UPDATE, 6:40 AM: Apple says the planned $2.65-a-share outlay will make the company one of the highest dividend payers in the U.S. The dividend will cost more than $10B in the first year while Apple spends $4B in the same period repurchasing shares, execs told analysts in a conference call. All told, it expects to return $45B from its domestic cash balance to shareholders over the plan’s three years. CEO Tim Cook says he wants the effort to attract new investors — without compromising the company’s ability to grow. “Innovation is the most important objective at Apple and we will not lose sight of that,” he says. For example, he says the company can still increase its investments in R&D, acquisitions, retail stores, and its infrastructure. Cook says Apple doesn’t plan to split the stock. That would lower the price of individual shares and attract investors who can’t afford to spend $585.57, Friday’s closing price. Still, he says, ”we are in a unique position at a unique point in time, so this is something we continue to look at.” Execs say that they are tapping their domestic cash holdings and grumbled that U.S. tax laws create an “economic disincentive” to repatriate cash Apple earns overseas. Cook declined to comment on other matters but did note that Apple had “a record weekend” for initial sales of its new iPad. “We’re thrilled with it.”
PREVIOUS, 5:38 AM: Apple shareholders finally got their wish: The company is returning to them a little of the $97.6B in cash it had on the books at the end of 2011. The repurchase and dividend don’t appear to be generous enough to wow investors, though. Apple’s share price hasn’t moved much in pre-market trading following its announcement. CEO Tim Cook will discuss the company’s cash plans shortly. Developing…
CUPERTINO, Calif.– 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. “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. “We are extremely confident in our future and see tremendous opportunities ahead.”