Apple to pay $38bn on overseas money pile

Jan 18, 2018, 13:56
Apple to pay $38bn on overseas money pile

The major point of Apple's statement-complete with tweetable images and infographics-is that it plans to spend about $30 billion of its repatriated cash, along with money it saves from lower corporate tax rates in general, to invest in new facilities that create The company also said they expected to pay about $38 billion for its one-time repatriation of cash back to the U.S.

The Cupertino, California-based tech giant said its investments will focus on job creation, spending with USA suppliers and an expansion of the App Store, Apple's digital content hub.

To date, Apple has already invested billions of dollars in data centers and co-located facilities in seven USA states, including North Carolina, Oregon, Nevada, Arizona and a recently announced project in Iowa.

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Apple, which past year unveiled its Advanced Manufacturing Fund for supporting innovation efforts both of us companies and foreign companies investing in the USA, plans increase that fund to $5 billion from its previous $1 billion commitment.

The company is the latest to announce a one-off payment as a result of recent changes to U.S. tax law, which allows companies to pay a levy of 15.5% on overseas cash holdings that are repatriated to the US. "A payment of that size would likely be the largest of its kind ever made", Apple said.

Apple's new investments add to the company's current pace of spending with domestic suppliers and manufacturers, estimated at $55 billion in 2018. While Apple did not specify the number of new factories that it plans to build, President Donald Trump stated in a June 2017 interview to the Wall Street Journal that he had a conversation with Tim Cook and that the CEO of Apple, Inc. promised three new factories.

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CFRA Research analyst Angelo Zino said on Wednesday he expects Apple could repurchase as much as 10% of its shares over the next 12 to 18 months. Currently, Apple employs 84,000 people nationwide in all 50 states.

Apple has the largest offshore cash reserves of any US company, with about $252 billion in at the end of September, the most recently reported fiscal quarter.

Apple's announcement also explained it will use lots of the cash in the us on things like a new tech support center that will contribute to 20,000 new hires it plans to make in the Land of the Free. Apple points out that the fund was "established to support innovation among American manufacturers and help others establish a presence in the U.S.", and since being announced last spring, it has already backed projects in Kentucky and Texas. It's not clear how large the campus will be nor whether Apple intends to make this a flagship campus, or just another of its many office locations around the globe.

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As part of its five-year investment plan, Apple said it will build another headquarters and hire some 20,000 people.