AAPL » Topics » Liquidity and Capital Resources

This excerpt taken from the AAPL 10-K filed Jan 25, 2010.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of and for the three years ended September 26, 2009 (in millions):

 

     2009    2008    2007

Cash, cash equivalents and marketable securities

   $ 33,992    $ 24,490    $ 15,386

Accounts receivable, net

   $ 3,361    $ 2,422    $ 1,637

Inventories

   $ 455    $ 509    $ 346

Working capital

   $ 20,049    $ 18,645    $ 12,595

Annual operating cash flow

   $ 10,159    $ 9,596    $ 5,470

As of September 26, 2009, the Company had $34.0 billion in cash, cash equivalents and marketable securities, an increase of $9.5 billion from September 27, 2008. The principal component of this net increase was the cash generated by operating activities of $10.2 billion, which was partially offset by payments for acquisitions of property, plant and equipment of $1.1 billion.

The Company’s marketable securities investment portfolio is invested primarily in highly rated securities, generally with a minimum rating of single-A or equivalent. As of September 26, 2009 and September 27, 2008, $17.4 billion and $11.3 billion, respectively, of the Company’s cash, cash equivalents and marketable securities were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. The Company believes its existing balances of cash, cash equivalents and marketable securities will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $1.1 billion during 2009, consisting of $369 million for retail store facilities and $775 million for real estate acquisitions and corporate infrastructure including information systems enhancements. The Company anticipates utilizing approximately $1.9 billion for capital asset purchases during 2010, including approximately $400 million for Retail facilities and approximately $1.5 billion for corporate facilities, infrastructure, and product tooling and manufacturing process equipment.

Historically the Company has opened between 25 and 50 new retail stores per year. During 2010, the Company expects to open a number of new stores near the upper end of this range, over half of which are expected to be located outside of the U.S.

This excerpt taken from the AAPL 10-K filed Oct 27, 2009.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of and for the three years ended September 26, 2009 (in millions):

 

     2009    2008    2007

Cash, cash equivalents and marketable securities

   $ 33,992    $ 24,490    $ 15,386

Accounts receivable, net

   $ 3,361    $ 2,422    $ 1,637

Inventories

   $ 455    $ 509    $ 346

Working capital

   $ 16,983    $ 18,219    $ 10,728

Annual operating cash flow

   $ 10,159    $ 9,596    $ 5,470

As of September 26, 2009, the Company had $34.0 billion in cash, cash equivalents and marketable securities, an increase of $9.5 billion from September 27, 2008. The principal component of this net increase was the cash generated by operating activities of $10.2 billion, which was partially offset by payments for acquisitions of property, plant and equipment of $1.1 billion. The Company’s cash generated by operating activities significantly exceeded its net income due primarily to the increase in deferred revenue, net of deferred costs, associated with subscription accounting for iPhone.

 

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Table of Contents

The Company’s marketable securities investment portfolio is invested primarily in highly rated securities, generally with a minimum rating of single-A or equivalent. As of September 26, 2009 and September 27, 2008, $17.4 billion and $11.3 billion, respectively, of the Company’s cash, cash equivalents and marketable securities were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. The Company believes its existing balances of cash, cash equivalents and marketable securities will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $1.1 billion during 2009, consisting of $369 million for retail store facilities and $775 million for real estate acquisitions and corporate infrastructure including information systems enhancements. The Company anticipates utilizing approximately $1.9 billion for capital asset purchases during 2010, including approximately $400 million for Retail facilities and approximately $1.5 billion for corporate facilities, infrastructure, and product tooling and manufacturing process equipment.

Historically the Company has opened between 25 and 50 new retail stores per year. During 2010, the Company expects to open a number of new stores near the upper end of this range, over half of which are expected to be located outside of the U.S.

