Apple 2002 Annual Report Download - page 42

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See accompanying notes to consolidated financial statements.
52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Summary of Significant Accounting Policies
Apple Computer, Inc. and its subsidiaries (the Company) designs, manufactures, and markets personal computers and related personal
computing and communicating solutions for sale primarily to education, creative, consumer, and business customers.
Basis of Presentation and Preparation
The accompanying consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been
eliminated. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and
accompanying notes. Actual results could differ materially from those estimates.
Typically, the Company's fiscal year ends on the last Saturday of September. Fiscal years 2002 and 2001 were each 52-week years. However,
approximately every six years, the Company reports a 53-
week fiscal year to align its fiscal quarters with calendar quarters by adding a week to
its first fiscal quarter. Consequently, an additional week was added to the first quarter of fiscal 2000. All information presented herein is based
on the Company's fiscal calendar.
Financial Instruments
Investments
The Company places its short-term investments in highly liquid securities issued by high credit quality issuers. All highly liquid investments
with maturities of three months or less at the date of purchase are classified as cash equivalents; highly liquid investments with maturities
greater than three months are classified as short
-
term investments. Management determines the appropriate classification of its investments in
Investing:
Purchase of short
-
term investments
(4,144
)
(4,268
)
(4,267
)
-
term investments
2,846
4,811
3,075
Proceeds from sales of short
-
term investments
1,254
278
256
Purchases of long
-
term investments
—
(
1
)
(232
)
Purchase of property, plant, and equipment
(174
)
(232
)
(142
)
Proceeds from sales of equity investments
25
340
372
Cash used for business acquisitions
(52
)
—
—
Other
(7
)
(36
)
(34
)
Cash generated by (used for) investing activities
(252
)
892
(972
)
Financing:
Proceeds from issuance of common stock
105
42
85
Cash used for repurchase of common stock
—
—
(
116
)
Cash generated by (used for) financing activities
105
42
(31
)
Increase (decrease) in cash and cash equivalents
(58
)
1,119
(135
)
Cash and cash equivalents, end of the year
$
2,252
$
2,310
$
1,191
Supplemental cash flow disclosures:
Cash paid during the year for interest
$
20
$
20
$
20
Cash paid for income taxes, net
$
11
$
42
$
47
Noncash transactions:
Issuance of common stock for conversion of Series A preferred stock
$
—
$
76
$
74
Issuance of common stock in connection with acquisition
$
—
$
66
$
—