Apple announces plans to initiate dividend and share repurchase program; expects to spend $45 billion over three years

Apple today announced plans to initiate a dividend and share repurchase program commencing later this year.

Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.

Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.

“We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future,” said Tim Cook, Apple’s CEO, in the press release. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program.”

“Combining dividends, share repurchases, and cash used to net-share-settle vesting RSUs, we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs,” said Peter Oppenheimer, Apple’s CFO, in the press release. “We are extremely confident in our future and see tremendous opportunities ahead.”

Apple will provide live streaming of a conference call to discuss its plans beginning at 6:00 a.m. PDT on Monday, March 19, 2012 at The Company will not be providing an update on the current quarter nor will any topics be discussed other than cash. This webcast will also be available for replay for approximately two weeks thereafter.

Soucre: Apple Inc.


    1. Or much more. I’m interested in how much they have now. It was $100 billion in December. It’s possible it’s closeer to $120 billion already.

      1. if they keep growing like before, they´ll add at least 45bln$ per year in the next three years.
        So in three years time, they´ll have paid 45bln$ and sit on 200bln$. big effing deal.

    1. The second definite un-Jobs move is not announcing how many iPads were sold this weekend.

      If it is a record launch like Cook said, Jobs would have announced a number. They always did.

  1. Dumb. Apple was doing fine, they fired Jobs and within a few years the company was on the verge of bankruptcy. Jobs is re-hired and turns the company around. A few months after Jobs is gone, they start doing things he wouldn’t even talk about.

    Have some balls Cook!

      1. Bongo, I don’t even own any Apple stock at this point, not in the position to. But that doesn’t change the fact that I can have an opinion on the subject. Everyone seems to know how Apple should change to become better. Obviously, Apple knows what it’s doing and has for a few years now. Apple does not need any analyst’s help or pressure to figure out what to do with their cash. I think Cook simply buckled under the pressure from all the people pushing to get cash out of Apple.

    1. I agree. I am an Apple share holder as I’m an ex-Apple staff. This is just plain stupid.

      Most customers buy Apple from an Apple retail store despite the mark up because there is an expectation that all profits from an Apple product goes back into Apple.

      Paying a dividend means that we’re rewarding people that just have the rights to hold onto stocks. Nothing more than that.

      I cannot be bothered buying Apple from a retail store, if I know it’s going back in the form of Dividends. I’ll use my EDU pass and as much discounts as I can get.

      Buy back is a great idea. Dividends is a stupid idea.

      T.Cook … grow some balls. S.Jobs is rolling in his grave!!!

          1. …” … like an Economics Student. The only part of his statement that whiffed – reeked? – of Republi-thought was that a janitor can afford to buy ANY stock, much less AAPL, these days. Oh, and thanks for introducing politics to what was a perfectly fine argument.
            My wife got all excited about this, knowing she has ~$100K tied up in AAPL, until I told her it was good for about $500 a quarter. About 2% per year. I trade on dividends and my entire list of possibilities offers at least twice that, if not three times! 2% is not a lot.

      1. Paying a dividend means rewarding shareholders of Apple that actually believe in the company and want to retain their ownership stake (i.e. not sell their shares).

        Yes, that’s a terrible decision, one that almost every mega cap stock makes because profits should eventually distributed to the shareholders.

        If you bought a well performing company, would you happily sit without drawing anything from it for 30 years, even if that cash did nothing to enhance the value of the company. Of course you wouldn’t, unless you’re already filthy rich or an idiot.

      1. I kind of wish I could opt out if this dividend and have the cash just baked into the price of my stock. Now I’m getting hit with taxes and the total equity amount is declining proportionate to the dividends.

        Not sure why everyone is so hot for dividends. I would not have minded a split.

    1. Mark, assume that this will happen. Talk with your investment broker about this. In fact, you should be able to elect this with your broker without having to wait for any announcement from Apple – it is up to you to do what you wish with your dividend.

      If you are an Apple stockholder, asking your stock brokerage firm to reinvest your dividends is the smart way to go, instead of getting a check every quarter. By reinvesting your dividend (of any dividend-paying stock you own), over time, your reinvested dividends will buy progressively more shares of stock. Most important, the dividends will COMPOUND every quarter, giving you more purchasing power. Over time, without having to spend a dime, you will own more shares of stock. And if the stock value per share increases, so do the value of your dividends. Years from now, this can result in really substantial increases in the value of your portfolio, all without lifting a finger. It is one of the smartest investment strategies you can make.

