l****z
发帖数: 29846 | 1 Top U.S. Firms Are Cash-Rich Abroad, Cash-Poor at Home .
By KATE LINEBAUGH
Emerson Electric Co. EMR +0.34% has $2 billion of cash in the bank. But this
year it had to borrow money in the U.S. to help buy back shares, distribute
dividends and even pay its taxes.
That's because "substantially all" of Emerson's cash is in Europe and Asia,
according to the company's filings with securities regulators. The maker of
power-plant and data-center equipment could always bring that cash back home
, but it would be taxed at the 35% rate on corporate profits minus whatever
tax it has already paid overseas.
Could the fiscal drag be bigger for the U.S. in 2013 than Europe? J.P.
Morgan Cazenove released a note to investors Monday, providing market
predictions for 2013. MarketWatch's David Weidner and Christopher Noble
discuss the UK investment bank's advices. (Photo: Getty Images)
.
As a result, Emerson says, it brings its foreign cash holdings back to the U
.S. only if that can be "accomplished tax efficiently." In its most recent
fiscal year, that meant bringing back just $500 million, then using debt to
cover other obligations.
At a time when American companies hold near record amounts of cash, many are
surprisingly cash-poor at home. That doesn't mean they could suddenly run
out of money to pay their bills. But it does mean there could be unseen
limits on their ability to pay dividends and buy back shares.
With billions of dollars overseas that may never come back, the Securities
and Exchange Commission is concerned that companies haven't been presenting
investors with an honest appraisal of their liquidity. As a result,
regulators are pressing companies to more clearly lay out how much of their
cash is in the U.S. and how much is overseas and potentially encumbered by U
.S. taxes.
Those disclosures are rolling in, and they are revealing the extent to which
U.S. tax policies—along with corporations' efforts to get around them—
have distorted American companies' balance sheets.
Illinois Tool Works Inc., ITW +0.20% a diversified manufacturer, had $2.1
billion in cash at the end of September, but none of that was in the U.S.,
where it generates more than 40% of its revenue. At the end of last year,
Johnson & JohnsonJNJ +0.48% kept all of its $24.5 billion in cash outside of
the U.S., which accounted for 46% of its revenue generation. General
Electric Co. GE +0.58% had only about a third of its $85.5 billion in cash
in the U.S. at the end of September, even though the U.S. accounted for
about 45% of the conglomerate's revenue.
Whirlpool Corp. WHR 0.00% had 85% of its cash offshore at the end of last
year, and Microsoft Corp. MSFT +0.09% had about 87% overseas as of Sept. 30.
Truck-parts supplier Wabco Holdings Inc. WBC -0.70% had only 3% of its cash
in the U.S. at the end of last year and is buying back shares with borrowed
money, but 91% of its sales are generated overseas.
Each of these companies is grappling with a growing problem that comes from
keeping Uncle Sam away from their foreign income: How to round up enough
cash in the U.S. to cover items like dividends, share repurchases, debt
repayments and pension contributions.
Regulators are pressing companies to more clearly lay out how much of their
cash is in the U.S. and how much is overseas and potentially encumbered by U
.S. taxes.
.
For now, easy borrowing terms give companies some ready options for closing
the gap. But having to resort to such workarounds introduces extra risk and
expense, that makes some chief financial officers uncomfortable.
"You end up with the really peculiar result where you are borrowing money in
the U.S. while you show cash on the balance sheet that is trapped overseas,
" said Bruce Nolop, former chief financial officer of Pitney Bowes and E-
Trade FinancialETFC +0.78% and now a director at Marsh & McLennan MMC -0.71%
. "It is a totally inefficient capital structure."
Illinois Tool Works, Johnson & Johnson, GE, Whirlpool, Microsoft and Wabco
declined to comment.
With lawmakers and the White House working to come up with a package of tax
increases and spending cuts to trim the deficit and head off the "fiscal
cliff," there is new impetus to change the corporate tax structure. There is
also broad agreement that the current system, in which foreign earnings are
kept offshore and untaxed, isn't working. But lawmakers and businesses
disagree on a fix.
The businesses want to pay taxes only in the country where profits are
earned. They argue that being able to move their funds back to the U.S.
freely would spur capital spending and help create jobs. As part of its
proposal to lower the corporate tax rate to 28%, the Obama administration
wants to expand the tax on foreign income to all income earned overseas.
