Apple to spend $45B over 3 years on dividend & share repurchase program

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  • dick applebaumdick applebaum Posts: 11,553member, moderator
    Quote:
    Originally Posted by anantksundaram View Post


    Actually, it helps reduce the deficit: a smaller percentage of repatriated funds is better for the treasury than 0% of funds sitting abroad!



    Congress can't force companies to bring their money back to the US.



    As I understand it, Apple would need to pay the difference between the foreign taxes already paid -- and the taxes that would be due if the money had been earned/booked domestically.



    Say Apple pays 20% taxes in France and 30% taxes in US -- they would need to pay 10% US tax to repatriate the money.



    Though, I do recall a recent (last 6 months) statement by Tim or Peter that Apple had set aside funds to pay US taxes on foreign earnings -- going forward (I think).
  • thataveragejoethataveragejoe Posts: 830member
    Quote:
    Originally Posted by anantksundaram View Post


    Actually, it helps reduce the deficit: a smaller percentage of repatriated funds is better for the treasury than 0% of funds sitting abroad!



    Congress can't force companies to bring their money back to the US.



    Kind of. If Congress did nothing and companies needed to bring money back they would just have to suck it up, no? That makes what you say more an opinion and not really fact. If companies just continually waited for tax holidays what's the point of having rules at all? Whole thing seems like a joke. No wonder we're in such a mess.
  • melgrossmelgross Posts: 28,737member, moderator
    Quote:
    Originally Posted by NOFEER View Post


    found some answers to my questions



    how do investors benefit with a stock buy back



    http://beginnersinvest.about.com/od/.../aa091806a.htm



    Yeah. But a lot of that is Voodoo. The point is that generalizations about this, as with most other things, doesn't help in an individual situation. It isn't even correct in a number of ways.



    Generally, share repurchasing is done to lift shares that are tottering, by supposedly showing that management has confidence that share prices will go higher in the future. Of course, in reality, is says no such thing. If management purchased those shares with their own money, THEN it would say something. But even then, management can be wrong, and often has been.



    With Apple, it's different. While I'm against share repurchaseing in principle, Apple has done it for a reason that really isn't saying that their shares should be worth more, and so this is going to prove they mean it. They are buying simply to equalize out the share growth over the years. Is that needed? I really don't think so, but it's not the worst thing.



    The problem with share repurchasing is that it throws money away. It's GONE! Nothing can be done with it. And for most companies doing it, it doesn't result in share price accumulation over the long term.



    That's why I prefer a dividend, or a disbursement. The money is actually going somewhere. It isn't being burned.
  • woodlinkwoodlink Posts: 198member
    Quote:
    Originally Posted by thataveragejoe View Post


    It has happened before, but given the gridlock in congress, and massive deficits the US has, to get anything done seems a long ways off. I could careless about politics, but I doubt a change of the guard is coming in November for better or worse. Funny how everyone wants to avoid paying taxes, even the richest company in the world.



    Yes, Congress has approved corporate tax holidays in the past.



    Problem is, every time Congress has done such, corporations just park even more money off shore hoping for another such holiday.



    It's a tricky situation to say the least, both for Congress and the corporations that take advantage of it.



    Our IRS tax code is a complete cluster - - - - .
  • dick applebaumdick applebaum Posts: 11,553member, moderator
    Quote:
    Originally Posted by thataveragejoe View Post


    Kind of. If Congress did nothing and companies needed to bring money back they would just have to suck it up, no? That makes what you say more an opinion and not really fact. If companies just continually waited for tax holidays what's the point of having rules at all? Whole thing seems like a joke. No wonder we're in such a mess.



    I think that a big part of the problem is that foreign countries are friendlier towards business -- lower taxes, fewer regulations...



    At times, I think that the US and some states (California) are doing everything they can to discourage business/investment.



  • shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by anantksundaram View Post


    Shareholder Return = % Capital Gains + % Dividend Yield.



    Wall Street is very happy with Apple's return, thank you.



