Dividends received 
 
269,169 
529,421 
206,083 
405,339 
Income tax paid 
  
(6,620,950) 
(11,498,895) 
(5,069,175) 
(8,803,859) 
Net cash from operating activities 
  
44,137,427 
62,181,346 
33,792,781 
47,607,682 
  
 
 
 
 
Investing activities 
 
 
 
 
 
Net decrease in short-term financial instruments 
 
39,421,565 
15,214,321 
30,182,192 
11,648,486 
Net decrease (increase) in short-term financial 
assets at amortized cost 
 
(195,616) 
3,050,104 
(149,769) 
2,335,240 
Net decrease in short-term financial assets at  
fair value through profit or loss 
 
2,718 
11,677 
2,081 
8,940 
Disposal of long-term financial instruments 
 
4,565,426 
8,272,909 
3,495,411 
6,333,958 
Acquisition of long-term financial 
instruments 
 
(5,307,770) 
(4,393,754) 
(4,063,769) 
(3,363,974) 
Disposal of financial assets at fair value  
 through other comprehensive income 
 
6,521,568 
496,090 
4,993,085 
379,820 
Acquisition of financial assets at fair value  
through other comprehensive income 
 
(124,488) 
(37,687) 
(95,311) 
(28,854) 
 Disposal of financial assets at fair value through 
profit or loss 
 
63,962 
166,315 
48,971 
127,335 
Acquisition of financial assets at fair value  
 through profit or loss 
 
(130,459) 
(158,244) 
(99,883) 
(121,156) 
 Disposal of investment in associates and joint 
ventures 
 
33,457 
13,233 
25,616 
10,132 
Acquisition of investment in associates and 
joint ventures 
 
(78,690) 
(907,958) 
(60,247) 
(695,157) 
Disposal of property, plant and equipment 
 
98,341 
217,878 
75,292 
166,813 
Acquisition of property, plant and equipment 
 
(57,611,292) 
(49,430,428) 
(44,108,728) (37,845,242) 
Disposal of intangible assets 
 
11,744 
23,462 
8,992 
17,963 
Acquisition of intangible assets 
 
(2,922,875) 
(3,696,304) 
(2,237,830) 
(2,829,988) 
Cash outflow from business combinations 
 
(356,511) 
(31,383) 
(272,954) 
(24,028) 
Cash outflow from other investing activities 
  
(913,897) 
(413,035) 
(699,705) 
(316,230) 
Net cash used in investing activities 
  
(16,922,817) 
(31,602,804) 
(12,956,556) (24,195,942) 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes. 
 
 
- 14 - 
(In millions of Korean won, in thousands of US dollars (Note 2.18)) 
 
  
  
For the years ended December 31, 
  
Notes 
2023 
2022 
2023 
2022 
       
 
KRW 
KRW 
USD 
USD 
Financing activities 
 
 
 
 
 
Net increase (decrease) in short-term borrowings 
27 
2,145,400 
(8,339,149) 
1,642,575 
(6,384,673) 
Increase in long-term borrowings  
27 
354,712 
271,997 
271,577 
208,248 
Repayment of debentures and long-term borrowings 
27 
(1,219,579) 
(1,508,465) 
(933,742) 
(1,154,921) 
Dividends paid 
 
(9,864,474) 
(9,814,426) 
(7,552,502) 
(7,514,184) 
Net decrease in non-controlling interests 
  
(9,118) 
(6) 
(6,981) 
(4) 
Net cash used in financing activities 
  
(8,593,059) 
(19,390,049) 
(6,579,073) 
(14,845,534) 
  
 
 
 
 
Reclassification to assets held-for-sale 
33 
(14,153) 
- 
(10,836) 
- 
Effect of foreign exchange rate changes  
  
792,785 
(539,198) 
606,977 
(412,822) 
Net increase in cash and cash equivalents 
  
19,400,183 
10,649,295 
14,853,293 
8,153,384 
  
 
 
 
 
Cash and cash equivalents 
 
 
 
 
 
Beginning of the year 
  
49,680,710 
39,031,415 
38,036,865 
29,883,483 
End of the year 
  
69,080,893 
49,680,710 
52,890,158 
38,036,867 
 
 
 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 15 - 
 
As of December 31, 2023 and 2022, and 
For the years ended December 31, 2023 and 2022 
1. General Information 
1.1 Company Overview 
 
Samsung Electronics Co., Ltd. (“SEC”) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares 
on the Korea Stock Exchange in 1975. SEC and its subsidiaries (collectively referred to as the “Company”) operate four 
business divisions: DX, DS, SDC and Harman. DX (Device eXperience) division comprises businesses for digital televisions, 
refrigerators, smartphones and communication systems. DS (Device Solutions) division comprises businesses for memory, 
foundry, and system Large Scale Integration (LSI). SDC includes display panels products. Harman division includes connected 
car systems, audio and visual products, enterprise automation solutions and connected services. SEC is domiciled in the 
Republic of Korea and is located in Suwon, the Republic of Korea. 
 
These consolidated financial statements have been prepared in accordance with Korean International Financial Reporting 
Standards (“Korean IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling company, consolidates its 232 
subsidiaries, including Samsung Display and Samsung Electronics America. The Company also applies the equity method of 
accounting for its 37 associates and joint ventures, including Samsung Electro-Mechanics Co., Ltd. 
 
1.2 Consolidated Subsidiaries  
 
The consolidated subsidiaries as of December 31, 2023 are as follows: 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
America 
Samsung Electronics America, Inc. (SEA) 
Sale of electronic devices 
100.0 
Samsung International, Inc. (SII) 
Manufacture of electronic devices 
100.0 
Samsung Mexicana S.A. de C.V (SAMEX) 
Manufacture of electronic devices 
100.0 
Samsung Electronics Home Appliances America, LLC (SEHA) 
Manufacture of home appliances 
100.0 
Samsung Research America, Inc. (SRA) 
R&D 
100.0 
Samsung Next LLC (SNX) 
Management of overseas subsidiaries 
100.0 
Samsung Next Fund LLC (SNXF) 
Venture capital investment fund 
100.0 
NeuroLogica Corp. 
Manufacture and sale of medical equipment 
100.0 
Samsung HVAC America, LLC 
Sale of air conditioning products 
100.0 
Joyent, Inc. 
Cloud services 
100.0 
SmartThings, Inc. 
Sale of smart home electronics 
100.0 
TeleWorld Solutions, Inc. (TWS) 
Installation of network devices 
100.0 
Samsung Semiconductor, Inc. (SSI) 
Sale of semiconductor and display panels 
100.0 
Samsung Federal, Inc. (SFI) 
R&D 
100.0 
Samsung Austin Semiconductor LLC. (SAS) 
Manufacture of semiconductors 
100.0 
Samsung Oak Holdings, Inc. (SHI) 
Management of overseas subsidiaries 
100.0 
SEMES America, Inc. 
Semiconductor equipment maintenance 
100.0 
Samsung Display America Holdings, Inc. (SDAH) 
Management of overseas subsidiaries 
100.0 
eMagin Corporation 
Development and manufacture of display 
panels 
100.0 
Samsung Electronics Canada, Inc. (SECA) 
Sale of electronic devices 
100.0 
AdGear Technologies Inc. 
Digital advertising platforms 
100.0 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 16 - 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
America 
Samsung Eletronica da Amazonia Ltda. (SEDA) 
Manufacture and sale of electronic devices 
100.0 
Samsung Electronics Mexico S.A. De C.V. (SEM) 
Sale of electronic devices 
100.0 
Samsung Electronics Digital Appliance Mexico, SA de CV (SEDAM) 
Manufacture of home appliances 
100.0 
Samsung Electronics Latinoamerica(Zona Libre), S. A. (SELA) 
Sale of electronic devices 
100.0 
Samsung Electronics Latinoamerica Miami, Inc. (SEMI) 
Sale of electronic devices 
100.0 
Samsung Electronica Colombia S.A. (SAMCOL) 
Sale of electronic devices 
100.0 
Samsung Electronics Argentina S.A. (SEASA) 
Marketing and related services 
100.0 
Samsung Electronics Chile Limitada (SECH) 
Sale of electronic devices 
100.0 
Samsung Electronics Peru S.A.C. (SEPR) 
Sale of electronic devices 
100.0 
Samsung Electronics Venezuela, C.A. (SEVEN) 
Marketing and related services 
100.0 
Samsung Electronics Panama. S.A. (SEPA) 
Consulting 
100.0 
Harman International Industries, Inc. 
Management of overseas subsidiaries 
100.0 
Harman Becker Automotive Systems, Inc. 
Manufacture and sale of audio products, 
R&D 
100.0 
Harman Connected Services, Inc. 
Connected service provider 
100.0 
Harman Connected Services Engineering Corp. 
Connected service provider 
100.0 
Harman da Amazonia Industria Eletronica e Participacoes Ltda. 
Manufacture and sale of audio products 
100.0 
Harman de Mexico, S. de R.L. de C.V. 
Manufacture of audio products 
100.0 
Harman do Brasil Industria Eletronica e Participacoes Ltda. 
Sale of audio products, R&D 
100.0 
Harman Financial Group LLC 
Management company 
100.0 
Harman International Industries Canada Ltd. 
Sale of audio products 
100.0 
Harman International Mexico, S. de R.L. de C.V. 
Sale of audio products 
100.0 
Harman KG Holding, LLC 
Management of overseas subsidiaries 
100.0 
Harman Professional, Inc. 
Sale of audio products, R&D 
100.0 
Roon Labs, LLC. 
Sale of audio products 
100.0 
Beijing Integrated Circuit Industry International Fund, L.P 
Venture capital investment fund 
61.4 
China Materialia New Materials 2016 Limited Partnership 
Venture capital investment fund 
99.0 
 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 17 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
Europe & 
CIS 
Samsung Electronics (UK) Ltd. (SEUK) 
Sale of electronic devices 
100.0 
Samsung Electronics Ltd. (SEL) 
Management of overseas subsidiaries 
100.0 
Samsung Semiconductor Europe Limited (SSEL) 
Sale of semiconductor and display panels 
100.0 
Samsung Electronics GmbH (SEG) 
Sale of electronic devices 
100.0 
Samsung Electronics Holding GmbH (SEHG) 
Management of overseas subsidiaries 
100.0 
Samsung Semiconductor Europe GmbH (SSEG) 
Sale of semiconductor and display panels 
100.0 
Samsung Electronics France S.A.S (SEF) 
Sale of electronic devices 
100.0 
Samsung Electronics Italia S.P.A. (SEI) 
Sale of electronic devices 
100.0 
Samsung Electronics Iberia, S.A. (SESA) 
Sale of electronic devices 
100.0 
Samsung Electronics Portuguesa, Unipessoal, Lda. (SEP) 
Sale of electronic devices 
100.0 
Samsung Electronics Hungarian Private Co. Ltd. (SEH) 
Manufacture and sale of electronic devices 
100.0 
Samsung Electronics Europe Logistics B.V. (SELS) 
Logistics 
100.0 
Samsung Electronics Benelux B.V. (SEBN) 
Sale of electronic devices 
100.0 
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 
Management of overseas subsidiaries 
100.0 
Samsung Electronics Nordic Aktiebolag (SENA) 
Sale of electronic devices 
100.0 
Samsung Electronics Slovakia s.r.o (SESK) 
Manufacture of TV and monitors 
100.0 
Samsung Display Slovakia, s.r.o., v likvidacii (SDSK) 
Toll processing of display panels 
100.0 
Samsung Electronics Polska, SP.Zo.o (SEPOL) 
Sale of electronic devices 
100.0 
Samsung Electronics Poland Manufacturing SP.Zo.o (SEPM) 
Manufacture of home appliances 
100.0 
Samsung Electronics Romania LLC (SEROM) 
Sale of electronic devices 
100.0 
Samsung Electronics Austria GmbH (SEAG) 
Sale of electronic devices 
100.0 
Samsung Electronics Switzerland GmbH (SESG) 
Sale of electronic devices 
100.0 
Samsung Electronics Czech and Slovak s.r.o. (SECZ) 
Sale of electronic devices 
100.0 
Samsung Electronics Baltics SIA (SEB) 
Sale of electronic devices 
100.0 
Samsung Electronics Greece S.M.S.A (SEGR) 
Sale of electronic devices 
100.0 
Samsung Electronics Air Conditioner Europe B.V. (SEACE) 
Sale of air conditioning products 
100.0 
Samsung Nanoradio Design Center (SNDC) 
R&D 
100.0 
Samsung Denmark Research Center ApS (SDRC) 
R&D 
100.0 
Samsung Cambridge Solution Centre Limited (SCSC) 
R&D 
100.0 
SAMSUNG Zhilabs, S.L. 
Development and sale of network solutions 
100.0 
FOODIENT LTD. 
R&D 
100.0 
Samsung Electronics Rus Company LLC (SERC) 
Sale of electronic devices 
100.0 
Samsung Electronics Rus Kaluga LLC (SERK) 
Manufacture of TV 
100.0 
Samsung Electronics Ukraine Company LLC (SEUC) 
Sale of electronic devices 
100.0 
Samsung R&D Institute Ukraine (SRUKR) 
R&D 
100.0 
Samsung Electronics Central Eurasia LLP (SECE) 
Sale of electronic devices 
100.0 
Samsung Electronics Overseas B.V. (SEO) 
Sale of electronic devices 
100.0 
Samsung R&D Institute Rus LLC (SRR) 
R&D 
100.0 
Samsung Electronics Caucasus Co. Ltd (SECC) 
Marketing 
100.0 
Samsung Electronics Uzbekistan Ltd. (SEUZ) 
Marketing 
100.0 
 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 18 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(*) 
Europe & 
CIS  
AKG Acoustics GmbH 
Manufacture and sale of audio products 
100.0 
Apostera UA, LLC 
Connected Service Provider 
100.0 
Harman Audio Iberia Espana Sociedad Limitada 
Sale of audio products 
100.0 
Harman Becker Automotive Systems GmbH 
Manufacture and sale of audio products, 
R&D 
100.0 
Harman Becker Automotive Systems Italy S.R.L. 
Sale of audio products 
100.0 
Harman Becker Automotive Systems Manufacturing Kft 
Manufacture of audio products, R&D 
100.0 
Harman Belgium SA 
Sale of audio products 
100.0 
Harman Connected Services AB. 
Connected service provider 
100.0 
Harman Finland Oy 
Connected service provider 
100.0 
Harman Connected Services GmbH 
Connected service provider 
100.0 
Harman Connected Services Poland Sp.zoo 
Connected service provider 
100.0 
Harman Connected Services UK Ltd. 
Connected service provider 
100.0 
Harman Consumer Nederland B.V. 
Sale of audio products 
100.0 
Harman Deutschland GmbH 
Sale of audio products 
100.0 
Harman France SNC 
Sale of audio products 
100.0 
Harman Holding GmbH & Co. KG 
Management company 
100.0 
Harman Hungary Financing Ltd. 
Financing company 
100.0 
Harman Inc. & Co. KG 
Management of overseas subsidiaries 
100.0 
Harman International Estonia OU 
R&D 
100.0 
Harman International Industries Limited 
Sale of audio products, R&D 
100.0 
Harman International Romania SRL 
R&D 
100.0 
Harman Management GmbH 
Management of overseas subsidiaries 
100.0 
Harman Professional Kft 
Manufacture of audio products, R&D 
100.0 
Harman Professional Denmark ApS 
Sale of audio products, R&D 
100.0 
Red Bend Software SAS 
Software design 
100.0 
Studer Professional Audio GmbH 
Sale of audio products, R&D 
100.0 
Harman Connected Services OOO 
Connected service provider 
100.0 
Harman RUS CIS LLC 
Sale of audio products 
100.0 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 19 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)* 
Middle East  
& Africa 
Samsung Gulf Electronics Co., Ltd. (SGE) 
Sale of electronic devices 
100.0 
Samsung Electronics Turkiye (SETK) 
Sale of electronic devices 
100.0 
Samsung Electronics Industry and Commerce Ltd. (SETK-P) 
Manufacture of electronic devices 
100.0 
Samsung Electronics Levant Co., Ltd. (SELV) 
Sale of electronic devices 
100.0 
Samsung Electronics Maghreb Arab (SEMAG) 
Sale of electronic devices 
100.0 
Samsung Electronics Egypt S.A.E (SEEG) 
Manufacture and sale of electronic devices 
100.0 
Samsung Electronics Israel Ltd. (SEIL) 
Marketing 
100.0 
Samsung Electronics Tunisia S.A.R.L (SETN) 
Marketing 
100.0 
Samsung Electronics Pakistan (Private) Ltd. (SEPAK) 
Marketing 
100.0 
Samsung Electronics Saudi Arabia Ltd. (SESAR) 
Sale of electronic devices 
100.0 
Samsung Semiconductor Israel R&D Center, Ltd. (SIRC) 
R&D 
100.0 
Corephotonics Ltd. 
R&D 
100.0 
Samsung Electronics South Africa(Pty) Ltd. (SSA) 
Sale of electronic devices 
100.0 
Samsung Electronics South Africa Production (Pty) Ltd. (SSAP) 
Manufacture of TV and monitors 
100.0 
Samsung Electronics West Africa Ltd. (SEWA) 
Marketing 
100.0 
Samsung Electronics East Africa Ltd. (SEEA) 
Marketing 
100.0 
Global Symphony Technology Group Private Ltd. 
Management of overseas subsidiaries 
100.0 
Harman Connected Services Morocco 
Connected service provider 
100.0 
Harman Industries Holdings Mauritius Ltd. 
Management of overseas subsidiaries 
100.0 
Red Bend Ltd. 
Manufacture of audio products 
100.0 
Asia 
(Excluding 
China) 
Samsung Asia Pte. Ltd. (SAPL) 
Management of overseas subsidiaries 
100.0 
Samsung Electronics Singapore Pte. Ltd. (SESP) 
Sale of electronic devices 
100.0 
Samsung Malaysia Electronics (SME) Sdn. Bhd. (SME) 
Sale of electronic devices 
100.0 
Samsung Electronics Display (M) Sdn. Bhd. (SDMA) 
Manufacture of electronic devices 
100.0 
Samsung Electronics (M) Sdn. Bhd. (SEMA) 
Manufacture of home appliances 
100.0 
Samsung Vina Electronics Co., Ltd. (SAVINA) 
Sale of electronic devices 
100.0 
Samsung Electronics Vietnam Co., Ltd. (SEV) 
Manufacture of electronic devices 
100.0 
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 
Manufacture of communication equipment 
100.0 
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 
Manufacture and sale of electronic devices 
100.0 
Samsung Display Vietnam Co., Ltd. (SDV) 
Manufacture of display panels 
100.0 
DOWOOINSYS VINA COMPANY LIMITED 
Manufacture of display panel components 
100.0 
PT Samsung Electronics Indonesia (SEIN) 
Manufacture and sale of electronic devices 
100.0 
PT Samsung Telecommunications Indonesia (STIN) 
Sale of electronic devices and services 
100.0 
Thai Samsung Electronics Co., Ltd. (TSE) 
Manufacture and sale of electronic devices 
91.8 
Laos Samsung Electronics Sole Co., Ltd (LSE) 
Marketing 
100.0 
Samsung Electronics Philippines Corporation (SEPCO) 
Sale of electronic devices 
100.0 
Samsung Electronics Australia Pty. Ltd. (SEAU) 
Sale of electronic devices 
100.0 
Samsung Electronics New Zealand Limited (SENZ) 
Sale of electronic devices 
100.0 
Samsung India Electronics Private Ltd. (SIEL) 
Manufacture and sale of electronic devices 
100.0 
Red Brick Lane Marketing Solutions Pvt. Ltd. 
Marketing 
100.0 
Samsung Display Noida Private Limited (SDN) 
Manufacture of display panels 
100.0 
Samsung R&D Institute India-Bangalore Private Limited (SRI-Bangalore) 
R&D 
100.0 
Samsung R&D Institute Bangladesh Limited (SRBD) 
R&D 
100.0 
Samsung Nepal Services Pvt. Ltd. (SNSL) 
Service 
100.0 
Samsung Japan Corporation (SJC) 
Sale of semiconductor and display panels 
100.0 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 20 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(
*
) 
Asia 
(Excluding 
China) 
Samsung R&D Institute Japan Co., Ltd. (SRJ) 
R&D 
100.0 
Samsung Electronics Japan Co., Ltd. (SEJ) 
Sale of electronic devices 
100.0 
Harman Connected Services Corp. India Pvt. Ltd. 
Connected service provider 
100.0 
Harman International (India) Private Limited 
Sale of audio products, R&D 
100.0 
Harman International Industries PTY Ltd. 
Management of overseas subsidiaries 
100.0 
Harman International Japan Co., Ltd. 
Sale of audio products, R&D 
100.0 
Harman Singapore Pte. Ltd. 
Sale of audio products 
100.0 
China  
Samsung (CHINA) Investment Co., Ltd. (SCIC) 
Sale of electronic devices 
100.0 
Samsung Electronics Hong Kong Co., Ltd. (SEHK) 
Sale of electronic devices 
100.0 
Samsung Electronics Taiwan Co., Ltd. (SET) 
Sale of electronic devices 
100.0 
Tianjin Samsung Electronics Co., Ltd. (TSEC) 
Manufacture of TV and monitors 
91.2 
Suzhou Samsung Electronics Co., Ltd. (SSEC) 
Manufacture of home appliances 
88.3 
Samsung Suzhou Electronics Export Co., Ltd. (SSEC-E) 
Manufacture of home appliances 
100.0 
Samsung Electronics Suzhou Computer Co., Ltd. (SESC) 
R&D 
100.0 
Tianjin Samsung Telecom Technology Co., Ltd. (TSTC) 
Manufacture of communication equipment 
90.0 
Beijing Samsung Telecom R&D Center (SRC-Beijing) 
R&D 
100.0 
Samsung Electronics China R&D Center (SRC-Nanjing) 
R&D 
100.0 
Samsung Mobile R&D Center China-Guangzhou (SRC-Guangzhou) 
R&D 
100.0 
Samsung R&D Institute China-Shenzhen (SRC-Shenzhen) 
R&D 
100.0 
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 
Sale of semiconductor and display panels 
100.0 
Samsung (China) Semiconductor Co., Ltd. (SCS) 
Manufacture of semiconductors 
100.0 
Samsung SemiConductor Xian Co., Ltd. (SSCX) 
Sale of semiconductor and display panels 
100.0 
Samsung Electronics Suzhou Semiconductor Co., Ltd. (SESS) 
Toll processing of semiconductors 
100.0 
Tianjin Samsung LED Co., Ltd. (TSLED) 
Manufacture of LED 
100.0 
Samsung Semiconductor (China) R&D Co., Ltd. (SSCR) 
R&D 
100.0 
Samsung Display Dongguan Co., Ltd. (SDD) 
Manufacture of display panels 
100.0 
Samsung Display Tianjin Co., Ltd. (SDT) 
Manufacture of display panels 
95.0 
SEMES (XIAN) Co., Ltd. 
Semiconductor/FPD equipment services 
100.0 
Samsung Semiconductor Investment L.P.Ⅰ 
Venture capital investment fund 
99.0 
Harman (China) Technologies Co., Ltd. 
Manufacture of audio products 
100.0 
Harman (Suzhou) Audio and Infotainment Systems Co., Ltd. 
Sale of audio products 
100.0 
Harman Automotive Electronic Systems (Suzhou) Co., Ltd. 
Manufacture of audio products, R&D 
100.0 
Harman Commercial (Shanghai) Co., Ltd. 
Sale of audio products 
100.0 
Harman Connected Services Solutions (Chengdu) Co., Ltd. 
Connected service provider 
100.0 
Harman Holding Limited 
Sale of audio products 
100.0 
Harman International (China) Holdings Co., Ltd. 
Sale of audio products, R&D 
100.0 
Harman Technology (Shenzhen) Co., Ltd. 
Sale of audio products, R&D 
100.0 
 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 21 - 
Region 
Subsidiaries 
Business 
Percentage of 
ownership (%)(
*
) 
Domestic 
Samsung Display Co., Ltd. 
Manufacture and sale of display panels 
84.8 
SU Materials 
Manufacture of display panel components 
50.0 
STECO Co., Ltd. 
Manufacture of semiconductor components 
70.0 
SEMES Co., Ltd. 
Manufacture and sale of semiconductor/FPD 
91.5 
Samsung Electronics Service Co., Ltd. 
Repair services for electronic devices 
99.3 
Samsung Electronics Service Customer Satisfaction Co., Ltd. 
Call center for repair services for electronic devices 
100.0 
Samsung Electronics Sales Co., Ltd. 
Sale of electronic devices 
100.0 
Samsung Electronics Logitech Co., Ltd. 
General logistics agency 
100.0 
Samsung Medison Co., Ltd. 
Manufacture and sale of medical equipment 
68.5 
Stella Forest of Hope 
Manufacture of food 
100.0 
Mirero System Co., Ltd. 
Development and supply of semiconductor 
process defect and quality control software 
99.9 
Dowooinsys Co., Ltd. 
Manufacture of display panel components 
69.0 
Gf-System Co., Ltd. 
Manufacture of display panel components 
100.0 
Harman International Korea 
Software development and supply 
100.0 
Samsung Venture Capital Union #21 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #22 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #26 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #28 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #29 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #32 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #33 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #37 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #40 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #42 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #43 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #45 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #48 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #52 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #55 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #56 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #57 
Venture capital investment fund 
99.0 
Samsung Venture Capital Union #62 
Venture capital investment fund 
99.0 
Growth Type Private Equity Trust Specialized in 
Semiconductors 
Investment in semiconductor industry 
66.7 
System LSI Mutual Benefit Private Equity Trust 
Investment in semiconductor industry 
62.5 
Semiconductor Ecosystem Private Equity Trust 
Investment in semiconductor industry 
66.7 
(*) Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 22 - 
1.3 Summary of Financial Data of Major Consolidated Subsidiaries 
 
