Apple 2010 Annual Report Download - page 44

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Table of Contents
Capital Assets
The Company’
s capital expenditures were $2.6 billion during 2010, consisting of approximately $404 million for retail store facilities and $2.2
billion for other capital expenditures, including product tooling and manufacturing process equipment and corporate facilities and infrastructure.
The Company’s actual cash payments for capital expenditures during 2010 were $2 billion.
The Company anticipates utilizing approximately $4.0 billion for capital expenditures during 2011, including approximately $600 million for
retail store facilities and approximately $3.4 billion for product tooling and manufacturing process equipment, and corporate facilities and
infrastructure, including information systems hardware, software and enhancements.
Historically the Company has opened between 25 and 50 new retail stores per year. During 2011, the Company expects to open 40 to 50 new
stores, over half of which are expected to be located outside of the U.S.
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.
The following table presents certain payments due by the Company under contractual obligations with minimum firm commitments as of
September 25, 2010 and excludes amounts already recorded on the Consolidated Balance Sheet (in millions):
Lease Commitments
As of September 25, 2010, the Company had total outstanding commitments on noncancelable operating leases of $2.1 billion, $1.7 billion of
which related to the lease of retail space and related facilities. The Company’
s major facility leases are typically for terms not exceeding 10 years
and generally provide renewal options for terms not exceeding five additional years. Leases for retail space are for terms ranging from five to 20
years, the majority of which are for ten years, and often contain multi
-year renewal options.
Purchase Commitments with Contract Manufacturers and Component Suppliers
The Company utilizes several contract manufacturers to manufacture sub-assemblies for the Company’
s products and to perform final assembly
and test of finished products. These contract manufacturers acquire components and build product based on demand information supplied by the
Company, which typically covers periods ranging from 30 to 150 days. The Company also obtains individual components for its products from a
wide variety of individual suppliers. Consistent with industry practice, the Company acquires components through a combination of purchase
orders, supplier contracts, and open orders based on projected demand information.
41
Total
Payments
Due in
Less
Than
1 Year
Payments
Due in
1-
3 Years
Payments
Due in
4-
5 Years
Payments
Due in
More
Than
5 Years
Operating leases
$
2,089
$
266
$
527
$
470
$
826
Purchase obligations
8,700
8,700
0
0
0
Other obligations
1,096
912
176
6
2
Total
$
11,885
$
9,878
$
703
$
476
$
828