    By capital gains I assume you mean the share price when you buy and sell. That means you will continue to make most of your profit from the rising share price rather than the dividend payments.



    So we are still going to have all these dipshit analysts talking up the share price all the time so their colleagues in the trading division can make a quick buck.
  • thataveragejoethataveragejoe Posts: 830member
    Quote:
    Originally Posted by jannewmx View Post


    I hope Apple gets some tax breaks. It just isn't fair to pay taxes



    I know right, taxes are just so unfair! Why would anyone want to do that? Let's get rid of all of them! Surely someone else must be willing to pay up for everything in our society.
  • melgrossmelgross Posts: 28,737member, moderator
    Quote:
    Originally Posted by Dick Applebaum View Post


    As I understand it, Apple would need to pay the difference between the foreign taxes already paid -- and the taxes that would be due if the money had been earned/booked domestically.



    Say Apple pays 20% taxes in France and 30% taxes in US -- they would need to pay 10% US tax to repatriate the money.



    Though, I do recall a recent (last 6 months) statement by Tim or Peter that Apple had set aside funds to pay US taxes on foreign earnings -- going forward (I think).



    No, that's not correct. I earlier quoted from today's Times article on this. They said that Apple could pay 30%, or more, on repatriated cash. It's a misconception to think that all they would pay is the difference.



    But, even if that were true, it could still be an additional 10%, which for Apple would be almost $7 billion.
  • melgrossmelgross Posts: 28,737member, moderator
    Quote:
    Originally Posted by Woodlink View Post


    Yes, Congress has approved corporate tax holidays in the past.



    Problem is, every time Congress has done such, corporations just park even more money off shore hoping for another such holiday.



    It's a tricky situation to say the least, both for Congress and the corporations that take advantage of it.



    Our IRS tax code is a complete cluster - - - - .



    No they don't. If the government gives a one time holiday, that's exactly what it is. Companies then continue to accumulate cash outside of the US, because that's where a lot of their income is. The cycle continues.
  • dick applebaumdick applebaum Posts: 11,553member, moderator
    Quote:
    Originally Posted by melgross View Post


    No, that's not correct. I earlier quoted from today's Times article on this. They said that Apple could pay 30%, or more, on repatriated cash. It's a misconception to think that all they would pay is the difference.



    But, even if that were true, it could still be an additional 10%, which for Apple would be almost $7 billion.



    Wow! Are you sure? Don't multinational companies get credit for foreign taxes paid?



    If not, then wouldn't the US's generally higher corporate tax rates tend to drive US companies off shore?



    Maybe Apple should buy Schlumberger



    Edit: I checked your posts and couldn't find it -- could you relink the article?
  • thataveragejoethataveragejoe Posts: 830member
    Quote:
    Originally Posted by melgross View Post


    No they don't. If the government gives a one time holiday, that's exactly what it is.



    And unlimited internet is really unlimited huh?



    Yes, just this one time little boys and girls...wink wink nudge nudge. See you again in 7 years when you beg for it again. And the band played on...
  • melgrossmelgross Posts: 28,737member, moderator
    Quote:
    Originally Posted by Shaun, UK View Post


    By capital gains I assume you mean the share price when you buy and sell. That means you will continue to make most of your profit from the rising share price rather than the dividend payments.



    So we are still going to have all these dipshit analysts talking up the share price all the time so their colleagues in the trading division can make a quick buck.



    Well, I'm long. I last purchased a large number of Apple share in the middle of 2004, and have bought more during large dips, such as the recession. I don't make money trading. I just make it from long term growth. I've been fortunate to be able to have a fairly large number of shares, so this dividend, even though it's somewhat lower than some expected, will give me a fair amount of income. Couldn't be happier.
  • melgrossmelgross Posts: 28,737member, moderator
    Quote:
    Originally Posted by Dick Applebaum View Post


    Wow! Are you sure? Don't multinational companies get credit for foreign taxes paid?



    If not, then wouldn't the US's generally higher corporate tax rates tend to drive US companies off shore?



