NEW Letter from JANA Partners and CALSTRS to APPLE INC.

June 4, 2018

Apple Inc.
1 Infinite Loop
Cupertino, California 95014

Last January, JANA Partners LLC and the California State Teachers’ Retirement System (“we” or “us”) challenged Apple Inc. (“Apple” or “you”) to give families more options to guide how children and adolescents use your devices, which we noted would benefit parents, kids and society, while also enhancing Apple’s offering to users concerned about the risks that come with today’s technology. With today’s announcement of more dynamic options for all users including parents, Apple took a huge step in meeting that challenge. Given that we openly discussed the shortcomings of Apple’s controls in our first letter, we want to be equally open today in commending you for your boldness and thoughtfulness in rethinking them.

We trust that Apple will be equally committed in your follow-through. As we noted in our initial letter, mobile device technology will continue to evolve and the research around developmentally optimal usage will continue to come into sharper focus, meaning this must be an ongoing effort. We encourage you to keep in close contact with the experts, to help them develop the public research, and to keep families publicly informed about Apple’s efforts. Doing so will help ensure that families are best positioned to make their own informed decisions and can effectively engage with their children on this topic. It will also help ensure that what Warren Buffett recently praised as Apple’s robust “ecosystem” remains a place in which parents and children feel empowered with the best tools to help them navigate and make the most of ever-changing technologies.

Given your exemplary history and our interaction with Apple, we are delighted but not surprised by today’s announcements. This shows the kind of ethical leadership that we believe is an important driver of long term value. We again thank and commend you.

Sincerely,

Barry Rosenstein Managing Partner JANA Partners LLC	Aeisha Mastagni Portfolio Manager, Corporate Governance The California State Teachers’ Retirement System

Charles Penner Partner, JANA Partners LLC Head of Impact Engagement, JANA Impact Capital	Daniel Hanson Head of Impact Investment, JANA Impact Capital

Open Letter from JANA Partners and CalSTRS to Apple Inc. dated January 6, 2018

Partners

JANA Partners LLC

JANA Partners is an investment manager specializing in event-driven investing founded in 2001 by Barry Rosenstein. JANA typically applies a fundamental value analysis discipline to identify companies that have one or more specific catalysts to unlock value. In certain cases, JANA can be the instrument for value creation by becoming an actively engaged shareholder.

The California State Teachers’ Retirement System

The California State Teachers’ Retirement System, with a portfolio valued at $219.6 billion as of October 31, 2017, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s more than 914,000 public school educators and their families from the state’s 1,700 school districts, county offices of education and community college districts.

Dr. Michael Rich

Michael Rich, MD, MPH, is Associate Professor of Pediatrics at Harvard Medical School, Associate Professor of Social and Behavioral Sciences at the Harvard School of Public Health, and practices Adolescent Medicine at Boston Children’s Hospital. He is the Founder and Director of the Center on Media and Child Health (CMCH) as well as a pediatrician, researcher, father, and media aficionado. As The Mediatrician®, Dr. Rich offers research-based answers parents’, teachers’, and clinicians’ questions about children’s media use and implications for their health and development. Ask the Mediatrician® provides information and strategies that are balanced, practical, and based in scientific evidence from the Database of Research (soon to be relaunched as Mediatrics), the comprehensive CMCH library of rigorous science from more than a dozen academic disciplines that address the effects of media on health and human development.

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Professor Jean M. Twenge

Jean M. Twenge, Professor of Psychology at San Diego State University, is the author of more than 140 scientific publications and books. Dr. Twenge frequently gives talks and seminars on teaching and working with today’s young generation based on a dataset of 11 million young people. Her research has been covered in Time, Newsweek, The New York Times, USA Today, U.S. News and World Report, and The Washington Post, and she has been featured on Today, Good Morning America, CBS This Morning, Fox and Friends, NBC Nightly News, Dateline NBC, and National Public Radio.

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