United states securities and exchange commission

Foreign Currency Risk
In general, the Company is a net receiver of currencies other than the U.S. dollar. Accordingly, 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. There is a risk that the Company will have to adjust local currency pricing due to competitive pressures when there 
has been significant volatility in foreign currency exchange rates.
The Company may enter into foreign currency forward and option contracts with financial institutions to protect against foreign 
exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future 
cash flows and net investments in foreign subsidiaries. In addition, the Company has entered, and in the future may enter, into 
foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign currency–denominated 
debt issuances. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue 
and inventory purchases, typically for up to 12 months. However, the Company may choose not to hedge certain foreign 
exchange exposures for a variety of reasons, including accounting considerations or the prohibitive economic cost of hedging 
particular exposures.
Apple Inc. | 2022 Form 10-K | 26

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To provide an assessment of the foreign currency risk associated with certain of the Company’s foreign currency derivative 
positions, the Company performed a sensitivity analysis using a value-at-risk (“VAR”) model to assess the potential impact of 
fluctuations in exchange rates. The VAR model consisted of using a Monte Carlo simulation to generate thousands of random 
market price paths assuming normal market conditions. 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. The VAR model 
is not intended to represent actual losses but is used as a risk estimation and management tool. Forecasted transactions, firm 
commitments and assets and liabilities denominated in foreign currencies were excluded from the model. Based on the results of 
the model, the Company estimates with 95% confidence, a maximum one-day loss in fair value of $1.0 billion as of 
September 24, 2022, compared to a maximum one-day loss in fair value of $550 million as of September 25, 2021. Because the 
Company uses foreign currency instruments for hedging purposes, the losses in fair value incurred on those instruments are 
generally offset by increases in the fair value of the underlying exposures.
Actual future gains and losses associated with the Company’s investment portfolio, debt and derivative positions may differ 
materially from the sensitivity analyses performed as of September 24, 2022 due to the inherent limitations associated with 
predicting the timing and amount of changes in interest rates, foreign currency exchange rates and the Company’s actual 
exposures and positions.
Apple Inc. | 2022 Form 10-K | 27

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