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 www.apple.com/quicktime/qtv/call31912. 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.

68 Comments

  1. I will use the dividend to buy more aapl shares. ~4 shares a year at current prices. A good way to increase my holdings without having to fork out more cash.

    Apple wouldn’t be doing this if they needed the cash for corporate growth. At some point having the money not actively being used does not make sense. Paying the shareholders 1.7% a year is a good hedge against inflation.

  2. Sounds good. To avoid the tax man I let dividends just roll over, as opposed to touching the money anyway.

    This way, my investment (and value) slowly multiplies, building strength.

  3. As much as I am *not* a huge fan of unregulated liassez-faire, free market capitalism without some form of group/gov’t regulation to protect those who will be adversely affected by purely economic-driven decisions, the dividend idea sounds solid to me.

    Isn’t the entire goal of dividends to offset the the hoarding of cash (and removal of said cash from the economic system) and to allow a flow of capital back into the economy to better encourage economic investment into other upcoming companies that help grow and nuture new ideas and a stronger economy in turn?

    As other have pointed out, it’s not like Apple won’t still be worth a new $100,000,000,000 in three years after all of these dividends and share buy-backs anyway, I strongly suspect.

    And if, as an investor in the free market, and you don’t have that confidence will continue to grow and maintain the stock prices it does now, feel free to sell your interest (and kick yourselves later, as I do after selling AAPL years ago at much lower prices but still having made the profit I needed at the time).

    Just an old guy’s $0.02.

  4. As many have pointed out, its only $2.65 per quarter. Apple brings in 11,12,13 per quarter. The cash portion of Apple should still grow at 30 billion per year.

  5. As a shareholder of AAPL with quite a bit of shares and a MacUser since 1989, I have all my confidence in Tim Cook and his team to grow the company. At the same time, as an retiree, I DON’T WANT TO SELL MY AAPL in order to get some cash to buy bread and gas. I can’t understand why the stupid assholes at MDN can’t see that. Fortunately, Tim and Peter is much much much much much much much much brighter than you stupid assholes

  6. Steve Jobs would not like any of this… he would fire anyone who voted for it.
    The business people have suckered Apple leadership into giving a dividend.
    Apple is getting too powerful for other big companies and financial groups … they are worried that Apple will have 500 billion in cash in a few years.
    Apple could move into nanotech, biotech and financial markets, etc.
    I hope this is not the first of a series of stupid moves that end up weakening Apple in the very long term.
    The stock is going up like a rocket,… a token but expensive dividend is unnecessary.
    If someone needs a dividend then sell your Apple stock and buy something else.
    I wonder if some Apple Board members are behind this move.
    …the people behind this dividend move are the traitors.

  7. Basic Supply and Demand … declaring a dividend means that the funds that were previously shut out may be buying in. Fixed supply of shares (or smaller supply due to buyback) combined with higher demand = rising stock price. Hopefully, this will reduce some of the volatility of the stocks and drive the contrarian short sellers away …. all leading to a more
    steady, rising stock price.

    1. This should stop the hedge funds from driving down the price like they used to. The more they knock the share price down that dividend gets more and more attractive. The stock will get bought up much sooner on dips from now on.

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