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Monday, February 19, 2024

Apple is debt-free, Steve Jobs says

February 18: Today in Apple history: Steve Jobs says Apple is finally debt-free February 18, 2004: Steve Jobs sends an inner memo to Apple workers revealing that the corporate is, for the primary time in years, completely debt-free.

“At present is a historic day of kinds for our firm,” he writes. This marks a giant turnaround from the dangerous previous days of the Nineties, when Apple carried greater than $1 billion in debt — and confronted the hazard of chapter.

Apple turns into debt-free

Attaining debt-free standing was, in some methods, a formality for Apple. By this time, the corporate had sufficient cash within the financial institution to simply clear its remaining debt. By 2004, Apple had launched the first iMac, the equally colourful iBook laptop computer and the groundbreaking iPod music participant. Cupertino additionally had launched the iTunes Retailer, which was on its approach to reworking the music business.

Apple clearly had modified course and was headed in the suitable route.

Nonetheless, utilizing $300 million in money to repay the final of its debt proved a symbolic triumph. Apple CFO Fred Anderson, on the verge of retirement, confirmed the information.

The top of Apple debt … for now

Apple revealed its plans to repay the debt, initially borrowed in 1994, in an SEC submitting dated February 10, 2004:

“The Firm at the moment has debt excellent within the type of $300 million of mixture principal quantity 6.5% unsecured notes that have been initially issued in 1994. The notes, which pay curiosity semiannually, have been bought at 99.925% of par, for an efficient yield to maturity of 6.51%. The notes, together with roughly $1.5 million of unamortized deferred positive aspects on closed rate of interest swaps, are due in February of 2004 and due to this fact have been labeled as present debt as of December 27, 2003. The Firm at the moment anticipates using its current money balances to settle these notes when due.”

Jobs’ e-mail to Apple workers additionally talked about that the corporate had $4.8 billion within the financial institution in February 2004. Nowadays, Apple maintains a a lot bigger pile of money reserves (though its funds are structured in such a manner that the corporate additionally carries a considerable amount of debt).

Apple turns into worthwhile as soon as once more

By 2004, Apple had been worthwhile for about six years. The change occurred in early 1998, when Jobs shocked attendees at San Francisco’s Macworld Expo by revealing that Apple was as soon as once more getting cash. The corporate’s fortunes dipped and rose a couple of instances earlier than the large restoration began. However Cupertino was as soon as once more sure for the highest of the tech world.

The February 2004 payoff of Apple’s remaining debt hammered house that time.

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