How much cash Apple has?
About $215 billion. Now despite such huge cash reserves, Apple is planning to borrow in excess of $10 billion for the following purpose:
We intend to use such net proceeds for general corporate purposes, including repurchases of our common stock and payment of dividends under our program to return capital to shareholders, funding for working capital, capital expenditures, acquisitions and repayment of debt.
The question: Why borrow when you have so much cash?
Apple now has over $215 billion in total cash, but $200 billion of this is located overseas.
— Deepak Singh (@smarket) February 16, 2016
The reason: US tax policy
Under current law, U.S. companies have to pay full 35 percent corporate tax rate on income they earn around the world. They receive tax credits for tax payments abroad, and have to pay the U.S. the difference only when they bring the money home.
The important thing: only when they bring the money home. Apple finds it tax efficient to keep the money abroad. As per some estimates, Large US companies hold more than $2.1 trillion cash offshore to avoid U.S. taxes.
How does it work?
Apple is sitting on huge cash and hence has AA+ credit, which is just one notch below the perfect AAA credit rating. It means Apple has capacity to borrow at extremely low rates. By borrowing, Apple gets cash to pay dividends and buy back shares of stock. Apple has been borrowing aggressively since 2013 and now has $53 bn of debt and is fourth most-indebted company in the S&P 500. In this way, it keeps cash abroad and use the current low interest rates in US to its full advantage.
The article is purely for informational purpose and reflects my understanding of the matter.