The World’s Richest Companies 2016: Global Cash 25

Global companies continue to hoard cash at record levels, as worrisome economic conditions hamper investment in operations and investors demand ever-increasing capital returns.

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SAVING FOR A RAINY DAY

In Global Finance’s fourth annual ranking of the Top 25 Cash-Rich Global Public Companies, US companies take 13 spots on the list, including the top three spots. Japanese companies take three of the top spots. Gree Electric is the first Chinese company to make the list, coming in at 25th, and utility Enel of Italy joins the ranks in 24th place. There are 14 companies on this year’s list with more than $20 billion in available short-term liquidity, versus 15 last year. The cutoff to make the ranking this year is around $13.5 billion, whereas last year’s cutoff was around $14 billion.

MAINTAINING LIQUIDITY

Companies continue to prioritize capital security and liquidity over returns, as evidenced by the continued growth of cash piles around the world. As we live with zero-interest-rate policy and negative rates in many global economies, companies are simply dealing with that reality, rather than looking to increase their risk or reduce their liquidity to garner some return. However, there is some evidence that this is changing.

Microsoft overtook GE as the most cash-rich global corporation, with $10.8 billion more in its coffers than last year. While increasing its liquidity, the tech giant from Redmond, Washington, also hiked capital expenditures—to $5.9 billion. But that is a rise of just 8% from the $5.4 billion it spent in 2014. This is a big change in year-on-year capex growth of prior years: 80% in 2013 and the 29% in 2014. Microsoft’s capital structure could change dramatically before we post next year’s list. The company recently announced its largest-ever acquisition—of professional social networking site LinkedIn. The $26.2 billion deal is expected to negatively impact Microsoft’s earnings in 2017 and 2018, and begin to add to profits by 2019.

GE takes second spot, with $70.5 billion in cash on hand. And Cisco once again rounds out the top three, increasing its hoard by $8.3 billion this year, to $60.4 billion.

The first non-US company on the global list is Toyota Motor of Japan, ranking fourth. The company had a strong performance in 2015, raking in net revenue of $227 billion—a 6% rise over the previous year—and it increased net income by 19%—to $18.1 billion, which is attributable, in part, to cost reductions and the weak yen.

Apple, which climbs from 10th spot last year to 5th, making the first time the firm has broken into the top five, despite its being routinely cited for hoarding in any discussion of corporate cash. This is because we look only at truly liquid assets, whereas most data and discussions of corporate cash on balance sheet incorporate long-term marketable securities—those securities that companies expect to hold for a year or longer—in addition to cash and cash equivalents. Apple increased its short-term coffers by $16.5 billion in 2015, bringing its total cash on balance sheet to $41.6 billion. The company also recorded the highest capital expenditures on our list, at just under $12 billion.

One of the big plunges this year is from Pfizer, which falls to 11th place from 5th on a drop of $12.8 billion in cash on balance sheet. Pfizer was in the news this year after its proposed  $152 billion merger with Allergan was scuppered—primarily as a result of closing tax loopholes in the US, which would have made a tax inversion (Allergan is headquartered in Dublin, Ireland) challenging, if not impossible. The tax inversion—wherein one company buys another to make the headquarters of the firm residing in a lower-tax jurisdiction its own headquarters—was believed to be a prime reason for the merger. Whether Pfizer will make use of its remaining cash hoard as part of another acquisition remains to be seen. Intel sneaks onto the list this year in 9th place, after just missing the cutoff last year.

HOARDING CASH

The US is the undisputed leader for corporate cash. Data from Moody’s Analytics puts the total cash on balance sheet of the US companies it rates (including long-term marketable securities) at somewhere around $1.7 trillion; that grows to closer to $3 trillion when including cash held overseas. “While the concentration of cash among the top-rated cash holders continues to grow, so too has the portion held by the technology sector, which accounted for a record 46% of total cash in 2015, up from 41% in 2014,” noted Richard Lane, a senior vice president at Moody’s, in a recent report. The top cash-hoarding industries in the US comprise technology, healthcare/pharmaceuticals, consumer products and energy, according to Lane.

Japanese corporates are not far behind, holding 246 trillion yen ($2.2 trillion) in cash and deposits worldwide, according to data from the Bank of Japan released earlier this year.