This excerpt taken from the AAPL 10-Q filed Apr 23, 2009.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of March 28, 2009 and September 27, 2008 (in millions):

 

        March 28, 2009       September 27, 2008

Cash, cash equivalents, and marketable securities

   $ 28,878    $ 24,490

Accounts receivable, net

   $ 1,932    $ 2,422

Inventory

   $ 312    $ 509

Working capital

   $ 20,102    $ 18,219

As of March 28, 2009, the Company had $28.9 billion in cash, cash equivalents, and marketable securities, an increase of $4.4 billion from September 27, 2008. The principal component of this net increase was the cash generated by operating activities of $4.8 billion, which was partially offset by payments for acquisitions of property, plant, and equipment of $439 million. The Company’s cash generated by operating activities significantly exceeded its net income due primarily to the increase in deferred revenue, net of deferred costs, associated with subscription accounting for iPhone.

 

35


The Company’s marketable securities investment portfolio is invested primarily in highly rated securities with a minimum rating of single-A. As of March 28, 2009 and September 27, 2008, $14.0 billion and $11.3 billion, respectively, of the Company’s cash, cash equivalents, and marketable securities were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. The Company believes its existing balances of cash, cash equivalents, and marketable securities will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $439 million during the first six months of 2009, consisting of approximately $101 million for Retail store facilities and $338 million for corporate facilities and infrastructure, including information systems enhancements. The Company anticipates utilizing approximately $1.2 billion for capital asset purchases during 2009, including approximately $350 million for Retail facilities and approximately $850 million for corporate facilities and infrastructure.

This excerpt taken from the AAPL 10-Q filed Jan 23, 2009.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of December 27, 2008 and September 27, 2008 (in millions):

 

     December 27, 2008    September 27, 2008

Cash, cash equivalents, and marketable securities

   $ 28,145    $ 24,490

Accounts receivable, net

   $ 2,196    $ 2,422

Inventory

   $ 396    $ 509

Working capital

   $ 20,406    $ 18,219

As of December 27, 2008, the Company had $28.1 billion in cash, cash equivalents, and marketable securities, an increase of $3.7 billion from September 27, 2008. The principal component of this net increase was the cash generated by operating activities of $3.9 billion, which was partially offset by payments for acquisitions of property, plant, and equipment of $339 million. The Company’s cash generated by operating activities significantly exceeded its net income due primarily to the increase in deferred revenue, net of deferred costs, associated with subscription accounting for iPhone.

The Company’s marketable securities investment portfolio is invested primarily in highly rated securities with a minimum rating of single-A. As of December 27, 2008 and September 27, 2008, $12.7 billion and $11.3 billion, respectively, of the Company’s cash, cash equivalents, and marketable securities were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. The Company believes its existing balances of cash, cash equivalents, and marketable securities will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $339 million during the first quarter of 2009, consisting of approximately $71 million for retail store facilities and $268 million for corporate facilities and infrastructure, including information systems enhancements. The Company anticipates utilizing approximately $1.3 billion for capital asset purchases during 2009, including approximately $350 million for Retail facilities and approximately $950 million for corporate facilities and infrastructure.

 

31


These excerpts taken from the AAPL 10-K filed Nov 5, 2008.

Liquidity and Capital Resources

The following table presents selected financial information and statistics as of and for the three fiscal years ended September 27, 2008 (in millions):

 

     2008    2007    2006

Cash, cash equivalents, and short-term investments

   $   24,490    $   15,386    $   10,110

Accounts receivable, net

   $ 2,422    $ 1,637    $ 1,252

Inventory

   $ 509    $ 346    $ 270

Working capital

   $ 20,598    $ 12,676    $ 8,066

Annual operating cash flow

   $ 9,596    $ 5,470    $ 2,220

As of September 27, 2008, the Company had $24.5 billion in cash, cash equivalents, and short-term investments, an increase of $9.1 billion from September 29, 2007. The principal components of this net increase were cash generated by operating activities of $9.6 billion, proceeds from the issuance of common stock under stock plans of $483 million and excess tax benefits from stock-based compensation of $757 million. These increases were partially offset by payments for acquisitions of property, plant, and equipment of $1.1 billion, payments made in connection with business acquisitions, net of cash acquired, of $220 million and payments for acquisitions of intangible assets of $108 million. The Company’s cash generated by operating activities significantly exceeded its net income due primarily to the large increase in deferred revenue, net of deferred costs, associated with subscription accounting for iPhone.