    Maybe Apple should buy Schlumberger



    It's not so simple.
  • khmannkhmann Posts: 1member
    The competition in the future is tough, the money can be invested in other great technology rather than paying dividends and buyback stocks. It is very disappointing to a long term investor and fan such as me.
  • anantksundaramanantksundaram Posts: 17,188member
    Quote:
    Originally Posted by Shaun, UK View Post


    By capital gains I assume you mean the share price when you buy and sell. That means you will continue to make most of your profit from the rising share price rather than the dividend payments.



    So we are still going to have all these dipshit analysts talking up the share price all the time so their colleagues in the trading division can make a quick buck.



    The average dividend yield in the US stock market is at about 2%. (So Apple is right about at the average.) A vast majority of the historical gains from owning shares has come from capital gains, not dividends.



    I think you have an excessively cynical view of stock markets. Perhaps it's not for you. I am simply pointing out a fact.
  • shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by Dick Applebaum View Post


    Wow! Are you sure? Don't multinational companies get credit for foreign taxes paid?



    If not, then wouldn't the US's generally higher corporate tax rates tend to drive US companies off shore?



    Maybe Apple should buy Schlumberger



    Edit: I checked your posts and couldn't find it -- could you relink the article?



    Maybe they should buy an offshore tax haven like the Bahamas and move there



    They could turn into Tracy Island. Thunderbirds are go.......
  • anantksundaramanantksundaram Posts: 17,188member
    Quote:
    Originally Posted by thataveragejoe View Post


    Kind of. If Congress did nothing and companies needed to bring money back they would just have to suck it up, no? That makes what you say more an opinion and not really fact. If companies just continually waited for tax holidays what's the point of having rules at all? Whole thing seems like a joke. No wonder we're in such a mess.



    If they have to bring their money back, then you would be right. The fact that an estimated $1.2 trillion of US corporate cash (of an estimated total of $2 trillion) being held outside the US by companies tells me that they think $800B is plenty for whatever it is they want to do at home.



    Indeed, most of the growth opportunities - and hence, investment needs - are abroad, rather than in mature economies such as the US.
  • dick applebaumdick applebaum Posts: 11,553member, moderator


    This just in...



    Apple gets Dubrovnik City Council approval for plans for new World Headquarters:







  • melgrossmelgross Posts: 28,737member, moderator
    Quote:
    Originally Posted by Dick Applebaum View Post


    Wow! Are you sure? Don't multinational companies get credit for foreign taxes paid?



    If not, then wouldn't the US's generally higher corporate tax rates tend to drive US companies off shore?



    Maybe Apple should buy Schlumberger



    Edit: I checked your posts and couldn't find it -- could you relink the article?



    You'll have to look at the Times article today in the business section. But the quote was this:



    Quote:

    \tWhile Apple ended last year with a cash balance of $97.6 billion, it cannot easily gain access to most of that for a dividend because roughly 66 percent of the money is held by its foreign subsidiaries. To bring that cash back to the United States, Apple would have to pay hefty repatriation taxes, very likely more than 30 percent.



    I don't know if they're talking about 30% more than the average of their foreign tax rate, or an actual 30% of the total. Whichever it is, it's a lot.
  • shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by anantksundaram View Post


    The average dividend yield in the US stock market is at about 2%. (So Apple is right about at the average.) A vast majority of the historical gains from owning shares has come from capital gains, not dividends.



    I think you have an excessively cynical view of stock markets. Perhaps it's not for you. I am simply pointing out a fact.



    I wasn't trying to be cynical. I didn't realise stock yields were that low in general. I always thought people owned stocks for the dividends rather than the share price.



    I don't invest in the stock market because I simply don't know enough about it to feel confident of not making a mistake. I follow Apple every day so I should have seen the big rise coming and invested a year ago but I used the money to set up a business instead so I can't complain.



    I don't like the way analysts and banks manipulate the stock for their own gain. I would rather see dividends plus small monthly gains taking the stock price up gradually so that small investors see a gradual return on their investment and speculators are forced out.
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