Apple 2005 Annual Report Download - page 74

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1—Summary of Significant Accounting Policies (Continued)
Segment Information
The Company reports segment information based on the “management” approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance as the source of the Company’s reportable segments. Information about
the Company’s products, major customers, and geographic areas on a company-wide basis is also disclosed.
Note 2—Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses 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 (in millions):
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 $5.9 million on its investment portfolio,
approximately half of which related to investments with stated maturities less than 1 year as of September 24, 2005 and net unrealized losses of
$6.3 million on its investment portfolio, primarily related to investments with stated maturities less than 1 year as of September 25, 2004. The
Company occasionally sells short-term investments prior to their stated maturities. The Company recognized a net loss before taxes of
$137,000 in 2005 and net gains before taxes of $1 million and $21 million in 2004 and 2003, respectively, as a result of such sales. These net
gains were included in interest and other income, net.
As of September 24, 2005, approximately $287 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 24, 2005 had maturities of 3 to 12 months. 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.
72
September 24,
2005
September 25,
2004
Cash
$
127
$
200
U.S. Treasury and Agency securities
89
87
U.S. corporate securities
2,030
1,795
Foreign securities
1,245
887
Total cash equivalents
3,364
2,769
U.S. Treasury and Agency securities
216
1,080
U.S. corporate securities
3,662
1,352
Foreign securities
892
63
Total short-term investments
4,770
2,495
Total cash, cash equivalents, and short-term investments
$
8,261
$
5,464