The corporate cash pile in Europe hovers under €1 trillion ($1.1 trillion). “Energy, automotive, telecommunications and utilities continue to be the most cash-flush industries in Europe,” noted Jean-Michel Carayon, senior vice president at Moody’s, in a report.

CAPITAL RETURNS

Companies in Europe have been returning more to shareholders in recent years, as they shy away from investing in their businesses in the face of poor economic conditions and rising geopolitical risk. Investors in European companies have favored those firms with high cash reserves and strong capital return programs, said Citi strategists in a note earlier this year. “The message to CEOs is obvious—if you want a re-rating, then reinvest less in your business and pay out more to shareholders,” said the Citi equity strategists. They added that it was possible that “much of the ECB’s super-cheap debt will find its way into financing M&A and share buybacks—rather than capex.”

In the US, the story has been somewhat different. Although overall capex fell slightly in 2015, when taking out a 13% decline in investment by energy companies, capex actually rises—by about 2%, according to data from Moody’s. “In 2016 we expect total capital expenditures to decline by 6% to 8%, driven by an estimated 25% to 30% reduction in the energy sector,” said Lane at Moody’s. The agency expects aggregate spending in the S&P 500 on capex, capital return programs and acquisitions this year to stay consistent with 2015 figures, at around $1.9 trillion.

Along with strong capex, excluding energy, outstanding shares in US companies are on track to decline overall in 2016—for the first time since 2011, according to S&P Dow Jones Indices. Companies took advantage of the weak US markets early in the year to buy back stocks aggressively.

S&P 500 companies bought back around $160 billion in shares in the first three months of this year, which is the second-biggest quarter in terms of share buybacks ever. In fact, share buybacks were up about 20% in Q1 2016 over the fourth quarter of 2015, and up 31% over the previous year period, according to S&P Dow Jones Indices. “They [companies] spent more on shares that cost less, and the result was more companies reducing their share count than previously,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, in a report.

Of the Global Cash 25, Apple, GE and Gilead Sciences were the biggest buyers of their own stock. Gilead Sciences spent $8 billion on buybacks, while Apple spent $6.7 billion, and GE, $6.1 billion.

Buybacks and dividend increases were also popular at some Global Cash 25 companies outside the US. Toyota Motor, for example, announced a dividend of ¥125 ($1.20) per share and a ¥40 billion share-buyback program for 2016 when it released its 2015 results. Samsung Electronics of South Korea announced an 11.3 trillion won ($10.3 billion) share buyback program in October 2015. Daimler of Germany raised its dividend to €3.25 on an annualized basis in 2015, up from €2.45 in 2014, but the automaker has no buybacks planned, according to company reports.

METHODOLOGY

The Global Finance Cash 25 ranks public companies by cash, cash equivalents and short-term securities on their balance sheets. Data is gathered from more than 70,000 public companies worldwide. It is a ranking of nonfinancial corporations—we exclude financial institutions from the list. Subsidiaries and nonpublic companies are excluded, and we use a minimum 25% holding for the path from a subject company to its ultimate owner as the cutoff for inclusion.

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Top 25 Global Public Companies By Cash On Balance Sheet

