Apple 2007 Annual Report Download - page 72

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September 29, 2007 and September 30, 2006, aggregated by investment category and the length of time that individual securities have been in a
continuous loss position (in millions):
The unrealized losses on the Company's investments during 2007 in U.S. Corporate securities and foreign securities and during 2006 in U.S.
Corporate securities were caused primarily by changes in interest rates. The Company typically invests in highly-rated securities with strong
liquidity and with low probabilities of default. The Company's investment policy requires investments to be rated single-A or better. Therefore,
the Company considers the declines to be temporary in nature. During 2007, the Company did not record any material impairment on
outstanding securities. As of September 29, 2007, the Company does not consider the investments to be other-than-temporarily impaired.
Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-
temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the
financial condition of the issuer, and the Company's ability and intent to hold the investment for a period of time, which may be sufficient for
anticipated recovery in market value.
Accounts Receivable
Trade Receivables
The Company distributes its products through third-party distributors and resellers and directly to certain education, consumer, and commercial
customers. The Company generally does not require collateral from its customers; however, the Company requires collateral in certain instances
to limit credit risk. In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain
customers in Latin America, Europe, Asia, and Australia by arranging with third-party financing companies to provide flooring arrangements
and other loan and lease programs to the Company's direct customers. These credit-financing arrangements are directly between the third-party
financing company and the end customer. As such, the Company generally does not assume any recourse or credit risk sharing related to any of
these arrangements. However, considerable trade receivables not
68
2007
Less than 12 Months
12 Months or Greater
Total
Security Description
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
U.S. Treasury and Agency securities
$
338
$
—
$
—
$
—
$
338
$
—
U.S. Corporate securities
2,521
(12
)
32
—
2,553
(12
)
Foreign securities
474
(1
)
8
—
482
(1
)
Total
$
3,333
$
(13
)
$
40
$
—
$
3,373
$
(13
)
2006
Less than 12 Months
12 Months or Greater
Total
Security Description
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
U.S. Treasury and Agency securities
$
234
$
—
$
26
$
—
$
260
$
—
U.S. Corporate securities
943
—
102
(1
)
1,045
(1
)
Foreign securities
164
—
34
—
198
—
Total
$
1,341
$
—
$
162
$
(1
)
$
1,503
$
(1
)