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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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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.

"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein

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