The Company’s short-term investment portfolio is invested primarily in highly rated securities with a minimum rating of single-A. As of September 27, 2008 and September 29, 2007, $11.3 billion and $6.5 billion, respectively, of the Company’s cash, cash equivalents, and short-term investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. The Company had $117 million in net unrealized losses on its investment portfolio, primarily related to investments with stated maturities ranging from one to five years, as of September 27, 2008, and net unrealized losses of approximately $11 million on its investment portfolio, primarily related to investments with stated maturities from one to five years, as of September 29, 2007. The Company has the intent and ability to hold such investments for a sufficient period of time to allow for recovery of the principal amounts invested. Accordingly, none of these declines in fair value were recognized in the Company’s Statement of Operations.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $1.1 billion during 2008, consisting of $389 million for retail store facilities and $702 million for real estate acquisitions and corporate infrastructure including information systems enhancements. The Company anticipates utilizing approximately $1.5 billion for capital asset purchases during 2009, including approximately $400 million for Retail facilities and approximately $1.1 billion for corporate facilities and infrastructure.

 

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Table of Contents

Liquidity and Capital Resources

STYLE="margin-top:0px;margin-bottom:0px">The following table presents selected financial information and statistics as of and for the three fiscal years ended September 27, 2008 (in millions):


 














































































   2008  2007  2006

Cash, cash equivalents, and short-term investments

  $  24,490  $  15,386  $  10,110

Accounts receivable, net

  $2,422  $1,637  $1,252

Inventory

  $509  $346  $270

Working capital

  $20,598  $12,676  $8,066

Annual operating cash flow

  $9,596  $5,470  $2,220

As of September 27, 2008, the Company had $24.5 billion in cash, cash equivalents, and short-term investments,
an increase of $9.1 billion from September 29, 2007. The principal components of this net increase were cash generated by operating activities of $9.6 billion, proceeds from the issuance of common stock under stock plans of $483 million and
excess tax benefits from stock-based compensation of $757 million. These increases were partially offset by payments for acquisitions of property, plant, and equipment of $1.1 billion, payments made in connection with business acquisitions, net of
cash acquired, of $220 million and payments for acquisitions of intangible assets of $108 million. The Company’s cash generated by operating activities significantly exceeded its net income due primarily to the large increase in deferred
revenue, net of deferred costs, associated with subscription accounting for iPhone.

The Company’s short-term investment portfolio is invested
primarily in highly rated securities with a minimum rating of single-A. As of September 27, 2008 and September 29, 2007, $11.3 billion and $6.5 billion, respectively, of the Company’s cash, cash equivalents, and short-term investments
were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. The Company had $117 million in net unrealized losses on its investment portfolio, primarily related to investments with stated maturities ranging from
one to five years, as of September 27, 2008, and net unrealized losses of approximately $11 million on its investment portfolio, primarily related to investments with stated maturities from one to five years, as of September 29, 2007. The
Company has the intent and ability to hold such investments for a sufficient period of time to allow for recovery of the principal amounts invested. Accordingly, none of these declines in fair value were recognized in the Company’s
Statement of Operations.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its
working capital needs, capital expenditures, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

FACE="Times New Roman" SIZE="2">Capital Assets

The Company’s cash payments for capital asset purchases were $1.1 billion during 2008,
consisting of $389 million for retail store facilities and $702 million for real estate acquisitions and corporate infrastructure including information systems enhancements. The Company anticipates utilizing approximately $1.5 billion for capital
asset purchases during 2009, including approximately $400 million for Retail facilities and approximately $1.1 billion for corporate facilities and infrastructure.

SIZE="1"> 


49







Table of Contents


This excerpt taken from the AAPL 10-Q filed Jul 23, 2008.

