A year old records report on the corporation (which Apple named after a type of apple particularly suited to long term storage) lists the address of its principals as being at suite 225 on 730 Sandhill Road, a suburban office park in Reno, Nevada (pictured above).
A blog entry profiling Apple's Reno operations as "the world's largest hedge fund" reiterated last September that Braeburn Capital was at the time operating from that address. It visited the building and photographed the office's sign (which is now gone; note that Braeburn is also not a "hedge fund," nor is its holdings as secret as the article suggested).
However, the office at that address is now in use by another firm (Randstad finance and accounting). Asked about Braeburn, the receptionist told AppleInsider that she only knew that the firm is no longer operating at that location and that she didn't know where it had relocated. A search of Apple's record filings did not turn up a new address.
Apple doesn't appear keen on publicizing the address of its Reno operations; neither Siri nor Maps offer any help in locating the Braeburn offices the way they do direct users to Apple's stores (including the one located in Reno) and its main headquarters facilities in Cupertino.
Why Apple is (somewhere) in Reno
Apple set up its Braeburn Capital subsidiary in 2006, tasked with managing the company's cash and short term investments. It located the operation in Nevada for tax purposes; Reno is the closest significant city in the state to Apple's Cupertino, California headquarters, located about 4 hours east of the San Francisco Bay Area.
At the end of 2005, Apple's holdings were $8.3 billion. By the end of 2006 Braeburn's managed asset pile had grown to $10.1 billion. Today, Apple's holdings are in excess of $130 billion, and generating intense scrutiny from shareholders and other investors that are hoping to seize some portion of the cash.
Apple's cash holdings through fiscal 2012. Image credit: Asymco.
Apple's critics are also bothered by the company's cash, and like to describe Braeburn as a form of "tax evasion." However, the firm is legitimately earning gains on capital invested from within Nevada, something that is no more scandalous than residents of Washington state shopping across the river in Oregon to take advantage of that state's lack of a sales tax, or Amazon's online sales that aren't subject to the sales taxes of shoppers.
Apple is not routing its American retail store revenues, software licensing and hardware revenues through any loopholes with Braeburn; Apple already pays federal and state corporate income, payroll and other taxes on its US revenues as they are earned. But its growing cash pile, even if conservatively invested, would frequently generate capital gains.
If located in Apple's home state of California, Braeburn Capital would require incremental payments of capital gains taxes at rates that are now among the highest in the nation.
Long term federal and state capital gains (profits on investments held more than one year) are now taxed in California at 33 percent, making it second worldwide only to Denmark; California's capital gains taxes are now higher than France, Finland or Sweden. In contrast, capital gains in Japan are only taxed at 10%, while tax havens in Luxembourg and Switzerland don't tax capital gains at all.
By locating Braeburn Capital in Reno, Nevada, Apple can take advantage of favorable tax rates while managing its growing investment pool. The subsidiary still pays federal US capital gains taxes, but Nevada has no state capital gains taxes of its own. When Apple distributes its cash to shareholders, or when shareholders sell their shares at a profit, those gains are taxed at the effective tax rate of the shareholder.
The question remains: where exactly is Braeburn Capital now located? (Update: reader AAPL1000 notes that Braeburn has moved to 6900 South McCarran Blvd, Suite 3020 in Reno Nevada. Additionally, a Reno Gazette-Journal blog notes that the subsidiary moved to the new location "about a year and half ago.")
Additionally, Apple has other plans for expanding in Reno. In addition to favorable tax rates, the area also has some other advantages that play into Apple's expansion plans, as a subsequent report will detail.