Apple quietly passes Exxon as most cash-rich non-financial company?

  • Posted: 09 February 2009 05:54 AM

    I haven’t seen this reported yet anywhere so perhaps my insomnia-infused
    exploration is missing something subtle—If true, it still seems
    mind-boggling ...

    Noted, from several sources (old news) that AAPL as of jan 1, 2009
    has $25.6 billion in cash and short-term securities (cash equivalents)
    together with no debt, per balance sheet rundowns at places like:

    http://finance.google.com/finance?fstype=bi&q=NASDAQ:AAPL

    Yahoo, Marketwatch, and elsewhere.

    Now look at Exxon, heretofore far in the lead as cash-rich, and
    usually listed together with MSFT, CSCO, GOOG, Berkshire Hathaway
    and AAPL, too, as loaded to the gills.

    Well, we know BRK is a financial, like a bank, supposedly more oriented
    to long- rather than short-term investments, and that AAPL passed by
    the others in the last quarter or two, except for Exxon.

    Well, XOM reported just a few days ago, so the cash flow and balance sheet
    info are not yet up at the popular financial sites, and Exxon’s own press
    releases don’t go into detail.  But check out the SEC Exhibit 99.2 to
    the Form 8-K filed 1/30/2009, 4Q08 data summary p. 3 of 11:

    http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6370108-43410-63048&type=sect&dcn=0000034088-09-000016

    For the last Q (and widely reported) they register net cash of $26.4B, beating
    AAPL handily, but this is for calendar Q308, now ancient history.

    Nothwithstanding, It shows current total cash + cash equiv. at $31.4B minus
    total debt of $9.4B, or a grand total of only $22.0B for net cash at New Years,
    due to *lower* quarter revs. together with the typical share repurchase and
    dividend payout programs in-progress.  Now we know that Exxon still has
    much larger cash flows than Apple, but they are spending it grandly, while
    Apple is not.  With this recent set of stats,

        Apple Is The Current U.S. Heavyweight Cash Champion (Yay team!)

    With a tip to the macabre, he who dies with the most toys wins.

    OK, so maybe some blogs can run with this now, unless I goofed up
    somewhere (I do software hacking, not accounting).  A subtlety is that
    Exxon lodged a further 1.7B classified as “short-term investments” rather
    than “cash equivalents”, while Apple has technically re-categorized
    certain cash equivalents as short-term investments.  Even adjusting
    for the 1.7B extra Exxon slop Apple still wins, methinks!

         
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    Posted: 09 February 2009 10:37 AM #1

    retiarius - 09 February 2009 09:54 AM

    I haven’t seen this reported yet anywhere so perhaps my insomnia-infused
    exploration is missing something subtle—If true, it still seems
    mind-boggling ...

    Noted, from several sources (old news) that AAPL as of jan 1, 2009
    has $25.6 billion in cash and short-term securities (cash equivalents)
    together with no debt, per balance sheet rundowns at places like:

    http://finance.google.com/finance?fstype=bi&q=NASDAQ:AAPL

    Yahoo, Marketwatch, and elsewhere.

    I think these numbers are old. This $25.6B is from the past. Didn’t Jobs say they had $25B back in Oct.? I believe the latest as of end of 2008, is around $28.1B. Can someone verify this? I know on Apple’s website they say this:

    “Our outstanding results generated over $3.6 billion in cash during the quarter,? said Peter Oppenheimer, Apple?s CFO.

    Signature

    “Whatever happens in the stock market today has happened before and will happen again.”    - Jesse Livermore

         
  • Posted: 09 February 2009 02:27 PM #2

    The numbers at the abovementioned link (Google Finance) are correct as stated,
    which just reflects the SEC filings.  The 28.1B figure being bandied
    about by CFO Oppenheimer—see F1Q09 earnings call transcript at

    http://seekingalpha.com/article/115797-apple-inc-f1q09-qtr-end-12-27-08-earnings-call-transcript?page=-1

    includes cash + short-term + *long*-term marketable securities.
    The Apple CFO is hinting that these are really cash equivalents due to the
    conservative investments of Apple subsidiary Braeburn Capital.

