“Apple has one of the biggest cash hoards in history, yet it has borrowed $35 billion in the past year and a half,” Peter Coy reports for Businessweek. “Strange, no? Why does a company as rich as Apple need to ask other people for money?”
“Most of Apple’s cash is overseas, where it can’t easily be gotten at. And the world’s most valuable company is giving mountains of money to its shareholders—$130 billion over two and a half years,” Coy reports. “Apple Chief Executive Officer Tim Cook told analysts in April that the size and pace of its ‘capital-return program’ is ‘unprecedented.'”
“Only 12 percent of its cash is held in the U.S. And as Chief Financial Officer Luca Maestri told analysts in April, ‘To repatriate our foreign cash under current U.S. tax law, we would incur significant cash tax consequences, and we don’t believe this would be in the best interest of our shareholders,'” Coy reports. “That’s one reason cash-rich Apple is borrowing money. The other reason, of course, is that borrowing is supercheap for Apple. Interest rates on its debt range from 0.45 percent for three-year debt to 4.45 percent for 30-year obligations.”
Read more in the full article here.