The Global Cash 25 list includes 13 US companies, seven Asian companies and five European firms.

Author: Denise Bedell

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Seven companies crack the ranking for the first time. Meanwhile, corporate liquidity keeps on rising.        

Last year, the breakdown was similar: 14 US corporations, six Asian and five European firms. Likewise, cash held by the top 25 companies is down from last year, but not by much. In the 2014 ranking, the top 25 companies held some $774.2 billion in cash and short-term investments. This year that figure has dropped to $721.3 billion. Survey after survey has shown that overall cash held by global corporates is generally rising, which suggests that cash hoards are increasing further down the value chain.

GE and Microsoft once again lead the ranking. GE is sitting on $90 billion in cash, Microsoft $85.4 billion. But Verizon Communications, which came in third last year, has completely fallen off the list. That’s to be expected. The company used a chunk of its cash to make a number of acquisitions and launch an impressive share buyback plan over the past year. In addition to its three-year, 100-billion share repurchase plan, which will terminate in 2017, the telecommunications company also announced a $5 billion accelerated share buyback earlier this year. Cash and short-term investments for the company dropped from around $54 billion last year to around $11 billion on its latest annual report.

Malaysia’s Petronas has also dropped from the list, after two years in the top five. Toyota is now the top-ranked firm in Asia, coming in 4th over all with $41.5 billion in cash—up from $34.7 billion last year.

Not surprisingly, there is once again an abundance of tech firms, automotive companies and pharmas on the list. Outside of those three sectors, Coca-Cola has been steadily working its way up, going from 21st place, with $16.6 billion in cash, on the 2013 ranking, to 14th place, with $20.3 billion last year, and finally moving up to 12th place this year, with a reported $21.7 billion in free cash.

The only other firms outside the three main sectors that make the Global Cash 25 ranking this year are US consumer products outfit Johnson & Johnson and France’s Total, which have both been on the list since we began running it in 2013. With Petronas off the list this year, Total is the only energy company to make the global ranking. The firm moved from 10th place in 2013 down to 13th in 2014. This year, it rose four spots, coming in 9th with $26.5 billion in cash on its balance sheet.

New entrants to the Global Cash 25 list include Hon Hai Precision Industries—which trades as FoxConn and is an electronics contract manufacturer. Japanese digital electronics maker SoftBank, semiconductor firm Qualcomm, Hyundai Motor, Amazon, HP and medical-device maker Medtronic also cracked the top 25 for the first time. They replace Verizon Communications, Petronas, Oracle, Intel, Spain’s Telefónica, Chevron and Japanese e-commerce outfit Rakuten.

Of those companies that made the list last year, the biggest riser this year is Amgen—which went from 17th last year with $19.4 billion in cash to 8th place this year with $27 billion in cash.

Hyundai saw the biggest yearly jump in cash, going from $6.9 billion last year to $20 billion this year—a $13 billion increase. Other big gainers by year-over-year change in cash include Microsoft, which built up an additional $8.7 billion in its war chest, and Amgen, which saw cash rise by $7.6 billion. Conversely, the biggest yearly drop in cash on balance sheet was made by Apple, which reduced its available cash and short-term investments by $15.5 billion. Daimler had the second-largest cash decline of those on the top 25 list, with a change year-on-year of -$4.8 billion.

The figures cited in the Global Cash 25 list include cash and short-term investments, but exclude long-term marketable securities, which are often cited in cash figures. This ranking, however, takes into account the fact that such securities are not as liquid, generally, as cash and equivalents—hence their exclusion. Apple, which is regularly cited as one of the most cash-rich companies in the world, comes in just 12th on our list (down from 6th last year), as a result of the exclusion of long term securities. The firm reported $130 billion in long-term securities on its latest annual report.


With cash still rising, corporate executives continue to feel the pressure from shareholders to make efficient use of cash—that or funnel some of the money back to investors. In the current low-interest-rate environment, and with cash repatriation still at a tax disadvantage in many jurisdictions, companies favor issuing debt for share repurchasing as a means of appeasing shareholders while keeping the cash hoard on hand. Apple is a prime example: The company paid out $55.3 billion in dividends and share repurchases in fiscal 2014, while taking on $18.3 billion in debt—bringing its total outstanding debt to around $45 billion. The company currently pays an annual dividend of $2.08 a share.

