Apple 2011 Annual Report Download - page 73

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current assets and $1.6 billion are classified as other assets in the Consolidated Balance Sheets. The Company had a total of $956 million of
inventory component prepayments outstanding as of September 25, 2010. The Company’
s outstanding prepayments will be applied to certain
inventory component purchases made during the term of each respective agreement.
Other Off-Balance Sheet Commitments
Lease Commitments
The Company leases various equipment and facilities, including retail space, under noncancelable operating lease arrangements. The Company
does not currently utilize any other off-
balance sheet financing arrangements. The 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. As of September 24, 2011, the Company’
s
total future minimum lease payments under noncancelable operating leases were $3.0 billion, of which $2.4 billion related to leases for retail
space.
Rent expense under all operating leases, including both cancelable and noncancelable leases, was $338 million, $271 million and $231 million in
2011, 2010 and 2009, respectively. Future minimum lease payments under noncancelable operating leases having remaining terms in excess of
one year as of September 24, 2011, are as follows (in millions):
Other Commitments
As of September 24, 2011, the Company had outstanding off-
balance sheet commitments for outsourced manufacturing and component
purchases of $13.9 billion.
Additionally, other outstanding obligations were $2.4 billion as of September 24, 2011, and were comprised mainly of commitments under long-
term supply agreements to make additional inventory component prepayments and to acquire capital equipment, commitments to acquire product
tooling and manufacturing process equipment, and commitments related to advertising, research and development, Internet and
telecommunications services and other obligations.
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and have not been fully
adjudicated, which are discussed in Part I, Item 3 of this Form 10-K under the heading “Legal Proceedings”
and in Part I Item 1A under the
heading “Risk Factors.”
In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material
loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently
uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were
resolved against the Company in the same reporting period for amounts in excess of management’s expectations, the Company’
s consolidated
financial statements of a particular reporting period could be materially adversely affected.
71
Years
2012
$
338
2013
365
2014
362
2015
345
2016
320
Thereafter
1,302
Total minimum lease payments
$
3,032