August 20, 2018

Apple to invest $350 billion in U.S. economy and create 20,000 jobs.

Money repatriated as a result of the tax bill will fund some of Apple’s spending

Apple Inc. AAPL, +0.23%  announced on Wednesday that it planned to contribute $350 billion to the U.S. economy over five years, through new jobs, a second headquarters, and a series of investments.

Apple is expecting to pay a repatriation tax of about $38 billion, the company said, without disclosing exactly how much of its overseas cash it’s planning to bring home. Apple has the most overseas cash of any U.S. company at more than $250 billion.

“A payment of that size would likely be the largest of its kind ever made,” Apple said in a release. Shares were up 0.6% in Wednesday afternoon trading.

The company plans to create 20,000 jobs on top of the 84,000 it currently has. Some of those positions will be at existing locations, while others will be at a new campus that the company expects to open in a city yet to be named. This location will “initially house technical support for customers,” according to the release. Apple opened a new spaceship-shaped campus called Apple Park in 2017, which took years to complete.

Amazon.com Inc. AMZN, +1.75%  announced late last year that it also planned to open a second campus, which prompted cities across the U.S. to make their cases as to why they’d be good homes for the tech giant. Cities promised tax breaks and even a mayoral role for founder Jeff Bezos if selected. Apple likely expects similar inducements.

Outside of its campuses, Apple intends to spend $10 billion on investments in data centers. It currently has them in seven states, the company said, including North Carolina, Oregon, and Nevada. Apple has committed to using “100 percent renewable energy sources” across its data centers and its new campus.

Apple’s spending over the next five years will also include more money being allocated to its Advanced Manufacturing Fund, which invests in domestic manufacturers. The company originally planned to make $1 billion in investments through the fund, but it said Wednesday that it would increase the size to $5 billion.

In December, Apple announced that it would award $390 million from the fund to Finisar Corp FNSR, +0.58% which makes vertical-cavity surface emitting lasers, or VCSELs. These lasers help power facial recognition and 3-D sensing on the iPhone X. Last May, the company doled out $200 million to Corning Inc. GLW, +1.69%

“Planned capital expenditures in the U.S., investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75 billion of Apple’s direct contribution,” the company said.

Finally, Apple plans to increase spending on its ConnectED program, which helps children in underserved schools learn coding skills.

Apple shares are up 48% over the last 12 months, compared with a 31% gain for the Dow Jones Industrial Average DJIA, +0.85%

Source: Market Watch

Share
Source: