Apple: The status quo remains

“When Apple reported its fiscal second quarter results last week, the company announced an expansion to its capital return plan,” Bill Maurer writes for Seeking Alpha. “For the last couple of years, the company has taken out large amounts of debt to accomplish this plan, given low interest rates are much cheaper than repatriating foreign funds. Last week, the company had another debt deal close, showing that this action continues to be the preferred way to go.”

“The total ‘cash pile’ that’s composed of cash and investments adds up to $256.8 billion, while the total debt pile comes out to $98.5 billion,” Maurer writes. “Of course, this doesn’t tell the whole story, because of that quarter trillion plus in cash and investments, $239.6 billion is held outside the US, unable to be used for dividends and buybacks.”

“Since we are still waiting for the Trump administration to come to terms on tax relief and repatriation, Apple management doesn’t want to pay huge amounts of taxes to bring its foreign funds home. As a result, taking out debt at very low rates continues to be the best move,’ Maurer writes. “The company took out $7 billion in debt last week to continue the status quo. With Apple paying just around 2.00% after taxes on the fixed rate portion of last week’s issuance, don’t expect the company to change what it is doing anytime soon.”

Read more in the full article here.

MacDailyNews Take: When the money’s basically free, you might as well generate it and use it to get the share count down and reward shareholders vid dividends.

SEE ALSO:
Why Apple is investing $148 billion in corporate debt – May 4, 2017
Apple raises $10 billion in debt ahead of President Trump’s repatriation tax plans – February 3, 2017
Apple has now amassed nearly $80 billion in debt – September 12, 2016

34 Comments

  1. “Since we are still waiting for the Trump administration to come to terms on tax relief and repatriation…”

    oh, I thought Trump was Dr. Evil, Mr. Maurer…you sure sound impatient after 100 whole fücking days that he spent cleaning up The Muslim Usurper’s “health plan.”

    1. At the end of our President’s first term, I want every vestige of The Muslim Usurper’s “legacy” eradicated from every law, statute and executive order….every building, highway and school.

      so far, so good.

      1. Wow. You get more ignorant with every post. If by clean up you mean kick people off of health care and deny women basic medical care then I guess clean up is legitimate.

        Is there no one you care about except your own pathetic existance?

            1. There are any number of things that the Pro-Life Movement might reasonably criticize Planned Parenthood of doing. This isn’t one of them.

              Of course they recommend patients for mammograms. They just don’t conduct them on their own premises, just like most other gynecologists and primary care physicians don’t conduct mammograms on their premises. The equipment is very expensive, so it is almost always located in a hospital radiology department or free-standing clinical testing facility.

              Doctors at Planned Parenthood conduct breast examinations (almost a million of them each year) and refer their patients for mammograms when that is indicated, just like almost every other women’s health practice does. They have a number of programs to help poorer women afford those services.

              In 2010, cancer screening and prevention services — which would include breast exams — made up 14.5 percent of all medical services performed by Planned Parenthood. The largest category was testing and treatment of sexually transmitted diseases (38 percent), followed by contraception (33.5 percent). Abortion made up 3 percent.

            2. “According to Planned Parenthood’s own apologist, Media Matters, its “total revenue from abortion services was approximately $164,154,000,” a year. Accordingly, over 51 percent of Planned Parenthood’s clinic income comes from abortion.

              In addition to its $320.1 million in clinic income and $223.8 million in private donations, Planned Parenthood receives $487.4 million dollars a year from taxpayers. And that number is drastically increasing. Taxpayer funding for the abortion giant has more than doubled in the last decade.”

          1. Nick, you aren’t even close to the real facts. Most of the changes in TrumpCare are distinctly Anti-Life and Anti-Woman.

            On the pro-life side, TrumpCare does defund the non-abortion services of Planned Parenthood (abortions have never been eligible for federal funding), which are often the only women’s health services in a given area. TrumpCare also effectively forbids insurers from providing privately-funded coverage for pregnancy terminations, even when necessary to save the life of the mother. Those two provisions might be reasonably related to a pro-life agenda.

            What is ANTI-life by anyone’s criteria is that TrumpCare makes the provision of prenatal care and other pregnancy-related medical services an optional coverage. If a woman cannot afford the extra-cost coverage and gets pregnant because she cannot afford contraception, she will be on her own and so will her baby. She is quite unlikely to get recommended care during pregnancy.

            The result will inevitably be many more premature and other high-risk babies. These will be born with a preexisting condition, and coverage for such patients is also an extra-cost option under TrumpCare. Because they cannot get affordable care for their chronic health conditions, they will grow worse until they present at an emergency room with an acute health crisis. They will, of course, be unable to pay for services, so the cost will be passed through to the public through taxes or higher medical prices for insurers and private-pay patients.

            That will be enormously more expensive over their lifetimes than simply providing preventative treatment in the first place. Of course, another feature of TrumpCare is that insurers will be able to reinstitute the lifetime caps that the Affordable Care Act outlawed. So, once the sickest people have exhausted the cap, they can go to the emergency room or die.

            Since women in their 50s and 60s are likely to have significantly less income and fewer assets than men the same age, they will be disproportionately affected by the 67% increase in premiums allowed for older Americans under TrumpCare (existing law allows only a multiplier of three on top of the rate a young person pays for the same coverage; TrumpCare allows a five-fold multiplier).

            Younger women aren’t any better off, as they are also poorer than their male age cohort, so they (particularly single mothers) will be disproportionately affected by the cuts in Medicaid.

            Women live longer, so once they pass 65, they are more likely to be affected by the long-term instability of Medicare caused by the higher proportion of the population that reaches eligibility in poor health due to inadequate preventative care.

