America's biggest corporations are sitting on a historically large amount of cash.

Cash and short-term investments on the S&P 500 constituent companies’ balance sheets have surged to 10-year highs in Q1 2016, totalling $1.45 trillion, according to a new report from Factset by Andrew Birstingl.

This does not include financial companies, as those companies are obligated to hold certain amounts of cash and debt on their balance sheets for regulatory purposes.

Tech companies have been leading the way, with Microsoft (MSFT) and Alphabet (GOOGL) possessing $105.6 billion and $75.3 billion, respectively. If longer term investments are included, another tech company, Apple (AAPL), takes the lead, with $232.9 billion.

The Information Technology sector in general is holding nearly $604 billion.

Some of that cash is being deployed

Corporations are spending quite a bit of money on their operations. In Q1, S&P 500 companies (ex-financials) spent $141.3 billion on capital expenditures. This was down 4.9% from the same period a year ago.

R&D spending (once again led by tech companies) is at an all-time high of $263.7 billion in the trailing twelve months (TTM). Amazon ($13 billion), Alphabet ($12.9 billion), and Intel ($12.3 billion) were the top spenders during this period.

Companies continue to return massive amounts of cash to shareholders in the forms of buybacks and dividends.

Cash outflows are outpacing cash inflows

Operating free cash flow, however, is flat year-over-year, and stands at “7.7% below the ten-year average for the index.”

How can cash levels be increasing, while cash inflow goes down and cash outlays go up?

The answer is debt, which has been increasing more rapidly than cash. The year-over-year growth rate for cash was a respectable 5.7%, but debt grew 9.9%.

Unsurprisingly, this means that the cash to debt ratio has also fallen to 34.7%, which is below the ten-year average of 36%. The total amount of debt on non-financial company balance sheets is $4.2 trillion.

There are a number of reasons for this increase in debt. For one, many companies are simply taking advantage of historically low interest rates. Many multinationals also hold their cash overseas to paying tax on it, despite having most of their expenses in the US. This means that they have to take out debt in the US.

However, given that the cash-to-debt ratio is falling, this isn’t entirely sustainable. Companies appear to already know what they’re planning to give up as well.

Capex may have been near its ten-year highs, but it actually dropped 7.6% year-over-year during the trailing twelve months.

“One of the ongoing trends in the S&P 500 (Ex-Financials) index has been less spending on capital expenditures and more spending on shareholder distributions," Birstingl observed.

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Rayhanul Ibrahim is a writer for Yahoo Finance.

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