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Apple's Press Release:
Apple accelerates US investment and job creation
$350 Billion Contribution to US Economy Over Next Five Years
https://www.apple.com/newsroom/2018/...-job-creation/
Apple Inc. said it will bring hundreds of billions of overseas dollars back to the U.S., pay about $38 billion in taxes on the money and spend tens of billions on domestic jobs, manufacturing and data centers in the coming years.
The iPhone maker plans capital expenditures of $30 billion in the U.S. over five years and will create 20,000 new jobs at existing sites and a new campus it intends to open, the Cupertino, California-based company said Wednesday in a statement. Apple’s shares rose 1.7 percent to a record closing price of $179.10 in New York.
“We are focusing our investments in areas where we can have a direct impact on job creation and job preparedness,” Chief Executive Officer Tim Cook said in the statement, which alluded to unspecified plans by the company to accelerate education programs.
Apple also told employees Wednesday that it’s issuing stock-based bonuses worth $2,500 each following the new U.S. tax law, according to people familiar with the matter.
In its December approval of the most extensive tax-code revisions since 1986, Congress scrapped the previous international tax system for corporations -- an unusual arrangement that allowed companies to defer U.S. income taxes on foreign earnings until they returned the income to the U.S. That “deferral” provision led companies to stockpile an estimated $3.1 trillion offshore and many were criticized for the moves, including Apple.
By switching to a new system that’s designed to focus on domestic economic activity, congressional tax writers also imposed a two-tiered levy on that ac ulated foreign income: Cash will be taxed at 15.5 percent, less liquid assets at 8 percent. Companies can pay over eight years.
Apple is the first major U.S. technology company to act on the new tax law and it joins others, such as Intel Corp., in responding to criticism by President Donald Trump and others that corporations have been ignoring American workers and manufacturing. Job creation was a key pillar of Trump’s election campaign. That means the new positions created by Apple are likely to have a more significant political impact than its $38 billion tax payment, according to Erik Gordon, a professor at the University of Michigan’s Ross School of Business.
“The thrust here is American jobs, jobs on American soil, build manufacturing here, don’t build everything in China,” Gordon said. “You can’t have an announcement of a million jobs. But you can have companies like Apple saying that we’re going to have 20,000 new jobs here. If other companies say they’re going to have new jobs too, it does add up.”
Apple has the largest offshore cash reserves of any U.S. company, with about $252 billion at the end of September, the most recently reported fiscal quarter. The tax rate indicates that Apple is likely bringing back a majority of its overseas cash back to the U.S., leaving only a small portion for international investments like retail stores.
“They’re going to have well over $200 billion by the end of this year that will be available for incremental investments, capital returns and M&A,” said Matthew Kanterman, a New York-based Bloomberg Intelligence analyst. The new tax law lets U.S. companies bring overseas cash reserves back home in one year and pay the resulting tax bill over eight years. “And Apple hasn’t historically done big M&A,” he said.
The $30 billion in capital expenditures will come as part of $350 billion that Apple expects to spend in the U.S. over the next five years. The 20,000 new jobs include additional Apple employees at its campuses, data centers, and retail stores, but not third-party developers for iPhone and Mac apps, an economy Apple has touted in the past.
Apple said that part of the $30 billion in capital expenditures will go toward a new U.S.-based campus, new data centers and additional supplier investments. The company, which opened a new headquarters in Cupertino last year, said its new U.S. site initially will be focused on employees who provide technical support to Apple product users. The new location, which Apple said it will announce later this year, will be similar to the company’s existing campus in Austin, Texas, for supply-chain and technical-support employees.
Apple said it will increase its local manufacturing fund, announced last year, from $1 billion to $5 billion, indicating that it will be sourcing more components for its products domestically. As part of the original fund, Apple invested in Corning Inc. and Finisar Corp., companies that make components for iPhone glass screens and lasers for Face ID and AirPods, respectively.
“These are probably many capital expenditure initiatives and new site build-outs that Apple was already planning on doing regardless of repatriation,” said Michael Olson, an analyst at Piper Jaffray, who has the equivalent of a buy rating on the stock.
“What’s not said in this release is that there is more potential for increased buybacks for shareholders and acquisitions that might not have taken place if it were not for the cash influx from overseas,” Olson said. Apple typically provides updates on its share buyback program when it announces second quarter earnings.
https://www.bloomberg.com/news/video...bout-38b-video
https://www.bloomberg.com/news/artic...patriated-cash
Apple's Press Release:
Apple accelerates US investment and job creation
$350 Billion Contribution to US Economy Over Next Five Years
https://www.apple.com/newsroom/2018/...-job-creation/
Yes! Just as I had hoped.
Wow thanks Trump!
Pretty telling - good news for the country and hardly a word from anyone - people would rather comment on s******e, mental deterioration, insults, and banging.
Good news for the Apple expansion in West Virginia.
Apple and their tax avoidance /evasion
The bulk of this money will go to Capital, not Labor
Poor you trump said companies would do this
That was a joke. They'll probably quadruple their presence in Austin now.
LMAO. Ducks doing "The Ducks" and pissing all over Booty.
$38B doesn't cover the $1.5T the tax bill cost the US tax payers.
Better to nothing and other companies will do it to
Is that $1.5 trillion annually or over an estimated time frame?
It’s an estimated value over a specific time frame.
How long? Like during this term? A decade?
10 years. Read the ing news or stop playing dumb. That $38B is a one time payment and was factored in when projecting the impact of cost of the tax bill.
You did more in that one answer than 3 of these repug gots. tbh.
So that $38 billion was factored in? Didn't see that in the CRFB analysis a few months ago. And if that $38 b was factored in, why not the "tens of billions" Apple is going to spend and invest, the $350 billion referenced in this article? The $1.5 trillion could be on the high end of the cost projection. And if Apple is "coming home", its a safe assumption others will too and will pay taxes and offset that $1.5 trillion and push the cost projection further to the high end.
$1.5 trillion added over a decade when the debt has basically quadrupled in two decades isn't much in the grand scale. The debt surpassing the economy in ten years isn't anywhere near the fault of this tax cut as it is the insane spending by the government this century.
I get you, but you can walk back the a few feet every now and then for discussion sake.
Cheerleader routines. Neat.You did more in that one answer than 3 of these repug gots. tbh.
The analysis probably did consider the benefits of repatriation due to lower tax rates. It may not have singled out by name Apple in any analysis but substantial repatriation almost certainly had to be an assumption in their calculations.
Might re-visit it soon, it was a very detailed, itemized cost breakdown.
link me to what you were looking at. This is offsetting revenue, not cost.
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