      Today’s announcement is an orgasm for Wall $treet. The big boys will make billions for doing nothing. And mutual funds will now start buying Apple stock. I’m not crazy about dividends, and agree with Warren Buffet’s position about dividends. But if this will shut the ANALysts’ pie holes, you might as well take advantage by reinvesting your dividends. In the long run, you could build for a better retirement.

  2. Pretty good move actually it quiets the people hounding for a dividend the same time helps preserve the stock price and at the end of three years they will still probably have 100 billion or more.

    By the way I used the dictation feature of the new iPad to post this comment. This is the hidden gem of the new iPad
    features. Its accuracy is amazing and is now my new preferred method of input with my new iPad

    Go Apple

  3. Frak, was getting the ducks lined up last week to buy some AAPL this week. Did not expect a first-thing-in-the-week announcement to mess with the price; it’s already up $10 in pre-opening trading.

  4. I don’t fully understand the stock market and have a question…..So its 2.65 per share a quarter, I have 38 shares so I am guessing 2.65×38=100. So I would get $100 a quarter now? I think thats chump change, I would have rather seen a split. I know everyone says split doesn’t help you in any way, but I think that is wrong.

    I bought 38 shares in 04 and it split in 05 giving me 76 shares. Over the years the stock has grown and if it was today I would have 38×585=$22,230 or 76×585=$44,460. So with the split I would have double the money. How doesn’t the split help? At the time it doesn’t, but over the years it does.

    I would have rather had a stock split and grown my money by thousands over the years like I did before and not receive chump change of 100 a quarter.

    1. Cashxx, see my comments above about reinvesting your dividends. This is one of the smartest moves you can make as an investor of dividend-paying stocks. If you reinvest your dividends and hold a stock for a long time, you will benefit from the value of your dividends compounding and multiplying over time without lifting a finger. The value if your dividends might not eel substantial now. But 10-20 years from now, you will be glad you took this advice.

      If I ever had to give you and the readers of this message board a gift, this advice is one that can reward you tremendously over time.

  5. Sorry, as a AAPL stockholder of about 1,000 shares I say: This is wrong. Apple should invest a part of this money:

    – green energy
    – cure cancer
    – pay Apple store shop assistants a little better

    Also Apple should invest in products that might not be huge hits, like iPad and iPhone, but what also is needed – like a new professional Mac server line, a new MacPro, a bigger iPhone (will be a hit!), a bigger iPad (12 inch, will also be a hit), a smaller iPad (will be a hit as well!), a complete home automation system for older people (keep in mind we all get old, this is a huge market!).

    And also there is a need of a bigger screen than 27″, if you compare to 30″ there is a big difference in resolution, essential for design, video, and many more. Why not make a 30″ oder 33″ iMac and/or Thunderbolt display?

    So, I do not want a dividend! I want a stronger Apple company and more of their great products. A dividend is just ridiculous.

    1. Apple is about focus on very little thing. Steve said that innovation is saying no to a hundred things. Why should Apple put their cash in cancer cure and green energy when that’s not their expertise. Fortunately, you’re a mere shareholder and not a director or executive.

      1. That kinda sucks. Great its a little extra money, but I would have rather had a stock split. Everyone says a split doesn’t do anything, but it does over the years or maybe months in Apple’s case.

        1. No, it does not. It makes absolutely no difference if you have 100 shares that cost $600 each, or 1000 shares that cost $60 each. The value of those shares would have moved exactly the same way regardless of whether it is $5, $50 or $500 per share.

          Now that they are paying dividends, even if they for some weird unexplainable reason decide to split the stock (say, 2:1), where one $600 ends up becoming two $300 shares, the dividend paid on the new cheaper shares would be automatically split as well, so it would end up being $1.32.

          Split gains absolutely NOTHING.

          1. Predrag, you are absolutely correct. Stock splits do NOTHING. In fact, splits can increase the volitility of per-share prices, making a stock easier to manipulate. Apple stock gets manipulated enough as it is.

            I really appreciate your comments. You are one of the few voices of reason on this message board. Kudos, Predrag.

        2. Splits do help but only way into the future.If Apple never did their last 2 for one split would the stock be $1200 per share today? Probably not. But the part that sucks for you is you only have 38 shares. How much can you realistically expect to make from that investment? You should sell those shares and get into something cheap that has a chance to explode. Maybe Nano Technology.

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