{ "docId": "019dd923-622b-71dc-a6da-df4a74be41a3", "docSlug": "d4c64e242528", "documentTitle": "Apple Inc. (AAPL)", "authorId": "04_Greenlight_Capital", "authorName": "David Einhorn", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2013-02-21 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 19, "pageCount": 55, "prevPage": 18, "nextPage": 20, "slideType": "scenario_table", "function": "quantify_opportunity", "density": "overcrowded", "nDataPoints": 8, "notes": "The slide explicitly clarifies that the repatriation scenario is for illustrative purposes and not a recommendation.", "elementsJson": [ "headline_text", "bullet_list", "data_table", "paragraph" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6da-df4a74be41a3/19", "deckHref": "/decks/019dd923-622b-71dc-a6da-df4a74be41a3", "deckJsonHref": "/decks/019dd923-622b-71dc-a6da-df4a74be41a3.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6da-df4a74be41a3#slide-19", "components": [ { "bbox": null, "kind": "callout", "text": "That leaves $84 billion in free cash to use for a one-time dividend, or a one-time self-tender offer for its shares.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f40-73bb-a5fa-90fafc7a011a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.28, "x": 0.205, "y": 0.205 }, "kind": "list", "text": "We made some basic assumptions in order to run through potential scenarios of what Apple could do: Apple could repatriate and pay taxes on current offshore cash of $94 billion; We assume a $20 billion war chest reserve to preserve flexibility", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "274859a8-4efa-48b9-bbe3-86f5315abd04", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "Total Cash Available: $84 billion", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-3f40-73bb-a5fa-94fae802308d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.73, "x": 0.135, "y": 0.705 }, "kind": "paragraph", "text": "While some have suggested that Apple could raise additional cash by selling debt, we believe that Apple is highly debt averse. Even asking it to reduce the cash balance to $20 billion is probably not realistic, but for the sake of this example we believe it is a reasonable number. That leaves $84 billion in free cash to use for a one-time dividend, or a one-time self-tender offer for its shares.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0459f82e-6585-4925-800f-2f21d9844e90", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.73, "x": 0.135, "y": 0.615 }, "kind": "paragraph", "text": "Obviously, Apple isn't going to deplete its cash reserves to zero, so we made some assumptions about a large cash reserve. We sought to pick a number that we felt would be more than sufficient for a rainy day fund. We took one year's worth of operating expense and capex less depreciation, and came up with $20 billion. This along with its ongoing franchise should leave Apple well positioned to execute its business plan, including acquisitions.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "32e7a473-1264-44ed-8e94-25c845d91677", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.73, "x": 0.135, "y": 0.525 }, "kind": "paragraph", "text": "In these scenarios, we assume Apple brings all its foreign cash back to the U.S. and pays the taxes for repatriating the funds. With $94 billion in foreign cash taxed at 35%, there is $61 billion of cash brought home. Add the existing $43 billion of domestic cash for a total of $104 billion available. Please note we are not advocating that Apple repatriate its foreign cash; in fact our proposal later on will show Apple does not need to do this.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5d5c3d38-7f98-4ef2-b145-9b74f0e73e53", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.73, "x": 0.135, "y": 0.48 }, "kind": "paragraph", "text": "To do a one-time dividend or a large one-time share repurchase, it's good to know how much cash is available. Apple currently has $137 billion in cash, $94 billion of which is offshore.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9a7577ad-ca3e-4920-b209-6836db1fee16", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.28, "x": 0.515, "y": 0.2 }, "kind": "table", "text": "Foreign Cash 94; Tax payment for repatriation (33); Net foreign cash 61; Total domestic cash 43; Reserves (20); Free domestic cash 23; Total Cash Available 84", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "85a3623e-ccde-4e5b-b69a-a681a2bb2a31", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.215, "x": 0.205, "y": 0.158 }, "kind": "title", "text": "How Much Cash is There?", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5d708bab-6c0b-4405-990a-f947538c640f", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Quantification", "slug": "quantification", "agent": null, "layer": "slide", "matchId": "3c1d0148-c768-41e7-ae5c-e5088a0b41dd", "evidence": "The slide provides specific numbers regarding Apple's cash and potential distributions.", "confidence": 0.7 } ], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }