Apple 2012 Annual Report Download - page 21

tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their
interpretation. The Company is also subject to the examination of its tax returns by the Internal Revenue Service
and other tax authorities. The Company regularly assesses the likelihood of an adverse outcome resulting from
these examinations to determine the adequacy of its provision for taxes. There can be no assurance as to the
outcome of these examinations.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The Company’s headquarters are located in Cupertino, California. As of September 29, 2012, the Company
owned or leased approximately 17.3 million square feet of building space, primarily in the U.S., and to a lesser
extent, in Europe, Japan, Canada, and the Asia-Pacific regions. Of that amount approximately 10.9 million square
feet was leased building space, which includes approximately 4.1 million square feet related to retail store space.
Of the Company’s owned building space, approximately 2.6 million square feet that is located in Cupertino,
California will be demolished to build a second corporate campus. Additionally, the Company owns a total of
1,077 acres of land in various locations.
As of September 29, 2012, the Company owned a manufacturing facility in Cork, Ireland that also housed a
customer support call center and facilities in Elk Grove, California that included warehousing and distribution
operations and a customer support call center. The Company also owned land in Austin, Texas where it will build
office space and a customer support call center. In addition, the Company owned facilities for research and
development and corporate functions in Cupertino, California, including land for the future development of the
Company’s second corporate campus. The Company also owned data centers in Newark, California; Maiden,
North Carolina; and Prineville, Oregon. Outside the U.S., the Company owned additional facilities for various
purposes.
The Company believes its existing facilities and equipment, which are used by all operating segments, are in
good operating condition and are suitable for the conduct of its business. The Company has invested in internal
capacity and strategic relationships with outside manufacturing vendors and 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 the various legal proceedings and claims, including those discussed below as well as
certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary
course of business. In the opinion of management, there was not at least a reasonable possibility the Company
may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss
contingencies. However, the outcome of legal proceedings and claims brought against the Company is subject to
significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be
remote, if one or more of these legal matters were resolved against the Company in a reporting period for
amounts in excess of management’s expectations, the Company’s consolidated financial statements for that
reporting period could be materially adversely affected. See the risk factors “The Company is frequently involved
in intellectual property litigation, and could be found to have infringed on intellectual property rights” and “The
Company could be impacted by unfavorable results of legal proceedings” in Part I, Item 1A of this Form 10-K
under the heading “Risk Factors.” The Company settled certain matters during the fourth quarter of 2012 that did
not individually or in the aggregate have a material impact on the Company’s financial condition and results of
operations.
20