Summary of financial data of major consolidated subsidiaries is as follows:  
 
(1) 2023 
(In millions of Korean won) 
As of December 31, 2023 
For the year ended December 31, 2023 
Major subsidiaries (*1) 
Assets 
Liabilities 
Sales 
Profit (loss)  
for the year 
Samsung Display Co., Ltd. 
65,328,568  
7,266,213  
27,083,336  
8,268,314  
Samsung Electronics America, Inc. (SEA) 
41,926,899  
15,322,780  
39,551,809  
477,338  
Samsung Asia Pte. Ltd. (SAPL) 
22,234,942  
282,614  
- 
14,140,195  
Harman and its subsidiaries (*2) 
17,956,557  
6,009,675  
14,367,766  
896,384  
Samsung Austin Semiconductor LLC. (SAS) 
16,714,945  
7,791,914  
4,109,744  
301,778  
Samsung (China) Semiconductor Co., Ltd. (SCS) 
15,808,283  
870,453  
8,693,788  
877,892  
Samsung Semiconductor, Inc. (SSI) 
12,796,440  
6,276,293  
23,465,031  
136,458  
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 
12,554,481  
3,593,527  
30,639,349  
2,240,480  
Samsung (CHINA) Investment Co., Ltd. (SCIC) 
10,222,557  
8,797,991  
3,148,858  
189,887  
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 
9,660,481  
4,585,806  
- 
103,387  
Samsung India Electronics Private Ltd. (SIEL) 
7,738,259  
3,373,730  
15,216,331  
1,153,256  
Samsung Display Vietnam Co., Ltd. (SDV) 
7,383,485  
1,570,459  
24,200,246  
1,143,824  
Samsung Electronics Vietnam Co., Ltd. (SEV) 
7,301,860  
2,215,062  
20,154,119  
1,476,382  
Samsung Eletronica da Amazonia Ltda. (SEDA) 
5,542,627  
1,587,911  
7,222,304  
333,812  
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 
5,262,086  
4,552,030  
15,649,307  
244,210  
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 
4,043,677  
843,736  
6,152,983  
402,418  
Thai Samsung Electronics Co., Ltd. (TSE) 
3,039,379  
640,512  
4,213,492  
150,510  
Samsung Electronics (UK) Ltd. (SEUK) 
2,902,722  
1,976,067  
5,859,133  
185,113  
SEMES Co., Ltd. 
2,187,919  
659,607  
2,502,143  
58,754  
Samsung Electronics Mexico S.A. De C.V. (SEM) 
2,153,032  
1,038,115  
3,638,080  
148,873  
Samsung Electronics GmbH (SEG) 
2,097,706  
2,033,152  
6,374,670  
(3,157) 
Samsung International, Inc. (SII) 
1,879,442  
383,763  
6,553,383  
141,226  
Samsung Electronics Taiwan Co., Ltd. (SET) 
1,797,627  
1,139,056  
4,108,479  
56,467  
Samsung Electronics Benelux B.V. (SEBN) 
1,794,552  
639,120  
2,833,717  
140,313  
Samsung Electronics Europe Logistics B.V. (SELS) 
1,639,004  
1,443,005  
15,462,852  
4,984  
(*1) Summary of condensed financial information is based on separate financial statements of each subsidiary.  
(*2) Consolidated financial data of an intermediate company, Harman International Industries, Inc. and its subsidiaries. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 23 - 
(2) 2022 
(In millions of Korean won) 
As of December 31, 2022 
For the year ended December 31, 2022 
Major subsidiaries (*1) 
Assets 
Liabilities 
Sales 
Profit (loss)  
for the year 
Samsung Display Co., Ltd. 
57,302,567  
7,282,718  
30,779,405  
4,365,588  
Samsung Electronics America, Inc. (SEA) 
37,883,156  
12,258,315  
46,738,920  
219,670  
Samsung Asia Pte. Ltd. (SAPL) 
26,894,611  
2,678,285  
- 
8,699,679  
Harman and its subsidiaries (*2) 
17,102,324  
6,380,456  
13,211,151  
631,019  
Samsung (China) Semiconductor Co., Ltd. (SCS) 
17,095,000  
2,970,835  
9,679,757  
638,385  
Samsung Electronics Vietnam THAINGUYEN Co., Ltd. (SEVT) 
15,718,299  
2,358,140  
36,336,963  
2,721,701  
Samsung (CHINA) Investment Co., Ltd. (SCIC) 
13,830,988  
9,764,636  
2,865,831  
257,878  
Samsung Semiconductor, Inc. (SSI) 
12,199,102  
5,930,369  
43,009,331  
88,467  
Samsung Electronics Vietnam Co., Ltd. (SEV) 
10,931,037  
1,408,387  
23,667,565  
1,646,165  
Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) 
10,841,515  
6,272,800  
- 
57,997  
Samsung Austin Semiconductor LLC. (SAS) 
9,301,017  
828,494  
3,663,909  
208,879  
Samsung Display Vietnam Co., Ltd. (SDV) 
7,471,680  
1,608,448  
25,773,970  
1,301,926  
Samsung India Electronics Private Ltd. (SIEL) 
6,772,537  
3,571,863  
16,180,492  
508,510  
Shanghai Samsung Semiconductor Co., Ltd. (SSS) 
5,067,891  
2,858,382  
21,370,622  
318,578  
Samsung Eletronica da Amazonia Ltda. (SEDA) 
4,600,508  
1,342,517  
7,485,104  
(38,490) 
Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) 
3,732,057  
980,448  
6,253,401  
386,119  
Thai Samsung Electronics Co., Ltd. (TSE) 
3,263,473  
486,820  
4,824,734  
168,524  
Samsung Electronics (UK) Ltd. (SEUK) 
2,819,792  
1,708,064  
5,929,357  
243,396  
Samsung Electronics Benelux B.V. (SEBN) 
2,377,730  
597,044  
2,834,008  
25,411  
Samsung Electronics Hungarian Private Co. Ltd. (SEH) 
2,374,317  
452,628  
3,935,745  
199,742  
Samsung Electronics Europe Logistics B.V. (SELS) 
2,194,975  
2,021,491  
15,409,984  
20,347  
Samsung Display Dongguan Co., Ltd. (SDD) 
2,135,132  
265,835  
2,556,608  
111,643  
SEMES Co., Ltd. 
2,065,558  
602,323  
2,889,238  
185,762  
Samsung Electronics GmbH (SEG) 
1,968,273  
1,907,132  
6,567,011  
3,695  
Samsung Electronics Mexico S.A. De C.V. (SEM) 
1,816,895  
996,002  
3,270,016  
110,386  
(*1) Summary of condensed financial information is based on separate financial statements of each subsidiary.  
(*2) Consolidated financial data of an intermediate company, Harman International Industries, Inc. and its subsidiaries. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 24 - 
1.4 Changes in Consolidation Scope  
 
Changes in consolidation scope during the year ended December 31, 2023 are as follows: 
Change 
Area 
Subsidiary 
Description 
Included 
Domestic 
Samsung Venture Capital Union #62 
Establishment 
Semiconductor Ecosystem Private Equity Trust 
Establishment 
America 
Samsung Federal, Inc. (SFI) 
Establishment 
Samsung Display America Holdings, Inc. (SDAH) 
Establishment 
eMagin Corporation 
Acquisition 
Roon Labs, LLC. 
Acquisition 
Excluded 
America 
Dacor Holdings, Inc. 
Merger 
Dacor, Inc. 
Merger 
Europe & CIS 
Red Bend Software Ltd. 
Liquidation 
Harman Finance International GP S.a.r.l 
Liquidation 
Harman Finance International, SCA 
Liquidation 
Harman Automotive UK Limited 
Liquidation 
 
 
2. Material Accounting Policies 
The followings are material accounting policies applied on financial statements. Unless mentioned otherwise, these policies 
are consistent throughout the accounting periods denoted. 
 
2.1 Basis of Presentation 
 
The Company’s financial statements have been written in accordance with the Korean International Financial Reporting 
Standards (“Korean IFRS”). The Korean IFRS refers to standards selected by the Republic of Korea among accounting 
standards and interpretations published by International Accounting Standards Board (IASB). 
 
The Korean IFRS permits application of material accounting estimates on the financial statements and requires management’s 
judgements in applying accounting policies. The areas involving a higher degree of judgment or complexity, or areas where 
assumptions and estimates are material to the financial statements are disclosed in Note 3. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 25 - 
2.2 Changes in Accounting Policies and Disclosures 
 
(A) 
New and amended standards adopted by the Company 
 
The Company applied the following amended standards for the first time for the annual reporting period commencing on 
January 1, 2023: 
 
Amendments to Korean IFRS 1001, Presentation of Financial Statements 
 
The amendments replace the term ‘significant’ accounting policy information with ‘material’ accounting policy and clarify its 
meaning. These amendments do not result in a change in accounting policy but affects the accounting policy information 
disclosed in the consolidated financial statements. In addition, IFRS Practice Statement 2, Making Materiality Judgments has 
been amended to provide guidance on the application of the concept of materiality. The Company has adopted the amendments 
to the standard and discloses the Company’s material accounting policies in Note 2. 
 
Amendments to Korean IFRS 1008, Accounting Policies, Changes in Accounting Estimates and Errors 
 
The amendments clarify how accounting estimates are defined and distinguished from changes in accounting policies. The 
adoption of the amendments does not have a significant impact on the Company’s consolidated financial statements. 
 
Amendments to Korean IFRS 1012, Income Tax 
 
The amendments add to a condition to the initial recognition exemption that the initial recognition exemption does not apply 
to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. The 
adoption of the amendments does not have a significant impact on the Company’s consolidated financial statements. 
 
Amendments to Korean IFRS 1012, Income Tax 
 
The amendments clarify that Korean IFRS 1012, Income Taxes, applies to income taxes arising from tax law enacted or 
substantively enacted to implement the Pillar Two Model Rules issued by the Organization for Economic Co-operation and 
Development (OECD). 
 
However, a temporary exemption from the requirements of Korean IFRS 1012, Income Taxes, has been adopted to allow the 
Company to neither recognize nor disclose deferred tax assets and liabilities relating to Pillar Two income taxes. 
 
(B) 
New and amended standards not yet adopted by the Company 
 
The amended accounting standards that have been issued but not yet effective for the annual reporting period commencing on 
January 1, 2023 which have not been early adopted by the Company are as follows:  
 
Amendments to Korean IFRS 1001, Presentation of Financial Statements 
 
The amendments to Korean-IFRS 1001 clarify that the classification of liabilities as current or non-current should be based 
on rights that are in existence at the end of the reporting period and that the classification is unaffected by management’s 
intentions or expectations about whether an entity will exercise its right to defer settlement of a liability. The amendments also 
introduce a definition of settlement to make clear that settlement includes the transfer to the counterparty of the entity's own 
equity instruments, however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity 
instruments is recognized separately from the liability as an equity component of a compound financial instrument. The 
amendments are applied for annual periods beginning on or after January 1, 2024, with early application permitted. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 26 - 
Amendments to Korean IFRS 1116, Leases 
 
The amendments add requirements for the subsequent measurement of sale-and-leaseback transactions that are accounted for 
as sales in accordance with Korean IFRS 1115, Revenue from Contracts with Customers. The amendments require the seller-
lessee to calculate the ‘lease payments’ or ‘revised lease payments’ in a way that does not result in the seller-lessee recognizing 
any gain or loss for the rights of use that the seller-lessee continues to retain after the lease commences. The amendments are 
effective for annual reporting periods beginning on or after January 1, 2024, with early application permitted. 
 
Amendments to Korean IFRS 1007, Statement of Cash Flows, and 1107, Financial Instruments: Presentation 
 
The amendments add to the disclosure objectives in Korean IFRS 1007, Statement of Cash Flows, that information about 
supplier financing arrangements should be disclosed to enable users of financial statements to assess the impact of those 
arrangements on the Company’s liabilities and cash flows. The amendments also amend Korean IFRS 1107, Financial 
Instruments: Presentation, to add supplier financing arrangements as an example of a requirement to disclose information 
about an entity’s exposure to concentrations of liquidity risk. 
 
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, and include specific 
transitional provisions for the first annual period in which they are applied. Early application is permitted. 
 
 
2.3 Consolidation 
 
The Company prepares its consolidated financial statements in accordance with Korean IFRS 1110, Consolidated Financial 
Statements.  
 
(A) 
Non-controlling interests 
 
Each component of profit or loss and other comprehensive income is attributable to the owners of the parent and the non-
controlling interests, and total comprehensive income is attributable to the owners of the parent and the non-controlling 
interests, even if the non-controlling interests have a negative balance.  
 
(B) 
Elimination of intercompany transactions 
 
Intercompany transactions, balances, income and expenses and unrealized gains and losses (excluding foreign exchange gains 
and losses) are eliminated on consolidation. The Company’s share of unrealized losses on transactions with associates 
accounted for using the equity method are eliminated in the same way as unrealized gains unless there is evidence of 
impairment of the asset.  
 
 
  2.4 Functional and Presentation Currency 
 
(A) 
Functional and presentation currency 
 
The Company measures the items included in the financial statements of each component using the currency of the primary 
economic environment in which each it operates (“functional currency”). The functional currency of the parent company is 
Korean won (KRW) and the consolidated financial statements are presented in Korean won (KRW). 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 27 - 
(B) 
Translation into the presentation currency 
 
The results and financial position of all entities subjected to consolidation that have a functional currency different from the 
parent’s presentation currency are translated into the parent’s presentation currency as follows: 
 
(1) Assets and liabilities are translated at the closing rate at the end of the reporting date. 
(2) Income and expenses in the statement of profit or loss are translated at average exchange rates for the period.  
However, if this average rate is not a reasonable approximation of the cumulative effect of the exchange rates at the 
dates of the transactions, the transactions are translated at the exchange rates at the dates of transactions.  
(3) Exchange differences arising on translation in (1) and (2) above are recognized in other comprehensive income. 
 
 
2.5 Cash and Cash Equivalents 
 
Cash and cash equivalents include cash on hand, deposits held at call with banks, and highly liquid short-term investment 
assets that are readily convertible to known amounts of cash at the date of acquisition and which are subject to an insignificant 
risk of changes in value. 
 