    (Aside:  Braeburn is like a giant money-market fund which holds U.S. Treasuries,
    U.S. “agency” securities (Fannie/Freddie/Farmer GSEs), short-term commercial paper,
    and perhaps even CDs, none of which accrue state tax because of the
    clever setup in Nevada.  For the most part, Apple has sidestepped fiascos
    like the Auction Rate Securities flap, holding paper issued by Lehman, etc. 

    Oppenheimer notes last quarter cash of 24.5B, which is the “old old news”.
    This figure checks by adding the cash + short-term + long-term in
    the table at the Google Finance link, or more importantly, within SEC docs.

    I would be interested to know what the financial cognoscenti allow as “cash” for
    for the purposes of GAAP accounting.

    As for the Exxon comparison, this wrinkle might make “apples-to-apples”
    comparisons problematic, because the traditional big boys like Buffett’s
    Berkshire Hathaway, the (now insolvent) banks, and certainly Exxon keep
    “long term investments” on the books.  In other words, if Apple classifies
    their 2-3B in long-term investments (mostly just principal-protected
    T-bills) as cash, does Exxon do the same?  They have billions in long-term
    investments which they net against billions in long-term debt.

    Can a real accountant chime in here?  Is “cash” just anything principal-protected
    but liquid (“marketable”) within a 60- or 90-day timeframe, or six months
    or a year to match financial reporting?  Just curious, but I think based
    on the most conservative definition there was a passing of the torch
    by Exxon to Apple made known in an SEC filing just a few days ago!

    —retiarius

    P.S. I’m forwarding a link to this thread to footnoted.org

         
  • Posted: 09 February 2009 02:27 PM #3

    AAPL’s $28.1B includes $2.5B of long term investments. XOM has $37B of long term investments. Perhaps next year?

         
  • Posted: 09 February 2009 04:31 PM #4

    Okay, say Apple is stretching the definition of cash.  So, let’s take
    it away and not count the 2.5B in LT investments.  Thus, AAPL has
    $25.7B in cash (cash + “equivalents” + ST investments), net of short-
    and long-term debt.

    Still and all, the same (non-Apple) definition yields only $22.0B for XOM,
    down from 26.4B last quarter when they were ahead of AAPL by
    this definition.

    Of course I know that mighty Exxon has (or at least had last Q) 37B in LT
    investments, and even more in assets, so they are “richer”.  But that’s not cash!
    Exxon’s LT stuff could be in stock of Citigroup derivatives margined by CDO
    residuals on CDS swaps of Lehman bonds, for all we know.

    Cash is king, and Apple is now king of cash.

    My real Jones is to find a stock screener that uncovers whether some
    other company (like Chevron or BP or a big pharma) beats
    Apple on this measure.  The best I can do fast is to use the Google
    screener to first sort by market cap, then add the criteria
    “cash per share” and “float” (shares outstanding), then multiply
    the last two columns in my head while going down the list.
    So far, nada.

    In a sense, Apple is signaling that they are giving up in this game
    by moving more stuff out further on the yield curve away from 0.0-0.5% on
    30-to-90 day instruments to lock in something that goes out 6 months
    or a year.  Didn’t they say their average duration on ST holdings was
    closer to two years, getting them the 2-3% return reflected in Other Income?

    So far so good with their investments—better than paying us a
    dividend to be taxed and/or lost on equities!  How has Exxon done
    with their investments?  Over the last two year interval, only converting
    the cash to gold (or a rare winning hedge fund) would have done much
    better for Apple—this includes everything from buying back AAPL shares or
    crude oil or even XOM!).  Kudos to Braeburn.

         
  • Posted: 09 February 2009 04:50 PM #5

    I have no idea, but I presume Exxon’s long term assets are primarily oil extraction rights. If oil price doesn’t go back up, those assets may have to be written down. And in any case they would not really be available for allocation to new business activities.

