Apple 2004 Annual Report Download - page 77

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Note 2
—
Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair value
due to the short maturities of those instruments.
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 25, 2004, and September 27, 2003 (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 $4 million on its investment
portfolio, primarily related to investments with stated maturities less than 1 year as of September 25, 2004 and net unrealized gains of $1 million
on its investment portfolio, primarily related to investments with stated maturities greater than 1 year, as of September 27, 2003. The Company
occasionally sells short-
term investments prior to their stated maturities. As a result of such sales, the Company recognized net gains before taxes
of $1 million in 2004, $21 million in 2003 and $7 million in 2002. These net gains were included in interest and other income, net.
As of September 25, 2004, approximately $180 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 25, 2004 had maturities of 3 to 12 months. 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.
In accordance with EITF 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments , the following
table shows the gross unrealized losses and fair value of the Company's
73
September 25, 2004
September 27,
2003
Cash
$
200
$
158
U.S. Treasury and Agency securities
87
87
U.S. corporate securities
1,795
2,368
Foreign securities
887
783
Total cash equivalents
2,769
3,238
U.S. Treasury and Agency securities
1,080
454
U.S. corporate securities
1,352
623
Foreign securities
63
93
Total short
-
term investments
2,495
1,170
Total cash, cash equivalents, and short
-
term investments
$
5,464
$
4,566