 
2.6 Financial Assets 
 
(A) 
Classification 
 
Financial instruments are classified based on the business model for managing the financial assets and the contractual cash 
flow characteristics of the financial asset. The Company considers the contractual terms of the relevant financial instrument 
and assesses whether the contractual cash flows consist solely of payments of principal and interest on the principal amount 
outstanding. 
 
(B) 
Impairment 
 
The Company assesses the expected credit losses of debt instruments carried at amortized cost or fair value through other 
comprehensive income on a forward-looking basis. However, the Company applies the simplified approach for trade 
receivables, which requires expected credit losses to be recognized over the life of the receivable from initial recognition. 
 
 
2.7 Trade Receivables 
 
Trade receivables are recognized at initial transaction price, unless they contain a significant financing component, and are 
subsequently measured at amortized cost using the effective interest method less any allowance for impairment.  
 
 
2.8 Inventories 
 
The Company determines the unit cost of inventories, except for materials in transit, using the average cost method. The cost 
of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production 
overheads based on normal operating capacity, excluding the cost of idle production equipment and scrapping costs.  
 
The Company measures inventories at the lower of cost and net realizable value. Net realizable value is the estimated selling 
price in the ordinary course of business less the applicable variable selling expenses, and reflects the decrease in selling price, 
the increase in costs to completion, or decrease in value due to excess or obsolete inventory.  
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 28 - 
2.9 Property, Plant and Equipment 
 
Depreciation of property, plant and equipment begins when assets are considered by management to be available for their 
intended use, such as in the production of products. 
 
The Company’s property, plant and equipment is depreciated on a straight-line method over the estimated useful lives of the 
assets, less any residual values. Land is not depreciated. Costs that are directly attributable to the acquisition, construction of 
a qualifying asset, including capitalized interest costs, are depreciated over the estimated useful lives. 
 
The estimated useful lives of property, plant and equipment used by the Company for each asset category are as follows: 
 
 
Estimated useful lives 
Buildings and structures 
15, 30 years 
Machinery and equipment 
5 years 
Other 
5 years 
 
 
2.10 Intangible Assets 
 
Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets of subsidiaries, 
associates and joint ventures, businesses and other entities acquired at the date of acquisition and is recognized as an intangible 
assets in respect of acquisitions of businesses of subsidiaries and as an investment in associates and joint ventures in respect 
of acquisitions of interests in associates and joint ventures.  
 
Intangible assets, other than goodwill, are initially recognized at their historical cost and are subsequently stated at cost less 
accumulated amortization and accumulated impairment losses. 
 
Membership rights are regarded as intangible assets with indefinite useful life and not amortized as there are no foreseeable 
restrictions on their use. However, whenever there is an indication of impairment, such as a decline in the market value of 
membership rights, a reasonable estimate is made to reflect the impairment. Intangible assets with finite useful lives, such as 
patents, trademarks and other intangible assets, are amortized on a straight-line method over their estimated useful lives.  
 
The estimated useful lives of intangible assets used by the Company are as follows: 
 
 
Estimated useful lives 
Patents, trademarks and other intangible assets 
3 - 25 years 
 
 
2.11 Financial Liabilities 
 
The Company classifies financial liabilities into financial liabilities at fair value through profit or loss and other financial 
liabilities and recognizes them on the consolidated statement of financial position when the Company becomes a party to a 
contract, depending on the substance of the contractual terms.  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 29 - 
2.12 Employee Benefits 
 
The Company operates various types of post-employment benefit plans, including defined benefit plans and defined 
contribution plans. The defined benefit liability (asset) recognized in the consolidated statement of financial position in respect 
of defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan 
assets, less any deficit (excess of plan assets over the asset recognition threshold) and is calculated annually by an independent 
actuary using the projected unit credit method.  
 
 
2.13 Income Tax Expense 
 
The Company applies the exemption to the recognition and disclosure of deferred tax assets and liabilities related to the Pillar 
Two Model Rules of OECD. Furthermore, as the relevant legislation will be effective from January 1, 2024, the Company has 
not recognized any current tax expense related to Pillar Two in the fiscal year ended December 31, 2023.  
 
The Company recognizes deferred tax liabilities for taxable temporary differences associated with investments in subsidiaries, 
associates and joint ventures, except where the Company is able to control the timing of the reversal of the temporary 
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are 
recognized for deductible temporary differences arising on these assets only to the extent that it is probable that the temporary 
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences 
can be utilized.  
 
 
2.14 Derivative Instruments  
 
The Company recognizes its rights and obligations under derivative contracts as assets and liabilities at fair value and records 
gains and losses on these contracts in the statement of profit or loss. However, effective portion of changes in the fair value of 
cash flow hedges are deferred in equity.  
 
The Company applies cash flow hedge accounting for hedges of risks including changes in the price of inventories. The 
effective portion of the change in fair value of a derivative that is designated as a cash flow hedge is recognized in other 
comprehensive income, while the ineffective portion is recognized in ‘financial income’ or ‘financial expense’.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 30 - 
2.15 Revenue Recognition 
 
The Company’s revenue primarily represents the fair value of the consideration received or receivable for the sale of goods in 
the ordinary course of the Company’s activities. Revenue is net of value-added tax, returns, sales incentives, discounts and 
others. 
 
(A) 
Identification of performance obligations 
 
The Company is required to transfer control of goods and services under contracts with customers. For the export of products 
and goods under Incoterms Group C terms (such as CIF), the Company recognize the transportation services (including 
insurance) provided after the control of the goods has passed to the customer as a separate performance obligation.  
 
(B) 
Performance obligations satisfied at a point of time 
 
The Company’s revenue is primarily derived from the sale of goods and is recognized when control of the goods passes to 
the customer.  
 
(C) 
Performance obligations satisfied over time 
 
The Company recognizes revenue over time for sales of software, transportation services, installation services, and etc. where 
the customer has direct control over the outcome during the performance of the service.  
 
(D) 
Variable consideration 
 
The Company provides a variety of sales promotions including incentives, promotion and sales allowances. Where these sales 
promotion policies result in variability in the consideration promised to customers, the Company estimates the variable 
consideration using either the expected value or the most likely amount whichever method the Company expects to better 
predict the amount of consideration to which it will be entitled. The estimate of variable consideration is included in transaction 
price only to the extent that it is highly probable that a significant portion of the cumulative revenue already recognized will 
not be reversed. Revenue and contract liabilities are recognized when the related revenue is earned or when the decision to 
pay the variable consideration to the customer is made, whichever is later.  
 
The Company recognizes contract liabilities (refund liabilities) after the sale of products to customers by estimating the return 
rate using the expected value methods based on historical experience. When the customer exercises its right to return the 
product, the Company recognizes the asset as a refund asset and adjusts cost of sales by the amount of the right to collect the 
product from the customer. The right to collect the product is measured by deducting the cost of collecting the product from 
the historical carrying amount of the product.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 31 - 
2.16 Leases 
 
(A) 
Lessee accounting 
 
The Company applies the practical expedient of Korean IFRS 1116, Leases, and does not separate the non-lease elements 
from the lease elements and accounts for the non-lease elements relating to each lease element as a single lease element.  
 
At the commencement date of a lease, the Company recognizes a right-of-use asset (the lease asset) representing the right to 
use the underlying asset and a lease liability representing the obligation to make lease payments. The right-of-use asset is 
presented in the consolidated statement of financial position as ‘property, plant and equipment’ and the lease liability is 
presented as ‘current portion of long-term liabilities’ or ‘long-term borrowings.’ 
 
Lease liabilities are measured at the inception of the lease at the present value of the lease payments outstanding at that date, 
discounted at the Company’s incremental borrowing rate.  
 
For short-term leases (lease terms of 12 months or less at the inception of the lease) and low value assets (underlying assets 
of USD 5,000 or less), lease payments are recognized as expenses on a straight-line basis over the lease term applying the 
simplified practical expedient.  
 
(B) 
Lessor accounting 
 
The Company, as a lessor, determines whether a lease is a finance or an operating lease at the inception of the lease.  
 
Leases that transfer substantially all the risk and rewards of ownership of the leased assets are classified as finance leases and 
all leases other than finance leases are classified as operating leases. Lease income from operating leases is recognized on a 
straight-line basis over the lease term, while initial direct costs incurred during the negotiation and contracting phase of an 
operating lease are added to the carrying amount of the leased asset and expensed over the lease term against the lease income.  
 
 
2.17 Government Grants 
 
Government grants relating to revenues are deferred and recognized in the consolidated statement of profit or loss in the same 
period in which they are matched with revenues or expenses related to the purpose for which the grant was made. Government 
grants received related to the acquisition of assets are treated as deferred income and credited to the consolidated statement of 
profit or loss over the useful lives of the related assets.  
 
 
2.18 Convenience Translation into United States Dollar Amounts 
 
The US dollar amounts provided in the consolidated financial statements represent supplementary information solely for the 
convenience of the reader. All Korean won amounts are expressed in US dollar at the rate of W 1,306.1 to $1, the average 
exchange rate for the year ended December 31, 2023. Such presentation is not in accordance with generally accepted 
accounting principles and should not be construed as a representation that the Korean won amounts shown could be readily 
converted, realized or settled in US dollars at this or any other rate.  
 
 
2.19 Approval of the Consolidated Financial Statements 
 
The consolidated financial statements of the Company were approved by the Board of Directors on January 31, 2024, and may 
be approved as amended at the Annual General Shareholders’ Meetings. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 32 - 
3. Material Accounting Estimates and Assumptions 
 
The Company makes estimates and assumptions concerning the future. Estimates and assumptions are continuously evaluated 
and are based on historical experience and future events that are reasonably foreseeable under the circumstances. These 
estimates may differ from actual results. The estimates and assumptions that have the most significant risk of causing a material 
adjustment to the carrying amounts of assets and liabilities in the next financial year are as follows. 
 
(A) Revenue recognition 
 
The Company recognizes a liability for a product return and a right to the returned goods that are expected to be returned by 
customers following the sale of products to customers. At the point of sale, the Company estimates the return using the 
expected value method based on accumulated experience at the portfolio level and the Company’s revenue is affected by 
changes in the expected return.  
 
Revenue from the sale of goods recognized at the point of transfer of control is the contractual consideration less consideration 
paid to customers in relation to certain sales promotion activities. Based on the historical experience and terms of contracts, 
the Company makes reasonable estimates of the sales deductions which affect the Company’s revenue 
 
(B) Provision for warranty 
 
The Company provides warranties for products sold. At the end of each reporting period, the Company recognizes a provision 
for warranties based on its best estimate of the amount it believes is necessary to provide for future and current warranty 
obligations. These best estimates are based on historical experience.  
 
(C) Fair value of financial instruments  
 
The fair value of financial instruments that are not traded in an active market is determined by using various valuation 
techniques and assumptions based on market conditions prevailing at the end of each reporting period. 
 
(D) Impairment of financial assets 
 
In measuring the allowance for impairment losses on financial assets, the Company make assumptions about the risk of default 
and expected credit rates. In making these assumptions and selecting the inputs for the impairment calculations, the Company 
makes judgment based on past experience and current and forecast of future economic conditions at the reporting date.  
 
(E) Lease 
 
In determining the lease term, the Company considers all relevant facts and circumstances that provide an economic incentive 
to exercise a renewal option, or not to exercise a termination option. The period covered by the renewal option (or the period 
covered by the termination option) is included in the lease term only if it is reasonably certain that the lessee will exercise (or 
not exercise) the renewal option.  
 
The lease term is reassessed when the option is actually exercised (or not exercised) or when the Company becomes committed 
to exercise (or not exercise) the option. The Company only changes its assessment of whether it is reasonably certain the 
renewal option will be exercised (or not) if there is a significant event or change in circumstances within the lessee’s control 
that affects the calculation of the lease term.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 33 - 
(F) Net defined benefit liabilities (assets) 
 
The net defined benefit liabilities (assets) are dependent on a number of factors which are determined using actuarial methods 
based on a number of assumptions. Among the assumptions used to determine the net defined benefit liabilities (assets) is the 
discount rate, and changes in these assumptions will affect the carrying amount of the net defined benefit liability (asset). At 
the end of each year the Company determines an appropriate discount rate, taking into account the interest rates on high-
quality corporate bonds, which represents the interest rate that should be used to determine the present value of the estimated 
future cash outflows expected to be required to settle the net defined benefit liability (asset). Some key assumptions relating 
to the net defined benefit liability (asset) are based on current market conditions.  
 
(G) Impairment of goodwill and intangible assets that have indefinite useful life 
 
The Company tests goodwill and intangible assets with indefinite useful life for impairment annually. The recoverable amount 
of a cash-generating unit or asset, including goodwill, is determined based on a value-in-use calculation. These calculations 
are based on estimates.  
 
(H) Income taxes 
 
Income taxes on the Company’s taxable income are calculated by applying tax laws and decisions of tax authorities in various 
countries, and, therefore, there is uncertainty in determining the final tax effect. The Company has recognized current and 
deferred tax based on its best estimate of the tax consequences expected to be payable in future periods as a result of the 
Company’s operating activities up to the reporting date. However, the actual future final tax liability may not be consistent 
with the related assets and liabilities recognized, and such differences may affect the current and deferred tax assets and 
liabilities when the final tax effect is determined.  
 
The Company is subject to additional income taxes, calculated in accordance with the method prescribed by tax laws, when a 
certain amount is not used for investment, wage growth, etcetera, in a given period. The related tax effect is reflected in the 
measurement of current and deferred income taxes for the period, and the amount of income tax payable by the Company 
depends on the level of investment, wage growth, etcetera in each year, resulting in uncertainty in determining the final tax 
effects.  
 
The Company assesses uncertainty over its tax positions and, if the Company concludes that it is not probably that the tax 
authorities will accept a uncertain tax position, the effect of the uncertainty is recognized in the consolidated financial 
statements for each uncertain tax position using the method that is expected to provide a better estimate of the resolution of 
the uncertainty, which is more likely of the following methods.  
 
(1) Most likely amount: the single most probable amount within a range of possible outcomes. 
(2) Expected value: the sum of the probability-weighted amounts in a range of possible outcomes. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 34 - 
4. Financial Instruments by Category 
 
(A) Categorizations of financial assets and liabilities as of December 31, 2023 and 2022 are as follows: 
 
(1) As of December 31, 2023 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured at fair 
value through 
other 
comprehensive 
income 
Financial assets 
measured at fair 
value through 
profit or loss 
Other 
financial 
 assets(*) 
Total 
 
 
 
 
 
 
Financial assets 
   
 
 
 
Cash and cash equivalents 
69,080,893 
- 
- 
- 
69,080,893 
Short-term financial instruments 
22,690,924 
- 
- 
- 
22,690,924 
Short-term financial assets at 
amortized cost 
608,281 
- 
- 
- 
608,281 
Short-term financial assets at fair 
value through profit or loss 
- 
- 
27,112 
- 
27,112 
Trade receivables 
36,647,393 
- 
- 
- 
36,647,393 
Financial assets at fair value through 
other comprehensive income  
- 
7,481,297 
- 
- 
7,481,297 
Financial assets at fair value through 
profit or loss  
- 
- 
1,431,394 
- 
1,431,394 
Other 
14,294,254 
- 
475,244 
70,777 
14,840,275 
Total 
143,321,745  
7,481,297  
1,933,750  
70,777  
152,807,569  
 
(*) Other financial assets include derivatives designated as hedging instruments. 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at  
amortized cost 
Financial liabilities 
measured at  
fair value through  
profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Trade payables 
11,319,824 
- 
- 
11,319,824 
Short-term borrowings 
504,552 
- 
6,610,049 
7,114,601 
Other payables 
13,996,395 
- 
- 
13,996,395 
Current portion of long-term 
liabilities 
310,436 
- 
998,439 
1,308,875 
Debentures  
537,618 
- 
- 
537,618 
Long-term borrowings 
- 
- 
3,724,850 
3,724,850 
Long-term other payables 
4,907,875 
- 
- 
4,907,875 
Other 
11,330,545 
49,904 
33,559 
11,414,008 
Total 
42,907,245  
49,904  
11,366,897  
54,324,046  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments. 
 
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 35 - 
(2) As of December 31, 2022 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured at 
fair value 
through other 
comprehensive 
income 
Financial assets 
measured at fair 
value through 
profit or loss 
Other 
financial  
assets(*) 
Total 
 
 
 
  
 
 
Financial assets 
   
 
 
 
Cash and cash equivalents 
49,680,710 
- 
- 
- 
49,680,710 
Short-term financial instruments 
65,102,886 
- 
- 
- 
65,102,886 
Short-term financial assets at 
amortized cost 
414,610 
- 
- 
- 
414,610 
Short-term financial assets at fair 
value through profit or loss 
- 
- 
29,080 
- 
29,080 
Trade receivables 
35,721,563 
- 
- 
- 
35,721,563 
Financial assets at fair value through 
other comprehensive income  
- 
11,397,012 
- 
- 
11,397,012 
Financial assets at fair value through 
profit or loss  
- 
- 
1,405,468 
- 
1,405,468 
Other 
9,945,209 
- 
334,263 
61,404 
10,340,876 
Total 
160,864,978  
11,397,012  
1,768,811  
61,404  
174,092,205  
 
(*)  Other financial assets include derivatives designated as hedging instruments. 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at 
amortized cost 
Financial liabilities 
measured at  
fair value through 
 profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Trade payables 
10,644,686  
- 
- 
10,644,686  
Short-term borrowings 
1,577,958  
- 
3,569,357  
5,147,315  
Other payables 
16,328,237  
- 
- 
16,328,237  
Current portion of long-term 
liabilities 
215,143  
- 
874,019  
1,089,162  
Debentures  
536,093  
- 
- 
536,093  
Long-term borrowings 
33,846  
- 
3,526,826  
3,560,672  
Long-term other payables 
2,289,236  
- 
- 
2,289,236  
Other 
12,047,761  
334,415  
27,353  
12,409,529  
Total 
43,672,960  
334,415  
7,997,555  
52,004,930  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 36 - 
(B) Net gains or losses on each category of financial assets and liabilities for the years ended December 31, 2023 and 2022 are 
as follows: 
 
(1) 2023 
 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured  
at fair value 
through other 
comprehensive 
income 
Financial assets 
measured  
at fair value 
through 
profit or loss 
Other financial 
assets(*) 
Total 
 
 
 
 
 
 
Financial assets 
 
 
 
 
 
Gain on valuation  
(other comprehensive income) 
- 
1,481,091  
- 
58,290  
1,539,381  
Gain (loss) on valuation/disposal 
(profit or loss) 
(64,758) 
- 
213,308  
436  
148,986  
Reclassification from other 
comprehensive income to profit 
or loss 
- 
- 
- 
1,169  
1,169  
Interest income 
4,357,792  
- 
230  
- 
4,358,022  
Foreign exchange differences  
(profit or loss) 
(98,522) 
- 
- 
- 
(98,522) 
Dividend income 
- 
161,509  
2,694  
- 
164,203  
Impairment/reversal  
(profit or loss) 
(74,594) 
- 
- 
- 
(74,594) 
 
(*) Other financial assets include derivatives designated as hedging instruments. 
 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at 
amortized cost 
Financial liabilities 
measured at  
fair value through 
profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Loss on valuation  
 (other comprehensive income) 
- 
- 
(16,809) 
(16,809) 
Loss on valuation/disposal  
 (profit or loss) 
- 
(116,167) 
(126) 
(116,293) 
Reclassification from  
other comprehensive income  
to profit or loss 
- 
- 
(337) 
(337) 
Interest expense 
(510,865) 
- 
(419,388) 
(930,253) 
Foreign exchange differences  
 (profit or loss) 
162,844  
- 
61,920  
224,764  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 37 - 
(2) 2022 
 
 
(In millions of Korean won) 
Financial assets 
measured at  
amortized cost 
Financial assets 
measured  
at fair value 
through other 
comprehensive 
income 
Financial assets 
measured  
at fair value 
through 
profit or loss 
Other financial 
assets(*) 
Total 
 
 
 
 
 
 
Financial assets 
 
 
 
 
 
Gain (loss) on valuation  
(other comprehensive 
income) 
- 
(1,969,498) 
- 
53,180  
(1,916,318) 
Gain (loss) on valuation/disposal 
(profit or loss) 
(36,550) 
- 
83,332  
474  
47,256  
Reclassification from other 
comprehensive income to 
profit or loss 
- 
- 
- 
310  
310  
Interest income 
2,720,213  
- 
266  
- 
2,720,479  
Foreign exchange differences  
(profit or loss) 
(822,011) 
- 
- 
- 
(822,011) 
Dividend income 
- 
413,467  
1,134  
- 
414,601  
Impairment/reversal  
(profit or loss) 
(19,124) 
- 
- 
- 
(19,124) 
 
(*) Other financial assets include derivatives designated as hedging instruments. 
 
