carnegie

The reason for the timing of these sales is pretty clear. The shares were sold when the share price climbed back above the share price at their vesting.

In recent years Mr. Maestri has routinely sold newly vested shares shortly after their vesting (e.g., not the day after vesting but a few days or weeks later). But he doesn't sell them at a share price lower than the vesting price (i.e., the cost basis). This is true of his time-based shares which vest every April and his performance-based shares which vest every October. He receives the shares, minus the 50+% which is withheld for tax purposes, and then sells all of them shortly thereafter if the share price hasn't gone down. In this case the share price started to drop shortly after these shares vested and didn't get back to the vesting price until the day they were sold, more than 4 months later.

bloggerblog said:

Sounds like Apple wants the opportunity to prove Qualcomm's patents are not original and therefore invalid. So that when 2025 comes around Qualcomm won't jump back on the lawsuit wagon. Sounds like a valid concern to me.

That's correct. The point here is that the patents in question are set to outlive the settlement agreement. Apple wanted an agreement from Qualcomm that it wouldn't sue in the future based on these patents. In return Apple would have agreed, in effect, to drop its PTAB challenges to the patents' validity. Qualcomm wouldn't agree so Apple maintained the right to continue the challenges.

It's a question that should probably be answered at some point: Basically, does a licensee have standing to challenge the validity of patents which will still be active, and based on which they might still be sued, after the expiration of an existing licensing agreement? (Or, under what circumstances do they have such standing?) That's why several parties field amicus briefs asking the Supreme Court to grant cert and consider the issue. It apparently just wasn't, in the eyes of enough justices, a big enough unresolved issue for the Court to take up the matter at this time.

gatorguy said:

aderutter said:

Does anyone know if the stock buy-backs are undetaken in US or overseas? Might it make sense for non-US income to be used for buy-backs to avoid repatriation tax? Just pondering an area I don’t know too much about…

The buybacks can't use un-repatriated funds. That's why you see Apple issuing bonds to at least partially fund the buybacks. That money held overseas, and as I understand it not necessarily subject to Irish or even EU law (see Paradise Papers), is significantly shielded from taxation by any authority including the US and Ireland. 

So much for that vaunted repatiation of $200B held overseas that Apple implied would have happened in 2018 or shortly thereafter. It did not. 

EDIT: A bit more detailed article concerning the Irish story reported by AppleInsider:
https://www.irishtimes.com/business/technology/apple-s-irish-subsidiary-doubles-pretax-profits-to-64bn-1.4871203

That was one of the reasons why, in years past, Apple issued debt to help fund buybacks. But it isn't an issue now. Apple owes U.S. income taxes on its foreign earnings - past and current - whether it actually repatriates those earnings or not. So, even if a controlled foreign corporation retains some of its earnings, Apple (i.e. the U.S. parent) has to pay the applicable U.S. income taxes on those earnings.

That said, according to reporting (from, e.g., the Irish Examiner) Apple has actually repatriated the bulk of its previously not-yet repatriated foreign earnings. It reportedly repatriated nearly $300 billion worth in 2019 and 2020. I haven't read the Irish B1C's myself, but I don't have reason to think the reporting by the Irish Examiner (and others) is wrong.

As for reasons why Apple still issues debt, there are other reasons why it makes sense. For one, even if you're trying to get close to a zero net cash position, having a pile of cash that's largely offset by a pile of debt gives you more flexibility - and more ability to deal with unanticipated developments - than having neither. That's especially the case considering how most of Apple's debt is structured. And the effective cost to Apple of having debt, rather then having less debt and less cash, is very small. It can borrow money at low rates which aren't that much higher than what it's able to safely earn on its retained cash.

aderutter said:

Does anyone know if the stock buy-backs are undetaken in US or overseas? Might it make sense for non-US income to be used for buy-backs to avoid repatriation tax? Just pondering an area I don’t know too much about…

Stock buybacks (of AAPL) are done by the parent company - the main U.S. Apple corporation. But it doesn't really matter anymore (i.e. since the TCJA of 2017 went into effect), for U.S. income tax purposes, whether foreign earnings are actually repatriated. Prior not-yet repatriated earnings were deemed repatriated by the TCJA, and the new minimum taxes on new foreign earnings that the TCJA created apply whether the earnings in question are repatriated or not. So Apple has to pay applicable U.S. income taxes on its foreign earnings - past or current - whether it repatriates foreign earnings or not.