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Table of Contents
third parties, related cost of sales and operating expenses directly attributable to the segment. Advertising expenses are generally included in the
geographic segment in which the expenditures are incurred. Operating income for each segment excludes other income and expense and certain
expenses managed outside the operating segments. Costs excluded from segment operating income include various corporate expenses, such as
manufacturing costs and variances not included in standard costs, research and development, corporate marketing expenses, stock-
based
compensation expense, income taxes, various nonrecurring charges, and other separately managed general and administrative costs. The
Company does not include intercompany transfers between segments for management reporting purposes. Segment assets exclude corporate
assets, such as cash, short-term and long-
term investments, manufacturing and corporate facilities, miscellaneous corporate infrastructure,
goodwill and other acquired intangible assets. Except for the Retail segment, capital asset purchases for long-
lived assets are not reported to
management by segment. Cash payments for capital asset purchases by the Retail segment were $369 million, $389 million and $294 million for
2009, 2008 and 2007, respectively.
The Company has certain retail stores that have been designed and built to serve as high-
profile venues to promote brand awareness and serve as
vehicles for corporate sales and marketing activities. Because of their unique design elements, locations and size, these stores require
substantially more investment than the Company’
s more typical retail stores. The Company allocates certain operating expenses associated with
its high-profile stores to corporate marketing expense to reflect the estimated Company-
wide benefit. The allocation of these operating costs to
corporate expense is based on the amount incurred for a high-
profile store in excess of that incurred by a more typical Company retail location.
The Company had opened a total of 11 high-
profile stores as of September 26, 2009. Expenses allocated to corporate marketing resulting from
the operations of high-profile stores were $65 million, $53 million and $39 million for 2009, 2008 and 2007, respectively.
Summary information by operating segment for the three years ended September 26, 2009 is as follows (in millions):
86
2009
2008
2007
Americas:
Net sales
$
16,142
$
14,573
$
11,596
Operating income
$
4,772
$
4,051
$
2,949
Depreciation, amortization and accretion
$
11
$
9
$
9
Segment assets (a)
$
4,290
$
3,039
$
1,497
Europe:
Net sales
$
9,365
$
7,622
$
5,460
Operating income
$
2,913
$
2,313
$
1,348
Depreciation, amortization and accretion
$
7
$
6
$
6
Segment assets
$
2,994
$
1,775
$
595
Japan:
Net sales
$
1,831
$
1,509
$
1,082
Operating income
$
657
$
440
$
232
Depreciation, amortization and accretion
$
2
$
2
$
3
Segment assets
$
638
$
302
$
159
Retail:
Net sales
$
6,574
$
6,315
$
4,115
Operating income
$
1,392
$
1,337
$
875
Depreciation, amortization and accretion (b)
$
146
$
108
$
88
Segment assets (b)
$
1,929
$
1,869
$
1,085
Other Segments (c):
Net sales
$
2,625
$
2,460
$
1,753
Operating income
$
748
$
615
$
388
Depreciation, amortization and accretion
$
4
$
4
$
3
Segment assets
$
953
$
534
$
252