Apple 2015 Annual Report Download - page 20

Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The Company’s headquarters are located in Cupertino, California. As of September 26, 2015, the Company owned or leased 25.6 million
square feet of building space, primarily in the U.S. The Company also owned or leased building space in various locations, including
throughout Europe, China, Singapore and Japan. Of the total owned or leased building space 18.5 million square feet was leased building
space, which includes approximately 5.3 million square feet related to retail store space. Additionally, the Company owns a total of 1,757
acres of land in various locations.
As of September 26, 2015, the Company owned a manufacturing facility in Cork, Ireland that also housed a customer support call center;
facilities in Elk Grove, California that included warehousing and distribution operations and a customer support call center; and a facility in
Mesa, Arizona. The Company also owned land in Austin, Texas where it is expanding its existing office space and customer support call
center. In addition, the Company owned facilities and land for R&D and corporate functions in San Jose, California and Cupertino,
California, including land that is being developed for 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.
Item 3. Legal Proceedings
The Company is subject to the legal proceedings and claims 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 for asserted legal and other claims. 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 factor “The Company could be impacted by unfavorable results of legal proceedings, such as being found to have
infringed on intellectual property rights” 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 2015 that did not individually or in the aggregate have a material impact on the Company’s financial
condition or operating results.
Apple eBooks Antitrust Litigation (United States of America v. Apple Inc., et al.)
On April 11, 2012, the U.S. Department of Justice filed a civil antitrust action against the Company and five major book publishers in the
U.S. District Court for the Southern District of New York, alleging an unreasonable restraint of interstate trade and commerce in violation of
§1 of the Sherman Act and seeking, among other things, injunctive relief, the District Court’s declaration that the Company’s agency
agreements with the publishers are null and void and/or the District Court’s reformation of such agreements. On July 10, 2013, the District
Court found, following a bench trial, that the Company conspired to restrain trade in violation of §1 of the Sherman Act and relevant state
statutes to the extent those laws are congruent with §1 of the Sherman Act. The District Court entered a permanent injunction, which took
effect on October 6, 2013 and will be in effect for five years unless the judgment is overturned on appeal. The Company has taken the
necessary steps to comply with the terms of the District Court’s order, including renegotiating agreements with the five major eBook
publishers, updating its antitrust training program and completing a two-year monitorship with a court-appointed antitrust compliance
monitor, whose appointment the District Court ended in October 2015. The Company appealed the District Court’s decision. Pursuant to
a settlement agreement reached in June 2014, any damages the Company may be obligated to pay will be determined by the outcome of
the final adjudication following exhaustion of all appeals.
Item 4. Mine Safety Disclosures
Not applicable.
Apple Inc. | 2015 Form 10-K | 18