In a report earlier this year, J.P. Morgan ChaseJPM -0.88% & Co. analyst
Dane Mott found that only about 600 of 1,000 U.S. multinationals that have
retained foreign profits overseas broke out how much cash they held outside
the U.S. For those companies, it was about $588 billion, or about 60% of
their total cash. Meanwhile, America's biggest companies generate only about
a third of their revenue outside the U.S., according to Thomson Reuters.
.
"If shareholders are thinking about cash balances being theirs, they may
need to haircut those cash balances," Mr. Mott said. "Cash balances are not
necessarily all there—available for dividends and buybacks."
The heavy imbalance between overseas and domestic cash at many U.S.
companies in part reflects international expansion into new and sometimes
more lucrative markets. Businesses may choose to pile up foreign cash to
expand globally, paying for new facilities and overseas acquisitions.
Yet the percentage of cash that companies hold overseas often exceeds the
percentage of revenue they generate outside the U.S. Enter the U.S. tax
system, which is structured so that companies can cut their tax bill by
shifting income offshore to lower-tax countries. The system also discourages
companies from bringing home profits earned overseas because of the tax
cost.
Emerson has expanded globally and says that 59% of its revenue now comes
from outside the U.S. Its sales and earnings fell late last year but have
recovered. While virtually all of its cash is overseas, the bulk of its
expenses are at home and use all the cash it generates in the U.S.
Tracking Special Dividends
Investors are seeing a jump in the number of companies making big one-time
payouts to stem a possible increase to the dividend-tax rate. See a table of
companies that have announced special dividends. Data provided by Markit.
In the fiscal year that ended Sept. 30, the company spent $2.4 billion on
dividends, share buybacks, debt repayment and pension contributions, based
on calculations from its regulatory filings. It also paid out $800 million
in federal and state taxes, a spokesman said. To cover the obligations, the
company increased its commercial paper borrowings to $936 million from $588
million a year earlier and added long-term debt.
"Were it not for a combination of additional debt and repatriated earnings,
EMR would likely be facing a shortfall in U.S. cash," J.P. Morgan analyst
Steve Tusa wrote recently, referring to Emerson by its stock symbol.
Emerson said it has a "conservative financial structure" that provides
strength and flexibility. Keeping cash outside the U.S. doesn't "impede our
ability to fund our growth initiatives and cash returns to shareholders," a
spokesman said in a written reply to questions.
The SEC is pressing companies on their cash holdings. In a June exchange
with Whirlpool, the SEC said that disclosing how much cash is overseas "
would illustrate that some investments are not presently available to fund
domestic operations such as corporate expenditures or acquisitions without
paying a significant amount of taxes upon their repatriation."
In response, Whirlpool, which holds 85% of its cash in foreign subsidiaries,
said its intent is to "permanently reinvest these funds outside of the U.S.
" If the funds were to be repatriated, Whirlpool said, it "would be required
to accrue and pay applicable U.S. taxes."
Diversified manufacturer Dover Corp. DOV +0.48% has about two-thirds of its
cash abroad, while 60% of its revenue comes from the U.S. "Using domestic
cash to fund things like debt, dividends, and to grow—sometimes there are
constraints," said Brad Cerepak, Dover's chief financial officer.
Write to Kate Linebaugh at k************[email protected] | l****z
发帖数: 29846 | 2 Bob Dunn (formerly of the Fed, RIP) used to teach Economics at GWU and we
left his freshman course knowing 2 things beyond a shadow of a doubt:
1) of land, labor and capital, all but land are "footloose" and move to
where they are the most productive (to your point), and
2) public sector borrowing causes 'crowding out" of the private sector in
capital markets; the bigger the public sector spend, the less capital
available for the private sector.
