Documents Apple's defense against accusations of tax dodging
Apple has posted the opening statements two of its executives -- CEO Tim Cook (PDF) -- and CFO Peter Oppenheimer (PDF) -- made during their testimony in front of the US Senate earlier today. The documents don't reveal anything new, but do constitute a record of Apple's stance during the Senate hearing. "We pay all of the taxes we owe -- every single dollar. We not only comply with the laws, but we comply with the spirit of the laws," Cook's statement reads.
Apple to be used as example of corporate tax avoidance in US
In the wake of Apple's published testimony, US Senators Carl Levin (D-MI) and John McCain (R-AZ) have released their own joint statement on the work of the Senate Permanent Subcommittee on Investigations. "Apple Inc. has used a complex web of offshore entities -- including three foreign subsidiaries the company claims are not tax resident in any nation -- to avoid paying billions of dollars in U.S. income taxes," Levin's office writes.
Company shells out to retain key executives
Apple's Peter Oppenheimer was the highest-paid chief financial officer during 2012, according to Bloomberg. The executive received compensation worth a theoretical $68.6 million, roughly 16 times what Apple CEO Tim Cook received for the year. By comparison, Oppenheimer's closest competition -- Oracle CFO Safra Catz -- was given $51.7 million, while Google CFO Patrick Pichette was granted $38.7 million.
CEO Tim Cook notably missing
Four out of the top five highest-paid executives among Standard & Poor 500 companies belonged to Apple during 2012, according to the Securities and Exchange Commission filings seen by Bloomberg. The people included senior VP of Technologies Bob Mansfield, CFO Peter Oppenheimer, senior VP of Operations Jeff Williams, and general counsel Bruce Sewell. About 80 percent of S&P 500 companies had submitted 2012 data as of April 12. The figures for the Apple execs are based on the total current worth of their possible stock and pay packages, rather than their actual 2012 salaries and bonuses.
Suggests that analysts don't have full picture, rely on bad info
Both CEO Tim Cook and CFO Peter Oppenheimer took time in today's conference call with analysts to specifically (or by inference) debunk a number of recent rumours about the company, and to suggest to analysts that they rely too heavily on bad information -- and that even when they do get a bit of gossip that turns out to be true, they are unable to see the information in the broader context, which may change its interpretation. It was a rare direct assault on the market-manipulation and other forces that have plagued the company and its stock.
Lack of stock options cuts income 99 percent verus 2011
Apple CEO Tim Cook will take in $4.17 million in pay by the end of 2012, according to filings seen by Bloomberg. That breaks down into a $1.36 million salary, and another $2.8 million in incentives. Notably, Cook's compensation is well below the $378 million he was technically awarded in 2011; $376.2 million of that, though, was from a one-time stock grant, for which he won't see the full benefit unless he stays as CEO for a decade.
Apple allegedly pushing profit at expense of workers, maintenance
The labor situation in Apple Stores is still in a rough state, despite promises by the company, according to sources for ifoAppleStore. For example, contrary to statements by Apple retail head John Browett, workers were recently laid off or fired, but later just rehired -- and while interstore transfers are now going through, demotions aren't being reversed, overtime is still limited, and managers are assigning minimum hours to part-timers. Apple is thought to be trying several methods of maximizing retail profits, including changing how worker performance is rated.
Company could still be having trouble with content deals
Plans for an Apple TV set (or a more advanced set-top) may still be some time in coming, suggests Pacific Crest's Andy Hargreaves. On Wednesday the analyst met with Apple's CFO, Peter Oppenheimer, and its senior VP for Internet software and services, Eddy Cue. Hargreaves pressed the idea of a "more significant move into TV distribution," according to a new memo. In response, Cue repeated a frequent company position that Apple will only enter markets where it thinks it can create good customer experiences and solve major obstacles.
Company 'very excited' about Chinese retail expansion
Apple CFO Peter Oppenheimer on Thursday told analysts that the company sees no ceiling on growth in China, according to ISI Group analyst Brian Marshall, who participated in a conference call. Oppenheimer also remarked that he was "very excited" about the possibilities of Apple Store expansion in China, noting that Apple will be adding more outlets in Beijing, Shanghai, and several cities in which the company has yet to establish a foothold. With the exception of a shop in Hong Kong, all of Apple's current stores are split between Beijing and Shanghai.
Customers waiting for next device
Apple executives have admitted that persistent rumors surrounding its upcoming devices, such as the sixth-generation iPhone, have had a negative impact on sales. After several years of stellar performance and beating Wall Street forecasts, the company failed to meet analyst expectations for its latest fiscal quarter. When pressed by analysts, chief financial officer Peter Oppenheimer cited the strong US dollar, economic conditions and ongoing rumors as its biggest challenges.
Mansfield, Forstall hold on to investments
Three key Apple executives have made about $150 million after selling newly-vested restricted stock, SEC filings show. CEO Tim Cook, CFO Peter Oppenheimer, and senior worldwide marketing VP Phil Schiller were among several executives granted shares in September 2008 in order to buy their loyalty through 2012. Although the shares were valued at just $105.26 each at the time, the grants were in total worth roughly $122 million.