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Rank	Company	Country	Industry	Cash^ ($m)	Cash^ ($m) Previous Year	Change (YoY $m)	Capex ($m)	Total Assets ($m)
1	MICROSOFT	US	Technology	96,282	85,465	10,817	-5,944	176,223
2	GENERAL ELECTRIC	US	Industrial	70,483	90,025	458	-7,309	493,072
3	CISCO SYSTEMS	US	Technology	60,416	52,074	8,342	-1,227	113,481
4	TOYOTA MOTOR*	Japan	Automotive	43,427	41,500	1,927	N/A	397,384
5	APPLE	US	Technology	41,601	25,077	16,524	-11,488	290,479
6	JOHNSON & JOHNSON	US	Consumer Products	38,376	33,089	5,287	-3,463	133,411
7	AMGEN	US	Biotech	31,382	27,026	4,356	-649	71,449
8	TOTAL	France	Oil and Gas	29,459	26,474	2,985	N/A	224,484
9	INTEL	US	Technology	25,313	14,054	11,259	-7,446	101,459
10	GENERAL MOTORS	US	Automotive	23,401	28,176	-4,775	-7,800	194,338
11	PFIZER	US	Pharma	23,290	36,122	-12,832	-1,496	167,381
12	SAMSUNG ELECTRONICS	South Korea	Consumer Electronics	23,253	18,309	4,944	N/A	206,550
13	VODAFONE	UK	Telecoms	20,795	15,891	4,904	N/A	192,587
14	HON HAI PRECISION INDUSTRY	Taiwan	Consumer Electronics	20,143	21,572	-1,429	N/A	70,038
15	COCA-COLA	US	Beverages	19,900	21,675	-1,775	-2,553	89,996
16	AMAZON	US	Retail	19,808	17,416	2,392	-4,589	65,444
17	DAIMLER	Germany	Automotive	18,574	18,123	451	N/A	236,429
18	TAIWAN SEMICONDUCTOR	Taiwan	Technology	17,785	13,789	3,996	N/A	50,292
19	QUALCOMM	US	Telecoms	17,321	17,565	-244	-994	50,796
20	SONY*	Japan	Consumer Electronics	15,703	18,270	-2,566	N/A	131,832
21	MITSUBISHI	Japan	Automotive	15,590	15,663	-73	N/A	132,436
22	HYUNDAI MOTOR	South Korea	Automotive	14,883	19,969	-5,085	N/A	141,039
23	GILEAD SCIENCES	US	Biotech	14,607	10,128	4,479	-747	51,716
24	ENEL	Italy	Utilities	14,175	20,727	-6,552	N/A	175,476
25	GREE ELECTRIC	China	Consumer Products	13,682	8,928	4,755	N/A	24,909

* FY 2014, all others FY 2015  ^Includes cash, cash equivalents and short-term securities (those maturing between three months and a year).  Data valid as of July 21, 2016.                                                                                                          

Data provided by: Orbis by Bureau van Dijk

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Top Regional Public Companies By Cash On Balance Sheet

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North America
There were big changes in the North American list this year, with technology giant Microsoft surpassing industrial powerhouse GE at the top of the ranking. GE’s drop—to $70.5 billion in cash from over $90 billion last year, reflects its sale of GE Capital assets as part of a broader restructuring to focus on its core industrial businesses and to release itself from the regulatory burden of being a “systemically important financial institution.” GE’s SIFI designation was officially removed in June this year. Microsoft has also undergone a transformation—from a has-been software and PC maker to a digital enterprise and Cloud force to be reckoned with—and now holds $96.3 billion, up from $85.5 billion last year.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	MICROSOFT	US	Technology	96,282	85,465	10,817
2.	GENERAL ELECTRIC	US	Conglomerate	70,483	70,025	458
3.	CISCO SYSTEMS	US	Technology	60,416	52,074	8,342
4.	APPLE	US	Technology	41,601	25,077	16,524
5.	JOHNSON & JOHNSON	US	Consumer Products	38,376	33,089	5,287
6.	AMGEN	US	Biotech	31,382	27,026	4,356
7.	INTEL	US	Technology	25,313	14,054	11,259
8.	GENERAL MOTORS	US	Automotive	23,401	28,176	-4,775
9.	PFIZER	US	Pharma	23,290	36,122	-12,832
10.	COCA-COLA	US	Beverages	19,900	21,675	-1,775
11.	AMAZON	US	Retail	19,808	17,416	2,392
12.	QUALCOMM	US	Telecommunications	17,321	17,565	-244
13.	GILEAD SCIENCES	US	Biotech	14,607	10,128	4,479
14.	MERCK & CO	US	Pharma	13,427	15,719	-2,292
15.	HEWLETT PACKARD ENTERPRISE	US	Technology	12,760	5,293	7,467