Liquidity and Capital Resources

The following table presents selected financial information and statistics for each of the fiscal quarters ended on the dates indicated (dollars in millions):

 

          June 28, 2008         September 29, 2007

Cash, cash equivalents, and short-term investments

   $ 20,774    $ 15,386

Accounts receivable, net

   $ 1,603    $ 1,637

Inventory

   $ 545    $ 346

Working capital

   $ 18,780    $ 12,676

As of June 28, 2008, the Company had $20.8 billion in cash, cash equivalents, and short-term investments, an increase of $5.4 billion from September 29, 2007. The principal components of this net increase were cash generated by operating activities of $5.3 billion, proceeds from the issuance of common stock under stock plans of $411 million, and excess tax benefits from stock-based compensation of $621 million. These increases were partially offset by purchases of property, plant, and equipment of $688 million. The Company’s short-term investment portfolio is invested primarily in highly rated securities with minimum ratings of single-A. As of June 28, 2008 and September 29, 2007, $9.2 billion and $6.5 billion, respectively, of the Company’s cash, cash equivalents, and short-term investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

 

30


Capital Assets

The Company’s cash payments for capital asset purchases were $688 million during the first nine months of 2008, consisting of approximately $251 million for retail store facilities and $437 million for corporate infrastructure, including information systems enhancements. The Company currently anticipates it will utilize approximately $1.2 billion for capital asset purchases during 2008, including approximately $400 million for expansion of the Company’s Retail segment, and approximately $800 million to support normal replacement of existing capital assets, including manufacturing related equipment and enhancements to general information technology infrastructure.

This excerpt taken from the AAPL 10-Q filed May 1, 2008.

Liquidity and Capital Resources

The following table presents selected financial information and statistics for each of the fiscal quarters ended on the dates indicated (dollars in millions):

 

         March 29, 2008        September 29, 2007

Cash, cash equivalents, and short-term investments

   $ 19,448    $ 15,386

Accounts receivable, net

   $ 1,593    $ 1,637

Inventory

   $ 364    $ 346

Working capital

   $ 17,102    $ 12,676

As of March 29, 2008, the Company had $19.4 billion in cash, cash equivalents, and short-term investments, an increase of $4.1 billion over the same balance at the end of September 29, 2007. The principal components of this net increase were cash generated by operating activities of $4 billion, proceeds from the issuance of common stock under stock plans of $233 million, and excess tax benefits from stock-based compensation of $445 million. These increases were offset partially by purchases of property, plant, and equipment and purchases of intangible assets of $384 million and $63 million, respectively. The Company’s short-term investment portfolio is invested primarily in highly rated securities. As of March 29, 2008 and September 29, 2007, $8.7 billion and $6.5 billion, respectively, of the Company’s cash, cash equivalents, and short-term investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $384 million during the first six months of 2008, consisting of approximately $138 million for retail store facilities and $246 million for corporate infrastructure, including information systems enhancements. The Company currently anticipates it will utilize approximately $1.25 billion for capital asset purchases during 2008, including approximately $400 million for expansion of the Company’s Retail segment, and approximately $850 million to support normal replacement of existing capital assets, including manufacturing related equipment and enhancements to general information technology infrastructure.

This excerpt taken from the AAPL 10-Q filed Feb 1, 2008.

Liquidity and Capital Resources

The following table presents selected financial information and statistics for each of the fiscal quarters ended on the dates indicated (dollars in millions):

 

     December 29, 2007    September 29, 2007

Cash, cash equivalents, and short-term investments

   $ 18,448    $ 15,386

Accounts receivable, net

   $ 1,939    $ 1,637

Inventory

   $ 459    $ 346

Working capital

   $ 15,654    $ 12,657

 

26


As of December 29, 2007, the Company had $18.4 billion in cash, cash equivalents, and short-term investments, an increase of $3.1 billion over the same balance at the end of September 29, 2007. The principal components of this net increase were cash generated by operating activities of $2.8 billion, proceeds from the issuance of common stock under stock plans of $179 million, and excess tax benefits from stock-based compensation of $315 million. These increases were partially offset by purchases of property, plant, and equipment of $224 million. The Company’s short-term investment portfolio is primarily invested in highly-rated securities. As of December 29, 2007 and September 29, 2007, $8.0 billion and $6.5 billion, respectively, of the Company’s cash, cash equivalents, and short-term investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Assets

