Apple tells investors its $14B tax bill won't have any near-term impact (AAPL)
Getty
Europe sent Apple a $14 billion tax bill over a sweetheart deal in Ireland on Tuesday.
Apple's response?
It doesn't think it will have an impact on the company. Not only does the company not expect the decision to affect its tax rate going forward, but it also doesn't expect "any near-term impact on" its financial results, according to a document posted on Apple's investor relations website.
The biggest change is that Apple expects to put an amount of money — likely the amount of the decision — into an escrow account labeled "restricted cash" as the years of appeals take place.
Of course, Apple has $231 billion in cash and short term securities on its balance sheet.
Apple is appealing and also posted a letter from CEO Tim Cook.
So far, Wall Street seems to agree with Apple's assessment. Apple's stock is down less than 1% in mid-day trading on Tuesday.
Here's Apple's complete investor FAQ:
Is the outcome of the European Commission’s decision final?
No. Both Apple and Ireland plan to appeal the decision and we are confident that it will be overturned by the courts of the European Union.
How does this decision impact Apple’s near-term financial results? Will you take a tax charge? Does this alter your previous guidance?
We do not expect any near-term impact on our financial results nor a restatement of previous results from this decision. We have previously accrued U.S. taxes related to the income in question. The tax rate guidance for Apple’s fourth fiscal quarter that we provided on July 26, 2016 does not change as a result of this decision.
What impact will this have on your tax rate going forward?
We do not currently expect this decision to have an impact on our tax rate going forward.
How will this decision impact your cash balance and when?
Our cash balance will not change as a result of this decision, but we anticipate we will place some amount of cash in an escrow account. At this point we do not know the size of the escrow amount, but we expect that it will be reported as restricted cash on Apple’s balance sheet.
How long is the appeals process likely to take?
While we desire a resolution as soon as possible, the process is likely to take several years.
NOW WATCH: This robot butler is like your own personal R2-D2