Info stems from meeting with Apple execs
Apple is likely uninterested in building a MacBook Air with an ARM-based processor, says Citigroup's Richard Gardner. The analyst met with Apple CEO Tim Cook and CFO Peter Oppenheimer at the company's Cupertino campus on Thursday, when among other things Cook repeated a view that iOS expansion will eventually result in tablets outselling conventional PCs. "We have wondered whether Apple might offer an ARM-based version of the MacBook Air at some point; we walked away from this meeting with the impression that Apple feels iPad satisfies -- or will soon satisfy -- the needs of those who might have been interested in such a product," writes Gardner in a new memo.
Apple uses Oppenheimer as interim retail lead
Apple's chief finance officer Peter Oppenheimer is temporarily filling in as the company's retail lead while it looks for a replacement for former retail senior VP Ron Johnson, a rumor maintained Friday. He was considered an interim leader by 9to5's source and was delegating broader orders to Real Estate VP Bob Bridger, international retail operations director Steve Cano, and merchandising VP Jerry McDougal. Neither Bridger nor McDougal were considered in the running, although one rumor had Cano as a candidate.
Apple SEC filing shows huge bonus payouts
Apple on Friday sent filings to the SEC that showed one of the larger bonus payouts to its senior vice presidents in recent memory. iOS head Scott Forstall, Hardware Engineering's Bob Mansfield, CFO Peter Oppenheimer, Worldwide Product Marketing lead Phil Schiller, general legal counsel Bruce Sewell, and operations head Jeff Williams all received share awards of 150,000 shares each. At current market values of about $400 per share, each will have made $60 million if they cashed in the same day.
Highlights from meeting with COO, CFO
RBC Capital technology analyst Mike Abramsky had a meeting yesterday with Apple's acting CEO and COO Tim Cook along with CFO Peter Oppenheimer, and while not directly quoting either executive, commented on his own "takeaways" from the meeting, confirming among other things that Apple is indeed planning a low-cost iPhone -- if it can be a "innovative, category-killer experience," reports Tiernan Ray at Barron's.
EPS guidance low due to "product transition"
During Apple's quarterly financial conference call, CFO Peter Oppenheimer announced that the company has changed its accounting rules to accommodate new services such as iCloud. The cloud-based services are said to be worth approximately $22, requiring the company to defer $22 in revenue for each Mac sold from June on.
Company claims software driving product cycles
Apple will likely reveal "major feature/function updates" at this year's WWDC in early June, says Morgan Stanley analyst Katy Huberty. The prediction is based on a meeting with key Apple executives, including CFO Peter Oppenheimer, senior retail VP Ron Johnson and VP of Internet services Eddy Cue. During the gathering the executives explained that Apple "generally views product cycles as software driven," according to Huberty.
Hopes products not 'just for the rich'
Apple has "clever things" planned in order to address the prepaid market for iPhones, says COO Tim Cook. The executive joined CFO Peter Oppenheimer and VP of Internet Services Eddy Cue in speaking with Toni Sacconaghi, an analyst with Bernstein Research. While the iPhone is in high demand, a new model can cost at least $600 off-contract. Apple doesn't want its products to be "just for the rich," according to Cook, and is "not ceding any market." He notes that the company has spent "huge energy" in China, said to be a "clasic prepaid market."
Rep insists Oppenheimer is 'extremely happy'
The CFO of the Blackstone Group, Laurence Tosi, was recently approached to see if he would be willing to take on the same job at Apple, say three Bloomberg sources. Two of the sources claim that Tosi then informed Blackstone CEO Stephen Schwarzman he was planning to stay. An Apple spokesman, Steve Dowling, insists that the company is "not conducting a CFO search."
Recipients go unlisted
Two executives and two board members at Apple donated over $3 million in stock this month, according to Securities and Exchange Commission filings. All of the donations took place between the 10th and the 17th; the biggest one is noted to have been made by board member Millard Drexler, also currently the CEO of J. Crew. He donated 6,800 shares on December 14th at a closing price of $320.29 per, making the offering worth about $2.178 million.
Efforts to close gap not having any effect
Apple is still unable to cope with interest in the iPhone 4, two of the company's key executives indicate. A Deutsche Bank analyst, Chris Whitmore, recently met with CFO Peter Oppenheimer and senior VP of retail Ron Johnson to discuss the state of sales. "iPhone 4 demand remains very robust and despite efforts to close the supply-demand imbalance and the continued supply ramp, Apple still cannot meet iPhone demand," Whitmore says of the discussion.
Individuals claim tens of millions in profit
Several Apple executives have become even richer after a stock selloff on Thursday, Fortune reports. Over a million restricted Apple shares became fully vested on Wednesday, and the next morning, four executives sold most of them under a Rule 10b5-1 trading plan. COO Tim Cook is noted to have profited most, having sold 300,000 shares at prices ranging from $226.90 to $230.70; the shares were originally worth $72.01 apiece. Cook's total haul is noted to have been $68.8 million, although $32 million was diverted to taxes.
Denies some expected features
Apple is unlikely to turn the Apple TV into a DVR set-top, despite analyst suggestions and hints in patents, says research firm Caris & Company. Analysts from the firm are said to have met recently with Apple CFO Peter Oppenheimer, who immediately tried to dispel rumors. "While some have wondered whether Apple might ultimately try to integrate traditional cable set-top box (decoding) functionality into its Apple TV product," a Caris investor note reads, "Mr. Oppenheimer pretty much killed that concept and said that it just doesn't fit Apple's business."