Apple 2013 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2013 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

Rent expense under all operating leases, including both cancelable and noncancelable leases, was $645 million,
$488 million and $338 million in 2013, 2012 and 2011, respectively. Future minimum lease payments under
noncancelable operating leases having remaining terms in excess of one year as of September 28, 2013, are as
follows (in millions):
2014 ............................................................................... $ 610
2015 ............................................................................... 613
2016 ............................................................................... 587
2017 ............................................................................... 551
2018 ............................................................................... 505
Thereafter ........................................................................... 1,855
Total minimum lease payments ...................................................... $4,721
Other Commitments
As of September 28, 2013, the Company had outstanding off-balance sheet third-party manufacturing
commitments and component purchase commitments of $18.6 billion.
In addition to the off-balance sheet commitments mentioned above, the Company had outstanding obligations of
$1.3 billion as of September 28, 2013, which consisted mainly of commitments to acquire capital assets,
including product tooling and manufacturing process equipment, and commitments related to advertising,
research and development, Internet and telecommunications services and other obligations.
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of
business and that have not been fully adjudicated. 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 litigation is inherently uncertain. 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.
Apple Inc. v. Samsung Electronics Co., Ltd, et al.
On August 24, 2012, a jury returned a verdict awarding the Company $1.05 billion in its lawsuit against Samsung
Electronics Co., Ltd and affiliated parties in the United States District Court, Northern District of California, San
Jose Division. On March 1, 2013, the District Court upheld $599 million of the jury’s award and ordered a new
trial as to the remainder. Because the award is subject to entry of final judgment, partial re-trial and appeal, the
Company has not recognized the award in its results of operations.
VirnetX, Inc. v. Apple Inc. et al.
On August 11, 2010, VirnetX, Inc. filed an action against the Company alleging that certain of its products
infringed on four patents relating to network communications technology. On November 6, 2012, a jury returned
a verdict against the Company, and awarded damages of $368 million. The Company is challenging the verdict,
believes it has valid defenses and has not recorded a loss accrual at this time.
74