Apple 2004 Annual Report Download - page 20

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the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and
information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. The contents of these
websites are not incorporated into this filing. Further, the Company's references to the URLs for these websites are intended to be inactive
textual references only.
Item 2. Properties
The Company's headquarters are located in Cupertino, California. The Company has manufacturing facilities in Cork, Ireland. As of
September 25, 2004, the Company leased approximately 3.3 million square feet of space, primarily in the U.S., and to a lesser extent, in Europe,
Japan, and the Asia Pacific region. The major facility leases are for terms of 5 to 10 years and generally provide renewal options for terms of 2 to
5 additional years. Leased space includes 660,000 square feet of retail space, a majority of which is in the U.S. Lease terms for retail space range
from 5 to 16 years, the majority of which are for 10 years, and often contain multi-year renewal options.
The Company owns its manufacturing facility in Cork, Ireland, which has approximately 352,000 square feet. The Cork facility also houses a
customer support call center. The Company also owns a 752,000 square-foot facility in Sacramento, California, which has a customer support
call center and is used for warehousing and distribution. In addition, the Company owns approximately 942,000 square feet of facilities located
in Cupertino, California, used for research and development and corporate functions. Outside the U.S., the Company owns additional facilities
totaling approximately 169,000 square feet.
The Company believes its existing facilities and equipment are well maintained and in good operating condition. The Company has invested in
internal capacity and strategic relationships with outside manufacturing vendors, and therefore believes it has adequate manufacturing capacity
for the foreseeable future. The Company continues to make investments in capital equipment as needed to meet anticipated demand for its
products.
Item 3. Legal Proceedings
The Company is subject to various legal proceedings and claims that are discussed below. The Company is also subject to certain other legal
proceedings and claims that have arisen in the ordinary course of business and which have not been fully adjudicated. In the opinion of
management, the Company does not have a potential liability related to any current legal proceedings and claims that would individually or in
the aggregate have a material adverse effect on its financial condition, liquidity or results of operations. However, the results of legal
proceedings cannot be predicted with certainty. Should the Company fail to prevail in any of these legal matters or should several of these legal
matters be resolved against the Company in the same reporting period, the operating results of a particular reporting period could be materially
adversely affected. The Company settled certain matters in 2004, which did not individually or in the aggregate have a material impact on the
Company's results of operations.
Antor Media Corporation v. Apple Computer, Inc., et al.
Plaintiff Antor Media filed this action on September 5, 2003 in the United States District Court in the Eastern District of Texas alleging
infringement by the Company and other defendants of U.S. patent 5,754,961 relating to a "Method and Apparatus for Transmitting Information
Recorded on Information Storage Means from a Central Server to Subscribers via a High Data Rate Digital Telecommunications Network." The
complaint seeks unspecified damages and other relief. The Company has answered the complaint, denying all allegations and asserting numerous
affirmative defenses. The Company also asserted counterclaims requesting declaratory judgment for non-infringement and invalidity. Trial is set
for March 2005. The Court held a Markman hearing on September 16, 2004 but has not yet issued a ruling.
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