 
 
(In millions of Korean won) 
Financial liabilities 
measured at 
amortized cost 
Financial liabilities 
measured at 
fair value through 
profit or loss 
Other financial 
liabilities(*) 
Total 
 
 
 
 
 
Financial liabilities 
 
 
 
 
Loss on valuation  
 (other comprehensive loss) 
- 
- 
(10,621) 
(10,621) 
Loss on valuation/disposal  
 (profit or loss) 
- 
(91,056) 
(45) 
(91,101) 
Reclassification from  
other comprehensive income  
to profit or loss 
- 
- 
59  
59  
Interest expense 
(322,529) 
- 
(440,486) 
(763,015) 
Foreign exchange differences  
 (profit or loss) 
574,771  
- 
155,952  
730,723  
 
(*) Other financial liabilities include lease liabilities, which are not subject to categorization, collateralized borrowings and derivatives 
designated as hedging instruments 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 38 - 
5. Transfer of Financial Assets 
 
The Company discounted trade receivables through factoring arrangements with banks during the years ended December 31, 
2023 and 2022. Trade receivables provided as collaterals in factoring transactions have not been derecognized as they do not 
meet the requirements for derecognition of financial assets as the Company retains substantially all the risks and rewards, 
including the recourse in the event of default by the debtor. Financial liabilities recognized in these transactions are classified 
as ‘short-term borrowings’ on the consolidated statement of financial position (refer to Note 12).  
 
The carrying amount of the discounted trade receivables and the associated liabilities as of December 31, 2023 and 2022 are 
as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Carrying amount of the discounted trade receivables (*) 
6,610,049 
3,569,357 
Carrying amount of the associated liabilities 
6,610,049 
3,569,357 
 
(*) Discounted trade receivables includes trade receivables between consolidated entities. 
 
 
6. Financial Assets at Fair Value 
 
(A) 
Details of financial assets at fair value as of December 31, 2023 and 2022 are as follows: 
 
(1) Financial assets at fair value through other comprehensive income 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Non-current  
 
 
Equity instruments 
7,481,297  
11,397,012  
 
(2) Financial assets at fair value through profit or loss 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Current  
 
 
Debt instruments 
27,112  
29,080  
Non-current  
 
 
Equity instruments 
812,358  
773,063  
Debt instruments 
619,036  
632,405  
Subtotal 
1,431,394  
1,405,468  
Total 
1,458,506  
1,434,548  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 39 - 
(B) 
Changes in financial assets at fair value for the years ended December 31, 2023 and 2022 are as follows: 
 
(1) Financial assets at fair value through other comprehensive income 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
11,397,012  
13,965,839  
Acquisition 
124,897  
35,013  
Disposal 
(5,918,616) 
(20,913) 
Fair value valuation gain (loss) 
1,548,022  
(2,636,448) 
Other 
329,982  
53,521  
Balance as of December 31 
7,481,297  
11,397,012  
 
 
(2) Financial assets at fair value through profit or loss 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
1,405,468  
1,525,344  
Acquisition 
146,392  
158,244  
Disposal 
(81,113) 
(80,718) 
Fair value valuation gain (loss) 
(38,110) 
(198,594) 
Other 
(1,243) 
1,192  
Balance as of December 31 
1,431,394  
1,405,468  
 
 
(C) 
Changes in gain (loss) on valuation of financial assets at fair value through other comprehensive income for the years 
ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
3,636,478  
6,222,980  
Fair value valuation gain (loss) 
1,548,022  
(2,636,448) 
Reclassification to retained earnings due to disposals 
(4,935,379) 
49,946  
Balance as of December 31 
249,121  
3,636,478  
Income tax effects on equity 
(54,702) 
(887,369) 
Total 
194,419  
2,749,109  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 40 - 
(D) 
Details of listed equity securities of financial assets at fair value as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won,  
number of shares and percentage) 
December 31, 2023 
December 31, 2022 
Number of 
shares owned 
Percentage of 
ownership(*) (%) 
Acquisition cost 
Carrying amount 
(Market value) 
Carrying amount 
(Market value) 
 
 
 
 
 
 
Samsung Heavy Industries Co., Ltd. 
134,027,281 
15.2 
932,158  
1,038,711  
684,879  
Hotel Shilla Co., Ltd.  
2,004,717 
5.1 
13,957  
131,108  
166,592  
iMarketKorea Inc. 
647,320 
1.9 
324  
5,560  
6,538  
SFA Engineering Corporation 
2,100,000 
5.8 
22,050  
63,840  
132,642  
Wonik Holdings Co., Ltd.  
3,518,342 
4.6 
30,821  
11,857  
11,945  
Wonik IPS Co., Ltd.  
3,701,872 
7.5 
32,428  
125,679  
91,621  
Wacom Co., Ltd. 
8,398,400 
5.3 
62,013  
50,358  
46,750  
Corning Incorporated 
80,000,000 
9.4 
3,980,636  
3,140,978  
3,238,205  
Other 
  
  
561,530  
1,030,123  
5,142,573  
Total 
  
  
5,635,917  
5,598,214  
9,521,745  
(*) Ownership represents the Company’s ownership of the ordinary shares issued by each entity. 
 
 
7. Trade and Non-Trade Receivables 
 
(A) Trade and non-trade receivables as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Trade 
Non-trade 
Trade 
Non-trade 
 
 
 
 
 
Receivables 
37,026,738  
7,474,967  
36,238,032  
7,051,536  
Less: Loss allowance 
(355,456) 
(82,224) 
(312,221) 
(78,101) 
Subtotal 
36,671,282  
7,392,743  
35,925,811  
6,973,435  
Less: Non-current  
(23,889) 
(759,495) 
(204,248) 
(824,226) 
Current  
36,647,393  
6,633,248  
35,721,563  
6,149,209  
 
 
(B) Movements in the loss allowance for receivables for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
2022 
(In millions of Korean won) 
Trade 
Non-trade 
Trade 
Non-trade 
 
 
 
 
 
Balance as of January 1 
312,221  
78,101  
310,880  
72,805  
Bad debt expense (reversal) 
62,964  
(297) 
8,784  
7,312  
Write-off 
(18,875) 
(124) 
(3,557) 
(6,154) 
Other 
(854) 
4,544  
(3,886) 
4,138  
Balance as of December 31 
355,456  
82,224  
312,221  
78,101  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 41 - 
(C) The details of trade and non-trade receivables classified by past due date for the purpose of measuring expected credit 
losses as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Trade 
Non-trade 
Trade 
Non-trade 
 
 
 
 
 
Receivables not past due 
33,633,006  
7,077,413  
33,177,298  
5,890,018  
Past due: 
 
 
 
 
Less than 31 days past due(*) 
2,262,296  
269,390  
2,206,622  
981,889  
31 days to 90 days past due 
478,371  
15,369  
642,859  
52,972  
More than 90 days past due 
653,065  
112,795  
211,253  
126,657  
Subtotal 
3,393,732  
397,554  
3,060,734  
1,161,518  
Total 
37,026,738  
7,474,967  
36,238,032  
7,051,536  
 
(*) The Company does not consider the credit risk of non-trade receivables that are overdue for less than or equal to 31 days has been 
significantly increased.  
 
(D) The maximum exposure to current credit risk is equivalent to the carrying amount of receivables as of December 31, 
2023. The Company has entered into insurance contracts with insurers for its major receivables. 
 
 
8. Inventories 
 
Inventories as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Gross 
amount 
Valuation 
allowance 
Carrying 
amount 
Gross 
amount 
Valuation 
allowance 
Carrying 
amount 
Finished goods 
16,120,367  
(1,567,353) 
14,553,014  
17,526,178  
(1,493,952) 
16,032,226  
Work in process  
26,501,664  
(4,303,216) 
22,198,448  
21,612,965  
(1,535,446) 
20,077,519  
Raw materials and supplies 
15,222,937  
(1,525,583) 
13,697,354  
16,268,974  
(1,289,694) 
14,979,280  
Materials in transit 
1,177,058  
- 
1,177,058  
1,098,841  
- 
1,098,841  
Total 
59,022,026  
(7,396,152) 
51,625,874  
56,506,958  
(4,319,092) 
52,187,866  
 
Inventories recognized as an expense for the year ended December 31, 2023 amount to W 177,539,372 million       
(2022: W 186,396,549 million). The amount includes a loss on the valuation of inventories. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 42 - 
9. Investments in Associates and Joint Ventures 
 
(A) 
Changes in investments in associates and joint ventures for the years ended December 31, 2023 and 2022 are as 
follows: 
 
(In millions of Korean won) 
2023 
2022 
Balance as of January 1 
10,893,869  
8,932,251  
Acquisition 
78,690  
1,006,998  
Disposal 
(33,464) 
(20,894) 
Share of profit 
887,550  
1,090,643  
Other(*) 
(59,201) 
(115,129) 
Balance as of December 31 
11,767,444  
10,893,869  
 
(*) Other consists of dividends, (reversal of) impairment, and reclassification. 
 
(B) 
Major investments in associates and joint ventures as of December 31, 2023 are as follows: 
 
(1) Investments in associates 
 
Investee 
Nature of relationship with associate 
Percentage of 
ownership (%)(*1) 
Principal 
business 
location 
Fiscal 
period-end 
Samsung Electro- 
 Mechanics Co., Ltd. 
Manufacture and supply electronic components 
including passive components, circuit boards, and 
modules 
23.7 
Korea 
December 
Samsung SDS Co., Ltd. 
Provide IT services including computer 
programming, system integration and 
management and logistical services 
22.6 
Korea 
December 
Samsung Biologics Co., Ltd. 
Investment in new business 
31.2 
Korea 
December 
Samsung SDI Co., Ltd.(*2) 
Manufacture and supply electronic parts including 
secondary cell batteries 
19.6 
Korea 
December 
Cheil Worldwide, Inc. 
Advertising agency 
25.2 
Korea 
December 
(*1) Ownership represents the Company’s ownership of the ordinary shares issued by each entity. 
(*2) The Company’s ownership of ordinary shares outstanding is 20.6%. 
 
 
(2) Investments in joint ventures 
 
Investee 
Nature of relationship with joint venture 
Percentage of 
ownership (%)(*1) 
Principal 
business 
location 
Fiscal 
period-end 
Samsung Corning 
 Advanced Glass, LLC 
Manufacture and supply industrial glass products 
50.0 
Korea 
December 
(*1) Ownership represents the Company’s ownership of the ordinary shares issued by each entity. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 43 - 
(C) 
Details of investments in associates and joint ventures as of December 31, 2023 and 2022 are as follows: 
 
(1) Investments in associates 
(In millions of Korean won) 
December 31, 2023 
Investee 
Acquisition cost 
Net asset value of 
equity shares(*) 
Carrying amount 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
359,237 
1,837,925 
1,841,393  
Samsung SDS Co., Ltd. 
147,963 
1,955,699 
1,966,206  
Samsung Biologics Co., Ltd. 
1,424,358 
3,068,636 
3,073,595  
Samsung SDI Co., Ltd. 
1,242,605 
3,726,675 
2,912,564  
Cheil Worldwide, Inc. 
506,162 
368,875 
669,363  
Other 
690,481 
844,645 
1,093,799  
Total 
4,370,806 
11,802,455 
11,556,920  
(*)\ The Company’s portion of net asset value of associates is based on the Company’s percentage of ownership. 
 
(In millions of Korean won) 
December 31, 2022 
Investee 
Acquisition cost 
Net asset value of 
equity shares(*) 
Carrying amount 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
359,237  
1,765,507  
1,764,249  
Samsung SDS Co., Ltd. 
147,963  
1,857,481  
1,870,338  
Samsung Biologics Co., Ltd. 
1,424,358  
2,804,547  
2,808,673  
Samsung SDI Co., Ltd. 
1,242,605  
3,318,875  
2,691,223  
Cheil Worldwide, Inc. 
506,162  
347,510  
649,161  
Other 
645,255  
718,801  
907,333  
Total 
4,325,580  
10,812,721  
10,690,977  
(*) The Company’s portion of net asset value of associates is based on the Company’s percentage of ownership. 
 
 
(2) Investments in joint ventures 
 
(In millions of Korean won) 
December 31, 2023 
Investee 
Acquisition cost 
Net asset value of 
equity shares (*) 
Carrying amount 
 
 
 
 
Samsung Corning Advanced Glass LLC 
215,000  
138,939  
138,938  
Other 
259,994  
72,215  
71,586  
Total 
474,994  
211,154  
210,524  
(*) The Company’s portion of net asset value of joint ventures is based on the Company’s percentage of ownership. 
 
(In millions of Korean won) 
December 31, 2022 
Investee 
Acquisition cost 
Net asset value of 
equity shares (*) 
Carrying amount 
 
 
 
 
Samsung Corning Advanced Glass LLC 
215,000  
137,727  
137,745  
Other 
259,994  
67,632  
65,147  
Total 
474,994  
205,359  
202,892  
(*) The Company’s portion of net asset value of joint ventures is based on the Company’s percentage of ownership. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 44 - 
(D) 
Details of the changes in investments in associates and joint ventures using the equity method are as follows: 
 
(1) For the year ended December 31, 2023 
 
(In millions of Korean won) 
Balance as of 
January 1 
Share of profit 
Share of other 
comprehensive 
income (loss) 
Other(*) 
Balance as of 
December 31 
 
 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
1,764,249  
106,455  
7,844  
(37,155) 
1,841,393  
Samsung SDS Co., Ltd. 
1,870,338  
154,282  
(2,503) 
(55,911) 
1,966,206  
Samsung Biologics Co., Ltd. 
2,808,673  
267,614  
(2,692) 
- 
3,073,595  
Samsung SDI Co., Ltd. 
2,691,223  
214,702  
20,506  
(13,867) 
2,912,564  
Cheil Worldwide, Inc. 
649,161  
53,690  
(94) 
(33,394) 
669,363  
Samsung Corning Advanced Glass LLC 
137,745  
1,336  
(124) 
(19) 
138,938  
Other 
972,480  
89,471  
52,175  
51,259  
1,165,385  
Total 
10,893,869  
887,550  
75,112  
(89,087) 
11,767,444  
(*) Other consists of acquisitions, disposals, dividends, impairment and reclassification. 
 
 
(2) For the year ended December 31, 2022 
 
(In millions of Korean won) 
Balance as of 
January 1 
Share of profit 
Share of other 
comprehensive 
income (loss) 
Other(*) 
Balance as of 
December 31 
 
 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
1,556,386  
242,139  
2,880  
(37,156) 
1,764,249  
Samsung SDS Co., Ltd. 
1,652,155  
241,962  
18,154  
(41,933) 
1,870,338  
Samsung Biologics Co., Ltd. 
1,577,664  
250,028  
(183) 
981,164  
2,808,673  
Samsung SDI Co., Ltd. 
2,529,650  
194,242  
(19,207) 
(13,462) 
2,691,223  
Cheil Worldwide, Inc. 
621,292  
55,476  
1,140  
(28,747) 
649,161  
Samsung Corning Advanced Glass LLC 
135,580  
1,999  
144  
22  
137,745  
Other 
859,524  
104,797  
(53,438) 
61,597  
972,480  
Total 
8,932,251  
1,090,643  
(50,510) 
921,485  
10,893,869  
 
 
(*) Other consists of acquisitions, disposals, dividends, impairment, and reclassification. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 45 - 
(E) 
Summary of the condensed financial information of major associates and joint ventures 
 
(1) Summary of condensed financial information of major associates and dividends received from associates as of 
December 31, 2023 and 2022, and for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
(In millions of Korean won) 
Samsung 
Electro-
Mechanics 
Co., Ltd. 
Samsung 
SDS Co., 
Ltd. 
Samsung 
Biologics 
Co., Ltd. 
Samsung 
SDI Co., 
Ltd. 
Cheil 
Worldwide, 
Inc. 
 
 
 
 
 
  
1. Condensed financial information 
 
 
 
 
 
Condensed statements of financial position: 
 
 
 
 
 
Current assets 
5,208,418  
8,160,300  
5,521,988  
9,187,029  
2,372,420  
Non-current assets 
6,449,453  
4,160,724  
10,524,209  
24,851,831  
517,085  
Current liabilities 
2,900,460  
2,391,861  
4,157,861  
8,518,933  
1,375,034  
Non-current liabilities 
727,087  
953,592  
2,057,844  
5,612,677  
216,707  
Non-controlling interests 
182,613  
317,562  
- 
1,395,877  
11,206  
Condensed statements of comprehensive income: 
Revenue 
8,909,348  
13,276,844  
3,694,589  
22,708,300  
4,138,275  
Profit from continuing operations, net of tax (*1) 
430,839  
693,422  
857,691  
2,009,207  
187,302  
Loss from discontinued operations, net of tax (*1) 
(7,883) 
- 
- 
- 
- 
Other comprehensive income (loss) (*1) 
45,054  
(11,085) 
(11,673) 
85,394  
3,685  
Total comprehensive income(*1) 
468,010  
682,337  
846,018  
2,094,601  
190,987  
2. Reconciliation to the carrying amount of investments in associates 
Net assets (a) 
7,847,711  
8,658,009  
9,830,492 
18,511,373 
1,286,558 
Ownership percentage (b) (*2) 
23.4% 
22.6% 
31.2% 
20.1% 
28.7% 
Net assets of equity shares (a x b) 
1,837,925  
1,955,699  
3,068,636 
3,726,675 
368,875 
Goodwill 
7,081  
26,801  
3,645 
- 
298,779 
Intercompany transactions and other(*3) 
(3,613) 
(16,294) 
1,314 
(814,111) 
 1,709 
Carrying amount of associates 
1,841,393  
1,966,206  
3,073,595 
2,912,564 
669,363 
3. Dividends from associates 
 
 
 
 
 
Dividends 
37,155  
55,911  
- 
13,867  
33,394  
(*1) Profit (loss) attributable to owners of the investee 
(*2) Ownership percentage includes ordinary and preference shares. 
(*3) Consists of uSnrealized gains and losses and other differences. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 46 - 
 
 
2022 
(In millions of Korean won) 
Samsung 
Electro-
Mechanics 
Co., Ltd. 
Samsung SDS 
Co., Ltd. 
Samsung 
Biologics Co., 
Ltd. 
Samsung 
SDI Co., 
Ltd. 
Cheil 
Worldwide, 
Inc. 
 