Surely, this is not beyond the grasp of Washington.... | g********w
发帖数: 2539 | 3 我一直就在问那些拿外包说事的左棍这样一个问题，从来没有人正面回应过，增税，
obamacare，会鼓励美国公司增加美国的就业还是外包？ | t**x
发帖数: 20965 | 4 关普通百姓屁事。回来了又不分给我，反而物价飞涨。。
lz真脑残，不是你的钱，你操鸡巴心。 | l******g
发帖数: 6771 | 5 +1
赞屁股决定脑袋
【在 t**x 的大作中提到】
: 关普通百姓屁事。回来了又不分给我，反而物价飞涨。。
: lz真脑残，不是你的钱，你操鸡巴心。
| b*x
发帖数: 5456 | 6 这种econ 101的， 他们不会明白。
【在 g********w 的大作中提到】
: 我一直就在问那些拿外包说事的左棍这样一个问题，从来没有人正面回应过，增税，
: obamacare，会鼓励美国公司增加美国的就业还是外包？
| l******g
发帖数: 6771 | 7 要不您启蒙一哈？
【在 b*x 的大作中提到】
: 这种econ 101的， 他们不会明白。
| l****z
发帖数: 29846 | 8 hehe,我什么时候指望过你这种脑残能理解这种稍微复杂点的问题阿.
【在 t**x 的大作中提到】
: 关普通百姓屁事。回来了又不分给我，反而物价飞涨。。
: lz真脑残，不是你的钱，你操鸡巴心。
| b*x
发帖数: 5456 | 9 您老省点精力过节吧。。。写了也是白写。
【在 l****z 的大作中提到】
: hehe,我什么时候指望过你这种脑残能理解这种稍微复杂点的问题阿.
| l******g
发帖数: 6771 | 10 不会不会，偶们都很好学，孜孜不倦
【在 b*x 的大作中提到】
: 您老省点精力过节吧。。。写了也是白写。
| | | b*x
发帖数: 5456 | | l******t
发帖数: 12659 | 12 哈哈，太逗了，mark
不解释，慢慢体会
【在 l******g 的大作中提到】
: 不会不会，偶们都很好学，孜孜不倦
| t*****o
发帖数: 81 | 13 给版主提两个建议：
1. 原文最好给出链接，你只给一个标题和作者，我想找的话，还得去google
http://online.wsj.com/article/SB1000142412788732371700457815733
2. 抄别人在wsj的评论，不做任何说明，这叫作弊，除非wsj网站上的KEMBER FORCKE是
你lcz。
【在 l****z 的大作中提到】
: Bob Dunn (formerly of the Fed, RIP) used to teach Economics at GWU and we
: left his freshman course knowing 2 things beyond a shadow of a doubt:
: 1) of land, labor and capital, all but land are "footloose" and move to
: where they are the most productive (to your point), and
: 2) public sector borrowing causes 'crowding out" of the private sector in
: capital markets; the bigger the public sector spend, the less capital
: available for the private sector.
: Surely, this is not beyond the grasp of Washington....
| l****z
发帖数: 29846 | 14 我哪里有那么空. 我贴了原文就不会贴link.贴了link就不会贴原文.
google也就一秒钟的事情. 别忘了我还写中文标题来着.
【在 t*****o 的大作中提到】
: 给版主提两个建议：
: 1. 原文最好给出链接，你只给一个标题和作者，我想找的话，还得去google
: http://online.wsj.com/article/SB1000142412788732371700457815733
: 2. 抄别人在wsj的评论，不做任何说明，这叫作弊，除非wsj网站上的KEMBER FORCKE是
: 你lcz。
| t*****o
发帖数: 81 | 15 我觉得你挺有空的，要不然怎么能做版主这么久。
不贴link，至少得注明出处吧，这个是wsj的。你要是真没时间，帖个link不是更省时
间。另外抄袭别人的评论当成自己的就有空了？
还有，也不是所有人都熟悉你转发文章的作者，比如你经常转贴的Jammie，也许对你来
说这人很知名，不过说实话我是没听说过。你要是贴出他博客的网址，我们也能像版主
一样向他多学习学习。
【在 l****z 的大作中提到】
: 我哪里有那么空. 我贴了原文就不会贴link.贴了link就不会贴原文.
: google也就一秒钟的事情. 别忘了我还写中文标题来着.
| h*******u
发帖数: 15326 | 16 全文作者都给了，给不给出处无所谓。
【在 t*****o 的大作中提到】
: 我觉得你挺有空的，要不然怎么能做版主这么久。
: 不贴link，至少得注明出处吧，这个是wsj的。你要是真没时间，帖个link不是更省时
: 间。另外抄袭别人的评论当成自己的就有空了？
: 还有，也不是所有人都熟悉你转发文章的作者，比如你经常转贴的Jammie，也许对你来
: 说这人很知名，不过说实话我是没听说过。你要是贴出他博客的网址，我们也能像版主
: 一样向他多学习学习。
|
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