By Michael Hirschfeld, BloombergTechnologyThe company announced Friday it’s “sadly” in the red in the annual report for the year, saying it had a $1.2 billion net loss for the quarter, and that it would have to slash spending by 10% of total revenue if it wanted to maintain its financial footing.

Apple said its revenue of $34.9 billion fell from a year earlier, mainly because of lower smartphone sales and a slowdown in China.

Apple’s iPhone business, which includes the iPhone and iPad line, saw its revenues fall 1.9% to $31.4 billion.

The company also said it had been unable to make the company’s iPhone software profitable enough to maintain iPhone sales and profitability.

Apple said its total operating expenses were $9.5 billion, which would have meant $5.5 for every dollar Apple earned.

Apple reported that it had $1,890 billion in cash on hand and $6.5 trillion in its balance sheet.