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AFP Press Release

Companies continue to Add to Cash Stockpiles in Fourth Quarter, Treasurers Report

AFP Corporate Cash Indicators™ show slightly more aggressive short-term investments


WASHINGTON – January 23, 2012– Companies increased their cash and short-term investment balances in the fourth quarter, according to the AFP Corporate Cash Indicators™ (AFP CCI), a quarterly study that measures recent and anticipated changes in U.S. corporate cash balances. Quarter-to-quarter, 49 percent of reporting organizations had greater cash balances at the end of 4Q11 than they had at the end of 3Q11.  

Meanwhile, companies reported that their investment selection for cash and short-term investments had become more slightly more aggressive, with a net five percent of respondents indicating a more aggressive investment selection.

Year-over-year, cash hoarding increased, with 43 percent holding larger balances at the end of 4Q11 than they had at the end of the 4Q10.

Looking ahead, 32 percent expect to further build cash and short-term investment balances during 1Q12 compared to 27 percent that expect to reduce balances. The difference (+5), however, was significantly smaller than the +13 and +17 reported in October and July 2011 surveys, suggesting the pace of building cash reserves may be slowing.

AFP Corporate Cash Indicators™
------------------------------------------
+24     4Q11 v. 3Q11  
+17      4Q11 v. 4Q10  
+05      1Q12 expectations   
      Represents “increase” percentage minus “decrease” percentage.

“With the U.S. election approaching and uncertainty with the euro, caution reigns among corporate treasurers,” said Jim Kaitz, AFP’s president and CEO. “Although they are choosing slightly more aggressive short-term investment vehicles, the stance that they are adopting for early 2012 is wait-and-see.”

The AFP CCI™ provides treasury and finance professionals, policymakers and market analysts with timely data on a determinant of economic activity: corporate cash. The AFP CCI™ is created and maintained by the Association for Financial Professionals (AFP), a professional society that serves corporate finance departments globally.
Methodology: On the opening days of each quarter, AFP asks select members whether their short-term holdings increased or decreased in the past year and past quarter; whether investment selections for those holdings changed in the last quarter; and whether they expect cash holdings to increase or decrease in the coming quarter. For consistency, AFP asks the same questions each quarter. AFP members have agreed to participate in this ongoing study on a long-term basis.

AFP began collecting quarterly data in January 2011 and has now collected five data sets. The next set will be published in the April 23, 2012 issue of AFP EconWatch newsletter (www.AFPonline.org/econwatch).

AFP Corporate Cash Indicators™ is a trademark of the Association for Financial Professionals. All AFP Corporate Cash Indicators™ survey questions and reports are the copyrights of the Association for Financial Professionals, and all rights are reserved.  For information about publishing the CCI on your site, see www.afponline.org/CCI or contact pr@afponline.org.

ABOUT AFP® (www.afponline.org )
The Association for Financial Professionals (AFP) is the daily resource for a network of more than 16,000 treasury and finance professionals. Headquartered outside Washington, DC, AFP provides members with news, economic research and data, treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators.

AFP's global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada; London-based gtnews, an on-line resource for the treasury and finance community; and bobsguide, a financial IT solutions network.

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