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Western Europe
There are no changes in the top three spots this year. French oil and gas company Total takes the top spot in the region again, with $29.5 billion in available short-term cash, up from $26.5 billion last year. The UK’s Vodafone Group comes in second, with $20.8 billion in its coffers. And German automaker Daimler completes the triumvirate, with $18.6 billion in cash. But a newcomer to the list occupies fourth place: Enel, Italy’s flagship utility, boasts $14.2 billion on its balance sheet. Five German companies make the list this year—Deutsche Telekom, Siemens, E.ON and RWE join Daimler.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	TOTAL	France	Oil and Gas	29,459	26,474	2,985
2.	VODAFONE GROUP	UK	Telecommunications	20,795	15,891	4,904
3.	DAIMLER	Germany	Automotive	18,574	18,123	451
4.	ENEL	Italy	Utilities	14,175	20,727	-6,552
5.	DEUTSCHE TELEKOM	Germany	Telecommunications	13,496	12,605	891
6.	MEDTRONIC*	Ireland	Medical Devices	12,634	19,480	-6,846
7.	SIEMENS	Germany	Industrial	12,471	11,247	1,224
8.	RWE	Germany	Utilities	10,842	9,204	1,638
9.	NOKIA	Finland	Telecommunications	10,723	9,367	1,356
10.	AIRBUS GROUP	Netherlands	Aerospace	10,294	12,895	-2,601
11.	VIVENDI	France	Media and Communications	10,164	8,370	1,794
12.	SANOFI	France	Pharma	9,974	8,924	1,050
13.	RIO TINTO	UK	Mining	9,470	12,580	-3,110
14.	TESCO	UK	Retail	9,067	4,255	4,812
15.	E.ON	Germany	Utilities	8,916	7,366	1,550

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Central/Eastern Europe & Turkey
Russian companies make up five of the top 10 spots this year, down from seven last year. Lukoil is once again at the head of the class, with $3.5 billion in cash, followed by Turkish construction conglomerate Enka, which is new to the list and holds $2 billion in its war chest. Also new to the list this year are retailer BIM of Turkey and Polish video game maker CD Projekt.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	LUKOIL	Russia	Oil and Gas	3,530	3,004	525
2.	ENKA INSAAT VE SANAYI*	Turkey	Construction	1,982	1,752	229
3.	SURGUTNEFTEGAS	Russia	Oil and Gas	1,461	509	951
4.	NOVATEK	Russia	Industrial	489	754	-265
5.	MOL GROUP	Hungary	Oil and Gas	461	1,645	-1,184
6.	ACRON GROUP	Russia	Fertilizer	420	507	-87
7.	ASSECO POLAND	Poland	Technology	410	349	61
8.	BIM	Turkey	Retail	120	140	-20
9.	CD PROJEKT	Poland	Video Gaming	101	10	91
10.	TOGLIATTIAZOT*	Russia	Chemicals	97	240	-143

* FY 2014, all others FY 2015  ^Includes cash, cash equivalents and short-term securities (those maturing between three months and a year).  Data valid as of July 21, 2016.                

Data provided by: Orbis by Bureau van Dijk

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Latin America
As with last year, some of the most cash-rich companies in Latin America are domiciled here, although their primary operations are elsewhere. Schlumberger once again ranks as the most cash-rich company in the region, having added $5.5 billion to its coffers over last year. In second is Cayman-domiciled Chinese online travel agency ctrip.com, up from seventh place last year. Brazil telecom group Oi is third, but is unlikely to make the list next year, as it filed for bankruptcy in June. Grupo Televisa of Mexico moved up from 13th last year to fourth place.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	SCHLUMBERGER	Curaçao	Industrial	13,034	7,501	5,533
2.	CTRIP.COM	Cayman Islands	Travel Services	4,581	2,055	2,526
3.	OI	Brazil	Telecoms	3,816	1,115	2,701
4.	GRUPO TELEVISA	Mexico	Media and Communications	3,181	2,345	835
5.	EMBRAER	Brazil	Aerospace	2,789	2,424	365
6.	MARVELL TECHNOLOGY*	Bermuda	Technology	2,530	1,969	560
7.	HENGAN INTERNATIONAL	Cayman Islands	Consumer Products	2,293	2,746	-453
8.	SINA Corp*	Cayman Islands	Media and Communications	2,167	1,868	298
9.	NOBLE GROUP	Bermuda	Industrial	1,953	904	1,049
10.	SMIC	Cayman Islands	Technology	1,590	1,485	105