The Company’s cash payments for capital asset purchases were $224 million during the first quarter of 2008, consisting of approximately $75 million for retail store facilities and $149 million for corporate infrastructure, including information systems enhancements. The Company currently anticipates it will utilize approximately $1.25 billion for capital asset purchases during 2008, including approximately $400 million for expansion of the Company’s Retail segment, and approximately $850 million to support normal replacement of existing capital assets, including manufacturing related equipment and enhancements to general information technology infrastructure.

These excerpts taken from the AAPL 10-K filed Nov 15, 2007.

Liquidity and Capital Resources

The following table presents selected financial information and statistics for each of the last three fiscal years (dollars in millions):

 
  September 29,
2007

  September 30,
2006

  September 24,
2005

Cash, cash equivalents, and short-term investments   $ 15,386   $ 10,110   $ 8,261
Accounts receivable, net   $ 1,637   $ 1,252   $ 895
Inventory   $ 346   $ 270   $ 165
Working capital   $ 12,657   $ 8,066   $ 6,813
Annual operating cash flow   $ 5,470   $ 2,220   $ 2,535

As of September 29, 2007, the Company had $15.4 billion in cash, cash equivalents, and short-term investments, an increase of $5.3 billion over the same balance at the end of September 30, 2006. The principal components of this net increase were cash generated by operating activities of $5.5 billion, proceeds from the issuance of common stock under stock plans of $365 million and excess tax benefits from stock-based compensation of $377 million. These increases were partially offset by payments for acquisitions of property, plant, and equipment of $735 million and payments for acquisitions of intangible assets of $251 million. The Company's short-term investment portfolio is primarily invested in highly rated, liquid investments. As of September 29, 2007 and September 30, 2006, $6.5 billion and $4.1 billion, respectively, of the Company's cash, cash equivalents, and short-term investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

50



Capital Assets

The Company's total capital asset purchases were $822 million during 2007, consisting of $294 million for retail store facilities and $528 million for real estate acquisitions and corporate infrastructure including information systems enhancements. Of the $822 million in total capital asset purchases during 2007, $87 million were not yet paid for as of September 29, 2007. The Company currently anticipates it will utilize approximately $1.1 billion for capital asset purchases during 2008, including approximately $400 million for expansion of the Company's Retail segment, and approximately $700 million to support normal replacement of existing capital assets, including manufacturing related equipment, enhancements to general information technology infrastructure, and real estate acquisitions.

Liquidity and Capital Resources



The following table presents selected financial information and statistics for each of the last three fiscal years (dollars in millions):










































































 
 September 29,

2007

 September 30,

2006

 September 24,

2005

Cash, cash equivalents, and short-term investments $15,386 $10,110 $8,261
Accounts receivable, net $1,637 $1,252 $895
Inventory $346 $270 $165
Working capital $12,657 $8,066 $6,813
Annual operating cash flow $5,470 $2,220 $2,535




As
of September 29, 2007, the Company had $15.4 billion in cash, cash equivalents, and short-term investments, an increase of $5.3 billion over the same balance at the
end of September 30, 2006. The principal components of this net increase were cash generated by operating activities of $5.5 billion, proceeds from the issuance of common stock under
stock plans of $365 million and excess tax benefits from stock-based compensation of $377 million. These increases were partially offset by payments for acquisitions of property, plant,
and equipment of $735 million and payments for acquisitions of intangible assets of $251 million. The Company's short-term investment portfolio is primarily invested in
highly rated, liquid investments. As of September 29, 2007 and September 30, 2006, $6.5 billion and $4.1 billion, respectively, of the Company's cash, cash equivalents, and
short-term investments were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings.



The
Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, outstanding
commitments, and other liquidity requirements associated with its existing operations over the next 12 months.



