Apple 2005 Annual Report Download - page 45

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purchase property, plant, and equipment of $260 million. The Company’s short-term investment portfolio is primarily invested in high credit
quality, liquid investments. As of September 24, 2005, approximately $4.3 billion of the Company’s cash, cash equivalents, and short-term
investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. Amounts held by foreign
subsidiaries are generally 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.
Capital Expenditures
The Company’s total capital expenditures were $260 million during 2005, $132 million of which were for retail store facilities and equipment
related to the Company’s Retail segment and $128 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
$390 million for capital expenditures during 2006, approximately $210 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.
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.
Since inception of the stock repurchase plan, the Company had repurchased a total of 13.1 million shares at a cost of $217 million. The
Company has not engaged in any transactions to repurchase its common stock during 2005 or 2004. The Company was authorized to
repurchase up to an additional $283 million of its common stock as of September 24, 2005.
On February 28, 2005, the Company effected a two-for-one stock split to shareholders of record as of February 18, 2005. All share and per
share information has been retroactively adjusted to reflect the stock split.
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.
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