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0000320193 | 20170201 | 10-Q | 92 | The Company generally enters into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 93 | To further limit credit risk, the Company generally enters into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 94 | The Company presents its derivative assets and derivative liabilities at their gross fair values in its Condensed Consolidated Balance Sheets. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 95 | The net cash collateral received by the Company related to derivative instruments under its collateral security arrangements was $1.1 billion as of December 31, 2016 and $163 million as of September 24, 2016, which were recorded as accrued expenses in the Condensed Consolidated Balance Sheets. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 96 | Under master netting arrangements with the respective counterparties to the Company’s derivative contracts, the Company is allowed to net settle transactions with a single net amount payable by one party to the other. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 97 | As of December 31, 2016 and September 24, 2016, the potential effects of these rights of set-off associated with the Company’s derivative contracts, including the effects of collateral, would be a reduction to both derivative assets and derivative liabilities of $2.7 billion and $1.5 billion, respectively, resulting in a net derivative liability of $222 million and a net derivative asset of $160 million, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 98 | Accounts Receivable
Trade Receivables
The Company has considerable trade receivables outstanding with its third-party cellular network carriers, wholesalers, retailers, value-added resellers, small and mid-sized businesses and education, enterprise and government customers. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 99 | The Company generally does not require collateral from its customers; however, the Company will require collateral in certain instances to limit credit risk. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 100 | In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers or by requiring third-party financing, loans or leases to support credit exposure. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 101 | These credit-financing arrangements are directly between the third-party financing company and the end customer. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 102 | As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 103 | As of December 31, 2016 and September 24, 2016, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 11% and 10%, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 104 | The Company’s cellular network carriers accounted for 55% and 63% of trade receivables as of December 31, 2016 and September 24, 2016, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 105 | Vendor Non-Trade Receivables
The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture sub-assemblies or assemble final products for the Company. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 106 | The Company purchases these components directly from suppliers. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 107 | Vendor non-trade receivables from three of the Company’s vendors accounted for 49%, 14% and 13% of total vendor non-trade receivables as of December 31, 2016, and two of the Company’s vendors accounted for 47% and 21% of total vendor non-trade receivables as of September 24, 2016. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 108 | Note 3 - Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of December 31, 2016 and September 24, 2016 (in millions):
Property, Plant and Equipment, Net
Other Non-Current Liabilities
Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for the three months ended December 31, 2016 and December 26, 2015 (in millions):
Note 4 - Acquired Intangible Assets
The Company’s acquired intangible assets with definite useful lives primarily consist of patents and licenses. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 109 | The following table summarizes the components of gross and net acquired intangible asset balances as of December 31, 2016 and September 24, 2016 (in millions):
Note 5 - Income Taxes
As of December 31, 2016, the Company recorded gross unrecognized tax benefits of $8.5 billion, of which $3.0 billion, if recognized, would affect the Company’s effective tax rate. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 110 | As of September 24, 2016, the total amount of gross unrecognized tax benefits was $7.7 billion, of which $2.8 billion, if recognized, would have affected the Company’s effective tax rate. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 111 | The Company’s total gross unrecognized tax benefits are classified as other non-current liabilities in the Condensed Consolidated Balance Sheets. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 112 | The Company had $1.2 billion and $1.0 billion of gross interest and penalties accrued as of December 31, 2016 and September 24, 2016, respectively, which are classified as other non-current liabilities in the Condensed Consolidated Balance Sheets. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 113 | The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 114 | However, the outcome of tax audits cannot be predicted with certainty. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 115 | If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 116 | Although timing of the resolution and/or closure of audits is not certain, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease (whether by payment, release or a combination of both) in the next 12 months by as much as $1.1 billion. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 117 | On August 30, 2016, the European Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (the “State Aid Decision”). | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 118 | The State Aid Decision orders Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 119 | Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 120 | The Company believes the State Aid Decision to be without merit and appealed to the General Court of the Court of Justice of the European Union. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 121 | Ireland has also appealed the State Aid Decision. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 122 | While the European Commission announced a recovery amount of up to €13 billion, plus interest, the actual amount of additional taxes subject to recovery is to be calculated by Ireland in accordance with the European Commission's guidance. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 123 | Once the recovery amount is computed by Ireland, the Company anticipates funding it, including interest, out of foreign cash into escrow, where it will remain pending conclusion of all appeals. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 124 | The Company believes that any incremental Irish corporate income taxes potentially due related to the State Aid Decision would be creditable against U.S. taxes. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 125 | Note 6 - Debt
Commercial Paper
The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 126 | The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 127 | As of December 31, 2016 and September 24, 2016, the Company had $10.5 billion and $8.1 billion of Commercial Paper outstanding, respectively, with maturities generally less than nine months. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 128 | The weighted-average interest rate of the Company’s Commercial Paper was 0.61% as of December 31, 2016 and 0.45% as of September 24, 2016. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 129 | The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the three months ended December 31, 2016 and December 26, 2015 (in millions):
Long-Term Debt
As of December 31, 2016, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $77.4 billion (collectively the “Notes”). | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 130 | The Notes are senior unsecured obligations, and interest is payable in arrears, quarterly for the U.S. dollar-denominated and Australian dollar-denominated floating-rate notes, semi-annually for the U.S. dollar-denominated, Australian dollar-denominated, British pound-denominated and Japanese yen-denominated fixed-rate notes and annually for the euro-denominated and Swiss franc-denominated fixed-rate notes. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 131 | The following table provides a summary of the Company’s term debt as of December 31, 2016 and September 24, 2016:
As of December 31, 2016 and September 24, 2016, ¥90.4 billion and ¥195.5 billion, respectively, of Japanese yen-denominated notes were designated as a hedge of the foreign currency exposure of the Company's net investment in a foreign operation. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 132 | The foreign currency transaction gain or loss on the Japanese yen-denominated debt designated as a hedge is recorded in OCI as a part of the cumulative translation adjustment. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 133 | As of December 31, 2016 and September 24, 2016, the carrying value of the debt designated as a net investment hedge was $767 million and $1.9 billion, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 134 | For further discussion regarding the Company’s use of derivative instruments see the Derivative Financial Instruments section of Note 2, “Financial Instruments.”
