Apple Announces Plan To Initiate Dividend And A Share Buyback

Read more: [www.businessinsider.com]

Noted at AppleInsider as well.

[www.appleinsider.com]

It is likely that they will make the amount they are spending on this over the same period, and I think they will still bank over the $100 billion.

The critics are probably going to say that it's not enough.

Conference call link
[events.apple.com.edgesuite.net]

Apple Announces Plans to Initiate Dividend and Share Repurchase Program

Expects to Spend $45 Billion Over Three Years

CUPERTINO, Calif.--(BUSINESS WIRE)--Apple® today announced plans to initiate a dividend and share repurchase program commencing later this year.

"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."

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."

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.

This press release contains forward-looking statements including without limitation those regarding future business outlook and plans for dividends and share repurchases. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company's reaction to those factors, on consumer and business buying decisions with respect to the Company's products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company's gross margin; the inventory risk associated with the Company's need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources; the effect that the Company's dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company's international operations; the Company's reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company's dependency on the performance of distributors, carriers and other resellers of the Company's products; the effect that product and service quality problems could have on the Company's sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company's financial results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended September 24, 2011 and its Form 10-Q for the fiscal quarter ended December 31, 2011. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

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Good Luck!
Jamie Dresser
Other World Computing

That will give me almost a single share of stock per year.

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Nothing to see here, move along.

I've got 40 shares, so I guess about $320/year for me.

I'll take it!

Repurchase is an OPTION as part of the reserve. I say they don’t exercise it because it is a waste of resources compared to just 15 months ago.

By the time Apple starts nearing $1000, they are going to have so many DOJ attys & judges up their arse , even without any clear “monopoly” in phones, tablets or laptops—it will be nothing but bad press without ever having DONE ANYTHING WRONG.

But they will be harder on Apple than they ever were on Gates/M$, (and they were NOT hard on them — as they didn’t ever make M$ DO anything! They didn’t even make them uncouple WinExplorer from IE!! “Donate $2 billion to charity, watch the heat come off." Fund a foundation and get Buffet's high praise and all his money on death, AND… be released forever as a Charity Saint - while never addressing the BUSINESS PRACTICES that got them there!!!

I think at 71% institution owned, AAPL needs to start its own “Blackwater” type organization, which it could easily do with just $1 billion. Hire 400 ex-Navy SEALs, Army Delta, and add a few Spetsnaz and other organizational thugs from other countries… and turn them into suited lobbyists who happen unload knives and C4 and multiple 45 calibre handguns, and other tools of the trade, so they can pass through the metal detectors at the offices of members of Congress and the Justice Department.

That’s a great budget of $2.5 million each (plus iPad/iPhone, exploding iPad, exploding iPhone) and has far greater return for the investment.

These guys are more than intelligent — they could become attorneys within a few years, just to add clout to their “We’ll do whatever Tim orders — from sue to eat your entrails while you lay watching before you die” - just for the added influence.

(Richard Marcinko - leader of SEAL Team 2, Creator of SEAL Team 6 & Red Cell, went from high school drop-out in UDT to Masters in International Relations in a decade while on ACTIVE duty!!)

THAT is an example of investor relations and protection of the Apple brand and business.



Edited 1 time(s). Last edit at 03/19/2012 09:28AM by Jimmypoo.

Admit it, you just wanted an excuse to use all those Smilies.

Every third quarter, I'll buy one more share...

Forbes suggests the dividend is not a financially smart move for many AAPL investors:

Steve Jobs Wouldn't Have Paid A Dividend @Forbes

Lew;

They're both right, and wrong...
Even with increased Dividend taxes (which I oppose), it's still a positive increase in net cash for shareholders.
However, they ARE right that any costs for increased paperwork, record keeping, etc have to be weighed by the investor vs the pay back.

I'm pulling out of many of my dividend reinvestment programs to pay for the increase in taxes next year...

