Apple 2014 Annual Report Download - page 38

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Capital Assets
The Company’s capital expenditures were $11.0 billion during 2014, consisting of $491 million for retail store facilities and
$10.5 billion for other capital expenditures, including product tooling and manufacturing process equipment and other
corporate facilities and infrastructure. The Company’s actual cash payments for capital expenditures during 2014 were $9.6
billion.
The Company anticipates utilizing approximately $13.0 billion for capital expenditures during 2015, including approximately
$600 million for retail store facilities and approximately $12.4 billion for other capital expenditures, including product tooling and
manufacturing process equipment, data centers and corporate facilities and infrastructure, including information systems
hardware, software and enhancements.
During 2015, the Company expects to open about 25 new retail stores, with approximately three-quarters located outside of
the U.S. During 2015, the Company also expects to remodel approximately five of its existing stores.
Debt
In April 2014, the Board of Directors authorized the Company to issue unsecured short-term promissory notes (“Commercial
Paper”) pursuant to a commercial paper program. The Company intends to use the net proceeds from the commercial paper
program for general corporate purposes, including dividends and share repurchases. As of September 27, 2014, the Company
had $6.3 billion of Commercial Paper outstanding, with a weighted-average interest rate of 0.12% and maturities generally less
than nine months.
In the third quarter of 2014 and 2013, the Company issued $12.0 billion and $17.0 billion of long-term debt, respectively. The
debt issuances included floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $29.0 billion
(collectively the “Notes”). The Company has entered, and may enter in the future, into interest rate swaps to manage interest
rate risk on the Notes. Interest rate swaps allow the Company to effectively convert fixed-rate payments into floating-rate
payments or floating-rate payments into fixed-rate payments. In the third quarter of 2014, the Company entered into interest
rate swaps with an aggregate notional amount of $9.0 billion, which effectively converted most of the fixed-rate notes into
floating-rate notes, and in the third quarter of 2013, the Company entered into interest rate swaps with an aggregate notional
amount of $3.0 billion, which effectively converted the floating-rate notes into fixed-rate notes.
Capital Return Program
In April 2014, the Company’s Board of Directors increased the share repurchase program authorization from $60 billion to $90
billion of the Company’s common stock, of which $67.9 billion had been utilized as of September 27, 2014. The share
repurchase program is expected to be completed by the end of December 2015. The Company’s share repurchase program
does not obligate it to acquire any specific number of shares. Under the program, shares may be repurchased in privately
negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
Apple Inc. | 2014 Form 10-K | 36