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Asia-Pacific
There is little change in the constituents of the Asia-Pacific list, although some big change within the ranking. SoftBank and Rakuten of Japan and Rio Tinto of Australia (and the UK) dropped off the list, replaced by Gree Electric of China in eighth place, Japan’s Honda Motor in ninth and Mitsui in 10th. The top three spots go to Toyota, Samsung of South Korea and Hon Hai Precision Industry of Taiwan. Samsung moves up from fifth place last year, having added $5 billion to its coffers. Hyundai was once again a big mover—dropping $5.1 billion in liquidity and going from fourth to seventh place.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	TOYOTA MOTOR*	Japan	Automotive	43,427	41,500	1,927
2.	SAMSUNG ELECTRONICS	South Korea	Consumer Electronics	23,253	18,309	4,944
3.	HON HAI PRECISION INDUSTRY	Taiwan	Consumer Electronics	20,143	21,572	-1,429
4.	TAIWAN SEMICONDUCTOR	Taiwan	Technology	17,785	13,789	3,996
5.	SONY*	Japan	Consumer Electronics	15,703	18,270	-2,566
6.	MITSUBISHI	Japan	Automotive	15,590	15,663	-73
7.	HYUNDAI MOTOR	South Korea	Automotive	14,883	19,969	-5,085
8.	GREE ELECTRIC	China	Consumer Products	13,682	8,928	4,755
9.	HONDA MOTOR*	Japan	Automotive	12,253	11,365	888
10.	MITSUI & CO*	Japan	Conglomerate	11,662	11,923	-261

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Middle East
Qatar Navigation, a newcomer last year, sprinted up the ranking to take the top spot—from fifth place last year—with $1.7 billion in cash. Check Point Software of Israel moves to second place from fourth place last year, though its available liquidity changed little. Saudi Arabian chemical company Tasnee sits in third with $1 billion in cash—down from $1.2 billion last year. Newcomers include Boubyan Petrochemical of Kuwait, Mellanox Technologies of Israel, the Savola Group food products company of Saudi Arabia, and the UAE’s Dana Gas and Air Arabia.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	QATAR NAVIGATION	Qatar	Shipping	1,672	1,031	641
2.	CHECK POINT SOFTWARE	Israel	Technology	1,284	1,312	-28
3.	TASNEE	Saudi Arabia	Industrial	1,018	1,217	-199
4.	QATAR FUEL	Qatar	Oil and Gas	659	1,082	-422
5.	SIPCHEM	Saudi Arabia	Chemicals	567	656	-89
6.	SAVOLA GROUP	Saudi Arabia	Industrial	551	436	115
7.	MELLANOX TECHNOLOGIES	Israel	Technology	511	389	122
8.	BOUBYAN PETROCHEMICAL*	Kuwait	Petrochemicals	481	489	-8
9.	DANA GAS	UAE	Oil and Gas	470	244	226
10.	AIR ARABIA	UAE	Airline	435	424	11

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Africa
South Africa’s chemicals company Sasol once again leads the list of cash-rich companies in Africa, increasing its coffers to $4.4 billion from $3.6 billion last year. In second position is South African mobile phone operator MTN Group, which has $4.3 billion in cash and operations in 22 countries. Internet and media group Naspers, also of South Africa, maintains third place in the roster, with $1.2 billion in cash on balance sheet. This year a second name from outside South Africa makes the list: In addition to Golden Agri-Resources of Mauritius in seventh place, Nigeria’s Seplat Petroleum comes in ninth, with $329 million in available short-term liquidity.

Rank	Company	Country	Industry	Cash* ($m)	Cash* ($m) Previous Year	Change YoY ($m)
1.	SASOL	South Africa	Chemicals	4,374	3,622	752
2.	MTN GROUP*	South Africa	Telecommunications	4,287	4,420	-133
3.	NASPERS*	South Africa	Media and Communications	1,222	1,292	-70
4.	GRINDROD*	South Africa	Shipping	725	579	146
5.	ASPEN PHARMACARE	South Africa	Pharma	710	776	-65
6.	SHOPRITE	South Africa	Retail	579	770	-191
7.	GOLDEN AGRI-RESOURCES	Mauritius	Agriculture	502	591	-88
8.	SAPPI	South Africa	Forest Products	456	528	-72
9.	SEPLAT PETROLEUM	Nigeria	Oil and Gas	329	310	19
10.	WILSON BAYLY HOLMES-OVCON	South Africa	Construction	328	260	68

* FY 2014, all others FY 2015  ^Includes cash, cash equivalents and short-term securities (those maturing between three months and a year).  Data valid as of July 21, 2016.                

Data provided by: Orbis by Bureau van Dijk