“Tech companies like Apple Inc. with large piles of cash sitting overseas typically cite the large tax liabilities they would face if they repatriated any of that money to fund dividends, or make acquisitions,” Dan Gallagher reports for MarketWatch.
“But Apple has already hedged much of the risk it might face in this respect, at least as far as risk to its income statement, according to one analyst on Monday,” Gallagher reports. “In this break-down, Apple has already been accruing taxes for much of its offshore cash, which would theoretically allow it to bring back about $42 billion worth of those funds without incurring any hit to its reported earnings.”
Gallagher reports, ““Apple can access about half of its offshore cash and return it to shareholders without incurring an incremental hit to its income statement,’ Toni Sacconaghi of Bernstein Research wrote [in a note to client today], though added that the company would still have to actually pay the cash tax. ‘That means that about $75 billion in total cash could be returned to shareholders with no impact to Apple’s reported tax rate or EPS.'”
Read more in the full article here.