February 18, 2004: Steve Jobs sends an inside memo to Apple workers revealing that the corporate is, for the primary time in years, completely debt-free.
“Right this moment is a historic day of types for our firm,” he writes. This marks a giant turnaround from the unhealthy outdated days of the Nineteen Nineties, when Apple carried greater than $1 billion in debt — and confronted the hazard of chapter.
Apple turns into debt-free
Reaching 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 iMac, iBook and iPod, and had launched the iTunes Retailer. Cupertino clearly modified course and headed in the suitable path.
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 tip of 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 present has debt excellent within the type of $300 million of combination principal quantity 6.5% unsecured notes that have been initially issued in 1994. The notes, which pay curiosity semiannually, have been offered 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 beneficial properties on closed rate of interest swaps, are due in February of 2004 and subsequently have been categorized as present debt as of December 27, 2003. The Firm at present anticipates using its present 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. Lately, Apple maintains a a lot bigger pile of money reserves (though its funds are structured in such a approach that the corporate additionally carries a considerable amount of debt).
Apple 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 earning profits. The corporate’s fortunes dipped and rose a couple of occasions earlier than the massive restoration began. However Cupertino was as soon as once more certain for the highest of the tech world.
The February 2004 payoff of Apple’s remaining debt hammered house that time.
