Apple: Good start; and what about the overseas cash?

“Apple this morning gave what amounts to a partial answer on how it will spend its large cash pile,” Eric Savitz reports for Forbes.

“With the new $2.65 a share quarterly dividend and a $10 billion three-year stock repurchase plan, the company will be giving back about $45 billion to shareholders over the next three years. But all of that will come from domestic cash,” Savitz reports. “The company has $64 billion of its cash outside the country. But due to the large tax bill the company would face from repatriating the cash, it will continue to pile up outside the country until the tax law changes or Apple figures out something else to do with it.”

Savitz reports, “Apple is one of a number of tech companies that have lobbied Congress for a change in the tax law to make it easier to bring some of the cash back into the country… One option for the cash is to make acquisitions outside the country… Other options would be to expand facilities outside the country”

Read more in the full article here.

MacDailyNews Take: Tax codes change and the more billions that Apple accumulates outside the U.S., the more pressure there will be in the U.S. for tax repatriation holiday.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related articles:
Apple’s foreign cash hoard piles up: $54 billion and rapidly growing – January 11, 2012
Senator John McCain eyes Apple’s $54 billion overseas cash pile – November 3, 2011
Google joins Apple in push for U.S. repatriation tax holiday – October 3, 2011
Apple lobbies Obama for tax holiday, wants to bring overseas bounty home – August 24, 2011
U.S Senate Democrat Schumer allies with Apple, other multinationals on repatriation tax talks – June 21, 2011
U.S. companies push for tax break on foreign cash – June 20, 2011
Apple, Oracle, Duke Energy, others organize lobbying blitz for tax holiday – February 17, 2011

32 Comments

      1. Your politics is showing, as are your fundamental ignorance of economics art the expense of ideology.

        See, Greece, Ireland and Spain as examples (and don’t just read news headlines).

    1. Well not really. Those profits were earned in other countries. Citizens of the United States aren’t allowed to just drain capital from the entire world. I’d rather Apple buy Saudi Arabia.

      1. Sooner or later the US would be a basket case country. Wall Street and the Liberals had destroyed the fundamentals of economics and thought that money grew from trees. They are against good work ethics of producing the actual wealth and have relied their faith on pseudo wealth such as paper money and toxic assets. It would be better for Apple not to bring back the money earned from overseas but rather pulled out its operations from the US since the US would not be an attractive place to do productive business anymore. Better for Apple to invest in banana plantations in the Caribbean because the US would soon be a big banana republic.

    2. … common sense in bed when you got up this morning? Apple has PAID the taxes on the monies held overseas! Just, not to the US of A. The money made in Britain was taxed in Britain, the made in Germany was taxed in Germany, etc. Why should Apple pay the US for moneys already taxed elsewhere?
      I agree with the article. Invest the ex-patriot funds in place, build new stores there, purchase new supplies there, whatever can be done to put the money to work.
      Next time you feel inclined to make an ignorant “for the people” comment, THINK! In this case, think of who devised the tax codes you think should be enforced. The marginally RICH. Those who want to get richer, mainly by not giving anything to the gov’t. So they make sure the middle class pays the bulk of it and they get spared.
      And, wipe the spittle off your chin. You’re embarrassing the rest of us 99%-ers.

      1. Companies are wooed by other countries which setup a low tax scheme. Now you’re saying that they’ve paid their taxes?

        Better would be is if they paid the equalization taxes. If you paid 5% in an outside country and you would pay 10% in the USA, then you should get a discount and not need to pay the full 10%. Say you pay the difference plus a 1% fee.

        Tax holiday is not a simple matter. There are many many different scenarios to consider.

  1. Can Apple use the overseas money to pay overseas suppliers / overseas investors, or does it have to go back through the USA first before it can be used?

  2. Apple’s done the bare minimum to appease Wall Street. The dividends and buy back cash will come from money held in the US. The overseas cash will build up until there is a tax holiday. In three years time Apple will have in excess of $200B cash despite the dividends and share buy backs.

    1. “Apple’s done the bare minimum to appease Wall Street. ” Which is good as we all know that Wall Street does not care about anything but its own bonuses and paycheck.

      Stock holders and investors are chump change to the big banks and big money that only cares to make more… for themselves. More is never enough…

      PS, I am pretty sure that Apple is able to use European money to pay Asia… Anyone an expert on this.??

      en

  3. I could see bringing it home if all your manufacturing and production was done exclusively in the U.S, But Apple is a word based entity now, so if most of your materials are purchased outside of the U.S then why argue about bringing it all back.

    I do understand all about why it’s a good idea to have it here, but why lose billions just to purchase items out side of the Country on a reoccurring basis, sure bring it home when Apple won’t lose a big percentage of its profits, and let’s not forget that they need to answer to shareholders that would be a might bit upset if billions was thrown away without some new type of tax reform.

    Eric just wants to plead with Apple to let him jump in it one time to see how it feels,and with reporting like this, he will never get near that amount of cash. Can we say “Dream Scape”

  4. People will never be satisfied have you not learned this yet.

    I love the new dictation feature of the new iPad. All those who wanted a physical keyboard, and because the iPad did not have one, decided not to buy an iPad….. Apple has answered your complaint regarding no physical keyboard with a new method of input that will blow you away.

    It takes some learning, and it’s best to use short sentences or short phrases and join them together…. but once you learn the tricks it is a joy to use. I have stopped answering emails on my desktop model iMac completely… it is just so much more convenient to dictate my answers into my iPad. I predict this will be the feature that sells more iPads than any other feature. It has to be tried to be believed.

  5. The “$64 billion of its cash outside the country” is shielded from our government at this time. I would rather Apple use it where it is than loose 1/3 or 1/2 to taxes. What does taxes do for AAPL? How about a few billion dollar server farms on each continent? This time using Apple Mac servers!

    Use it where it is don’t lose it to taxes.

    1. I work in the school system part time, so i see hundreds of documents a week created by students.

      I swear that there must be a world wide conspiracy among spell checker developers to replace the word “lose” with “loose” Just one of those dumb things.

      Far be it from me to give modern students very much credit for their abilities which do not include the ability or the motivation to proofread their own writing, but I give them a pass on this one. I see lose replaced with loose a dozen times a day. Wish someone would just fix it.

      1. Some of the posters here have a high school education. Some even have gone past grade 9. We must applaud them for their effort to have their views read and understood. After all, they are worthwhile people too. Give them a break.

        1. If you don’t point out spelling and syntax errors to English as a first language users, the perpetrators will never learn the proper way to get their thoughts across.

          We want their views heard.

  6. “Some of the posters here have a high school education. Some even have gone past grade 9.”
    I am a language arts teacher; don’t see much change from grade 5 through 12 honestly, doesn’t seem to get much better.
    In fact, I did a semester 4 years ago, the class that sticks out to me involved a great deal of writing and was inhabited predominantly by college sophomores. Very little improvement from 5-12 there either. Not a good sign.
    Writing and communication skills just are not valued as they once were. Only about half the 8th graders can do cursive letters, many still print. Many elementary teachers just don’t take the time to teach it, and the parents don’t care.

  7. I won the bet. Not soon after Apple is trying to please everybody by offering more stock incentives, is some crybaby complaining this is just not good enough. No matter what Apple does or doesn’t do, you can’t please everybody.

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