The effective interest rates for the Notes include the interest on the Notes, amortization of the discount and, if applicable, adjustments related to hedging. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 135 | The Company recognized $509 million and $271 million of interest expense on its term debt for the three months ended December 31, 2016 and December 26, 2015, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 136 | As of December 31, 2016 and September 24, 2016, the fair value of the Company’s Notes, based on Level 2 inputs, was $77.7 billion and $81.7 billion, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 137 | Note 7 - Shareholders’ Equity
Dividends
The Company declared and paid cash dividends per share during the periods presented as follows:
Future dividends are subject to declaration by the Board of Directors. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 138 | Share Repurchase Program
In April 2016, the Company’s Board of Directors increased the share repurchase authorization from $140 billion to $175 billion of the Company’s common stock, of which $144 billion had been utilized as of December 31, 2016. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 139 | The Company’s share repurchase program does not obligate it to acquire any specific number of shares. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 140 | Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 141 | The Company has entered, and in the future may enter, into accelerated share repurchase arrangements (“ASRs”) with financial institutions. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 142 | In exchange for up-front payments, the financial institutions deliver shares of the Company’s common stock during the purchase periods of each ASR. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 143 | The total number of shares ultimately delivered, and therefore the average repurchase price paid per share, is determined at the end of the applicable purchase period of each ASR based on the volume-weighted average price of the Company’s common stock during that period. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 144 | The shares received are retired in the periods they are delivered, and the up-front payments are accounted for as a reduction to shareholders’ equity in the Company’s Condensed Consolidated Balance Sheets in the periods the payments are made. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 145 | The Company reflects the ASRs as a repurchase of common stock in the period delivered for purposes of calculating earnings per share and as forward contracts indexed to its own common stock. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 146 | The ASRs met all of the applicable criteria for equity classification, and therefore were not accounted for as derivative instruments. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 147 | The following table shows the Company’s ASR activity and related information during the three months ended December 31, 2016 and the year ended September 24, 2016:
(1)
“Number of Shares” represents those shares delivered in the beginning of the purchase period and does not represent the final number of shares to be delivered under the ASR. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 148 | The total number of shares ultimately delivered, and therefore the average repurchase price paid per share, will be determined at the end of the purchase period based on the volume-weighted average price of the Company’s common stock during that period. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 149 | The November 2016 ASR purchase period will end in February 2017. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 150 | (2)
Includes 22.5 million shares delivered and retired at the beginning of the purchase period, which began in the fourth quarter of 2016 and 4.4 million shares delivered and retired at the end of the purchase period, which concluded in the first quarter of 2017. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 151 | Additionally, the Company repurchased shares of its common stock in the open market, which were retired upon repurchase, during the periods presented as follows:
Note 8 - Comprehensive Income
Comprehensive income consists of two components, net income and OCI. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 152 | OCI refers to revenue, expenses, and gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 153 | The Company’s OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges and unrealized gains and losses on marketable securities classified as available-for-sale. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 154 | The following table shows the pre-tax amounts reclassified from AOCI into the Condensed Consolidated Statements of Operations, and the associated financial statement line item, for the three months ended December 31, 2016 and December 26, 2015 (in millions):
The following table shows the changes in AOCI by component for the three months ended December 31, 2016 (in millions):
Note 9 - Benefit Plans
Stock Plans
The Company had 316.4 million shares reserved for future issuance under its stock plans as of December 31, 2016. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 155 | RSUs granted generally vest over four years, based on continued employment, and are settled upon vesting in shares of the Company’s common stock on a one-for-one basis. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 156 | Each share issued with respect to RSUs granted under the Company’s stock plans reduces the number of shares available for grant under the plan by two shares. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 157 | RSUs cancelled and shares withheld to satisfy tax withholding obligations increase the number of shares available for grant under the plans utilizing a factor of two times the number of RSUs cancelled or shares withheld. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 158 | Rule 10b5-1 Trading Plans
During the three months ended December 31, 2016, Section 16 officers Timothy D. Cook, Luca Maestri, Daniel Riccio, Philip Schiller and Jeffrey Williams had equity trading plans in place in accordance with Rule 10b5-1(c)(1) under the Exchange Act. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 159 | An equity trading plan is a written document that pre-establishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including shares acquired pursuant to the Company’s employee and director equity plans. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 160 | Restricted Stock Units
A summary of the Company’s RSU activity and related information for the three months ended December 31, 2016 is as follows:
RSUs that vested during the three months ended December 31, 2016 and December 26, 2015 had fair values of $2.2 billion and $2.0 billion, respectively, as of the vesting date. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 161 | Share-Based Compensation
The following table shows a summary of the share-based compensation expense included in the Condensed Consolidated Statements of Operations for the three months ended December 31, 2016 and December 26, 2015 (in millions):
