This morning Apple announced their plans to initiate a dividend and share repurchase program. This answers any questions anyone may have had about about what the company would be doing with their massive cash piles. You know, when you have $100 billion, people want to know how you intend to spend it.
Apple is estimated to be spending around $45 billion of their domestic cash over the next three years as part of their program. However, none of that is coming from overseas.
Based on what we heard this morning, much of Apple’s money is overseas and Apple is not changing that due to tax laws. Trying to bring the cash into the states would mean paying some major taxes … not something they want to do.
“We do not want to incur the tax cost to repatriate the foreign cash at this time,” said Apple CFO Peter Oppenheimer during the early morning conference call Monday.
They are not the only tech giant that has initiated a plan like this. Major corporations like Microsoft, Intel, HP, Cisco, IBM and Oracle have all done the same. In fact, this was pretty much expected of Apple when they announced that they would be doing something with their huge cash reserves.
Companies like Google, Amazon and eBay are some of those major tech companies that don’t pay a dividend.
Apple has been thinking for a long time about what to do with the money, Tim Cook has said it before, and he said it again during today’s call. He has even said in the past that “It’s a lot [of money]” and that “it’s more than we need to run the company.”