Apple 2013 Annual Report Download - page 22

concentrated within cellular network carriers, and its non-trade receivables and prepayments related to long-term
supply agreements were concentrated among a few individual vendors located primarily in Asia. While the
Company has procedures to monitor and limit exposure to credit risk on its trade and vendor non-trade
receivables as well as long-term prepayments, there can be no assurance such procedures will effectively limit its
credit risk and avoid losses.
The Company could be subject to changes in its tax rates, the adoption of new U.S. or international tax
legislation or exposure to additional tax liabilities.
The Company is subject to taxes in the U.S. and numerous foreign jurisdictions, including Ireland, where a
number of the Company’s subsidiaries are organized. Due to economic and political conditions, tax rates in
various jurisdictions may be subject to significant change. The Company’s future effective tax rates could be
affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation
of deferred tax assets and liabilities, or changes in tax laws or their interpretation, including in the U.S. and
Ireland. The Company is also subject to the examination of its tax returns and other tax matters by the Internal
Revenue Service and other tax authorities and governmental bodies. 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. If the Company’s effective tax
rates were to increase, particularly in the U.S. or Ireland, or if the ultimate determination of the Company’s taxes
owed is for an amount in excess of amounts previously accrued, the Company’s operating results, cash flows,
and financial condition could be adversely affected.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The Company’s headquarters are located in Cupertino, California. As of September 28, 2013, the Company
owned or leased approximately 19.1 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 12.0 million square
feet was leased building space, which includes approximately 4.6 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
1,428 acres of land in various locations.
As of September 28, 2013, 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 is
building 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; Prineville, Oregon; and Reno, Nevada. 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.
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