On the dividend front, Coca-Cola and Johnson & Johnson are both members of the Dividend Champions Club—meaning they have increased their dividend every year for 25 years or more. In fact, they each have hiked payouts to shareholders for the past 53 years. Johnson & Johnson’s dividend now sits at $3.00 a share. Coca-Cola’s is $1.32 a share.


Michael Fossaceca, head of TTS, North America, at Citi, says banks, as well as corporates, are maintaining their focus on enhancing shareholder returns—and thus desire to keep balance sheets efficient. “The combination of greater regulatory value and emphasis on operational deposits together with a shareholder-return- driven focus on efficient balance sheets, shows how corporate and bank relationship management drivers have really shifted,” he says. “Banks now are scrutinizing their deposits for the ‘right’ type of deposits—those linked to cash management and other transactional business.”

This trend is even more acute in Europe, where negative ECB interest rates have been in place since late last year, notes Laurens Tijdhof, a partner at treasury consultancy Zanders. “Corporates are currently operating in a historically low interest-rate environment, fueled by the ECB, [which] pushed its deposit rate to -0.2% in September 2014,” he notes. “This drives down yields on short-term deposits and investments.” He notes that a large Swiss wealth manager recently announced it is passing on the cost of the ECB’s negative interest rate to its institutional clients. Similarly, Tijdhof says a large Belgian bank announced it is applying negative interest rates on short-term deposits by very large corporates.

 This puts pressure on companies to move affected deposits into short-term, liquid investment vehicles. Patricia Hines, senior analyst at consultancy Celent, says corporates with non-operational cash deposits may find them difficult to place in overnight investments. “Many banks are reducing their non-operating deposits, either by encouraging corporates to place their funds elsewhere or by creating new investment products such as 31+ CDs, money market funds and repurchase agreements to avoid the LCR [Liquidity Coverage Ratio] charge on excess balances.”


But given the changing regulatory environment—particularly the new rules for money market funds—corporates are concerned about what to do about prime money funds, notes Brad Vollmer, treasurer at biotech firm Gilead Science. “We use prime money market funds for daily liquidity. We are now looking at how we morph our program with the new SEC rules coming into play next August. We want to move—but not too early—and we want to be able to easily move back if nothing happens,” says Vollmer. “We want to make sure we have the right processes and strategies in place so we can adapt and change when any new rule comes into play.”

According to the Association for Financial Professionals’ 2015 Liquidity Survey, the overall allocation of short-term cash to bank deposits has grown significantly, rising to 56% in 2015 from 37% in 2009. “With new money market fund rules,” notes Fossaceca, “nearly half of respondents anticipate their companies will either discontinue investing in prime funds altogether, or move some or all of their holdings out of prime funds. Allocation of short-term cash to money market funds and T-Bills [fell] from 41% to 21% in the period from 2009 to 2015.”

Companies are looking at both new deposit accounts and ultra-short bond funds as alternatives. The changes are also pushing companies to consider allocating part of their portfolios to asset managers via separately managed accounts. Notes Vollmer: “We outsource most of our money management. We are not in the business of managing money, so we hire pros to do it.” He believes the new regulations will push many companies to use outside managers. “A lot of companies will go to having a portion of their portfolio in separately managed accounts,” he says. Vollmer anticipates that companies will also use ultra-short funds along with US government funds for daily liquidity.

Despite the challenges­—inconsistent, onerous regulatory regimes, a strong US dollar and activist shareholders—corporate cash continues to grow. Global market volatility is of great concern, notes Enrico Camerinelli, senior analyst at consultancy Aite Group. “Security of principal, liquidity, and yield are, in that order, the priorities of corporate treasurers.”

Greg Kavanaugh, head of global core cash management, global transaction services, Bank of America Merrill Lynch, adds: “The level of corporate cash is at an all-time high and this trend looks like it will continue for the foreseeable future.”


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