Apple’s multi-billion dollar bonanza
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Apple will make about $US38 billion ($A53 billion) in tax payments on its overseas cash and plans to open a second US campus as part of a five-year, $US30 billion US investment plan.
Apple said it plans a wave of investing and hiring in the United States and will create 20,000 jobs through hiring at its existing campus and the new one. It will announce the location later this year.
About a third of the new spending will be on data centers to house its iCloud, App Store and Apple Music services. The company has data centers in seven states and also on Wednesday broke ground on an expansion of its operations in Reno, Nevada, where local officials granted it tax breaks on a downtown warehouse.
The announced tax payment was roughly in line with what analysts expected from the tax bill, which requires companies to pay a one-time tax on foreign-held earnings whether they intend to bring them back to the United States or not.
Apple has $US252.3 billion in cash abroad and previously had set aside $US36.3 billion in anticipation of tax payments on its foreign cash, meaning the payment would not represent a major impact on its cash flow this quarter.
Apple did not indicate how much, if any, of its cash it would actually bring back to the United States.
Apple also said it would boost its advanced manufacturing fund, which it uses to provide capital and support to suppliers such as Finisar Corp and Corning Inc, from $US1 billion to $US5 billion. Apple said it plans to spend $US55 billion with US-based suppliers in 2018, up from $US50 billion last year.
Apple joins Amazon.com Inc in scouting for a location for a second campus. Amazon finished taking applications from cities in October for its second campus.
Questions & Answers
Q.What is Apple's total US investment plan over the next five years?
What is Apple's total US investment plan over the next five years?
Apple plans a five-year, $US30 billion investment in the US. This includes a new campus, expanded existing operations, and significant spending on data centres for services like iCloud and the App Store.
Q.How many new jobs does Apple expect to create in the United States?
How many new jobs does Apple expect to create in the United States?
Apple intends to create 20,000 new jobs in the United States. These positions will be across its existing campus and the new second campus, the location of which will be announced later this year.
Q.How much is Apple increasing its advanced manufacturing fund by?
How much is Apple increasing its advanced manufacturing fund by?
Apple is boosting its advanced manufacturing fund from $US1 billion to $US5 billion. This fund provides capital and support to key suppliers, including companies like Finisar Corp and Corning Inc.
Q.How does the announced tax payment compare to analysts' expectations?
How does the announced tax payment compare to analysts' expectations?
The $US38 billion tax payment was roughly in line with what analysts expected. This is due to the new tax bill requiring a one-time tax on foreign-held earnings, regardless of repatriation plans.