Apple Announces $11 Dividend And Share Buyback

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Photo: Associated Press

Apple announced a quarterly dividend of $2.65 a share and authorised a share buyback plan this morning.According to the release, it anticipates spending about $45 billion in cash over the first three years of the dividend and buyback plan. 

The buyback authorization is worth $10 billion and starts in fiscal 2013, which starts after September 30, 2012. (Important note: a buyback authorization doesn’t mean Apple is going to rush out and buy stock, it just means it could buy stock.)

The dividend starts in fiscal Q4, which is after July 1, 2012.

The $45 billion Apple anticipates spending will be less than a third of the cash it will bring in over the next three years. (We anticipate it generating ~$150 billion in cash in the next three years.)

Apple shares have been halted, and will start trading again at 8:50 eastern.

Here’s the release:

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 authorised 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 neutralising 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. “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 utilising approximately $45 billion of domestic cash in the first three years of our programs,” said Peter Oppenheimer, Apple’s CFO. “We are extremely confident in our future and see tremendous opportunities ahead.”

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