1. Apple, Inc.
Zachary Rose

2. The Company
Apple is a multinational Technology Corporation headquartered in Cupertino, California.
Main functions are to design, develop, and sell computer software, consumer electronics, and online services.
Products consist of the iPhone, iPad, MacBook, Mac Computer, Apple Watch, Apple TV, and the iHome.
Their devices possess different services and software such as the iOS operating system, safari, iTunes, and the app store.

3. History
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976.
It was incorporated as Apple Computer Inc. in 1977.
Apple went public in 1980.
Steve Jobs became CEO in 1997 and opened Apple’s first retail store in 2001.
Steve Jobs passed away in 2011 but because of his development of the company, Apple is the world’s largest information technology company by revenue and the world’s third-largest mobile phone manufacturer.

4. Geographical Diversification
Apple’s sales and revenues are divided into five segments of reporting
iPhone
iPad
Mac
Services
Other Products

5. Geographical Diversification
Apple reported during Quarter 1 of 2017 that the iPhone produced 69% of revenues, iPad produced 7% of revenues, Mac produced 9% of revenues, Services produced 9% of revenues, and Other Products produced 5% of revenues.

6. Geographical Diversification

7. Geographical Diversification
Apple’s sales and revenue are the highest and reported mainly from
Americas
Europe
Greater China
Japan
Rest of Asia Pacific

8. Geographical Diversification

9. Currency Exposure
In January 2017, Tim Cook (Chief Executive) noted the Chinese Yen had devalued by 6% year over year compared to the U.S. Dollar.
This allowed Apple to report non-GAAP earnings on a constant currency basis.
Because of the U.S. Dollar’s strength compared to the Chinese Yen, Apple has been able to
Invest in large infrastructure
Production and retail projects internationally (such as new retail stores in China and their Battersea Power Station development in London)
Research and development facilities around the world

10. Currency Exposure

11. Political Risk
When President Donald Trump was elected into Office, he proposed travel bans, restrictions on visas, the halting of infrastructure spending, and the postponement of a repatriation tax holiday.
This caused shares of Apple to drop dramatically as well as the rest of the market.
This political downfall hurt the U.S. Dollar but this had a positive effect on Apple’s global profitability.

12. Political Risk
As the U.S. dollar weakened, Apple was making more money in different territories at its current price.
This allowed Apple to lower product and application prices overseas in order to increase demand.

13. Financial Risk
Apple reported during Quarter 1 in 2017 on their Balance Sheet:
Cash Equivalents = $16.4 Billion
Short-Term Marketable Securities = $44.1 Billion
Accounts Receivable = $14.1 Billion
Long-Term Marketable Securities = $185.6 Billion
Total = $246.1 Billion

14. Financial Risk
In order to transfer money into domestic accounts, Apple must repatriate the funds.
When a company repatriates funds, they pay a 35% corporate tax rate fee.
Apple has been issuing long-term debt at high interest rates to fund domestic purchases and their long-term debt has been increasing over time.

15. Financial Risk
Compared to Microsoft and Johnson & Johnson

16. Financial Risk
Although with Apple’s long-term debt, their earnings-per-share grew from $0.32 in 2006 to $8.31 in 2016 which has been rather rewarding.

17. Financial Risk

18. Current Event
For years, Apple has funneled the majority of their overseas profits through Ireland.
Arrangements with the Irish government allowed them to pay a tax rate of 0.005% in 2014 on its overseas sales.
The Paradise Papers have reported Apple is looking for a new place to store their mass quantities of money that they have resisted from bringing back to the United States.

19. Current Event
It was reported Apple began for a new jurisdiction in 2014 when the European Commission began to try and close tax loopholes that allowed companies to lower their tax below Ireland’s 12.5% rate.
Apple aimed for Jersey, a British Crown Dependency off the coast of France.
Jersey doesn’t charge tax on foreign companies’ profits and falls outside of EU jurisdiction.

20. Current Event
When this became public, Apple stated they adjusted their corporate structure when Ireland changed its tax laws in 2015.
Apple’s subsidiary became resident in Jersey.
Since then, Apple has paid billions of dollars in U.S. tax on the investment income of the subsidiary.
Apple states it pays every dollar it owes to every country around the world at the stated tax rate.
Tim Cook (CEO) was also forced to defend Apple’s tax practices in front of the U.S. Senate.

21. References