         
  • Posted: 09 February 2009 11:20 PM #6

    What about CISCO at 29.5?

    http://finance.google.com/finance?fstype=bi&q=NASDAQ:csco

         
  • Posted: 10 February 2009 02:23 AM #7

    cranium - 10 February 2009 03:20 AM

    What about CISCO at 29.5?

    http://finance.google.com/finance?fstype=bi&q=NASDAQ:csco

    It has offsetting current liabilities.

    Andy has a good chart here (a bit old now though):

    Apple is radically more undervalued than others

    [ Edited: 10 February 2009 02:33 AM by deasys ]      
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    Posted: 10 February 2009 02:59 AM #8

    Question?

    Why doesn’t APPLE finance their own computers at 12% ?

    It would seem to me that this would make sense, it would goose sales and goose the yield on the cash sitting there rotting away.

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    “Even in the worst of times, someone turns a profit. . ” —#162 Ferengi: Rules of Acquisition

         
  • Posted: 10 February 2009 05:01 AM #9

    Re: Cisco, one must net out the debt ($6.8B at the weblink), so no cigar.

    Interesting you mention CSCO, however, since they just filed a few hours
    ago for a $4B+ debt shelf, so as a company they are going the other way.

    New revelation:  Hear ye, hear ye!

    Although this topic may bore some to tears, I think my subject title
    may actually understate Apple’s position relative to the capitalist environs.

    That is, and this is what needs a true green eye-shade to microanalyze,
    it is quite possible that Apple is now not only the most cash-rich
    non-financial company but the one that is cash king *regardless* of sector.

    Some rough sleuthing:  trad finance beheamoths like B of A and Citigroup
    seem like history, since their (leveraged) debt is in such peril that it more
    than nets out the cash.  What about J. P. Morgan Chase WAMU or whatever
    it is called this week?  Perhaps, depending on TARP funds. 

    HSBC?  Wells Fargo?  European banks?  Seems not.

    This could only leave Berkshire Hathaway.  Oddly, Google shows only 28B
    (and change) cash net-of-debt for them, and that was for the last quarter
    before Buffett went further on a spending spree.  Warren Buffett’s reporting style
    and reporting periods are both idiosyncratic.  At base he is a riverboat gambler.

    For industrials, Exxon, verily, could stop share repurchases and cut their
    dividend to reclaim the title.

    Could it really be that Apple is financially the most liquid, conservative,
    cash-rich company in the world, including the formerly most esteemed
    financial institutions, bar none? 

    It lends new meaning to Michael Dell’s infamous quip on what to do
    with the ‘beleaguered Apple’—using his words “shut it down and
    give the money back to the shareholders.”  If done today, Apple
    seemingly would give the most bang for the buck.  Others might
    net more (inventory sales, auctioning assets into a bad economy, etc.),
    but it would take time while Apple’s cash means instant real,
    not notional value.  And this juggernaut hasn’t even yet tapped more
    than a small minority of PC or enterprise computer market share,
    phones in China, or even a footprint into the television or media
    content ownership markets.

    The enormity of all this is unsettling.

         
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    Posted: 10 February 2009 09:33 AM #10

    deasys - 10 February 2009 06:23 AM

    It has offsetting current liabilities.

    Andy has a good chart here (a bit old now though):

    Apple is radically more undervalued than others

    This really is a fascinating article! The interesting thing is that AAPL’s stock is almost exactly what it was back then in October, and Apple’s cash is a lot more. It would be interesting to have this article updated.

    Signature

    “Whatever happens in the stock market today has happened before and will happen again.”    - Jesse Livermore

         
  • Posted: 25 February 2009 08:51 PM #11

    Briefly, Barron’s reports today that Buffett’s pile of cash has indeed
    dwindled to only $10-15B at December 31, with full details left
    for the forthcoming 10K:

    http://online.barrons.com/article/SB123550459968062015.html

    Who’s left for Apple to stoop to conquer in this category?