 
 
 
 
 
1. Condensed financial information 
 
 
 
 
 
Condensed statements of financial position: 
 
 
 
 
 
Current assets 
4,888,319 
8,005,764 
6,457,657 
9,651,702 
2,193,979 
Non-current assets 
6,108,852 
3,946,660 
10,124,394 
20,605,823 
557,466 
Current liabilities 
2,525,123 
2,493,323 
4,181,542 
8,006,939 
1,335,643 
Non-current liabilities 
778,563 
992,132 
3,416,034 
5,033,084 
194,373 
Non-controlling interests 
154,991 
243,777 
- 
731,779 
9,388 
Condensed statements of comprehensive income: 
Revenue 
9,441,276  
17,234,750  
3,001,295  
20,124,070  
4,253,367  
Profit from continuing operations, net of tax (*1) 
1,009,739  
1,099,745  
798,056  
1,952,149  
193,732  
Loss from discontinued operations, net of tax (*1) 
(29,187) 
- 
- 
- 
- 
Other comprehensive income (loss) (*1) 
(2,215) 
80,368  
6,995  
(139,877) 
(1,122) 
Total comprehensive income(*1) 
978,337  
1,180,113  
805,051  
1,812,272  
192,610  
2. Reconciliation to the carrying amount of investments in associates 
Net assets (a) 
7,538,494 
8,223,192 
8,984,475 
16,485,723 
1,212,041 
Ownership percentage (b) (*2) 
23.4% 
22.6% 
31.2% 
20.1% 
28.7% 
Net assets of equity shares (a x b) 
1,765,507  
1,857,481  
2,804,547  
3,318,875  
347,510  
Goodwill 
7,081  
26,801  
3,645  
- 
298,779  
Intercompany transactions and other(*3) 
(8,339) 
(13,944) 
481  
(627,652) 
2,872  
Carrying amount of associates 
1,764,249  
1,870,338  
2,808,673  
2,691,223  
649,161  
3. Dividends from associates 
 
 
 
 
 
Dividends 
37,155 
41,933 
- 
13,463 
28,748 
(*1) Profit (loss) attributable to owners of the investee. 
(*2) Ownership percentage includes ordinary and preference shares. 
(*3) Consists of unrealized gains and losses and other differences. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 47 - 
(2) 
Summary of condensed financial information of major joint ventures and dividends received from joint ventures as 
of December 31, 2023 and 2022, and for the years ended December 31, 2023 and 2022 are as follows: 
 
 
Samsung Corning Advanced Glass, LLC 
(In millions of Korean won) 
2023 
2022 
 
 
 
1. Condensed financial information 
 
 
Condensed statements of financial position: 
 
 
Current assets 
116,372  
170,103  
Non-current assets 
185,100  
125,507  
Current liabilities 
22,684  
19,794  
Non-current liabilities 
911  
363  
Condensed statements of comprehensive income: 
 
 
Revenue 
122,446  
133,634  
Profit from continuing operations, net of tax(*1) 
2,672  
3,998  
Other comprehensive income (loss) (*1) 
- 
288  
Total comprehensive income(*1) 
2,672  
4,286  
2. Reconciliation to the carrying amount of investments in joint ventures 
Net assets (a) 
277,877  
275,453 
Ownership percentage (b) 
50.0% 
50.0% 
Net assets of equity shares (a x b) 
138,939  
137,727 
Intercompany transactions and other(*2) 
(1) 
18  
Carrying amount of joint ventures 
138,938  
137,745 
3. Dividends from joint ventures 
 
 
Dividends 
-     
-     
 
(*1) Profit (loss) attributable to owners of the parent company. 
(*2) Consists of unrealized gains and losses and other differences. 
 
(3) 
Profit (loss) attributable to owners of the parent company from associates and joint ventures which are not individually 
material for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
2022 
(In millions of Korean won) 
Associates 
Joint ventures 
Associates 
Joint ventures 
 
 
 
 
 
Profit from continuing operations 
87,072  
2,399  
102,930  
1,867  
Other comprehensive income (loss) 
50,260  
1,915  
(50,761) 
(2,677) 
Total comprehensive income (loss) 
137,332  
4,314  
52,169  
(810) 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 48 - 
(F) 
Fair value of marketable investments in associates as of December 31, 2023 and 2022 is as follows: 
 
(In millions of Korean won  
and number of shares) 
December 31, 2023 
December 31, 2022 
Number of shares held 
Market value 
Market value 
 
 
 
 
Samsung Electro-Mechanics Co., Ltd. 
17,693,084  
2,710,580  
2,308,947  
Samsung SDS Co., Ltd. 
17,472,110  
2,970,259  
2,149,070  
Samsung Biologics Co., Ltd. 
22,217,309  
16,885,155  
18,240,411  
Samsung SDI Co., Ltd. 
13,462,673  
6,354,382  
7,956,440  
Cheil Worldwide, Inc. 
29,038,075  
552,595  
669,328  
 
(G) Other matters 
On July 12, 2018, the Korea Securities and Futures Commission determined an initial measure following an investigation 
relating to Samsung Biologics Co., Ltd., an associate of the Company, and its accounting for its investment in Samsung 
Bioepis Co., Ltd, a joint venture between Biogen Therapeutics Inc. and Samsung Biologics Co., Ltd. This measure included 
a recommendation to dismiss the director in charge, prosecution charges, and external auditor designation by the regulator, 
on the basis that the Joint Venture Agreement was not disclosed in the notes to the financial statements. On November 14, 
2018, the Korea Securities and Futures Commission determined a second measure which included a penalty of W 8,000 
million, a recommendation to dismiss the CEO, a requirement to restate its financial statements, and further prosecution 
charges.  
 
To prove justification of its accounting treatment, Samsung Biologics Co., Ltd. filed a suit for cancellation of the 
aforementioned measures to the Seoul Administrative Court, which is currently in progress. On September 24, 2021, the 
Seoul Administrative Court announced a decision to cancel the first measure charged by the Korea Securities and Futures 
Commission, and suspended its execution until the final rulings of the appeal. On October 16, 2021, the Korea Securities and 
Futures Commission appealed and the litigation is in progress at Seoul High Court. Samsung Biologics Co., Ltd. also filed 
for suspending the execution of the initial and second measures. On January 22, 2019 and February 19, 2019, the Seoul 
Administrative Court pronounced decisions to suspend the second and initial measure, respectively, until the final rulings. 
The Korea Securities and Futures Commission immediately appealed against the decisions but the appeals were dismissed 
by the Seoul High Court on May 13, 2019 and May 24, 2019, in relation to the second and first measures, respectively. On 
May 23, 2019 and June 10, 2019, the Korea Securities and Futures Commission re-appealed against the dismissals relating 
to the second and first measures, respectively. On September 6, 2019 and October 11, 2019, the Supreme Court of Korea 
dismissed the Korea Securities and Futures Commission’s re-appeal relating to the second and first measures, respectively, 
and confirmed the decision to suspend the execution of these measures. 
 
Although the future outcome of the administrative litigation cannot be estimated, should Samsung Biologics Co., Ltd. be 
required to restate its financial statements to amend its historical accounting treatment relating to its investment in Samsung 
Bioepis Co., Ltd., the Company’s share of profit or loss relating to its equity method investment, the amount of investment 
in associates, and retained earnings, for the years ended December 31, 2015 and onwards, and the profit on disposal of 
investment for the year ended December 31, 2016, may be impacted. Given the timing of completion and the final result of 
the administrative litigation between Samsung Biologics Co., Ltd. and the Korea Securities and Futures Commission is 
uncertain and cannot currently be estimated, it is not possible for the Company to recognize the effects of these proceedings 
in the current period consolidated financial statements. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 49 - 
10. Property, Plant and Equipment 
(A) 
Changes in property, plant and equipment for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Construction in 
progress 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
9,892,167  
40,706,918  
79,714,631  
33,607,564  
4,124,108  
168,045,388  
Acquisition cost 
10,024,569  
67,713,808  
303,000,627  
33,607,564  
13,248,490  
427,595,058  
Accumulated depreciation 
and impairment 
(132,402) 
(27,006,890) 
(223,285,996) 
- 
(9,124,382) 
(259,549,670) 
Acquisitions and capital 
expenditures(*1) 
172,262  
6,498,611  
33,641,691  
13,141,766  
1,462,032  
54,916,362  
Acquisitions through 
business combinations 
- 
18,125  
20,140  
34,698  
165  
73,128  
Depreciation 
(49,367) 
(3,884,333) 
(30,031,617) 
- 
(1,567,094) 
(35,532,411) 
Disposals/scrap 
(25,934) 
(181,700) 
(37,681) 
(256) 
(30,547) 
(276,118) 
Impairment (reversal) 
- 
(30,864) 
(47,044) 
- 
(7,449) 
(85,357) 
Reclassify as held-for-sale 
(6,615) 
(54,318) 
(37,101) 
(6,255) 
(14,100) 
(118,389) 
Other(*2) 
16,864  
165,676  
86,149  
(57,189) 
22,159  
233,659  
Balance as of December 31 
9,999,377  
43,238,115  
83,309,168  
46,720,328  
3,989,274  
187,256,262  
Acquisition cost 
10,157,963  
73,689,951  
328,561,492  
46,720,328  
14,058,654  
473,188,388  
Accumulated depreciation 
 and impairment 
(158,586) 
(30,451,836) 
(245,252,324) 
- 
(10,069,380) 
(285,932,126) 
(*1) Acquisition cost and capital expenditures include amounts reclassified from constructions in progress. Capitalized borrowing costs amount to      
W 204,814 million and the capitalization interest rate used to calculate the capitalized borrowing costs ranged from 3.9%~5.8%. 
(*2) Other includes effects of changes in foreign currency exchange rates. 
 
 
2022 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Construction in 
progress 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
9,830,154  
38,869,440  
79,526,297  
18,009,324  
3,693,324  
149,928,539  
Acquisition cost 
9,943,570  
62,651,459  
274,909,571  
18,009,324  
11,958,070  
377,471,994  
Accumulated depreciation 
and impairment 
(113,416) 
(23,782,019) 
(195,383,274) 
- 
(8,264,746) 
(227,543,455) 
Acquisitions and capital 
expenditures(*1) 
138,925  
5,302,095  
31,010,080  
16,675,741  
2,100,119  
55,226,960  
Depreciation 
(49,516) 
(3,533,917) 
(30,761,685) 
- 
(1,606,980) 
(35,952,098) 
Disposals, scrap 
(57,596) 
(127,935) 
(35,098) 
(193) 
(34,208) 
(255,030) 
Impairment (reversal) 
- 
(2,255) 
(11,815) 
- 
(12,323) 
(26,393) 
Other2 
30,200  
199,490  
(13,148) 
(1,077,308) 
(15,824) 
(876,590) 
Balance as of December 31 
9,892,167  
40,706,918  
79,714,631  
33,607,564  
4,124,108  
168,045,388  
Acquisition cost 
10,024,569  
67,713,808  
303,000,627  
33,607,564  
13,248,490  
427,595,058  
Accumulated depreciation 
 and impairment 
(132,402) 
(27,006,890) 
(223,285,996) 
- 
(9,124,382) 
(259,549,670) 
(*1) Acquisition cost and capital expenditures include amounts reclassified from constructions in progress. Capitalized borrowing costs amount to      
W 41,634 million and the capitalization interest rate used to calculate the capitalized borrowing costs ranged from 2.1~4.1%. 
(*2) Other includes effects of changes in foreign currency exchange rates and effects of the deduction of government grants. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 50 - 
(B) Changes in the right-of-use assets included in the property, plant and equipment for the years ended December 31, 2023 
and 2022 are as follows: 
 
 
2023 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Other 
Total 
 
 
 
 
 
 
Balance as of January 1 
503,203  
3,451,596  
175,151  
787,659  
4,917,609  
Acquisition 
38,677  
1,594,886  
10,058  
158,842  
1,802,463  
Depreciation 
(49,367) 
(871,275) 
(47,174) 
(147,178) 
(1,114,994) 
Cancellation of contracts 
(12,461) 
(174,426) 
(279) 
(6,904) 
(194,070) 
Reclassify as held-for-sale 
(4,305) 
(17) 
- 
(414) 
(4,736) 
Other(*) 
5,863  
33,288  
(182) 
3,791  
42,760  
Balance as of December 31 
481,610  
4,034,052  
137,574  
795,796  
5,449,032  
 
(*) Other includes effects of changes in foreign currency exchange rates. 
 
 
 
2022 
(In millions of Korean won) 
Land 
Buildings and 
structures 
Machinery 
and equipment 
Other 
Total 
 
 
 
 
 
 
Balance as of January 1 
525,954  
2,841,970  
191,059  
391,584  
3,950,567  
Acquisition 
32,632  
1,542,889  
29,098  
507,041  
2,111,660  
Depreciation 
(49,516) 
(823,543) 
(58,000) 
(116,287) 
(1,047,346) 
Cancellation of contracts 
(13,741) 
(111,145) 
(263) 
(4,220) 
(129,369) 
Other(*) 
7,874  
1,425  
13,257  
9,541  
32,097  
Balance as of December 31 
503,203  
3,451,596  
175,151  
787,659  
4,917,609  
 
(*) Other includes effects of changes in foreign currency exchange rates. 
 
 
(C) 
Details of depreciation of property, plant and equipment for the years ended December 31, 2023 and 2022 are as 
follows: 
 
(In millions of Korean won) 
2023 
2022 
Cost of sales 
31,647,926  
32,285,800  
Selling and administrative expenses and other 
3,884,485  
3,666,298  
Total 
35,532,411  
35,952,098  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 51 - 
11. Intangible Assets 
(A) 
Changes in intangible assets for the years ended December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
2023 
Intellectual 
property rights 
Development 
cost 
Membership 
Goodwill 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
4,278,750  
85,018  
253,554  
6,014,422  
9,586,010  
20,217,754  
External acquisitions 
401,561  
- 
6,251  
- 
4,608,488  
5,016,300  
Acquisition through business 
combinations 
3,944  
- 
- 
315,136  
37,758  
356,838  
Amortization 
(276,781) 
(85,018) 
- 
- 
(2,772,349) 
(3,134,148) 
Disposals/scrap 
(41,492) 
- 
(8,656) 
- 
(44) 
(50,192) 
Impairment(reversal) 
(6,265) 
- 
3,738  
- 
(2,900) 
(5,427) 
Reclassify as held-for-sale 
(2) 
- 
- 
(58,455) 
(4,405) 
(62,862) 
Other(*) 
64,851  
- 
1,972  
186,516  
150,260  
403,599  
Balance as of December 31 
4,424,566  
- 
256,859  
6,457,619  
11,602,818  
22,741,862  
 
(*) Other includes the cumulative effect of changes in foreign currency exchange rates and others. 
 
(In millions of Korean won) 
2022 
Intellectual 
property rights 
Development 
cost 
Membership 
Goodwill 
Other 
Total 
 
 
 
 
 
 
 
Balance as of January 1 
4,153,236  
236,910  
241,219  
5,844,259  
9,760,620  
20,236,244  
External acquisitions 
299,484  
- 
8,905  
- 
2,375,986  
2,684,375  
Amortization 
(268,070) 
(151,892) 
- 
- 
(2,735,599) 
(3,155,561) 
Disposals/scrap 
(50,979) 
- 
(417) 
- 
(402) 
(51,798) 
Impairment(reversal) 
- 
- 
(509) 
- 
(5,753) 
(6,262) 
Other(*) 
145,079  
- 
4,356  
170,163  
191,158  
510,756  
Balance as of December 31 
4,278,750  
85,018  
253,554  
6,014,422  
9,586,010  
20,217,754  
 
(*) Other includes the cumulative effect of changes in foreign currency exchange rates and others. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 52 - 
(B) Goodwill 
 
Goodwill is allocated to each cash-generating unit. Details of goodwill as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
DX 
1,256,815  
1,249,290 
DS 
164,607  
159,359 
SDC 
343,967  
138,754 
Harman 
4,691,440  
4,466,339 
Other 
790  
680 
Total 
6,457,619  
6,014,422 
 
The Company tests goodwill for impairment annually and the recoverable amount of each cash-generating units is determined 
based on value-in-use calculations. The value-in-use calculation is based on estimates of pre-tax cash flows based on financial 
budgets approved by management for the next five years (or longer if the medium and long-term plans are reasonable, such 
as in new technology business). A constant growth rate assumption (but not exceeding the industry average growth rate) has 
been used to calculate the perpetual cash flows for periods beyond the fiver-year period.  
 
(C) 
Details of amortization of intangible assets for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Cost of sales 
2,197,662  
2,211,481  
Selling and administrative expenses and other 
936,486  
944,080  
Total 
3,134,148  
3,155,561  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 53 - 
12. Borrowings  
(A) Details of the carrying amounts of borrowings as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
Financial institutions 
Interest rates (%) 
as of Dec 31, 2023 
December 31, 2023 
December 31, 2022 
 
 
 
 
 
Short-term borrowings 
 
 
 
 
Collateralized borrowings(*1) 
Woori Bank and others 
0.0~17.3 
6,610,049  
3,569,357  
Non-collateralized borrowings 
Citibank and others 
0.0~62.2 
504,552  
1,577,958  
Total 
  
  
7,114,601  
5,147,315  
 
 
 
 
 
Current portion of long-term borrowings 
 
 
 
Bank borrowings 
BNP and others 
36.1~61.5 
304,082  
208,915  
Lease liabilities(*2) 
CSSD and others 
4.3 
998,439  
874,019  
Total 
  
  
1,302,521  
1,082,934  
 
 
 
 
 
Long-term borrowings 
 
 
 
 
Bank borrowings 
- 
- 
- 
33,846  
Lease liabilities(*2) 
CSSD and others 
4.3 
3,724,850  
3,526,826  
Total 
  
  
3,724,850  
3,560,672  
(*1) Collateralized borrowings are secured by trade receivables. 
(*2) Interest expenses arising from the lease liabilities for the years ended December 31, 2023 and 2022 amount to W 197,202 million and 
W 140,111 million, respectively, which were determined using the weighted average incremental borrowing rate. Short-term lease 
payments and low-valued asset lease payments that are not included in lease liabilities during the years ended December 31, 2023 and 
2022 amount to W 158,395 million and W 211,283 million, respectively.  
 
(B) Maturities of lease liabilities outstanding as of December 31, 2023 are as follows: 
(In millions of Korean won) 
Lease liabilities 
Repayment in 
 
2024 
1,171,751  
2025 
965,266  
2026 
821,551  
2027 
625,811  
2028 and thereafter 
1,822,019  
Total 
5,406,398  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 54 - 
13. Debentures 
 
(A) Details of the carrying amounts of debentures as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
Issue date 
Due date 
Interest rate (%) 
as of Dec 31, 2023 
December 31, 2023 
December 31, 2022 
US dollar denominated 
straight bonds(*1) 
Oct. 2, 1997 
Oct. 1, 2027 
7.7 
25,788  
31,683  
(US $ 20 million) 
(US $ 25 million) 
US dollar denominated 
debenture bonds(*2) 
May 11, 2015 
May 15, 2025 
4.2 
515,760  
506,920  
(US $ 400 million) 
(US $ 400 million) 
Less: Discounts 
 
 
 
(370) 
(543) 
Add: Premium 
 
 
 
2,794  
4,261  
Less: Current portion 
 
 
 
(6,354) 
(6,228) 
Total 
  
  
  
537,618  
536,093  
(*1) US dollar denominated straight bonds are repaid annually for twenty years after a ten-year grace period from the date of issuance.  
Interest is paid semi-annually in arrears. 
(*2) Harman International Industries, Inc. issued US dollar denominated debenture bonds. These debentures are repaid on the maturity and   
 interest is paid semi-annually in arrears. 
 
(B) Repayment schedule of debentures outstanding as of December 31, 2023 are as follows: 
 
(In millions of Korean won)  
Debentures 
Repayment in 
 
2024 
6,447  
2025 
522,207  
2026 
6,447  
2027 
6,447  
Total 
541,548  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 55 - 
14. Net Defined Benefit Liabilities (Assets) 
 
(A) 
Details of net defined benefit liabilities (assets) recognized in the statements of financial position as of December 31, 
2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Present value of funded defined benefit obligations 
15,403,976  
13,639,460  
Present value of unfunded defined benefit obligations 
319,689  
370,848  
Subtotal 
15,723,665  
14,010,308  
Fair value of plan assets 
(20,172,327) 
(19,593,910) 
Total 
(4,448,662) 
(5,583,602) 
 
 
(B) 
The components of defined benefit costs recognized in profit or loss for the years ended December 31, 2023 and 2022 
are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Current service cost 
1,294,308  
1,365,600  
Net interest income 
(354,220) 
(99,356) 
Past service cost 
4,839  
(253) 
Other 
9,491  
28,713  
Total 
954,418  
1,294,704  
 
The amount recognized as expenses of defined contribution plans for the years ended December 31, 2023 and 2022 are 
W 203,004 million and W 145,395 million, respectively. 
 