50











Capital Assets



The Company's total capital asset purchases were $822 million during 2007, consisting of $294 million for retail store facilities and $528 million for real
estate acquisitions and corporate infrastructure including information systems enhancements. Of the $822 million in total capital asset purchases during 2007, $87 million were not yet
paid for as of September 29, 2007. The Company currently anticipates it will utilize approximately $1.1 billion for capital asset purchases during 2008, including approximately
$400 million for expansion of the Company's Retail segment, and approximately $700 million to support normal replacement of existing capital assets, including manufacturing related
equipment, enhancements to general information technology infrastructure, and real estate acquisitions.



This excerpt taken from the AAPL 10-Q filed Aug 8, 2007.

Liquidity and Capital Resources

As of June 30, 2007, the Company had $13.8 billion in cash, cash equivalents, and short-term investments, an increase of $3.7 billion over the same balance at the end of September 30, 2006. The principal components of this net increase were cash generated by operating activities of $3.8 billion, proceeds from the issuance of common stock under stock plans of $294 million, and excess tax benefits from stock-based compensation of $303 million.  These increases were partially offset by purchases of property, plant, and equipment of $530 million and payments for acquisitions of intangible assets of $222 million. The Company’s short-term investment portfolio is primarily invested in high credit quality, liquid investments. Additionally, the Company’s working capital was $11.8 billion as of June 30, 2007 compared to $8.0 billion as of September 30, 2006.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Expenditures

The Company’s total capital expenditures were $530 million during the first nine months of 2007, consisting of $164 million for retail store facilities and $366 million for real estate acquisitions and corporate infrastructure including information systems enhancements.  The Company currently anticipates it will utilize approximately $850 million for capital expenditures during 2007, including approximately $315 million for expansion of the Company’s Retail segment, and approximately $535 million is projected to support normal replacement of existing capital assets, enhancements to general information technology infrastructure, and to be used for real estate acquisitions including purchases related to the Company’s second corporate campus.

This excerpt taken from the AAPL 10-Q filed May 10, 2007.

Liquidity and Capital Resources

The following table presents selected financial information and statistics for each of the fiscal quarters ended on the dates indicated (dollars in millions):

 

3/31/07

 

9/30/06

 

Cash, cash equivalents, and short-term investments

 

$

12,577

 

$

10,110

 

Accounts receivable, net

 

$

928

 

$

1,252

 

Inventory

 

$

208

 

$

270

 

Working capital

 

$

10,544

 

$

8,038

 

Days sales in accounts receivable (DSO) (a)

 

16

 

24

 

Days of supply in inventory (b)

 

6

 

7

 

Days payables outstanding (DPO) (c)

 

66

 

89

 


(a)          DSO is based on ending net trade receivables and most recent quarterly net sales for each period.

(b)         Days supply of inventory is based on ending inventory and most recent quarterly cost of sales for each period.

(c)          DPO is based on ending accounts payable and most recent quarterly cost of sales adjusted for the change in inventory.

As of March 31, 2007, the Company had $12.6 billion in cash, cash equivalents, and short-term investments, an increase of $2.5 billion over the same balance at the end of September 30, 2006. The principal components of this net increase were cash generated by operating activities of $2.5 billion, proceeds from the issuance of common stock under stock plans of $176 million, and excess tax benefits from stock-based compensation of $192 million. This increase in cash, cash equivalents, and short-term investments was partially offset by purchases of property, plant, and equipment of $247 million and payments for acquisitions of intangible assets of $216 million. The Company’s short-term investment portfolio is primarily invested in high credit quality, liquid investments.

The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months.

Capital Expenditures

The Company’s total capital expenditures were $247 million during the first six months of 2007, consisting of $76 million for retail store facilities and $171 million for real estate acquisitions and corporate infrastructure including information systems enhancements. The Company currently anticipates it will utilize approximately $775 million for capital expenditures during 2007, including approximately $360 million for expansion of the Company’s Retail segment, and approximately $415 million is projected to support normal replacement of existing capital assets, enhancements to general information technology infrastructure, and to be used for real estate acquisitions including purchases related to the Company’s second corporate campus.

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