Apple 2007 Annual Report Download - page 71

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Note 2
—
Financial 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 issued by foreign companies, and certificates of deposit and time
deposits with foreign institutions, most of which are denominated in U.S. dollars. The Company had $11 million in net unrealized losses on its
investment portfolio, primarily related to investments with stated maturities ranging from 1 to 5 years, as of September 29, 2007, and net
unrealized losses of approximately $687,000 on its investment portfolio, primarily related to investments with stated maturities less than 1 year,
as of September 30, 2006. The Company may sell its investments prior to their stated maturities for strategic purposes, in anticipation of credit
deterioration, or for duration management. The Company recognized net gains before taxes of approximately $474,000 in 2007 and net losses
before taxes of approximately $434,000 and $137,000 in 2006 and 2005, respectively.
As of September 29, 2007 and September 30, 2006, $1.9 billion and $921 million, respectively, of the Company's short-term investments had
underlying maturities ranging from 1 to 5 years. The remaining short-term investments as of September 29, 2007 and September 30, 2006 had
maturities less than 12 months.
In accordance with FASB Staff Position ("FSP") FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments,
the following table shows the gross unrealized losses and fair value for those investments that were in an
unrealized loss position as of
67
September 29, 2007
September 30, 2006
Cash
$
256
$
200
U.S. Treasury and Agency securities
670
52
U.S. Corporate securities
5,597
4,309
Foreign securities
2,829
1,831
Total cash equivalents
9,096
6,192
U.S. Treasury and Agency securities
358
447
U.S. Corporate securities
4,718
2,701
Foreign securities
958
570
Total short
-
term investments
6,034
3,718
Total cash, cash equivalents, and short-term
investments
$
15,386
$
10,110