Emerson Electric Co. EMR -0.26% 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.
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.Read the rest of the article HERE.
EXPECT more of the same over the next 4 years until the U.S. becomes more business friendly once again and it's MORE PROFITABLE to keep their money here rather than there.