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Paul F.
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A sword never kills anybody; it is a tool in the killer's hand. - Lucius Annaeus Seneca c. 5 BC - 65 AD
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Good is the enemy of Excellent. Talent is not necessary for Excellence.
Persistence is necessary for Excellence. And Persistence is a Decision.
--
Eureka, CA

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Jimmypoo
it will be nothing but bad press without ever having DONE ANYTHING WRONG.

You could argue Apple used their iPod monopoly to muscle into phones and tablets. Might also consider Apple's tablet marketshare when they instituted the 30% cut of anything sold "in app". Nice bait and switch, Apple changed the rules after people agreed to different rules when entering the ecosystem. Clearly used to punish iBooks competitors.

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Jimmypoo
They didn’t even make them uncouple WinExplorer from IE!!

Red herring. Many other operating systems also embedded their web browser into the OS (cough, Apple, cough OS X cough Safari/Webkit cough*). Microsoft threatening their partners from offering alternative operating systems at point of sale was the bigger sin. Then there's the Microsoft embrace, extend, and extinguish agenda (similar to Apple's stance on ePub actually) and the FUD attacks on rivals (hmmmm…"Linux is using our IP" versus "Android is a stolen product", this is getting eerily similar).

*Side note regarding Safari/Webkit being embedded in OS X. I updated two Macs for a client recently. Almost the same hardware (one Core 2 Duo GMA950 MacBook and one Core 2 Duo x3100 MacBook). Running the same software (10.6.8 with the same apps installed ). One update went well, the other update broke with the latest Safari patch. Software Update, Safari, Mac app store, and other similar apps crashed on launch. Downloaded and reinstalled Safari and everything starting working again.



Edited 1 time(s). Last edit at 03/19/2012 12:59PM by silvarios.

This distribution will hardly be noticed. It'll cost Apple about $13B/year, but they estimate that they'll accumulate another $150B over the next three years...

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hal
This distribution will hardly be noticed. It'll cost Apple about $13B/year, but they estimate that they'll accumulate another $150B over the next three years...

Agreed, except I think they'll earn even more than they estimate. So what does Apple do when they have $300 billion or more? I can't see this freight train derailing, or even slowing down in the near future. It's a bit scary!

Personally, I'll gladly take the dividend. I've been holding/adding AAPL for the past 12 years. I've kept my itchy fingers from selling and will finally see some extra income that will gladly be thrown into the economy.

Spend, baby, SPEND!!!

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“There is no greater calling than to serve your fellow men. There is no greater contribution than to help the weak. There is no greater satisfaction than to have done it well.”

- Walter Reuther

Explain this as if I were five...

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Never underestimate the predictability of stupidity

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bazookaman
Explain this as if I were five...

Buying a stock like AAPL makes you part owner of the company. Now normally, a company that is profitable distributes some of the profit to its owners and this is through a dividend. For companies that don't give out dividends, the only way to earn money from ownership is to sell some or all of your stake in the company to someone else who is willing to pay a higher price.

Apple has just moved from being a company that doesn't issue dividends to one that does.

A share buyback reduces the number of outstanding shares so the profit per share should increase and presumably the value of the shares should go up as well.

.

That's just the latest example of Apple's growing prosperity under Cook's leadership.

The company's stock price has soared 60 percent since Cook became CEO to propel Apple's market value to $560 billion - the most in the world. The shares hit a new high Monday before closing at $601.10, up $15.53. In Apple's first quarter following Jobs' death, the company generated more revenue than any other three-month period in its 36-year history.

Apple is doing so well now that analyst Wu expects Apple to add another $70 billion to $85 billion to its cash hoard this year. That works out to an average of $1.3 billion to $1.6 billion in cash per week.

"You would have to give Tim an 'A plus' as CEO so far," Bajarin says. "This is probably the best transition in corporate leadership that we have ever seen. And you really have to give Steve credit for that. He really spent the last four years of his life making sure the company would be prepared to carry on without him."

Love this stuff. My favorite rags to riches story.

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