Apple to bring overseas cash back to U.S., invest heavily in data centers
(Bloomberg) -- Apple Inc. said it will bring hundreds of billions of overseas dollars back to the U.S., pay about $38 billion in taxes on the money and spend tens of billions on domestic jobs, manufacturing and data centers in the coming years.
The iPhone maker plans capital expenditures of $30 billion in the U.S. over five years and will create 20,000 new jobs at existing sites and a new campus it intends to open, the Cupertino, California-based company said Wednesday in a statement. Apple’s shares gained about 1 percent to $178.32 at 2:51 p.m. in New York.
“We are focusing our investments in areas where we can have a direct impact on job creation and job preparedness,” Chief Executive Officer Tim Cook said in the statement, which alluded to unspecified plans by the company to accelerate education programs.
Apple has the largest offshore cash reserves of any U.S. company, with about $252 billion at the end of September, the most recently reported fiscal quarter. The tax rate indicates that Apple is likely bringing back a majority of its overseas cash back to the U.S., leaving only a small portion for international investments like retail stores.
The $30 billion in capital expenditures will come as part of $350 billion that Apple expects to spend in the U.S. over the next five years. The 20,000 new jobs include additional Apple employees at its campuses, data centers, and retail stores, but not third-party developers for iPhone and Mac apps, an economy Apple has touted in the past.
Apple said that part of the $30 billion in capital expenditures will go toward a new U.S.-based campus, new data centers and additional supplier investments. The company, which opened a new headquarters in Cupertino last year, said its new U.S. site initially will be focused on employees who provide technical support to Apple product users. The new location, which Apple said it will announce later this year, will be similar to the company’s existing campus in Austin, Texas, for supply-chain and technical-support employees.
Apple said it will increase its local manufacturing fund, announced last year, from $1 billion to $5 billion, indicating that it will be sourcing more components for its products domestically. As part of the original fund, Apple invested in Corning Inc. and Finisar Corp., companies that make components for iPhone glass screens and lasers for Face ID and AirPods, respectively.
--With assistance from Alexis Leondis