 
(C) 
The expenses related to the defined benefit plans recognized in the statements of profit or loss for the years ended  
December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Cost of sales 
378,104  
514,589  
Selling and administrative expenses and other 
576,314  
780,115  
Total 
954,418  
1,294,704  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 56 - 
(D) Changes in the defined benefit obligations for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
14,010,308  
14,658,185  
Current service cost 
1,294,308  
1,365,600  
Interest cost 
805,084  
528,884  
Past service cost 
4,839  
(253) 
Remeasurement: 
 
 
Actuarial gains or losses arising from changes in demographic assumptions 
62,291  
34,917  
Actuarial gains or losses arising from changes in financial assumptions 
266,505  
(2,496,879) 
Other 
123,165  
521,452  
Benefits paid 
(846,457) 
(630,019) 
Other(*) 
3,622  
28,421  
Balance as of December 31 
15,723,665 
14,010,308  
(*) Other includes effects of changes in foreign currency exchange rates and reclassifications as held for sales. 
 
 
(E) Changes in the fair value of plan assets for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Balance as of January 1 
19,593,910  
17,001,891  
Interest income on plan assets 
1,159,304  
628,240  
Remeasurement of plan assets 
(654,005) 
(312,565) 
Contributions by employer 
746,068  
2,741,417  
Benefits paid 
(687,125) 
(498,246) 
Other(*) 
14,175  
33,173  
Balance as of December 31 
20,172,327  
19,593,910  
(*) Other includes effects of changes in foreign currency exchange rates and reclassifications as held for sales. 
 
The reasonable estimate of the employer contributions expected to be paid in 2024 in respect of the defined benefit plans as 
of December 31, 2023 is W 1,757,413 million. 
 
(F) Plan assets as of December 31, 2023 and 2022 consist of the following: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Principal guaranteed fixed income financial instruments and other 
18,178,623 
18,766,006 
Other 
1,993,704 
827,904 
Total 
20,172,327 
19,593,910 
 
Plan assets are mostly invested in instruments which have a quoted price in active markets. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 57 - 
(G) The principal actuarial assumptions as of December 31, 2023 and 2022 are as follows:  
 
 (In percentage) 
December 31, 2023 
December 31, 2022 
 
 
 
Discount rate 
3.9~5.9 
4.3~6.4 
Salary growth rate (including the effects of inflation) 
3.0~6.3 
2.0~6.4 
 
 
(H) The sensitivity analysis of the defined benefit obligations as of December 31, 2023 and 2022 to changes in the principal 
assumptions is as follows: 
 
 
Defined benefit obligations 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Discount rate 
 
 
1% p increase 
14,291,442 
12,920,156 
1% p decrease 
17,385,125 
15,268,164 
Salary growth rate 
 
 
1% p increase 
17,365,127 
15,261,609 
1% p decrease 
14,280,988 
12,900,865 
 
 
(I) The weighted average maturity of the defined benefit obligations is 9.84 years as of December 31, 2023. 
 
 
15. Provisions  
 
Changes in provisions for the year ended December 31, 2023 are as follows: 
(In millions of Korean won) 
Warranty (A) 
Royalty   
expenses (B) 
Long-term 
incentives (C) 
Other 
(D, E) 
Total 
 
 
 
 
 
 
Balance as of January 1 
2,309,726  
1,546,606  
783,263  
3,133,830  
7,773,425  
Charged to profit or loss 
2,456,609  
595,307  
468,745  
2,012,062  
5,532,723  
Payment 
(2,279,281) 
(299,250) 
(261,622) 
(1,125,666) 
(3,965,819) 
Other(*) 
53,158  
(4,611) 
3,365  
11,085  
62,997  
Balance as of December 31 
2,540,212  
1,838,052  
993,751  
4,031,311  
9,403,326  
 (*) Other includes effects of changes in foreign currency exchange rates. 
 
(A) 
The Company accrues warranty provisions for estimated costs of quality assurance, exchanges, repairs, recalls, and 
future services based on historical experience and terms of warranty programs. 
 
(B) 
The Company recognizes provisions for the estimated royalty expenses that are under negotiation with counterparties. 
The timing and amount of payment depend on the settlement of the negotiation. 
 
(C) 
The Company has a long-term incentive plan for its executives based on a three-year management performance criteria 
and recognizes a provision for the estimated incentive cost. 
 
(D) 
The Company records provisions for estimated losses from contracts associated with discontinued products. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 58 - 
(E) 
The Company makes provisions for the emission in excess of the emission rights held by the Company. Details of 
emission rights and liabilities as of December 31, 2023 are as follows: 
 
(1) The amount of emission rights allocated free of charge in the current commitment period and the estimated amount 
of emission as of December 31, 2023 are as follows: 
(In million metric tons) 
December 31, 2023 
Emission rights allocated free of charge(*) 
18.06 
Estimated volume of emission 
17.66 
 (*)As of December 31, 2023, emission rights allocated free of charge for the remainder of the plan period are 32.60 million metric 
tons (2024: 16.30 million metric tons, 2025: 16.30 million metric tons). 
 
(2) Changes in the emission rights for the year ended December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
2023 
2022 
Balance as of January 1 
19,567  
46,073  
Increase 
1,272  
1,872  
Utilization 
(17,702) 
(28,378) 
Balance as of December 31(*) 
3,137  
19,567  
 (*) The quantity of emission rights is 56.25 million metric tons and there is no emission rights provided as provision of collateral  
   as of December 31, 2023.  
 
(3) Changes in emissions liabilities for the year ended December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
2023 
2022 
Balance as of January 1 
32,838  
45,049  
Charged to profit or loss 
(15,210) 
16,167  
Utilization 
(17,491) 
(28,378) 
Balance as of December 31 
137  
32,838  
 
 
16. Commitments and Contingencies 
 
(A) 
Litigation 
 
As of December 31, 2023, the Company is involved in various claims, disputes, and investigations conducted by regulatory 
bodies that arose during the normal course of business with numerous entities. Although the outflow of resources and timing 
of these matters are uncertain, the Company believes the outcome will not have a material impact on the financial position 
of the Company. 
 
(B) Other commitments  
 
(1) As of December 31, 2023, the Company has trade financing agreements, trade notes receivable discounting facilities, 
and loan facilities secured by accounts receivable with 28 financial institutions, including Woori Bank, with a 
combined limit of W 21,762,600 million. In addition, the Company has a trade financing agreement with 23 financial 
institutions, including Shinhan Bank, with a limit of W 15,958,875 million, and loan facilities secured by trade 
receivables with 13 banks, including Woori Bank, with a limit of W 2,149,320 million. 
 
(2) As of December 31, 2023, contractual commitments for the acquisition of property, plant and equipment and 
intangible assets amount to W 9,783,549 million. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 59 - 
17. Contract Liabilities 
 
The Company has recognized contract liabilities related to contracts with customers as follows:  
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Contract liabilities(*) 
13,327,724  
13,255,682  
 
(*) Contract liabilities include advances received, accrued expenses, other current liabilities and others. 
 
The revenue recognized for the year ended December 31, 2023 in relation to the contract liabilities carried forward as of 
January 1, 2023 amounts to W 1,156,619 million. 
 
 
18. Share Capital 
 
As of December 31, 2023, the parent company’s total number of authorized shares is 25,000,000,000 shares (W 100 per share). 
As well as its ordinary shares, the parent company also has non-cumulative preference shares that are eligible for an additional 
1% cash dividend over par value per annum compared to ordinary shares, but without voting rights. The parent company has 
issued 5,969,782,550 shares of ordinary shares and 822,886,700 shares of preference shares as of December 31, 2023, 
excluding the number of retired shares. As of the December 31, 2023, the number of shares outstanding is the same as the 
number of shares aforementioned with no changes during the years ended December 31, 2023 and 2022. Due to the retirement 
of shares, the total par value of the shares issued which excludes the number of retired shares is W 679,267 million (ordinary 
shares of W 596,978 million and preference shares of W 82,289 million), which does not agree with paid-in capital of W 
897,514 million.  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 60 - 
19. Retained Earnings 
 
(A) Retained earnings as of December 31, 2023 and 2022 consist of the following: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Discretionary reserve and other 
208,198,003  
192,294,496  
Unappropriated retained earnings 
138,454,235  
145,651,911  
Total 
346,652,238  
337,946,407  
 
 
(B) Details of interim and year-end dividends are as follows:  
 
(1) Interim dividends (Record date: March 31, June 30 and September 30, 2023 and 2022) 
 
(In millions of Korean won and number of shares) 
2023 
2022 
1st Quarter 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary/Preference  
361% 
361% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,062  
297,062  
Total 
2,452,154  
2,452,154  
2nd Quarter 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary/Preference    
361% 
361% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,062  
297,062  
Total 
2,452,154  
2,452,154  
3rd Quarter 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary/Preference   
361% 
361% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,062  
297,062  
Total 
2,452,154  
2,452,154  
 
(2) Year-end dividends (Record date: December 31, 2023 and 2022) 
 
 (In millions of Korean won and number of shares) 
2023 
2022 
Number of shares eligible for dividends 
Ordinary shares 
5,969,782,550 
5,969,782,550 
Preference shares 
822,886,700 
822,886,700 
Dividend rate (based on par value) 
Ordinary shares 
361% 
361% 
Preference shares 
362% 
362% 
Dividend amount 
Ordinary shares 
2,155,092  
2,155,092  
Preference shares 
297,884  
297,884  
Total 
2,452,976  
2,452,976  
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 61 - 
20. Other Components of Equity 
Other components of equity as of December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Gain on valuation of financial assets at fair value through other comprehensive income 
194,419  
2,749,109  
Share of other comprehensive income of associates and joint ventures 
185,144  
114,987  
Foreign currency translation differences for foreign operations 
3,651,112  
1,039,197  
Remeasurement of net defined benefit assets 
(2,849,526) 
(2,051,610) 
Other 
98,981  
86,645  
Total 
1,280,130  
1,938,328  
 
 
21. Expenses by Nature  
 
Expenses by nature for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Changes in finished goods, work in process, and other 
(644,905)  
(10,355,548)  
Raw materials used, merchandise purchased, and other 
96,219,181  
112,591,917  
Wages and salaries 
30,405,245  
30,078,623  
Post-employment benefit 
1,157,422  
1,440,099  
Depreciation 
35,532,411  
35,952,098  
Amortization 
3,134,148  
3,155,561  
Welfare 
6,472,979  
6,091,626  
Utilities 
7,502,408  
6,142,317  
Outsourcing 
7,058,833  
6,597,467  
Advertising 
5,213,896  
6,112,951  
Sales promotion  
6,894,395  
7,110,649  
Other  
53,422,505  
53,936,970  
Total(*) 
252,368,518  
258,854,730  
 
(*) Equal to the sum of cost of sales and selling and administrative expenses in the consolidated statements of profit or loss. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 62 - 
22. Selling and Administrative Expenses 
Selling and administrative expenses for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Selling and administrative expenses 
 
 
Wages and salaries 
8,324,562  
7,763,588  
Post-employment benefit 
299,369  
330,115  
Commissions  
8,753,442  
7,457,896  
Depreciation 
1,649,335  
1,574,757  
Amortization 
688,786  
664,346  
Advertising 
5,213,896  
6,112,951  
Sales promotion  
6,894,395  
7,110,649  
Transportation 
1,721,614  
3,214,301  
Service  
3,968,816  
3,671,913  
Other  
6,125,999  
5,993,246  
Subtotal 
43,640,214  
43,893,762  
Research and development expenses 
 
 
Research and development 
28,339,724  
24,919,198  
Total 
71,979,938  
68,812,960  
 
 
23. Other Non-Operating Income and Expenses 
Details of other non-operating income and expenses for the years ended December 31, 2023 and 2022 are as follows: 
  
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Other non-operating income 
 
 
Dividend income 
164,203  
414,601  
Rental income 
150,273  
140,908  
Gain on disposal of property, plant and equipment 
104,663  
159,123  
Other 
761,309  
1,247,439  
Total 
1,180,448  
1,962,071  
 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Other non-operating expenses 
 
 
Loss on disposal of property, plant and equipment 
85,799  
61,256  
Donations 
243,377  
305,941  
Other 
754,151  
1,422,979  
Total 
1,083,327  
1,790,176  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 63 - 
 
24. Financial Income and Expenses 
 
Details of financial income and expenses for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial income 
 
 
Interest income 
4,358,022  
2,720,479  
Financial assets measured at amortized cost 
4,357,792  
2,720,213  
Financial assets measured at fair value through profit or loss 
230  
266  
Foreign exchange differences 
10,608,661  
16,537,855  
Gain from derivatives 
1,133,465  
1,570,661  
Total 
16,100,148  
20,828,995  
 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial expenses 
 
 
Interest expenses 
930,253  
763,015  
Financial liabilities measured at amortized cost 
510,865  
322,529  
Other financial liabilities 
419,388  
440,486  
Foreign exchange differences 
10,711,058  
16,809,703  
Loss from derivatives 
1,004,219  
1,454,971  
Total 
12,645,530  
19,027,689  
 
The Company recognizes foreign exchange gains and losses arising from foreign currency transactions and translation as 
financial income and expenses. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 64 - 
25. Income Tax Expense 
 
(A) 
Income tax expense for the years ended December 31, 2023 and 2022 consists of the following: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Current taxes 
 
 
Current tax on profits for the year 
5,660,505  
7,391,099  
Adjustments recognized in the current year 
(725,524) 
(501,683) 
Subtotal 
4,934,981  
6,889,416  
Deferred taxes 
 
 
Changes in deferred taxes arising from unused tax credits 
(5,346,657) 
(1,080,068) 
Changes in deferred taxes arising from temporary differences 
(3,061,001) 
(15,407,692) 
Changes in deferred taxes arising from unused tax losses 
(1,041,996) 
160,123  
Other 
33,838  
224,618  
Subtotal 
(9,415,816) 
(16,103,019) 
Income tax expense 
(4,480,835) 
(9,213,603) 
 
 
(B) 
The difference between the income tax expense on the Company’s profit before tax and the theoretical amount computed  
     using the weighted-average tax rate applicable to the profit before tax of each of the Company’ entities is as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Profit before income tax 
11,006,265  
46,440,474  
Tax calculated at weighted average of applicable tax rates(*) 
1,901,195  
13,652,900  
Adjustments: 
 
 
Permanent differences 
219,374 
(2,090,031) 
Temporary differences for which no deferred income tax was recognized 
(12,588)  
769,211  
Tax credits and exemptions 
(6,706,820) 
(5,185,576) 
Results of interest in subsidiaries, etc. 
(389,305) 
(16,186,745) 
Impact of changes in tax rates 
(3,926) 
(376) 
Other 
511,235  
(172,986) 
Subtotal 
(6,382,030) 
(22,866,503) 
Income tax expense 
(4,480,835) 
(9,213,603) 
 
(*) The statutory tax rate is the weighted average of the statutory tax rates applicable to the Company’s year-end profits as of December 
31, 2023 and 2022, which vary by tax jurisdictions. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 65 - 
(C) 
The movement in deferred income tax assets and liabilities for the years ended December 31, 2023 and 2022 are as 
follows: 
 
 
2023 
2022 
(In millions of Korean won) 
Balance  
as of 
 January 1 
Increase 
(Decrease) 
Balance  
as of 
December 31 
Balance  
as of 
January 1 
Increase 
(Decrease) 
Balance  
as of 
December 31 
 
 
 
 
 
 
 
Deferred tax arising from temporary differences 
Revaluation of land 
(898,505) 
(182) 
(898,687) 
(936,822) 
38,317  
(898,505) 
Investments in subsidiaries, associates 
and joint ventures(*1,2) 
(4,960,247) 
57,640  (4,902,607) (20,614,554) 
15,654,307  (4,960,247) 
Accumulated depreciation and other 
(2,566,535) 
682,845  (1,883,690) 
(1,771,793) 
(794,742) 
(2,566,535) 
Accrued income 
39,680  
28,042  
67,722  
6,853  
32,827  
39,680  
Provisions, accrued expenses, and other 
5,219,130  
1,923,486  
7,142,616  
4,560,874  
658,256  
5,219,130  
Foreign currency translation 
185,900  
(12,997) 
172,903  
12,076  
173,824  
185,900  
Asset impairment losses 
234,734  
1,011 
235,745  
258,886  
(24,152) 
234,734  
Other 
(969,702) 
381,157  
(588,545)  
(638,757) 
(330,945) 
(969,702) 
Subtotal 
(3,715,545) 
3,061,002  
(654,543) (19,123,237) 
15,407,692  (3,715,545) 
Deferred tax arising from tax losses  
Unused tax losses  
276,358  
1,041,996  
1,318,354  
436,481  
(160,123) 
276,358  
Deferred tax arising from unused tax credits 
Unused tax credits 
2,746,430  
5,346,657 
8,093,087  
1,666,362  
1,080,068  
2,746,430  
Deferred tax recognized in equity 
Loss (gain) on valuation of financial assets at fair value  
through other comprehensive income and other 
(50,392) 
(156,443)  
(206,835)  (3,155,310) 
3,104,918  
(50,392) 
Remeasurement of net defined benefit assets 
733,135  
308,050  
1,041,185  
1,238,713  
(505,578) 
733,135  
Subtotal 
682,743  
151,607  
834,350  (1,916,597) 
2,599,340  
682,743  
Net deferred tax assets (liabilities) 
(10,014) 
9,601,262 
9,591,248 (18,936,991) 
18,926,997 
(10,014) 
Deferred tax assets 
5,101,318  
5,110,479 
10,211,797 
4,261,214 
840,104  
5,101,318  
Deferred tax liabilities 
(5,111,332) 
4,490,783 
(620,549) (23,198,205) 
18,086,873  (5,111,332) 
 
(*) Deferred tax assets are not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for 
investments in subsidiaries, associates and joint ventures. 
 
 
The Company assessed that it is probable that deferred tax asset will be realized to the extent that the Company’s expected 
average annual taxable losses and tax credits that can be utilized in each accounting period. However, the following temporary 
differences have not been recognized for tax purposes as it is not probable that they will be realized in the future as of December 
31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Unused tax losses 
597,176  
594,798  
Unused tax credits 
118,694  
46,550  
 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 66 - 
Expected expiry dates of unused tax losses and credits for which no deferred tax asset is recognized are as follows: 
 
(In millions of Korean won) 
2023 
2024 
2025 
2026 and after 
 
 
 
 
 
Unused tax losses 
37,899  
741  
- 
558,536  
Unused tax credits 
7,163  
-  
110,450  
1,081  
 
 
(D) Details of the period when the deferred tax assets (liabilities) are expected to be recovered (settled) as of December 31, 
2023 and 2022 are as follows: 
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Deferred tax assets 
 
 
Deferred tax assets to be recovered within 12 months 
9,392,311  
3,249,661  
Deferred tax assets to be recovered after 12 months 
819,486  
1,851,657  
Subtotal 
10,211,797  
5,101,318  
Deferred tax liabilities 
 
 
Deferred tax liabilities to be settled after 12 months 
(620,549) 
(5,111,332) 
Total 
9,591,248  
(10,014) 
 
 
(E) Global minimum top-up tax 
 
The global minimum top-up is a system under which multinational companies with consolidated revenue of €750 million or 
more in at least two of the four preceding financial years are required to pay a substantial amount of tax to the tax authorities 
of the country in which the parent company resides if their effective tax rate in those countries is less than 15%.  
  
The Republic of Korea, where the parent company is domiciled, enacted the Global Minimum Tax Act in 2023, which requires 
the application of the Global Minimum Tax for accounting periods beginning on or after January 1, 2024. 
   
The Company believes that it will be subject to the Global Minimum Tax Act, but as the Global Minimum Tax Act will be 
effective in the Republic of Korea from January 1, 2024, there is no impact on the Company's current income tax expense. In 
addition, the Company has applied the temporary exemption for deferred taxes under Korean IFRS 1012 and has not 
recognized any deferred tax assets or liabilities related to the global minimum tax law and has not disclosed any deferred tax 
information. 
 
