Apple 1996 Annual Report Download - page 36

The following table summarizes the Company's available-for-sale securities as of September 29, 1995:
(In millions)
The gross realized gains recorded to earnings on sales of available-for-sale securities, as well as the related cash proceeds from those sales,
were $15 million and $1 million in 1996 and 1995, respectively. There were no gross realized losses recorded to earnings on sales of available-
for-sale securities in 1996 or 1995.
The Company's cash and cash equivalent balance at September 27, 1996, includes $177 million pledged primarily as collateral to support
letters of credit, and at September 29, 1995, includes $90 million pledged as collateral to support notes payable to banks.
Interest Rate Derivatives and Foreign Currency Instruments The table on page 35 shows the notional principal, fair value, and credit risk
amounts of the Company's interest rate derivative and foreign currency instruments as of September 27, 1996, and September 29, 1995. The
notional principal amounts for off-balance-sheet instruments provide one measure of the transaction volume outstanding as of year end, and do
not represent the amount of the Company's exposure to credit or market loss. The credit risk amount shown in the table below represents the
Company's gross exposure to potential accounting loss on these transactions if all counterparties failed to perform according to the terms of the
contract, based on then-current currency exchange and interest rates at each respective date. The Company's exposure to credit loss and market
risk will vary over time as a function of interest rates and currency exchange rates.
The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information as of
September 27, 1996, and September 29, 1995. In certain instances where judgment is required in estimating fair value, price quotes were
obtained from several of the Company's counterparty financial institutions. Although the table below reflects the notional principal, fair value,
and credit risk amounts of the Company's interest rate and foreign exchange instruments, it does not reflect the gains or losses associated with
the exposures and transactions that the interest rate and foreign exchange instruments are intended to hedge. The amounts ultimately realized
upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market
conditions during the remaining life of the instruments.
34
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
U.S. Treasury securities
and obligations of U.S.
government agencies $ 232 $ -- $ -- $ 232
U.S. corporate debt
securities 140 -- -- 140
Foreign government
securities 456 2 -- 458
Total included in cash
and cash equivalents $ 828 $ 2 $ -- $ 830
U.S. corporate
debt securities $ 48 $ -- $ -- $ 48
Foreign government
securities 146 -- -- 146
Total included in
short-term investments$ 194 $ -- $ -- $ 194
Equity securities $ 1 $ 42 $ -- $ 43
Total included in
other assets $ 1 $ 42 $ -- $ 43
Total $1,023 $ 44 $ -- $1,067