Apple 1997 Annual Report Download - page 9

Financial Statements under the subheading "Provisions for Inventory Write-downs and Related Accruals" under the heading "Significant
Accounting Estimates", which information is hereby incorporated by reference.
RESEARCH AND DEVELOPMENT
Because the personal computer industry is characterized by rapid technological advances, the Company's ability to compete successfully is
heavily dependent upon its ability to ensure a continuing and timely flow of competitive products to the marketplace. The Company continues
to develop new products and technologies and to enhance existing products in the areas of hardware and peripherals, system software,
networking and communications, and the Internet. The Company's research and development expenditures, before a charge for in-process
research and development in 1997, totaled $485 million, $604 million, and $614 million in 1997, 1996, and 1995, respectively.
Further information regarding the Company's R&D expenditures for 1997, 1996 and 1995 is set forth in Part II, Item 7 of this Form 10-
K under
the heading "Research and Development," which information is hereby incorporated by reference. For information regarding in-process
research and development charges taken in 1997 refer to Part II, Item 7 of this Form 10-K under the subheading "In-Process Research and
Development," under the heading "Special Charges."
ENVIRONMENTAL LAWS
Compliance with U.S. federal, state, and local laws and foreign laws enacted for the protection of the environment has to date had no material
effect upon the Company's capital expenditures, earnings, or competitive position. Although the Company does not anticipate any material
adverse effects in the future based on the nature of its operations and the thrust of such laws, no assurance can be given that such laws, or any
future laws enacted for the protection of the environment, will not have a material adverse effect on the Company.
EMPLOYEES
As of September 26, 1997, Apple and its subsidiaries worldwide had 8,437 regular employees, and an additional 1,739 temporary or part-time
contractors and employees.
FOREIGN AND DOMESTIC OPERATIONS AND GEOGRAPHIC DATA
Information regarding financial data by geographic area and the risks associated with international operations is set forth in Part II, Item 8 of
this Form 10-K under the heading "Industry Segment and Geographic Information," and in Part II, Item 7 of this Form 10-K under the
subheading "Global Market Risks," included under the heading "Factors That May Affect Future Results and Financial Condition," which
information is hereby incorporated by reference.
Margins on sales of Apple products in foreign countries, and on domestic sales of products that include components obtained from foreign
suppliers, can be adversely affected by foreign currency exchange rate fluctuations and by international trade regulations, including tariffs and
anti-dumping penalties.
ITEM 2. PROPERTIES
The Company's headquarters are located in Cupertino, California. The Company has manufacturing facilities in Sacramento, California, Cork
and Dublin, Ireland, and Singapore. As of September 26, 1997, the Company leased approximately 3.7 million square feet of space, primarily
in the U.S., and to a lesser extent, in Europe and the Asia/Pacific region. Leases are generally for terms of five to ten years, and usually provide
renewal options for terms of up to five additional years.
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