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Global Credit Research - 31 Mar 2014
New York, March 31, 2014 -- US non-financial companies rated by Moody's held $1.64
trillion in cash at year-end 2013, up 12% from the
prior record of $1.46 trillion a year earlier, Moody's
Investors Services says in a new report, "Cash Pile Grows
12% to $1.64 Trillion; Overseas Holdings Continue
to Expand." The top 50 holders of cash account for $1.04
trillion of the total, and entry to the top 50 list now requires
$5.7 billion in cash.
"Among sectors, technology continues to hold the most cash
and has extended its lead," says Senior Vice President,
Richard Lane. "The technology sector held $638 billion,
or 39%, of total corporate cash at the end of last year,
followed by healthcare/pharmaceuticals, consumer products and energy."
Apple, Microsoft, Google and Verizon are in the top five most
cash rich companies, the new report says. Together with pharmaceutical
giant Pfizer, they held $404 billion, or 25%,
of the total non-financial corporate cash balance at year-end
2013, up 24% from $347 billion at end-2012.
Apple accounted for $159 billion, or 9.7%,
of total corporate cash in 2013, up from $137 billion,
or 9.5%, in 2012, Lane says. "Apple's
surging balance has contributed to the concentration of cash among the
top cash holders, to 64% of the current total. By
itself, Apple now holds more cash than the total for every industry
sector except technology and healthcare/pharmaceuticals."
Capital spending and dividends reached seven-year highs in 2013,
at $869 billion and $365 billion, respectively.
Share buybacks increased 11% and spending on acquisitions went
down 15%. Moody's expects businesses to remain cautious
over the next year, with spending on capital investments,
dividends, acquisitions and share buybacks going up only slightly,
to around $1.7 trillion.
Cash coverage of five-year debt maturities continues to improve,
and exceeded 100% for the third year in a row last year.
At the beginning of 2010 the US non-financial corporate sector
had $1.05 trillion in cash and $1.35 trillion
in debt maturities, but higher cash balances and a similar amount
of debt maturities brought cash coverage of maturities to 107%
Overseas cash is estimated at $947 billion, or 58%
of current total cash, up from Moody's estimate of $840
billion last year, Lane says. "The high amount reflects
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."
Moody's research subscribers can access this report at https://www.moodys.com/research/US-Non-Financial-Companies-Cash-Pile-Grows-12-to-164--PBC_166546.
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Richard J Lane
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
Robert P Jankowitz
Associate Managing Director
Corporate Finance Group
Moody's: US non-financial corporates' cash pile grows, led by technology
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
No Related Data.
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