“Sure, the company needs to find money to fund the extra $50 billion it plans to spend on share buybacks by 2015, which at a total of $60 billion makes it the largest single share repurchase program in corporate history. It also needs more money for its 15% dividend increase to $3.05 per share,” Lauria reports. “But taken together those moves only amount to $100 billion in extra cash between now and 2015, which Apple can easily fund from its normal business operations — cash flow from operations for the second quarter alone totaled $12.5 billion.”
Lauria reports, “The real reason Apple is borrowing money is because more than two-thirds of its $145 billion cash pile resides overseas, and bringing it back to the U.S., known as ‘repatriating,’ would subject the company to a huge tax hit… Apple isn’t alone in wanting to keep its cash overseas to avoid taxes. A study of 60 U.S. companies by the Wall Street Journal in March found that together they kept a total of $166 billion offshore last year, or more than 40% of their annual profits.”
Read more in the full article here.
Related articles:
Apple’s massive $100 billion capital return program is a perfect tax arbitrage – April 26, 2013
Apple to tap a hungry debt market; strong demand likely from investors eager to get cash off sidelines – April 25, 2013
Debt-free Apple plans to borrow to finance massive capital-return program – April 23, 2013
Apple beats Street on EPS and revenue; ups quarterly dividend by 15%; ups buybacks to $60 billion – April 23, 2013
Apple paid $6 billion in U.S. federal income taxes, 1/40th of all corporate income taxes collected by U.S. government in 2012 – January 5, 2013
Google, Apple, eBay shouldn’t pay taxes – people should pay taxes – November 25, 2012
So how much did Apple really pay in taxes? – November 1, 2012
Apple’s showdown with the U.S. government over taxes on offshore cash – July 13, 2012
Apple‘s $74 billion tops list of U.S. tech companies’ overseas cash – July 9, 2012
Apple’s dividend move puts spotlight on foreign cash holdings, repatriation tax reform – March 20, 2012
Apple: Good start; and what about the overseas cash? – March 19, 2012
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
Tagged: AAPL, Apple buybacks, Apple dividends, repatriation holiday, tax repatriation, U.S. taxes
