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Apple's Cash to Top a Quarter Trillion Dollars with 90% Overseas

1af X99 horde of cash   Apple

 

It's being reported today that Apple is expected to report Tuesday that its stockpile of cash has topped a quarter of a trillion dollars, an unrivaled corporate hoard that is greater than the market value of both Wal-Mart Stores Inc. and Procter & Gamble Co. and exceeds the combined foreign-currency reserves held by the U.K. and Canada combined.

 

The Wall Street Jounal reports that more than 90% of Apple's money "is stockpiled outside of the U.S., has drawn fresh attention as President Donald Trump has proposed slashing business taxes and a one-time tax holiday on corporate cash brought home. That could ratchet up pressure on the tech giant to make splashy acquisitions or dole out more money to shareholders.

 

Apple's quarterly results will show the company has doubled its cash pile in just over 4 1/2 years. In the last three months of 2016, it racked up new cash at a rate of about $3.6 million an hour.

 

As of December, the company had $246.09 billion total cash, cash equivalents, and securities. Apple, like many big American companies, parks most of that cash offshore rather than paying U.S. taxes on its overseas profits.

 

Apple Chief Executive Tim Cook early this year said he was eager to bring cash home if tax changes enabled it. Chief Financial Officer Luca Maestri said such a move would give Apple flexibility to do more capital returns. Neither has given detailed plans.

 

One possible approach would be a special dividend. Apple could deliver such a windfall, benefiting investors including Warren Buffett's Berkshire Hathaway Inc., which more than doubled its Apple position in January.

 

With $250 billion, Apple could buy both Tesla and Netflix and still have plenty left over. It also might want to use some cash to pay down some of its debt or look to boost U.S. manufacturing after facing calls last year from then-President-elect Trump to build a plant in the U.S.

 

Either way, a sense is growing that Apple's cash hoard has far outstripped its needs. "If this a rainy-day fund, they're saving for a millennial flood," said Lee Pinkowitz, a Georgetown University professor of finance.

 

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