Apple to Announce Q3 2017 Earnings on August 1

Yikes. It got ugly in here quickly. I forgot what I was going to post. :eek::confused: I hate it when mom and dad argue about money...so I'll go off and read about IPhone 8 rumors.

Which Apple's taxes has no correlation with an earnings call.

Untrue.

Apple -- like many companies -- has a provision for income taxes in the consolidated statement of operations. Operating income + other income - provision for income taxes = net income.
[doublepost=1499293636][/doublepost]

I get what you're saying, but that is collected as well in the purchase of the products. Some accounting genius will correct my minor errors, but here's how I see it:

Example:
Cost of iPhone to design, manufacture, and distribute: $350 (includes everything it costs to get it into your hands on September 18, 2017)

Somebody in Cupertino said, "We need to make $300 profit on each of these bad boys, and sell 80 million of them this year."

His (or her) underling says, "OK, if we sell it to our distributors (i.e. Best Buy, AT&T, T-Mobile) for $000, we'll have a profit, before taxes of $650, and we'll pay out $250 in taxes, so we make the $300 needed. We'll set the sales price at $1000 at the Apple Store, and we'll have some story about short supply, so we get the customary lines around the block, and an extra $100 in profit!"

"OK, sell them for $1000, then, and we'll work on our suppliers to cut costs, so we (and Uncle Sam, at least in the USA) make more!"

That's what I mean by Apple (and any other business that pays taxes) collects for the IRS/Taxing authority. THey just bake it into the price. That's also why they are so creative in the way they lobby the governments.

No, it's not "baked into the price." The provision for income tax is a separate line item. But don't just take my word for it, go read their consolidated statement of operation ('https://www.apple.com/newsroom/pdfs/Q2FY17ConsolidatedFinancialStatements.pdf'). Gross margin does not include income tax, nor is income tax considered an operating expense.

Apple is setting aside 25% as a provision for income taxes.

Look, there are two things that happen that day: the earnings release AND the conference call with financial analysts.

The tax information is in the earnings release. That's actually the document that gets filed with the SEC. The conference call accompanies the earnings release, but isn't actually a requirement (it is expect from a company like Apple though).

Bladerunner2000 was simply inquiring about the tax information. That's part of the earnings release. He did not ask if the tax information was part of the conference call.

The call is not the official communication. The official communication is the earnings release. Sure, there is usually some additional insight provided in the call (otherwise there would be no point in conducting the call), but it's not a legal document. Of course, shareholders might get understandably upset by any misinformation in the call, but the analysts would probably pick up on any contradictory statements between the earnings release and what is uttered in the call.

If you want to supplement your understanding of Apple's business by reading call transcripts, by all means go ahead, but the document of record is the earning release.

Taxes aren't brought up in the conference call because it's a moot point. Apple sets aside 25-26% to provision for income taxes and there's really no discussion because that's what it will be. It's not up to Apple to make up tax rates. They file a return just like you and I and the government either approves it or doesn't approve it.

But just because taxes aren't mentioned in the typical conference call doesn't mean that Apple hasn't communicated it. They have and it's a crucial number because it affects net income.

I'm more interested in how much taxes they actually paid.

Which Apple's taxes has no correlation with an earnings call.

I'll let you know now.

$0

They just acted as collectors for the IRS for any money sent to them.

True for sales tax revenue, but not for all taxes.

Example 1: corporate income tax. Apple owes the government a percentage of their income.

Example 2: property tax. If Apple owns any real estate, it will receive a property tax bill from the respective authority. For Santa Clara County, that would be the County Tax Assessor's office.

Example 3: payroll tax. While it varies by jurisdiction, Apple is required to pay certain payroll taxes. This is not the tax withheld on employee paychecks. Apple probably puts this as an expense in their budget (employee salaries) but technically it's a tax.

Example 4: investment taxes. This is actually a line item in their consolidated statements of cash flow. Apple buys and sells marketable securities, so they are required to pay capital gains taxes.

There are probably more examples for Apple.

Note that at least in California, sales tax collected would not be reported as revenue.

Apple's most recent tax rate was 25.5% according to their quarterly earnings press release ('https://www.apple.com/newsroom/2017/05/apple-reports-second-quarter-results/').

That's irrevelant to the public release of their quarterly sales and Apple has NEVER touched on taxes, period. Apple reports earnings based on sales with hardware and services.

Again, an incomplete understanding and thus inaccurate.

Have you guys ever looked at a corporate earnings statement? Not just from Apple, but from any publicly trade company?

The provision for income taxes is taken out before net income is reported. Again, go look at their consolidated statement of operations ('https://www.apple.com/newsroom/pdfs/Q2FY17ConsolidatedFinancialStatements.pdf'). It's right there. Earnings per share (EPS) is calculated from net income (after income tax provision).

It's not like Apple says at a conference call, "here's what we earned" then come back later and say "oops, sorry, it was actually less because we just paid taxes." That tends to upset shareholders.

Apple doesn't post their consolidated financial statements for giggles. AS A PUBLICLY TRADED COMPANY THEY ARE REQUIRED BY LAW TO DO SO. It provides some basic information to potential and current investors about what the company does to make money, how much it makes and how it spends its money.

Sometimes the news is good, sometimes it's bad, but investors have a basic right to know.