Apple to Spend $45 Billion on Dividend & Stock Buy Back

Monday, March 19, 2012
By OP Editor

No, Tim Cook didn’t spend Apple’s $100 billion cash reserve on kitchen renovation nor buying Foxconn.

Apple Conference Call March 19, 2012

“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.

Apple’s financial conference call this morning (transcript highlight at macrumors):

  • Apple “plans to initiate” quarterly dividend of $2.65 per share starting in Q4 of fiscal 2012, which begins on July 1, 2012
  • $10 billion share repurchase program over three years, designed to reduce dilution from future employee equity grants and employee stock purchase programs

Companies usually issue dividend when it can’t figure out what to do with its cash. Perhaps it should buy more companies?

In recent years, Apple bought companies such mapping company C3 technologies and Siri (and added the Apple personality). Apple could use half of its cash reserves money to buy up some companies, but perhaps too many acquisitions will dilute Apple’s culture.

But Tim Cook explains how Apple used some of its cash reserve:

“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.”

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Tags: Apple, Financials

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