            It is no wonder that all the pictures of our President celebrating his House victory show him surrounded by fifty or so people, all of whom are white, all of them male, and almost all of them millionaires. They are the only ones with something to celebrate.

            1. “Most of the changes in TrumpCare are distinctly Anti-Life and Anti-Woman.”

              except the bill hasn’t even been passed by the senate, much less signed by the president, you troll.

            2. You can’t have it both ways, botvinnik

              Either: “you sure sound impatient after 100 whole fücking days that [Trump] spent cleaning up The Muslim Usurper’s “health plan.”

              Or: “except the bill hasn’t even been passed by the senate, much less signed by the president.”

              If the bill passed by the House and pushed by the White House to “clean up” the health care system is NOT actually what the President wants, why did he invite all those rich men to a big celebration of the passage of a bill that most seriously impacts poor women? Why is he not lobbying for changes?

              If the House Bill DOES represents what he wants—as he says it does—why is the bill not open to criticism based on its actual text and not on what might be included in some imagined, but utterly different, Senate substitute?

              The fact is, the only bill we have to discuss at the moment is the American Health Care Act passed by 4 votes in the House of Representatives. That bill is an absolute disaster for the health care of everybody except healthy young males.

              If a Senator’s constituents do not point out the shortcomings of the House bill, why would we expect him to vote for any amendments? If we wait to criticize TrumpCare until after the Senate has acted and the President has signed it into law, it will be too late.

              You are the one who originally brought this subject up in the very first comment on this thread by arguing that this national disaster waiting to happen was the signature accomplishment of the first 100 days. On that, we agree.

            1. BARACK Obama will reportedly pocket a staggering £2.5million (€3million) today for delivering a speech to a sold-out audience in Milan as part of his lucrative post-presidential speaking tour.

              The former President, who has already earned hundreds of thousands of dollars for private speeches since leaving the White House, will make his highest-paying appearance yet at the Global Food Innovation Summit today.

            2. “Global Food Innovation Summit”…three million bucks would sure buy a lot of food for hungry children.

              Obama is a goddamned devil.

    2. Hmmmm, this seems like it could get risky, no?

      What if…

      Apple starts to materially slide… and with the debt, they may get to a point where they have to start paying it down big time… could they pay it with the offshore money with no tax consequences…?

      1. If something happened to cause a slide of that magnitude, Apple would have lots bigger problems than its debt load. The $20B in-country is probably enough for debt service, and the offshore money could probably be “creative financed” as well. At the worst case, the foreign reserves minus the tax penalty would still be more than adequate to pay off the debt, should it ever be in the company’s best interest to do so.

    3. He spent the first 100 days playing golf, getting laws passed to feather HIS OWN PERSONAL FORTUNE and the fortunes of his billionaire palls.

      Usually it takes corrupt Republican administrations a couple of years to do what it took Trump only 100 days. History will not be kind to the Hypocrite in Command.

    4. Comrade TRUMPanzee did not “clean up” anything, especially the ACA. Trump is all about perceived victories regardless of the actual impact of the legislation and the fact that it violates most of his promises. Everyone saw Trump throw the job to Ryan and then start threatening House GOP members and sending Bannon after them. Trump did not care what was in the bill – he doesn’t read them, by all accounts – he just wanted to be able to claim victory, as demonstrated by that stupid celebration after the most recent vote. Why was it stupid? Because the House version won’t go anywhere in the Senate, and because it is not anywhere close to the infamous “Repeal and Replace.” It is more like “Modify and Cripple” to the benefit of the wealthy.

      Face it, Trump is just a juvenile egomaniac looking for approval. Look what happened after he sent 59 cruise missiles into Syria (another flip-flop from his former position)…he gained some approval from politicians and ill-informed voters and then decided to drop a big bomb in Afghanistan that had been sitting around for many years. If he gets enough approval for that, a nuclear bomb comes next. It does not matter if the action/policy works. It only matters if he gets positive press and people clap and yell for him at his ego rallies.

      We did not elect a President. We elected a Trump. His supporters are too blind to see that he has no foundation except his ego. He flip-flops on nearly everything. He denies saying things that he clearly said – it is recorded! And he does not represent the party that elected him because that party is far too fragmented for anyone to truly represent them.

      1. “… because that party is far too fragmented for anyone to truly represent them..”
        uh, how’s this for “representation,” you goddamned idiot:
        • The Presidency
        • The Senate
        • The House
        • The Supreme Court
        • The Governorships
        • The State Houses

        the “fragmentation” is between your collectivist ears, “comrade.”

      2. you find that bot is just tRump’s cockholster and all you are going to get from him is more and more regurgitation. It’s getting hard to tell what it is now, he’s so deep in denial.

  2. Someone please explain to me WHY Apple needs to take on debt with all that cash in the bank? I may be a fuddy duddy, but in our household we pay cash for every purchase (old mortgage excluded), or we don’t buy …

    1. Exactly the same reason you don’t pay off the old mortgage: you don’t use money you could invest at 8% to pay off a mortgage that is only charging 4%. With Apple’s bond rating as high as it is, it can borrow money for less than the rate it is receiving on its invested cash reserves… and that might even be true if Apple weren’t facing a huge repatriation penalty if it moved its offshore cash home. With the penalty, borrowing the money is an absolute no-brainer.

    2. Personal budgets have absolutely no relationship to corporate OR governmental budgets. That logic is strictly right wing nonsense.

      Debt is good when it allows corporations and governments to improve their operation and profits (well not govt hopefully).

  3. You can’t handle the truth! Your petty insults like a 5-year old is all you got? No wonder you lost your business and your not married. Pity. No I take that back. A racist POS does not deserve pity or help of any kind …

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