Apple 2004 Annual Report Download - page 47

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Stock Repurchase Plan
In July 1999, the Company's Board of Directors authorized a plan for the Company to repurchase up to $500 million of its common stock. This
repurchase plan does not obligate the Company to acquire any specific number of shares or acquire shares over any specified period of time.
During the fourth quarter of 2001, the Company entered into a forward purchase agreement to acquire 1.5 million shares of its common stock in
September of 2003 at an average price of $16.64 per share for a total cost of $25.5 million. In August 2003, the Company settled this agreement
prior to its maturity, at which time the Company's common stock had a fair value of $22.81. Other than this forward purchase transaction, the
Company has not engaged in any transactions to repurchase its common stock since fiscal 2000. Since inception of the stock repurchase plan, the
Company had repurchased a total of 6.55 million shares at a cost of $217 million. The Company was still authorized to repurchase up to an
additional $283 million of its common stock as of September 25, 2004.
Off-Balance Sheet Arrangements and Contractual Obligations
The Company has not entered into any transactions with unconsolidated entities whereby the Company has financial guarantees, subordinated
retained interests, derivative instruments or other contingent arrangements that expose the Company to material continuing risks, contingent
liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk
support to the Company.
The following table presents certain payments due by the Company under contractual obligations with minimum firm commitments as of
September 25, 2004 and excludes amounts already recorded on the Company's balance sheet as current liabilities (in millions):
Lease Commitments
As of September 25, 2004, the Company had total outstanding commitments on noncancelable operating leases of approximately $617 million,
$436 million of which related to the lease of retail space and related facilities. Remaining terms on the Company's existing operating leases range
from 2 to 16 years.
Purchase Obligations
The Company utilizes several contract manufacturers to manufacture sub-assemblies for the Company's products and to perform final assembly
and test of finished products. These contract manufacturers acquire components and build product based on demand information supplied by the
Company, which typically covers periods ranging from 30 to 130 days. The Company also obtains individual components for its products from a
wide variety of individual suppliers. Consistent with industry practice, the Company acquires components through a combination of purchase
orders, supplier contracts, and open orders based on projected demand information. Such purchase commitments typically cover the Company's
forecasted component and manufacturing requirements for periods ranging from 30 to 130 days. The nature of the Company's outstanding third-
party manufacturing commitments and component purchase commitments has not changed significantly since the end of its fiscal 2003. As of
September 25, 2004, the Company had
44
TOTAL
Payments
Due in Less
Than 1 year
Payments
Due in
1-3 years
Payments
Due in
4-5 years
Payments
Due in More
Than 5 years
Operating Leases
$
617
$
89
$
170
$
126
$
232
Purchase Obligations
1,112
1,112
—
—
—
Asset Retirement Obligations
12
—
1
2
9
Other Obligations
24
14
10
—
—
Total
$
1,765
$
1,215
$
181
$
128
$
241