Apple to spend $45B over 3 years on dividend & share repurchase program

Posted:
in AAPL Investors edited January 2014


Later this year, Apple will initiate a dividend and share repurchase program, spending $45 billion over the next three years, the company announced on Monday.



Apple's new quarterly dividend will amount to $2.65 per share. Assuming it is approved by the company's board of directors, it will be initiated at some point in the company's fourth quarter of fiscal 2012, which begins on July 1 of this year.



The dividend will be joined by a $10 billion share repurchase program that will start with Apple's fiscal 2013. The share repurchase program has already been authorized by the company's board of directors.



Apple plans to repurchase shares over three years, with the primary objective to neutralize the impact of dilution from future employee equity grants and employe 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," Apple Chief Executive Tim Cook said. "You'll see more of all of these in the future. 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."



More details on the new initiatives will be discussed during a conference call that Cook and Apple Chief Financial Officer Peter Oppenheimer will participate in at 9 a.m. Eastern, 6 a.m. Pacific Monday morning. The company will not, however, provide any updates on its current quarter, and no topics other than cash will be discussed.



"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," Oppenheimer said. "We are extremely confident in our future and see tremendous opportunities ahead."



[ View article on AppleInsider ]

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Comments

  • umrk_labumrk_lab Posts: 550member
    The prophecy is on its way ..
  • cogitodextercogitodexter Posts: 166member
    By the looks of it, that will barely dent the cash pile, if future profits are taken into consideration!



    I guess there is such a thing as an embarrassment of riches!
  • geoffrobinsongeoffrobinson Posts: 54member
    It would be nice if they instituted a DRIP. I would like to buy each of my kids a share and teach them about investing and compounding interest/dividends. It's more fun with a stock than a savings account.
  • ksecksec Posts: 1,189member
    I thought the conference doesn't start for another 10 min... why are are already getting the news already?
  • deepkiddeepkid Posts: 96member
    I wish there was a big ass DON'T LIKE button I could click on Tim's head.
  • ladybumpsladybumps Posts: 25member
    I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...
  • deepkiddeepkid Posts: 96member
    Quote:
    Originally Posted by ksec View Post


    I thought the conference doesn't start for another 10 min... why are are already getting the news already?



    Companies tend to allow journalists to publish the information shortly before the actual event sometimes through a press release. It's a common practice in an attempt to get more coverage for what the company deems good news.
  • anantksundaramanantksundaram Posts: 17,188member
    Oh well, a little bit of something for both sides of the coin. Attempting to please all investors, I suppose.



    I would have preferred a bold buyback move alone. But here we are. Somewhat un-Apple-like to try and compromise like this.



    That said, a new era had begun! Let's hope AAPL defines a new category of stock: the "growth income" company.



    AAPL is dead. Long live AAPL!!
  • Quote:
    Originally Posted by ladybumps View Post


    I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...





    They don't force you to sell. They buy them from willing sellers at market value.
  • anantksundaramanantksundaram Posts: 17,188member
    Quote:
    Originally Posted by ladybumps View Post


    I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...



    You don't have to do anything. It's entirely voluntary. There'll be enough people wanting to sell their holdings for Apple to meet its $10B buyback goal.



    You'll get a dividend check for 60*2.65*4 = $636 in 2012. Almost enough for a new iPad, after taxes!
  • ladybumpsladybumps Posts: 25member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    They don't force you to sell. They buy them from willing sellers at market value.



    Thanks
  • priced4evilpriced4evil Posts: 15member
    Quote:
    Originally Posted by ladybumps View Post


    I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...



    Apple won't force you to sell them back, but they will make a nice offer to all shareholders to entice them to sell back shares. Once they buy back a set amount of shares at a raised price that is it, at least for now.



    Depending on how much you bought your shares at, it may make more sense to take that higher value buyback and then also re-invest that money into apple stock for more shares and an increased dividend payout each quarter. But consult with a financial adviser/planner before doing anything.
  • dick applebaumdick applebaum Posts: 11,556member, moderator
    Quote:
    Originally Posted by geoffrobinson View Post


    It would be nice if they instituted a DRIP. I would like to buy each of my kids a share and teach them about investing and compounding interest/dividends. It's more fun with a stock than a savings account.



    One of the reasons I wanted a large split was to setup investment accounts for my grandkids... at $600 a pop there wouldn't be much room for action...



    They each have saving accounts -- but that's just a lay-away for future needs (car, insurance, etc.).



    My Dad had shares of Southern Cal Edison that offered dividend reinvestment at a fixed grant price for a period of time... He was able to accumulate shares at a fraction of their price in an up market...



    That could be a great deal for AAPL investors!



  • j1h15233j1h15233 Posts: 274member
    Quote:
    Originally Posted by anantksundaram View Post


    You don't have to do anything. It's entirely voluntary. There'll be enough people wanting to sell their holdings for Apple to meet its $10B buyback goal.



    You'll get a dividend check for 60*2.65*4 = $636 in 2012. Almost enough for a new iPad, after taxes!



    Almost? That's more than enough for a 16 gb iPad. They're only 540 after taxes. You could get a 16 gb iPad and a real nice case on Apples dime.
  • priced4evilpriced4evil Posts: 15member
    Quote:
    Originally Posted by anantksundaram View Post


    You don't have to do anything. It's entirely voluntary. There'll be enough people wanting to sell their holdings for Apple to meet its $10B buyback goal.



    You'll get a dividend check for 60*2.65*4 = $636 in 2012. Almost enough for a new iPad, after taxes!



    Not really, because there will only be two quarters paid out once the dividend starts: 60*2.65=$159*2=$318



    Close, but no virtual cigar app on a new iPad...
  • anantksundaramanantksundaram Posts: 17,188member
    One thing I am super happy about: they didn't announce some large acquisition.



    That would have been a terrible move.
  • asdasdasdasd Posts: 4,363member
    Not being an investor - although I was - I don't really care. I think that stock buybacks just make money disappear - it shouldn't even lead to a stock increase as the drop in cash assets should be exactly counteracted by the reduction in the amount of stock available - leading, in theory - to no stock price gains.



    Dividends are for mature companies, sure Apple has been around for a while, but is it not a perennial startup in mentality?



    Not overly pleased. I can see Apple - a small company in its core divisions - becoming a huge juggernaught. This and the new Large building might make it suffer the consequences of all huge corporations, static and slow reaction times, fiefdoms, etc.



    I suppose the money was becoming embarrassing.
  • anantksundaramanantksundaram Posts: 17,188member
    Quote:
    Originally Posted by asdasd View Post


    .... becoming a huge juggernaught.



    Pun intended?



    A great oxymoron if I ever heard one!
  • taniatania Posts: 63member
    Quote:
    Originally Posted by priced4evil View Post


    Not really, because there will only be two quarters paid out once the dividend starts: 60*2.65=$159*2=$318



    i'm being stupid but what's the 60 from?
  • williamhwilliamh Posts: 324member
    Quote:
    Originally Posted by tania View Post


    i'm being stupid but what's the 60 from?



    The 60 refers to the question from a stockholder with 60 shares.
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