Apple 2003 Annual Report Download - page 55

Cash, Cash Equivalents and Short-Term Investments
The following table summarizes the fair value of the Company's cash and available-for-sale securities held in its short-term investment
portfolio, recorded as cash and cash equivalents or short-term investments as of September 27, 2003, and September 28, 2002 (in millions):
The Company's short-term investment portfolio consists of investments in U.S. Treasury and Agency securities, U.S. corporate securities, and
foreign securities. The Company's U.S. corporate securities consist primarily of commercial paper, certificates of deposit, time deposits and
corporate debt securities. Foreign securities consist primarily of foreign commercial paper, certificates of deposit and time deposits with foreign
institutions, most of which are denominated in U.S. dollars. The Company had net unrealized losses totaling $1 million on its investment
portfolio, primarily related to investments with stated maturities greater than 1 year as of September 27, 2003 and net unrealized gains of
$20 million on its investment portfolio, primarily related to investments with stated maturities greater than 1 year, as of September 28, 2002.
The Company occasionally sells short-term investments prior to their stated maturities. As a result of such sales, the Company recognized net
gains of $21 million in 2003 and $7 million in 2002. These net gains were included in interest and other income, net.
As of September 27, 2003, approximately $629 million of the Company's short-term investments had underlying maturities ranging from 1 to
5 years. The remaining short-term investments as of September 27, 2003 had maturities of 3 to 12 months. As of September 28, 2002,
approximately $1.087 billion of the Company's short-term investments had underlying maturities ranging from 1 to 5 years. The remaining
short-term investments as of September 28, 2002 had maturities of 3 to 12 months.
Accounts Receivable
Trade Receivables
The Company distributes its products through third-party resellers and directly to certain education, consumer, and commercial customers. The
Company generally does not require collateral from its customers. However, when possible the Company does attempt to limit credit risk on
trade receivables with credit insurance for certain customers in Latin America, Europe and Asia and by arranging with third-
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party financing companies to provide flooring arrangements and other loan and lease programs to the Company's direct customers. These credit
financing arrangements are directly between the third-party financing company and the end customer. As such, the Company does not assume
any recourse or credit risk sharing related to any of these arrangements. However, considerable trade receivables that are not covered by
collateral, third-party flooring arrangements, or credit insurance are outstanding with the Company's distribution and retail channel partners.
Trade receivables from a single customer, Ingram Micro, Inc., accounted for approximately 10.3% and 10.8% of net accounts receivable as of
September 27, 2003, and September 28, 2002, respectively.
The following table summarizes the activity in the allowance for doubtful accounts (in millions):
September 27, 2003 September 28, 2002
Cash
$
158
$
161
U.S. Treasury and Agency securities
87
47
U.S. corporate securities
2,368
1,828
Foreign securities
783
216
Total cash equivalents
3,238
2,091
U.S. Treasury and Agency securities
454
674
U.S. corporate securities
623
1,330
Foreign securities
93
81
Total short
-
term investments
1,170
2,085
Total cash, cash equivalents, and short
-
term investments
$
4,566
$
4,337
2003 2002 2001