Apple announces a dividend and share repurchase program

During a conference call held earlier today, Apple CEO Tim Cook announced plans to launch a quarterly dividend of $2.65 per share, and revealed that the company’s board of directors has authorised a $10 billion share repurchase program.

Although the programs are expected to cost $45 billion over the first three years, Cook assured investors that the company would still have enough money to both maintain a “war chest”, and operate their business.

Just before the conference call started, the following press release was issued by Apple, outlining their plans:

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.”

A recording of the conference call is available, for a limited time, on this page of Apple’s website.