Apple Inc.has announced that it will increase what it “contributes” to the US economy. The company revealed details about what it plans to do with the money it will save on taxes and the billions of dollars it plans to repatriate. Apple contributions to the US economy will jump to $350 billion over the next five years.
Apple stock ticked higher after investors heard everything the company is planning to do for the US economy. However, it’s a departure from the huge share repurchases analysts were counting on to support Apple stock, thanks to the tax reform and upcoming cash repatriation.
Apple contributions to the US economy rise to $350 billion in five years
The new plans for Apple contributions to the US economy were revealed in a press release today. The company said the plans span three areas in which it impacts the creation of jobs the most, which are direct employment, spending and investment with its domestic suppliers and manufacturers, and what it calls the “app economy.”
The firm claimed that Apple contributions to the US economy already include the creation and support of more than 2 million jobs, and it expects even more jobs to be generated as a result of the initiatives announced today. The iPhone maker estimates its current pace of spending with US-based manufacturers and suppliers at about $55 billion for this year. After adding the amount it expects to spend on the initiatives announced today, direct Apple contributions to the US economy will surpass the $350 billion mark over the next five years, the company explained.
That amount does not include the company’s regular tax payments or tax revenues generated on the wages of its employees and sales of its products.
Apple contributions to US economy to include new campus
The iPhone maker said about $75 billion of its direct contribution to the nation’s economy will come from “planned capital expenditures in the US, investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits.” Apple estimates its tax payment on cash repatriation at about $38 billion.
The company plans to spend more than $30 billion on capital expenditures within the country over the next five years and create more than 20,000 new jobs. In addition to hiring for new positions at its existing campuses, Apple also plans to build a new one. The company claims that it employs 84,000 people in all 50 states, and it just opened its Apple Park campus, its newest one, last year. The new Apple campus will initially be home to a technical support team to serve customers, with the location of the new campus to be announced sometime later this year.
Apple plans to spend more than $10 billion in capital expenditures on investments in data centers throughout the country. The company is also breaking ground on a new facility in Reno, Nevada today to support its already-existing facilities in the state.
Apple to boost manufacturing and education investments
The company also said it is increasing the size of its Advanced Manufacturing Fund from $1 billion to $5 billion. The fund was only just announced last spring, and it was created “to support innovation among American manufacturers and help others establish a presence in the US,” the company explained.
Future Apple contributions to the US economy also include an acceleration in efforts to support coding education and STEAM (science, technology, engineering, arts and math) programs, all of which are aimed at supporting what the company refers to as “the iOS app economy.” Apple claims that its app economy created over 1.6 million jobs in the country and also generated $5 billion in revenues for app developers in the US last year.
Apple stock jumped by less than 1% to as high as $177.52 in intraday trading following the announcement.