use to have a material impact on the Company's financial statements because the impairment assessment under Statement 144 is largely unchanged from Statement 121. The provisions of the Statement for assets held for sale or other disposal generally are required to be applied prospectively after the adoption date to newly initiated disposal activities. Therefore, management cannot determine the potential effects that adoption of Statement 144 will have on the Company's financial statements.

As of September 29, 2001, the Company had $4.336 billion in cash, cash equivalents, and short-term investments, an increase of $309 million or 8% over the same balances at the end of 2000. The primary sources of this increase included $185 in cash flows from operations, $340 million in proceeds from the sale of non-current debt and equity investments, and $42 million in proceeds from the exercise of employee stock options. The most significant use of cash was capital expenditures of $232 million. Capital expenditures during 2001 included approximately $92 million related to the Company's retail initiative comprised of expenditures for retail store facilities and equipment and other related corporate infrastructure, including information systems enhancements and training facilities. The Company currently anticipates it will utilize approximately $200 million for the acquisition of property, plant, and equipment during 2002 to support normal replacement of existing capital assets, enhancements to its general information technology infrastructure, and further development of its Retail segment.

In July 1999, the Company's Board of Directors authorized a plan for the Company to repurchase up to $500 million of its common stock. This repurchase plan does not obligate the Company to acquire any specific number of shares or acquire shares over any specified period of time. During 2001, the Company repurchased no common shares. However, during the fourth quarter of 2001, the Company entered into a forward purchase agreement to acquire 1.5 million shares of its common stock in September of 2003 at an average price of $16.64 per share for a total cost of $25.5 million. Since inception of the repurchase plan, the Company has repurchased or committed to repurchase a total of 6.55 million shares of its common stock at a cost of $217 million.

The Company believes its balances of cash, cash equivalents, and short-term investments will be sufficient to meet its cash requirements over the next twelve months, including any cash that may be utilized by its current stock repurchase plan.

Non-Current Debt and Equity Investments  The Company has held significant investments in ARM, Samsung Electronics Co., Ltd, Akamai Technologies, Inc., and EarthLink Network, Inc. These investments are reflected in the consolidated balance sheets as non-current debt and equity investments and have been categorized as available-for-sale requiring that they be carried at fair value with unrealized gains and losses, net of taxes, reported in equity as a component of accumulated other comprehensive income. All realized gains on the sale of these investments have been included in other income.