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Global Credit Research - 18 Mar 2013
New York, March 18, 2013 -- The US non-financial companies that Moody's rates held $1.45
trillion in cash at the end of 2012, up 10% from the record
level of $1.32 trillion at the end of 2011, Moody's
Investors Service says in new report.
The top five "cash kings" increased their share of all cash
in 2012, with the technology sector extending its lead in general,
according to the new report "Cash Pile Grows 10% to $1.45
Trillion; Overseas Holdings Continue to Expand."
Currently leading the pack with the most cash are Apple, Microsoft,
Google, Pfizer, and Cisco. These five companies have
$347 billion or 24% of the total non-financial corporate
cash balances. This amount is up from $278 billion or 21%
for the top five in 2011.
Apple has the most cash, at $137 billion. Moody's
estimates that if it continues to follow its current policies Apple is
on track to having about $170 billion, or 11% of total
corporate cash, by the end of the year.
Apple alone represents $103 billion or 26% of the total
$396 billion increase in the total cash pile since 2009.
With Apple, the technology sector contributed $239 billion
to the increase. The technology sector currently has the largest
cash hoard, at $556 billion or 38% of the total,
a share that is growing.
Together, the four most cash-flush industries - technology,
healthcare/pharmaceuticals, energy and consumer products -
have $990 billion in cash in all or 68% of the corporate
The top 50 holders of cash account for $889 billion, up 13%
from $784 billion in 2011. Entrée to the top 50 list
now requires $4.9 billion of cash, up from $2.9
billion in 2006.
Of the $1.32 trillion for all the rated companies,
Moody's estimates that $840 billion, or 58%
of the total cash, is held overseas.
The overseas cash stood at $700 billion at the end of 2011,
Moody's estimates, which was 53% of the total.
"The amount overseas reflects the relative strength of most emerging
market economies over the last few years, the negative tax consequences
of permanently repatriating money to the US, and the domestic use
of cash for dividends, share buybacks, and the majority of
acquisitions," says Richard Lane, the Moody's
Senior Vice President who wrote the report.
In general, Moody's views the liquidity and operating flexibility
the high cash balances allow as positive credit factors. The cash
helps ensure companies can retire near-term maturing debt if capital
markets are disrupted and also withstand significant deterioration in
their business conditions. Cash coverage of total debt maturities
over the next five years is up for third year in a row, to 108%
compared to 78% in 2010.
"At the same time, large cash balances can be qualitatively
negative," says Moody's Lane. "They can
encourage management to deploy cash in ways that heighten business or
financial risk, such as making expensive acquisitions within or
outside of a company's core strategy."
For more information, Moody's research subscribers can access
this report at http://www.moodys.com/research/US-Non-Financial-Companies-Cash-Pile-Grows-10-to-145--PBC_151499
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Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
MD-US and Amer Corporate Fin
Corporate Finance Group
Moody's: US companies' cash pile grows 10% in 2012, to $1.45 trillion
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
No Related Data.
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