As the legislation in the countries where the Company’s subsidiaries are located that are primarily affected by the global 
minimum top-up tax legislation has not been enacted or specific legislation is in the process of being enacted, it is not possible 
to reasonably estimate the impact on the Company as at December 31, 2023. Each of the Company’s subsidiaries is reviewing 
the impact on its financial statements with tax experts in each country. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 67 - 
26. Earnings per Share 
 
(A) 
Basic earnings per share 
 
Basic earnings per share for the years ended December 31, 2023 and 2022 are calculated as follows: 
 
(1) 
Ordinary shares 
 
(In millions of Korean won, thousands of number of shares) 
2023 
2022 
 
 
 
Profit for the year attributable to owners of the parent company 
14,473,401  
54,730,018  
Profit for the year available for ordinary shares 
12,719,321  
48,099,117  
Weighted-average number of ordinary shares outstanding 
5,969,783  
5,969,783  
Basic earnings per ordinary share (in Korean won) 
2,131  
8,057  
 
(2) 
Preference shares 
 
(In millions of Korean won, thousands of number of shares) 
2023 
2022 
 
 
 
Profit for the year attributable to owners of the parent company 
14,473,401  
54,730,018  
Profit for the year available for preference shares 
1,754,080  
6,630,901  
Weighted-average number of preference shares outstanding 
822,887  
822,887  
Basic earnings per preference share (in Korean won) 
2,132  
8,058  
 
 
(B) 
Diluted earnings per share 
 
The Company does not have dilutive potential ordinary shares and as a result, basic earnings per share and diluted earnings 
per share are the same for the years ended December 31, 2023 and 2022. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 68 - 
27. Statements of Cash Flows 
(A) The Company used the indirect method to present cash flows from operating activities. Adjustments and changes in assets 
 and liabilities arising from operating activities for the years ended December 31, 2023 and 2022 are as follows: 
 
- 
Adjustments 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Adjustments: 
 
 
Income tax income 
(4,480,835) 
(9,213,603) 
Financial income 
(6,156,093) 
(5,778,279) 
Financial expenses 
3,076,837  
4,336,254  
Post-employment benefits 
1,157,422  
1,440,099  
Depreciation 
35,532,411  
35,952,098  
Amortization 
3,134,148  
3,155,561  
Bad debt expense 
62,964  
8,784  
Dividend income 
(164,203) 
(414,601) 
Share of profit of associates and joint ventures 
(887,550) 
(1,090,643) 
Gain on disposal of property, plant and equipment 
(104,663) 
(159,123) 
Loss on disposal of property, plant and equipment 
85,799  
61,256  
Loss on valuation of inventories and others 
5,037,579  
4,408,767  
Others 
225,718  
366,869  
Total 
36,519,534  
33,073,439  
 
- 
Changes in assets and liabilities arising from operating activities 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Changes in assets and liabilities : 
 
 
Decrease (increase) in trade receivables 
(90,243) 
7,856,258  
Decrease (increase) in other receivables 
325,894  
(1,524,173) 
Decrease (increase) in prepaid expenses 
(390,636) 
3,506  
Increase in inventories 
(3,206,615) 
(13,311,072) 
Increase (decrease) in trade payables 
318,432  
(5,298,547) 
Increase (decrease) in other payables 
785,534  
(1,443,409) 
Increase in advances received 
138,188  
106,977  
Increase (decrease) in withholdings 
(411,028) 
25,392  
Increase (decrease) in accrued expenses 
(3,704,020) 
919,271  
Increase (decrease) in provisions 
1,566,904  
(34,298) 
Payment of post-employment benefits 
(938,691) 
(707,887) 
Decrease (increase) in plan assets 
100,384  
(2,243,171) 
Other 
47,152  
(1,347,795) 
Total 
(5,458,745) 
(16,998,948) 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 69 - 
(B) 
 Significant non-cash investing and financing transactions for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Valuation of financial assets at fair value through other comprehensive income 
1,548,022  
(2,636,448) 
Valuation of investments in associates and joint ventures 
75,112  
(50,510) 
Reclassification of construction in progress to property, plant and equipment 
39,749,735  
36,047,916  
New lease contracts established 
1,802,463  
2,111,660  
Reclassification of current portion of debentures and long-term borrowings 
1,308,875 
1,089,162 
 
 
(C) Changes in liabilities arising from financing activities for the years ended December 31, 2023 and 2022 are as follows: 
 
(1) 2023 
 
 
As of 
January 1 
Cash flows from 
financing 
activities 
Non-cash transactions 
As of  
December 31 
(In millions of Korean won) 
New lease 
contracts 
Other(*) 
 
 
 
 
 
 
Short-term borrowings 
5,147,315  
2,145,400  
- 
(178,114) 
7,114,601  
Debentures and long-term borrowings 
5,185,927  
(864,867) 
1,497,058  
(246,775) 
5,571,343  
Total 
10,333,242  
1,280,533  
1,497,058  
(424,889) 
12,685,944  
 
(*) Other includes accreted interest and effects of changes in foreign currency exchange rates. 
 
(2) 2022 
 
 
As of 
January 1 
Cash flows from 
financing 
activities 
Non-cash transactions 
As of 
December 31 
(In millions of Korean won) 
New lease 
contracts 
Other(*) 
 
 
 
 
 
 
Short-term borrowings 
13,687,793  
(8,339,149) 
- 
(201,329) 
5,147,315  
Debentures and long-term borrowings 
4,704,356  
(1,236,468) 
2,111,660  
(393,621) 
5,185,927  
Total 
18,392,149  
(9,575,617) 
2,111,660  
(594,950) 
10,333,242  
 
(*) Other includes accreted interest and effects of changes in foreign currency exchange rates.  
 
For the years ended December 31, 2023 and 2022, cash outflows from repayment of the principal of lease liabilities 
(financial activities) amount to W 1,098,944 million and W 998,531 million, respectively, while cash outflows due to 
interest expenses (operating activities) in relation to the lease liabilities amount to W 197,202 million and W 140,111 
million, respectively. 
 
 
(D) The Company recorded cash inflows and outflows from short-term financial instruments with frequent transactions, large 
gross amounts and short-term maturities, as well as from short-term borrowings on a net basis. As of December 31, 2023, 
most of the Company’s cash and cash equivalents consist mainly of bank deposits. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 70 - 
28. Financial Risk Management 
 
The Company manages its financial risks with a focus on minimizing market risk, credit risk, liquidity risk and others arising 
from its operating activities. To this end, the Company closely monitors and responds to each risk factor. 
 
The Company establishes global financial management standards and manages the risks by periodically measuring customer’s 
and counterparties’ financial risk, applying currency hedges, and reviewing cash flows.  
 
The Company also manages foreign exchange risk by monitoring foreign exchange rate fluctuations through local financial 
centers in the major regions (United States, United Kingdom, Singapore, China, Brazil, and Russia), which act as an agent for 
the subsidiaries in each region to manage foreign exchange transactions. In addition, local finance centers in the major regions 
respond to liquidity risk through a regionally integrated financial structure. 
 
The Company’s financial assets subject to financial risk management consist of cash and cash equivalents, short-term financial 
instruments, financial assets at amortized cost, trade receivables and others, while its financial liabilities consist of trade 
payables, borrowings, and others. 
 
(A) 
Market risk 
 
(1) 
Foreign exchange risk  
 
The Company is exposed to foreign exchange risk arising from its global operations through transactions in currencies other 
than its functional currency. The main currencies in which the Company is exposed to foreign exchange risk are the US dollar 
and European Euro. 
 
The Company focuses on minimizing the impact of foreign exchange fluctuation by matching levels of assets and liabilities 
denominated in each foreign currency. To minimize exchange position, the Company’s foreign exchange management 
policy requires normal business transactions, including import and export, as well as financing transactions such as 
depositing and borrowing, to be in local currency or match as closely as possible cash inflows and outflows incurred in the 
respective foreign currencies. This reduces but does not eliminate the foreign exchange risk to which the Company is 
exposed. Moreover, the Company periodically evaluates and monitors the foreign exchange risk to efficiently mitigate such 
risk, and the speculative foreign exchange transactions are strictly prohibited. 
 
As of December 31, 2023 and 2022, the impact on profit or loss (before tax) of a 5% change in exchange rates on the 
Company’s financial assets and financial liabilities denominated in a major foreign currency other than the functional 
currency would be as follows:   
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Increase 
Decrease 
Increase 
Decrease 
 
 
 
 
 
USD 
418,776  
(418,776) 
258,655  
(258,655) 
EUR 
151,740  
(151,740) 
92,546  
(92,546) 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 71 - 
(2) 
Interest rate risk 
 
Interest rate risk for floating interest rate financial instruments can be defined as the risk of changes in the fair value of 
components of the statements of financial position due to changes in the market interest rates, and the risk of changes in the 
future cash flows of interest income and expenses arising from investing and financing activities. The Company’s exposure 
to interest rate risk arises primarily from interest-bearing deposits and floating interest rate debt obligations, and the 
Company manages its exposure to interest rate risk to minimize uncertainty and cost of financing resulting from changes in 
interest rates.  
 
As of December 31, 2023 and 2022, the effect on profit or loss before tax of a 1%p change in interest rates on the Company’s 
variable rate financial assets and liabilities at the reporting date would have been as follows:  
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Increase 
Decrease 
Increase 
Decrease 
 
 
 
 
 
Financial assets 
210,617  
(210,617) 
72,750  
(72,750) 
Financial liabilities 
(6,197) 
6,197  
(8,427) 
8,427  
Net effect 
204,420  
(204,420) 
64,323  
(64,323) 
 
 
(3) 
 Price risk 
 
The Company’s investment portfolio consists of direct and indirect investments in equity instruments classified as financial 
assets at fair value through other comprehensive income and financial assets at fair value through profit or loss, which is in 
line with the Company’s strategy. 
 
As of December 31, 2023 and 2022, price fluctuation of marketable equity securities (listed stocks) by 1% would result in 
changes in other comprehensive income (before income tax) of W 52,510 million and W 92,073 million, respectively, and 
changes in profit before tax of W 3,472 million and W 3,144 million, respectively.  
 
 
(B) 
 Credit risk 
 
Credit risk arises during the normal course of transactions and investing activities where customers or other parties fail to 
discharge an obligation. The Company monitors and sets the customer’s and counterparty’s credit limit on a periodic basis 
based on the customer’s and counterparty’s financial conditions, default history and other factors. Adequate insurance 
coverage is maintained for trade receivables related to trading partners situated in higher risk countries. 
 
Credit risk can arise from transactions with financial institutions including financial instrument transactions such as cash and 
cash equivalents, deposits, and derivative instruments. To minimize such risk, the Company has a policy of transacting only 
with banks that have a strong international credit rating (S&P A and above), and new transactions with financial institutions 
which the Company does not have an existing relationship are subject to the completion of risk assessments prior to 
commencement of transactions. The Company generally enters into financial agreements without restrictions, such as debt 
ratio covenants, provision of collateral and/or repayment of borrowings, and otherwise separate approvals are obtained. 
 
The carrying amount of the Company’s financial assets net of impairment losses is the Company’s maximum exposure to 
credit risk. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 72 - 
(C) 
Liquidity risk  
 
Liquidity risk is the risk that a company will have difficulty in meeting all its financial obligations. The Company’s main 
sources of liquidity are cash generated from operations and funds raised from the capital markets and financial institutions, 
while its main liquidity needs are for investments in production, research and development, working capital and dividends. 
Due to the nature of the Company’s business, which involves large investments, maintaining adequate levels of liquidity is 
critical. The Company maintains and manages adequate liquidity through forecasting periodic cash flows, estimating required 
cash levels, and monitoring inflows and outflows of cash. 
 
The Company has established Cash Pooling by region to respond effectively to liquidity risks, even when individual companies 
within a region are underfunded. Cash Pooling is a system that shares funds between underfunded and overfunded companies, 
minimizing the liquidity risk of individual companies, easing the burden of fund management, and reducing financial costs.  
 
In addition, the Company has secured credit lines for its overseas subsidiaries by means of payment guarantees from the head 
office in the event of large liquidity needs, and, at the end of the period, the Company had investment grade ratings of Aa2 
from Moody’s and AA- from S&P, enabling it to raise funds on the capital market in a timely manner.  
 
As of December 31, 2023 and 2022, the maturity analysis of financial liabilities, based on the remaining period from the 
reporting date to the contractual maturity date, is as follows:  
 
 
December 31, 2023 
(In millions of Korean won) 
Less than 
3 months 
~ 6 months 
~1 year 
1 ~ 5 years 
More than 
5 years 
 
 
 
 
 
 
Financial liabilities 
43,302,421 
589,743 
1,529,785 
7,811,246 
2,337,792 
 
 
December 31, 2022 
(In millions of Korean won) 
Less than 
3 months 
~ 6 months 
~1 year 
1 ~ 5 years 
More than 
5 years 
 
 
 
 
 
 
Financial liabilities 
42,990,570 
733,984 
1,925,448 
5,402,672 
1,562,274 
 
The cash flows included in the maturity classification, based on the remaining period to the contractual maturity date, are 
undiscounted expected cash outflows.  
 
The Company’s derivative financial liabilities of W 44,252 million (December 31, 2022: W 119,061 million) has been 
included within the less than 3 months bucket. These are the Company’s trading portfolio of derivative instruments, on a net 
settlement term, of which the contractual maturities are not essential for understanding its cash flows. These contracts are 
managed on a net fair value basis rather than by the maturity date. Net settled derivatives consist of forwards on currency rates 
used by the Company to manage the exchange rate profile. 
 
Derivatives that are settled on a gross basis by the delivery of underlying items, including derivatives for hedging, will be 
settled within the next 48 months from the end of the reporting period. These derivatives are not included in the table above. 
 
There is no maximum liquidity risk exposure from those other than the above financial liabilities (e.g., payment and 
performance guarantees) as of December 31, 2023. 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 73 - 
(D) 
Derivative financial instruments 
 
The Company uses cash flow hedge accounting to hedges of the exposure to changes in the price of inventories. As of 
December 31, 2023, the Company’s derivative financial instruments designated as cash flow hedges are as follows:  
 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
Assets 
Liabilities 
Assets 
Liabilities 
 
 
 
 
 
Currency forward exchange contracts 
 
 
 
 
Current  
50,018  
15,031  
44,567  
11,035  
Non-current  
19,853  
18,099  
15,703  
15,813  
Total 
69,871  
33,130  
60,270  
26,848  
 
For the years ended December 31, 2023 and 2022, the Company recognizes the gains and losses relating to the effective 
portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges in other comprehensive 
income, which amount to the gain of W 927 million (after tax) and loss of W 12,893 million (after tax), respectively, and 
recognizes the gains relating to the ineffective portion in profit or loss, which amount to the gain of W 1,304 million (before 
tax) and gain of W 611 million (before tax), respectively. For the years ended December 31, 2023 and 2022, gains and losses 
reclassified directly from other comprehensive income to profit or loss amount to the gain of W 6,692 million (after tax) and 
the loss of W 4,602 million (after tax), respectively, and the gains reclassified from other comprehensive income to the carrying 
amount of inventory amount to the gain of W 51,614 million (after tax) and the gain of W 55,856 million (after tax), 
respectively. 
 
 
(E) 
Capital risk management  
 
The purpose of capital management is to maintain a sound capital structure and protect the Company’s ability to continue to 
provide benefits to its shareholders and stakeholders as a going concern. The Company monitors capital on the basis of credit 
ratings and debt ratio.  
 
The debt ratio as of December 31, 2023 and 2022 are as follows: 
(In millions of Korean won) 
December 31, 2023 
December 31, 2022 
 
 
 
Total liabilities 
92,228,115  
93,674,903  
Total equity 
363,677,865 
354,749,604 
Debt ratio 
25.4% 
26.4% 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 74 - 
(F) 
Fair value measurement 
 
(1) 
Carrying amounts and fair value of financial instruments by category as of December 31, 2023 and 2022 are as 
follows: 
 
 
December 31, 2023 
December 31, 2022 
(In millions of Korean won) 
Carrying amount 
Fair value 
Carrying amount 
Fair value 
Financial assets 
 
 
 
 
Cash and cash equivalents 
69,080,893  
(*1) 
49,680,710  
(*1) 
Short-term financial instruments 
22,690,924  
(*1) 
65,102,886  
(*1) 
Short-term financial assets at amortized cost  
608,281  
(*1) 
414,610  
(*1) 
Short-term financial assets at fair value  
through profit or loss 
27,112  
27,112 
29,080  
29,080 
Trade receivables 
36,647,393  
(*1) 
35,721,563  
(*1) 
Financial assets at fair value through  
other comprehensive income 
7,481,297  
7,481,297 
11,397,012  
11,397,012 
Financial assets at fair value through  
profit or loss 
1,431,394  
1,431,394 
1,405,468  
1,405,468 
Other(*2) 
14,840,275  
546,021 
10,340,876  
395,667 
Total financial assets 
152,807,569  
  
174,092,205  
  
Financial liabilities 
 
 
 
 
Trade payables 
11,319,824  
(*1) 
10,644,686  
(*1) 
Short-term borrowings 
7,114,601  
(*1) 
5,147,315  
(*1) 
Other payables 
13,996,395  
(*1) 
16,328,237  
(*1) 
Current portion of long-term liabilities 
1,308,875  
6,757 
1,089,162  
6,580 
 - Long-term borrowing 
1,302,521  
(*1)(*3) 
1,082,934  
(*1)(*3) 
 - Debentures 
6,354  
6,757 
6,228  
6,580 
Debentures  
537,618  
529,254 
536,093  
521,129 
Long-term borrowings 
3,724,850  
(*1)(*3) 
3,560,672  
(*1)(*3) 
Long-term other payables 
4,907,875  
(*1) 
2,289,236  
(*1) 
Other(*2) 
11,414,008  
83,463 
12,409,529  
361,768 
Total financial liabilities 
54,324,046  
  
52,004,930    
 
(*1) Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures. 
(*2) Assets measured at the cost of W 14,294,254 million and W 9,945,209 million as at December 31, 2023 and 2022, respectively, and 
liabilities measured at the cost of W 11,330,545 million and W 12,047,761 million as at December 31, 2023 and 2022, respectively, are excluded 
as their carrying amounts are a reasonable estimation of fair value. 
(*3) Lease liabilities, classified under the current portion of long-term liabilities and long-term borrowings, are excluded from the fair value 
disclosures in accordance with Korean IFRS 1107. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 75 - 
(2) 
Fair value hierarchy classifications of the financial instruments that are measured at or only disclosed their fair value 
as of December 31, 2023 and 2022 are as follows: 
 
 
December 31, 2023 
(In millions of Korean won) 
Level 1 
Level 2 
Level 3 
Total balance 
Assets 
 
 
 
 
Short-term financial assets at fair value 
through profit or loss 
- 
27,112  
- 
27,112  
Financial assets at fair value through 
other comprehensive income 
5,250,993  
- 
2,230,304  
7,481,297  
Financial assets at fair value through 
profit or loss 
347,221  
- 
1,084,173  
1,431,394  
Other 
- 
130,364  
415,657  
546,021  
Liabilities 
 
 
 
 
Current portion of debentures 
- 
6,757  
- 
6,757  
Debentures 
- 
529,254  
- 
529,254  
Other 
- 
83,463  
- 
83,463  
 
 
December 31, 2022 
(In millions of Korean won) 
Level 1 
Level 2 
Level 3 
Total balance 
Assets 
 
 
 
 
Short-term financial assets at fair value 
through profit or loss 
- 
29,080  
- 
29,080  
Financial assets at fair value through 
other comprehensive income 
9,207,295  
- 
2,189,717  
11,397,012  
Financial assets at fair value through 
profit or loss 
314,449  
- 
1,091,019  
1,405,468  
Other 
- 
373,176  
22,491  
395,667  
Liabilities 
 
 
 
 
Current portion of debentures 
- 
6,580  
- 
6,580  
Debentures 
- 
521,129  
- 
521,129  
Other 
- 
354,364  
7,404  
361,768  
 
The levels of the fair value hierarchy and its application to financial assets and liabilities are described below. 
 
ㆍ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities 
ㆍ Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either 
directly or indirectly 
ㆍ Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) 
 
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A 
market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry 
group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions 
on an arm’s length basis. These instruments are included in Level 1. The instruments included in Level 1 are listed equity 
investments, most of which are classified as financial assets at fair value through other comprehensive income. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 76 - 
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. 
These valuation techniques maximize the use of observable market data where available and rely as little as possible on 
entity-specific estimates. If all significant inputs required to measure the fair value of an instrument are observable, the 
instrument is included in Level 2. 
 