The income tax benefit related to share-based compensation expense was $465 million and $413 million for the three months ended December 31, 2016 and December 26, 2015, respectively. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 162 | As of December 31, 2016, the total unrecognized compensation cost related to outstanding RSUs, restricted stock and stock options was $11.0 billion, which the Company expects to recognize over a weighted-average period of 2.9 years. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 163 | Note 10 - Commitments and Contingencies
Accrued Warranty and Indemnification
The following table shows changes in the Company’s accrued warranties and related costs for the three months ended December 31, 2016 and December 26, 2015 (in millions):
The Company generally does not indemnify end-users of its operating system and application software against legal claims that the software infringes third-party intellectual property rights. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 164 | Other agreements entered into by the Company sometimes include indemnification provisions under which the Company could be subject to costs and/or damages in the event of an infringement claim against the Company or an indemnified third-party. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 165 | In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss with respect to indemnification of end-users of its operating system or application software for infringement of third-party intellectual property rights. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 166 | The Company offers an iPhone Upgrade Program, which is available to customers who purchase a qualifying iPhone in the U.S., the U.K. and mainland China. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 167 | The iPhone Upgrade Program provides customers the right to trade in that iPhone for a specified amount when purchasing a new iPhone, provided certain conditions are met. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 168 | The Company accounts for the trade-in right as a guarantee liability and recognizes arrangement revenue net of the fair value of such right with subsequent changes to the guarantee liability recognized within revenue. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 169 | The Company has entered into indemnification agreements with its directors and executive officers. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 170 | Under these agreements, the Company has agreed to indemnify such individuals to the fullest extent permitted by law against liabilities that arise by reason of their status as directors or officers and to advance expenses incurred by such individuals in connection with related legal proceedings. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 171 | It is not possible to determine the maximum potential amount of payments the Company could be required to make under these agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each claim. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 172 | However, the Company maintains directors and officers liability insurance coverage to reduce its exposure to such obligations. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 173 | Concentrations in the Available Sources of Supply of Materials and Product
Although most components essential to the Company’s business are generally available from multiple sources, a number of components are currently obtained from single or limited sources. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 174 | In addition, the Company competes for various components with other participants in the markets for mobile communication and media devices and personal computers. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 175 | Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage and significant pricing fluctuations that could materially adversely affect the Company’s financial condition and operating results. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 176 | The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 177 | When a component or product uses new technologies, initial capacity constraints may exist until the suppliers’ yields have matured or manufacturing capacity has increased. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 178 | If the Company’s supply of components for a new or existing product were delayed or constrained, or if an outsourcing partner delayed shipments of completed products to the Company, the Company’s financial condition and operating results could be materially adversely affected. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 179 | The Company’s business and financial performance could also be materially adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 180 | Continued availability of these components at acceptable prices, or at all, may be affected if those suppliers concentrated on the production of common components instead of components customized to meet the Company’s requirements. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 181 | The Company has entered into agreements for the supply of many components; however, there can be no guarantee that the Company will be able to extend or renew these agreements on similar terms, or at all. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 182 | Therefore, the Company remains subject to significant risks of supply shortages and price increases that could materially adversely affect its financial condition and operating results. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 183 | Substantially all of the Company’s hardware products are manufactured by outsourcing partners that are located primarily in Asia. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 184 | A significant concentration of this manufacturing is currently performed by a small number of outsourcing partners, often in single locations. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 185 | Certain of these outsourcing partners are the sole-sourced suppliers of components and manufacturers for many of the Company’s products. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 186 | Although the Company works closely with its outsourcing partners on manufacturing schedules, the Company’s operating results could be adversely affected if its outsourcing partners were unable to meet their production commitments. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 187 | The Company’s manufacturing purchase obligations typically cover its requirements for periods up to 150 days. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 188 | Other Off-Balance Sheet Commitments
Operating Leases
The Company leases various equipment and facilities, including retail space, under noncancelable operating lease arrangements. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 189 | The Company does not currently utilize any other off-balance sheet financing arrangements. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 190 | As of December 31, 2016, the Company’s total future minimum lease payments under noncancelable operating leases were $7.5 billion. | 0001628280-17-000717/full-submission.txt |
0000320193 | 20170201 | 10-Q | 191 | The Company's retail store and other facility leases are typically for terms not exceeding 10 years and generally contain multi-year renewal options. | 0001628280-17-000717/full-submission.txt |