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Cook is wondering what to do with the company's $97.6 billion

There's no doubt that Apple is a cash cow. Just last year, many reports started circulating that the tech giant had a larger bank account than the U.S. government, where Apple ended June 2011 with $76.2 billion and the government had $73.8 billion. Now, Apple CEO Tim Cook is saying that the company has more money than it needs.

At the annual shareholders' meeting on Thursday, which is the first since former Apple CEO Steve Jobs' death, Cook tried to determine whether Apple should stop hoarding cash the way Jobs has been for years, or if it's time to stick a hand in the $97.6 billion cookie jar and pay shareholders a dividend this year.

Apple used to pay shareholders a quarterly dividend, but stopped doing so in 1995 because of Apple's financial hardships. Apple even had to turn to Microsoft for a $150 million infusion around the time that Jobs came back as CEO in 1997.

After those dark times, Jobs held on to every cent that the company made. When the new millennium rolled around, Apple started seeing great success with Macs, Macbooks, iPods/iPod touch's, iPhones and iPads. Despite the large amount of cash coming in, Jobs continued pinching pennies.

Now, Jobs has been deceased since October 5, 2011, and Cook is looking to use some of the money that it has because he said "it's more than we need to run the company." The problem is figuring out what to do with the money.

Paying a dividend to shareholders would offer a long-term increase to Apple's stock price because it would lure new investors who only buy shares in companies with a dividend.

However, Apple shareholder Asif Khan of Sugar Land, Texas suggested that Cook not provide a quarterly dividend every three months because it might be misinterpreted by some investors that Apple is losing faith in its ability to continue pushing its stock price higher as the company keeps introducing popular products. Rather, Khan would prefer Apple to pay a one-time divided later this year before the federal tax rate limits dividends to 15 percent.

Apple's stock has soared 50 percent over the past year, producing about $160 billion in shareholder wealth and now has a market value of $480 billion. Shares of Apple rose less than 1 percent to $516.39 at closing yesterday.

Another suggestion of what to do with the cash was to buy Greece, which is currently experiencing a debt crisis, but Cook said Apple is not interested.

The cash cow is only likely to get larger with Apple planning several product and software launches this year. For instance, the iPad 3 is due to be announced at an event next week, and the OS X Mountain Lion operating system is due this year as well.

Source: Bloomberg

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Make more jobs!
By chilenoinusa on 2/24/2012 9:23:37 AM , Rating: 3
The best thing Apple can do with that money is to create new jobs in the US. Obviously everyone knows there are problems with the labor Apple uses (Foxconn). So instead of contracting other companies to create the Apple products, why not hire people here that can do the same? They have the money to pay the salary required from US. Also, I'm sure they would sell even more products if they are marked as "Made in US".

RE: Make more jobs!
By vortmax2 on 2/24/2012 11:03:32 AM , Rating: 2
Also, I'm sure they would sell even more products if they are marked as "Made in US".

...instead of "Designed in California"...

RE: Make more jobs!
By The Raven on 2/24/2012 1:44:00 PM , Rating: 1
So they should donate it all to Ron Paul's campaign?

RE: Make more jobs!
By The Raven on 2/24/2012 1:56:00 PM , Rating: 1
So instead of contracting other companies to create the Apple products, why not hire people here that can do the same?

$87/wk there compared to minimum $280+ here in the US. And that is not counting payroll taxes and other regulation like worker's comp, etc. Apple would die if they did that.

So you are out of your mind, unless you are ok with allowing illegals to to take these jobs legally at prevailing wages like $1/hr or something like that. It certainly won't be the US high-school educated+ citizens here.
They have the money to pay the salary required from US.
In conclusion: no they don't. The US itself doesn't have that kind of money. Why don't you think these freedom-hating politicians in DC don't do that already? I mean they could easily tax all that cash away from Apple and therefore make them do it, capice?

RE: Make more jobs!
By Solandri on 2/24/2012 2:45:44 PM , Rating: 1
I'm kinda curious where all the people saying Exxon should pay a windfall profits tax have gone. The $13.1 billion in profit Apple reported last quarter is the second-largest by a company ever, behind the $14.8 billion Exxon reported in 3Q2008.

And Exxon did it on $138 billion in revenue, a 10.7% profit margin. Apple did it with just $46.3 billion in revenue, a 28.2% profit margin.

