Apple 2004 Annual Report Download - page 46

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Liquidity and Capital Resources
The following table presents selected financial information and statistics for each of the last three fiscal years (dollars in millions):
(a)
2004
2003
2002
Cash, cash equivalents, and short
-
term investments
$
5,464
$
4,566
$
4,337
Accounts receivable, net
$
774
$
766
$
565
Inventory
$
101
$
56
$
45
Working capital
$
4,375
$
3,530
$
3,730
Days sales in accounts receivable (DSO) (a)
30
41
36
Days of supply in inventory (b)
5
4
4
Days payables outstanding (DPO) (c)
76
82
77
Annual operating cash flow
$
934
$
289
$
89
DSO is based on ending net trade receivables and most recent quarterly net sales for each period.
(b)
Days supply of inventory is based on ending inventory and most recent quarterly cost of sales for each period.
(c) DPO is based on ending accounts payable and most recent quarterly cost of sales adjusted for the change in inventory.
As of September 25, 2004, the Company had $5.464 billion in cash, cash equivalents, and short-term investments, an increase of $898 million
over the same balances at the end of fiscal 2003. The principal components of this increase were cash generated by operating activities of
$934 million and proceeds of $427 million from the issuance of common stock under stock plans, partially offset by cash used to repay the
Company's outstanding debt of $300 million and purchases of property, plant, and equipment of $176 million. The Company's short-term
investment portfolio is primarily invested in high credit quality, liquid investments. Approximately $3.2 billion of this cash, cash equivalents,
and short-term investments are held by the Company's foreign subsidiaries and would be subject to U.S. income taxation on repatriation to the
U.S. The Company is currently assessing the impact of the one-time favorable foreign dividend provisions recently enacted as part of the
American Jobs Creation Act of 2004, and may decide to repatriate earnings from some of its foreign subsidiaries.
The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital
needs, capital expenditures, stock repurchase activity, outstanding commitments, and other liquidity requirements associated with its existing
operations over the next 12 months.
Debt
In February 2004, the Company retired $300 million of debt outstanding in the form of 6.5% unsecured notes. The notes were originally issued
in 1994 and were sold at 99.9925% of par for an effective yield to maturity of 6.51%. The Company currently has no long-term debt obligations.
Capital Expenditures
The Company's total capital expenditures were $176 million during fiscal 2004, $104 million of which were for retail store facilities and
equipment related to the Company's Retail segment and $72 million of which were primarily for corporate infrastructure, including information
systems enhancements and operating facilities enhancements and expansions. The Company currently anticipates it will utilize approximately
$240 million for capital expenditures during 2005, approximately $125 million of which is expected to be utilized for further expansion of the
Company's Retail segment and the remainder utilized to support normal replacement of existing capital assets and enhancements to general
information technology infrastructure.
43