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3. 
 
The Company performs the fair value measurements required for financial reporting purposes, including Level 3 fair values, 
and discusses valuation processes and results in line with the financial reporting timelines. The Company’s policy is to 
recognize transfers between levels at the end of the reporting period if corresponding events or changes in circumstances 
have occurred. 
 
Specific valuation techniques used to value financial instruments include: 
 
ㆍ Quoted market prices or dealer quotes for similar instruments 
ㆍThe fair value of forward foreign exchange contracts is determined using forward exchange rates at the reporting date, 
with the resulting value discounted to present value 
 
Other techniques, such as discounted cash flow analysis, binomial distribution model, etcetera, are used to determine fair 
value for the remaining financial instruments. For trade and other receivables that are classified as current assets, the book 
value approximates a reasonable estimate of fair value. 
 
(3) 
Valuation technique and the inputs 
 
The Company utilizes a present value technique to discount future cash flows using proper interest rates for corporate bonds, 
government and public bonds, and bank debentures that are classified as Level 2 in the fair value hierarchy.   
 
The following table presents the valuation technique and the inputs used for major financial instruments classified as Level 
3 as of December 31, 2023. 
 
(In millions of Korean won and percentage)  
Classification 
Fair 
value 
Valuation technique 
Level 3 inputs 
Input range 
(Weighted average) 
Financial assets at fair value through other comprehensive income 
Samsung Venture Investment 
32,286 
Discounted cash flow 
Permanent growth rate 
1.0% 
Weighted average cost of capital 
17.1% 
MiCo Ceramics Co., Ltd. 
33,973 
Discounted cash flow 
Permanent growth rate 
0.0% 
Weighted average cost of capital 
15.8% 
TCL China Star Optoelectronics 
Technology Co. Ltd. (CSOT) 
1,286,007 
Discounted cash flow 
Permanent growth rate 
0.0% 
Weighted average cost of capital 
10.6% 
China Star Optoelectronics 
Semiconductor Display 
Technology Ltd (CSOSDT) 
226,531 
Discounted cash flow 
Permanent growth rate 
0.0% 
Weighted average cost of capital 
10.6% 
Others 
Call option on equity instruments 
393,235 
Binomial model 
Risk-free discount rate 
3.2% 
Price volatility 
69.5% 
Put option on equity instruments 
22,422 
Binomial model 
Risk-free discount rate 
3.9%~5.2%, 2.2% 
Price volatility 
22.7%, 24.4% 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 77 - 
(4) 
Changes in Level 3 instruments for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial assets 
 
 
Balance as of January 1 
3,303,227  
3,430,214  
Acquisitions 
207,023  
207,730  
Disposals 
(124,477) 
(207,252) 
Amount recognized in profit or loss 
297,680  
73,782  
Amount recognized in other comprehensive income 
46,725  
(197,830) 
Other 
(44) 
(3,417) 
Balance as of December 31 
3,730,134  
3,303,227  
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Financial Liabilities 
 
 
Balance as of January 1 
7,404  
5,438  
Amount recognized in profit or loss 
619  
1,966  
Other 
(8,023) 
- 
Balance as of December 31 
- 
7,404  
 
 
(5) 
Sensitivity analysis for recurring fair value measurements categorized within Level 3 
 
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value of 
financial instruments which are affected by the unobservable parameters, using a statistical technique. When the fair value 
is affected by more than two input parameters, the amounts represent the most favorable or unfavorable. 
 
The results of the sensitivity analysis for effect on income or loss before tax from changes in inputs for major financial 
instruments which are categorized within Level 3 and subject to sensitivity analysis are as follows: 
 
(In millions of Korean won) 
Favorable changes 
Unfavorable changes 
Classification 
Profit or loss 
Equity 
Profit or loss 
Equity 
Financial assets at fair value through 
other comprehensive income(*1) 
- 
161,758  
- 
(111,678) 
Other (*2) 
101,749  
- 
(101,696) 
- 
 
(*1) For equity securities, changes in fair value are calculated with the correlation between the growth rate (-1.0%~1.0%) and the discount 
rate, which are significant unobservable inputs. 
(*2) Changes in fair value were calculated based on the correlation between underlying asset price (20%) and price volatility (10%), which 
are significant unobservable inputs. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 78 - 
29. Segment Information 
 
(A) 
Operating segment information 
 
The chief operating decision-maker has been identified as the Management Committee. The Company determines operating 
segments based on the segment information reported to the Management Committee. The Management Committee reviews 
the operating profits of each operating segment in order to evaluate the performance and to make strategic decisions regarding 
the allocation of resources to each segment. 
 
Revenue consists mostly of product sales. The operating segments are product-based and are identified based on the internal 
organization and revenue streams. As of the reporting date, the operating segments are comprised of DX, DS, SDC, Harman, 
and others. 
 
The segment information including depreciation, amortization and operating profits is prepared after adjusting intercompany 
transactions. Total assets and liabilities of each operating segment are excluded from the disclosure as these have not been 
provided regularly to the Management Committee. 
 
(1) For the year ended December 31, 2023 
 
(In millions of Korean won) 
DX 
DS 
SDC 
Harman 
Intercompany 
reconciliations 
Total(*) 
 
 
 
 
 
 
 
Revenue 
169,992,337  
66,594,471  
30,975,373  
14,388,454  (23,015,141)  258,935,494  
Depreciation 
2,524,199  
29,371,056  
3,108,935  
327,572  
 -  
35,532,411  
Amortization 
1,721,938  
754,901  
222,045  
200,896  
 -  
3,134,148  
Operating profit 
14,384,705  (14,879,458)  
5,566,478  
1,173,702  
 -  
6,566,976  
(*) Other operating segments are not separately disclosed. 
 
Revenue by major product for the year ended December 31, 2022 are as follows: 
 
(In millions of Korean won) 
TV, monitor, and 
other 
Smartphone and 
other 
Memory 
Display panels 
Total(*) 
 
 
 
 
 
 
Revenue 
30,375,193  
108,632,515  
44,125,386  
30,975,373  
258,935,494  
(*) Other products are not separately disclosed. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 79 - 
(2) For the year ended December 31, 2022 
 
(In millions of Korean won)  
DX 
DS 
SDC 
Harman 
Intercompany 
reconciliations 
Total(*) 
 
 
 
 
 
 
 
Revenue 
182,489,720  
98,455,270  
34,382,619  
13,213,694  (26,309,943)  302,231,360  
Depreciation 
2,520,708  
28,196,959  
4,768,498  
331,342  
 -  
35,952,098  
Amortization 
1,678,572  
809,270  
237,182  
211,549  
 -  
3,155,561  
Operating profit 
12,746,074  
23,815,810  
5,952,973  
880,548  
 -  
43,376,630  
(*) Other operating segments are not separately disclosed. 
 
Revenue by major product for the year ended December 31, 2022 are as follows: 
 
(In millions of Korean won) 
TV, monitor, and 
other 
Smartphone and 
other 
Memory 
Display panels 
Total(*) 
 
 
 
 
 
 
Revenue 
33,279,488  
115,425,375  
68,534,930  
34,382,619  
302,231,360  
(*) Other products are not separately disclosed. 
 
 
(B) 
Regional information 
 
The regional information provided to the Management Committee for the reportable segments as of and for the years ended 
December 31, 2023 and 2022 are as follows: 
 
(1) 
As of and for the year ended December 31, 2023 
 
(In millions of Korean won) 
Korea 
America 
Europe 
Asia 
and Africa 
China 
Intercompany 
elimination 
Consolidated 
 
 
 
 
 
 
 
 
Revenue 
45,599,419  
92,136,669  
48,108,965  
44,814,355  
28,276,086  
- 
258,935,494  
Non-current assets(*) 
163,312,301  
20,346,775  
6,288,864  
8,737,541  
12,191,879  
(879,236) 
209,998,124  
 
 
(*) Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets. 
 
(2) 
As of and for the year ended December 31, 2022 
 
(In millions of Korean won) 
Korea 
America 
Europe 
Asia 
and Africa 
China 
Intercompany 
elimination 
Consolidated 
 
 
 
 
 
 
 
 
Revenue 
48,654,656  
118,974,561  
50,283,975  
48,692,399  
35,625,769  
- 
302,231,360  
Non-current assets(*) 
144,936,912  
14,022,225  
5,839,813  
9,056,272  
15,338,153  
(930,233) 
188,263,142  
 
(*) Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets. 
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 80 - 
30. Related Party Transactions 
(A) 
Sale and purchase transactions 
Sale and purchase transactions with related parties for the years ended December 31, 2023 and 2022 are as follows: 
 
 
2023 
(In millions of 
Korean won) 
Name of company(*1) 
Sales 
Disposal of 
non-current 
assets 
Purchases 
Purchase of 
non-current 
assets 
Associates and 
joint ventures 
Samsung SDS Co., Ltd. 
202,810  
- 
1,984,263  
291,120  
Samsung Electro-Mechanics Co., Ltd. 
69,782  
- 
1,113,058  
60  
Samsung SDI Co., Ltd. 
110,025  
- 
754,792  
31,750  
Cheil Worldwide Inc. 
38,930  
- 
948,677  
4,900  
Other 
1,023,702  
- 
12,540,601  
168,977  
Total  
1,445,249  
- 
17,341,391  
496,807  
Other related 
parties 
Samsung C&T Co., Ltd. 
49,366  
70  
270,079  
6,149,229  
Other 
582,978  
- 
1,675,564  
4,686,787  
Total  
632,344  
70  
1,945,643  
10,836,016  
Other(*2) 
Samsung Engineering Co., Ltd. 
1,358  
- 
35,482  
2,837,309  
S-1 
9,720  
- 
527,232  
40,327  
Other 
239,223  
- 
1,251,775  
612,481  
Total  
250,301  
- 
1,814,489  
3,490,117  
 
(*1) Transactions with separate entities that are related parties of the Company.  
(*2) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 
 
 
2022 
(In millions of 
Korean won) 
Name of company(*1) 
Sales 
Disposal of 
non-current 
assets 
Purchases 
Purchase of 
non-current 
assets 
Associates and 
joint ventures 
Samsung SDS Co., Ltd. 
214,105  
- 
1,865,588  
378,770  
Samsung Electro-Mechanics Co., Ltd. 
62,274  
767  
1,401,483  
120  
Samsung SDI Co., Ltd. 
82,062  
- 
803,556  
24,926  
Cheil Worldwide Inc. 
31,782  
- 
964,096  
361  
Other 
1,353,769  
- 
15,158,969  
125,053  
Total  
1,743,992  
767  
20,193,692  
529,230  
Other related 
parties 
Samsung C&T Co., Ltd. 
51,447  
- 
433,100  
7,423,404  
Other 
345,901  
188  
1,595,487  
1,910,813  
Total  
397,348  
188  
2,028,587  
9,334,217  
Other(*2) 
Samsung Engineering Co., Ltd. 
1,666  
- 
53,793  
3,249,254  
S-1 
13,634  
- 
510,311  
54,069  
Other 
166,052  
- 
550,757  
746,749  
Total  
181,352  
- 
1,114,861  
4,050,072  
 
(*1) Transactions with separate entities that are related parties of the Company.  
(*2) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 81 - 
(B) 
Balances of receivables and payables 
 
Balances of receivables and payables arising from the sales and purchases of goods and services as of December 31, 2023 
and 2022 are as follows: 
 
 
 
December 31, 2023 
(In millions of Korean won) 
Name of company(*1) 
Receivables 
Payables(*2) 
Associates and  
joint ventures 
Samsung SDS Co., Ltd. 
84,747  
458,723  
Samsung Electro-Mechanics Co., Ltd. 
1,894  
138,405  
Samsung SDI Co., Ltd. 
117,690  
92,854  
Cheil Worldwide Inc. 
137  
440,414  
Other 
310,708  
1,268,131  
Total  
515,176  
2,398,527  
Other related parties 
Samsung C&T Co., Ltd. 
213,538  
1,955,976  
Other 
23,155  
318,355  
Total  
236,693  
2,274,331  
Other(*3) 
Samsung Engineering Co., Ltd. 
305  
807,098  
S-1 
1,289  
49,955  
Other 
16,096  
390,073  
Total  
17,690  
1,247,126  
(*1) Balances due from and to separate entities that are related parties of the Company. 
(*2) Payables and others include lease liabilities. 
(*3) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 
 
 
December 31, 2022 
(In millions of Korean won) 
Name of company(*1) 
Receivables 
Payables(*2) 
Associates and  
joint ventures 
Samsung SDS Co., Ltd. 
49,792  
512,022  
Samsung Electro-Mechanics Co., Ltd. 
385  
133,952  
Samsung SDI Co., Ltd. 
121,605  
92,452  
Cheil Worldwide Inc. 
223  
453,545  
Other 
371,575  
1,236,017  
Total  
543,580  
2,427,987  
Other related parties 
Samsung C&T Co., Ltd. 
217,818  
2,783,240  
Other 
20,830  
250,103  
Total  
238,648  
3,033,343  
Other(*3) 
Samsung Engineering Co., Ltd. 
331  
1,251,039  
S-1 
3,839  
73,102  
Other 
15,647  
545,684  
Total  
19,817  
1,869,825  
(*1) Balances due from and to separate entities that are related parties of the Company. 
(*2) Payables and others include lease liabilities. 
(*3) Although these entities are not related parties of the Company in accordance with Korean IFRS 1024, they belong to the same large 
enterprise group in accordance with the Monopoly Regulation and Fair Trade Act. 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 82 - 
(C) 
For the years ended December 31, 2023 and 2022, the Company invested W 78,690 million and W 907,958 million, 
respectively, in associates and joint ventures. In addition, the Company has made capital recovery of W 33,457 million 
and W 13,087 million from its investments in associates and joint ventures during the year ended December 31, 2023 
and 2022, respectively. 
 
(D) 
For the years ended December 31, 2023 and 2022, the Company declared dividend of W 1,650,995 million and W 
1,663,149 million, respectively, to related parties. In addition, for the years ended December 31, 2023 and 2022, the 
Company declared dividends of W 128,232 million and W 128,232 million, respectively, to the entities that are not 
related parties of the Company in accordance with Korean IFRS 1024, but belong to the same conglomerate according 
to the Monopoly Regulation and Fair Trade Act. As of December 31, 2023 and 2022, there are no dividends payable to 
related parties. 
 
(E) 
For the years ended December 31, 2023 and 2022, the Company entered into lease agreements with its related parties 
amounting to W 3,791 million and W 25,243 million, respectively, and the lease payments made to the related parties 
were W 25,443 million and W 22,607 million, respectively. 
 
(F) 
Key management compensation 
 
The compensation paid or payable to key management (executive directors) for their services for the years ended December 
31, 2023 and 2022 consists of: 
 
(In millions of Korean won) 
2023 
2022 
 
 
 
Short-term employee benefits 
14,073  
14,768  
Post-employment benefits 
557  
612  
Other long-term employee benefits 
7,834  
5,434  
 
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 83 - 
31. Information for Non-Controlling Interests 
(A) Changes in non-controlling interests 
 
The profit or loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are 
material to the Company for the years ended December 31, 2023 and 2022 are as follows: 
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
2023 
2022 
 
 
 
Percentage of non-controlling interests 
15.2% 
15.2% 
Balance as of January 1 
8,853,712  
8,028,555  
Profit for the year 
941,786  
853,290  
Dividends 
(43,646) 
(3,947) 
Other 
(24,178) 
(24,186) 
Balance as of December 31 
9,727,674  
8,853,712  
 
 
(B) The summarized financial information for the subsidiary with non-controlling interests that are material to the Company 
before the intercompany eliminations for the years ended December 31, 2023 and 2022 are as follows: 
 
(1) Summarized consolidated statements of financial position  
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
December 31, 2023 
December 31, 2022 
 
 
 
Current assets 
24,721,411  
42,082,412 
Non-current assets 
46,413,723  
23,070,658 
Current liabilities 
5,821,885  
6,294,310 
Non-current liabilities 
1,485,250  
1,220,097 
Equity attributable to: 
63,827,999  
57,638,663 
Owners of the parent company 
63,769,776  
57,552,528 
Non-controlling interests 
58,223  
86,135 
 
 
(2) Summarized consolidated statements of comprehensive income 
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
2023 
2022 
 
 
 
Sales 
30,950,579  
34,298,283  
Profit for the year 
6,331,238  
6,614,496  
Other comprehensive loss 
(108,689) 
(67,942) 
Total comprehensive income attributable to: 
6,222,549  
6,546,554  
Owners of the parent company 
6,217,248  
6,539,633  
Non-controlling interests 
5,301  
6,921  
 
 
 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 84 - 
(3) Summarized consolidated statements of cash flows 
 
(In millions of Korean won) 
Samsung Display Co., Ltd. and its subsidiaries 
2023 
2022 
 
 
 
Cash flows from operating activities 
9,244,331  
11,395,827  
Cash flows from investing activities 
(3,931,091) 
(8,654,933) 
Cash flows from financing activities 
(277,515) 
(1,146,117) 
Reclassify as held-for-sale 
(14,153) 
- 
Effect of exchange rate changes on cash and cash equivalents 
(1,534) 
(44,426) 
Increase in cash and cash equivalents 
5,020,038  
1,550,351  
Cash and cash equivalents at beginning of the year 
2,309,210  
758,859  
Cash and cash equivalents at end of year 
7,329,248  
2,309,210  
 
 
32. Business Combinations 
 
To enhance the competitiveness of Micro-Display, Samsung Display America Holdings, Inc., the Company's subsidiary, 
acquired 100% of the equity shares of eMagin Corporation on October 18, 2023. 
 
(1) Overview of the acquired company 
 
 
Name of the acquired company 
eMagin Corporation 
Headquarters location 
New York, USA 
Representative director 
Andrew G. Sculley Jr. 
Industry 
Development and manufacture of display panels 
 
(2) Purchase price allocation 
(In millions of Korean won) 
Amount 
I. Consideration transferred 
 
Cash and cash equivalents 
295,291 
Fair value of additional consideration transferred 
15,164 
Total consideration transferred 
310,455 
II. Identifiable assets and liabilities 
 
Cash and cash equivalents 
4,473 
Trade and other receivables 
13,033 
Inventory 
13,753 
Property, plant and equipment 
77,500 
Intangible assets 
15,580 
Other assets 
1,691 
Trade and other payables 
(22,370) 
Other liabilities 
(69,653) 
Total net identifiable assets 
34,007 
III. Goodwill (I - II) 
276,448 
 
Assuming that eMagin Corporation had been consolidated from January 1, 2023, eMagin Corporation’s revenue and net loss 
for the year ended December 31, 2023, would have been W 27,781 million and W 36,021 million, respectively. Revenue and 
net loss for the period contributed by eMagin Corporation since consolidation amounted to W 4,684 million and W 6,847 
million, respectively. 


Samsung Electronics Co., Ltd. and its subsidiaries 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
- 85 - 
33. Assets and Liabilities Held-for-Sale 
 
During the year ended December 31, 2023, the Company’s management decided to sell its 56.8% ownership in Dowooinsys 
Co., Ltd. to three parties, including New Power Plasma Co., Ltd. The sale and purchase agreement was signed on December 
7, 2023, and the sale was completed on January 31, 2024.  
 
(1) Details of assets and liabilities classified as held-for-sale as of December 31, 2023 are as follows: 
(In millions of Korean won) 
December 31, 2023 
Assets held-for-sale 
 
Cash and cash equivalents 
14,153 
Trade receivables 
1,316 
Inventories 
4,697 
Other current assets 
13,134 
Property, plant and equipment and intangible assets 
181,251 
Other non-current assets 
3,313 
Total 
217,864 
Liabilities held-for-sale 
 
Current liabilities 
27,608 
Non-current liabilities 
34,046 
Total 
61,654 
 
(2) Details of accumulated other comprehensive income attributable to assets held-for-sale are as follows: 
(In millions of Korean won) 
December 31, 2023 
Foreign currency translation, net of tax 
(217)