Bulletin: Apple Inc. Signals Potential Shift Of Financial Policy Based On Tax Reform; Ratings Not Immediately Affected

SAN FRANCISCO (S&P Global Ratings) Feb. 2, 2018--S&P Global Ratings said today that its ratings and outlook on Cupertino, Calif.-based hardware provider Apple Inc. (AA+/Stable/A-1+) are not immediately affected by the company's announcement yesterday that it plans to reduce its cash balances and become approximately net cash neutral over time. No further information was provided regarding timing and use of the surplus cash, which we expect will skew heavily toward shareholder returns but could include acquisitions. Apple is likely to give further guidance during its second quarter earnings call in May 2018 as part of the annual update to its capital return program. Apple reported $285 billion of cash and investments and $122 billion of debt, resulting in a net

...SAN FRANCISCO (S&P Global Ratings) Feb. 2, 2018--S&P Global Ratings said today that its ratings and outlook on Cupertino, Calif.-based hardware provider Apple Inc. (##+/Stable/A-1+) are not immediately affected by the company's announcement yesterday that it plans to reduce its cash balances and become approximately net cash neutral over time. No further information was provided regarding timing and use of the surplus cash, which we expect will skew heavily toward shareholder returns but could include acquisitions. Apple is likely to give further guidance during its second quarter earnings call in May 2018 as part of the annual update to its capital return program. Apple reported $285 billion of cash and investments and $122 billion of debt, resulting in a net cash position of $163 billion as of fiscal first quarter ended Dec. 31, 2017. We view Apple's announcement as a potential shift in its financial policy. Our assessment of Apple's financial risk profile is a key consideration for the...

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