Or are only oil companies allowed to have their profits described as "windfall"?

RE: Make more jobs!
By FITCamaro on 2/24/2012 2:59:16 PM , Rating: 1
Of course because hippies love Apple but oil companies are evil.

RE: Make more jobs!
By sigmatau on 2/24/2012 9:01:20 PM , Rating: 2
I think you are confusing discussions. Exxon was vilified, and rightfully so, for being so profitable AND taking tax subsidies as though they are some up and coming vital industry that is struggling.

RE: Make more jobs!
By weskurtz0081 on 2/25/2012 1:42:31 AM , Rating: 1
So, you are saying Exxon should be vilified for taking tax breaks (that's what subsidies basically are, tax breaks) but Apple shouldn't be? Is Apple in a "up and coming vital industry that is struggling"? Come on man, the oil companies were just the villain de jour that politicians used to channel the anger away from DC.

Not only does Exxon have a higher effective tax rate in the US than Apple, but they have MUCH lower margins and Apple receives some of the same "subsidies" that the Exxon receives in section 199 of the tax code... only Apple is able to get away with a 9% reduction while the EVIL OIL COMPANIES are capped at a max of 6%.

It's funny how many of those articles have been retracted, corrected, and proven to be flat out false since the outrage and blame shifting that took place in 2009. And, without those oil companies, the iPhone wouldn't be able to exist.

RE: Make more jobs!
By sigmatau on 2/25/2012 3:48:45 PM , Rating: 3
I was not aware that Apple received tax breaks in the amount of $10 billion a year like Exxon? If they do then yes. Apple should not receive any tax breaks really.

You must be a politician as you invented words that you claimed I typed. Nice stretch there buddy though. Good try!

RE: Make more jobs!
By weskurtz0081 on 2/26/2012 11:56:06 PM , Rating: 3
There are tons of different "subsidies" that all company get for manufacturing in the US, there are subsidies for capital equipment, their are foreign tax credits (for paying taxes to foreign countries), and then the ability to write off other types of business costs. All industries get all sorts of tax writes offs (AKA- subsidies), not just Exxon and Apple.

Keep in mind, Exxon pays a TON of taxes, for example in Q1/2011, when XOM made about $10Billion in profit, they paid about $8Billion in taxes (roughly 40% of the gross).

Just do a little research, that's all. Politicians singled out the oil companies and started misleading the public in order to avert the anger that was being aimed at them.

And, I don't think I claimed you typed any words that you didn't. Interesting though trying to shift the conversation away from the topic at hand.

RE: Make more jobs!
By Reclaimer77 on 2/24/2012 4:07:59 PM , Rating: 3
Idealist feel good fluff, that's what this post is. Parts from 30 different companies right there near Foxconn go into the iPhone/iPad. Meaning if Apple moved manufacturing to America, they would have to ship billions of components from China on a regular basis! What do you think that would do to the price of these things?

When you actually examine the facts, you come to the admittedly sad conclusion that there is nowhere else in the world Apple can make these products at the scale necessary to satisfy demand. Certainly not here in America. I doubt anyone would allow a factory of the scale necessary (500,000k+ employees) to be built in their backyard.

RE: Make more jobs!
By simsony on 2/25/2012 11:26:15 AM , Rating: 2
Not to mention what moving production to the US would do to their stock price.

If it was just about spending the money, they could move production, spend all the money, and when they run out, move back to China.

You have to invest the money not just spend it. The ROI of such a move would and will be negative.

RE: Make more jobs!
By augiem on 2/27/2012 3:08:57 AM , Rating: 1
Sure they can! They'd just have to charge $4000 / iPad. Just sayin...

RE: Make more jobs!
By teng029 on 2/25/2012 2:32:27 PM , Rating: 2
and this is based on what set of facts?

RE: Make more jobs!
By LordSojar on 2/26/2012 10:11:23 AM , Rating: 2
and this is based on what set of facts?

Where most economic "facts" here on DailyTech are pulled from... The YERPOYA. What is the YERPOYA you ask? Yearly Economic Review Pulled
Out of Your Ass

RE: Make more jobs!
By teko on 2/27/2012 2:36:51 PM , Rating: 1
RE: Make more Jobs

I don't think cloning is legal yet... But maybe Apple can change that!

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