Apple 1999 Annual Report Download - page 30

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chose to convert virtually all of the outstanding debentures to common stock at a rate of $29.205 per share resulting in the issuance of
approximately 22.6 million shares of the Company's common stock.
During 1994, the Company issued $300 million aggregate principal amount of 6.5% unsecured notes in a public offering registered with the
SEC. The notes were sold at 99.925% of par, for an effective yield to maturity of 6.51%. The notes pay interest semiannually and mature on
February 15, 2004.
The following table presents the principal (or notional) amounts and related weighted-average interest rates for the Company's investment
portfolio and its long-term debt obligations. The long-term debt is comprised of $300 million of unsecured notes described above, which
mature in February 2004. The Company's U.S. corporate securities include commercial paper, loan participations, certificates of deposit, time
deposits and corporate debt securities. Foreign securities include foreign commercial paper, loan participation, certificates of deposit and time
deposits with foreign institutions, most of which are denominated in U.S. dollars. The Company's cash equivalents and short-term investments
have generally been held until maturity. Gross unrealized gains and losses were negligible as of September 25, 1999 and 1998.
In millions, except weighted-average interest rates
Purchased floors are options limiting the Company's exposure to falling interest rates on its cash equivalents and short-term investments by
locking in a minimum interest rate. The Company receives a payment when interest rates fall below a predetermined level. A purchased floor
generally qualifies for hedge accounting treatment and is reported on the balance sheet at its premium cost, which is amortized over the life of
the floor. The purchased floors are generally designated and effective as hedges against interest rate risk on the Company's securities classified
as available-for-sale and are carried at fair value in other current liabilities with the unrealized gains and losses recorded as a component of
accumulated other comprehensive income. Purchased floors outstanding as of September 25, 1998, provided the Company with the option of a
weighted-average interest rate of 5.15% on the notional amount of $525 million. There were no purchased floors outstanding as of September
25, 1999. Gains and losses are recognized in income as a component of interest and other income (expense), net in the same period as the
hedged transaction. Unrealized gains and losses on such contracts were immaterial as of September 25, 1998.
27
SEPTEMBER 25, 1999 SEPTEMBER 25, 1998
-------------------- --------------------
WEIGHTED- WEIGHTED-
AVERAGE AVERAGE
CARRYING INTEREST CARRYING INTEREST
AMOUNT RATE AMOUNT RATE
-------- --------- -------- ---------
Assets:
Cash equivalents:
U.S. Treasury and Agency securities................ $ 3 5.00% $ 10 5.45%
U.S. corporate securities.......................... 517 5.16% 785 5.55%
Foreign securities................................. 636 4.94% 613 5.55%
------ ------
Total cash equivalents........................... 1,156 5.04% 1,408 5.55%
------ ------
Short-term investments:
U.S. Treasury and Agency securities................ $ 298 5.57% $ 0 N/A
U.S. corporate securities.......................... 780 5.72% 163 5.56%
Foreign securities................................. 822 5.39% 656 5.54%
------ ------
Total short-term investments..................... 1,900 5.55% 819 5.54%
------ ------
Total investment securities.......................... $3,056 5.36% $2,227 5.55%
====== ======
Debt:
Fixed rate........................................... $ 300 5.98% $ 954 6.07%
====== ======