Cupertino, Calif. - Apple said it expects to spend about $45 billion of its current $98 billion in cash holdings over the next three years to offer dividends for the first time and launch a stock buy-back program, and the company said it will still have enough money left over to run and invest in the business.
"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure," said Apple CEO Tim Cook. "You'll see more of all of these in the future." Even with those investments, however, "we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."
The money for the dividend and stock buyback program will come out of the company's domestic cash balance, not the $64 billion in cash currently held outside the U.S., to avoid the "significant tax consequences" that Apple would incur by repatriating its foreign funds, said chief financial officer Peter Oppenheimer.
He said Apple has told Congress and the president that the country's current tax laws create "considerable economic disincentives" for businesses to repatriate money to the U.S.
In other comments, Cook said new iPad sales hit a record for the first weekend of availability of a new iPad mode, and he said of his smartphone and tablet businesses, "We don't see a ceiling to our business."