Apple today announced that its Board of Directors has authorized another
significant increase to the Company’s program to return capital to
shareholders. The Company expects to utilize a total of over $130
billion of cash under the expanded program by the end of calendar 2015.
As
part of the program, the Board has increased its share repurchase
authorization to $90 billion from the $60 billion level announced last
year. The Company expects to continue to utilize about $1 billion
annually to net-share-settle vesting restricted stock units.
Additionally,
the Board has approved an increase to the Company’s quarterly dividend
of approximately 8 percent and has declared a dividend of $3.29 per
common share, payable on May 15, 2014 to shareholders of record as of
the close of business on May 12, 2014. The Company also plans to
increase its dividend on an annual basis. With annual payments of $11
billion, Apple is among the largest dividend payers in the world.
From August 2012 through March 2014, Apple has spent $66 billion in cash on its capital return program.
To
assist in funding the program, the Company expects to access the public
debt markets during 2014, both domestically and internationally, for an
amount of term debt similar to what the Company raised during 2013. The
management team and the Board of Directors will continue to review each
element of the capital return program regularly.
“We are
announcing a significant increase to our capital return program,” said
Tim Cook, Apple’s CEO. “We’re confident in Apple’s future and see
tremendous value in Apple’s stock, so we’re continuing to allocate the
majority of our program to share repurchases. We’re also happy to be
increasing our dividend for the second time in less than two years.”
The
Board of Directors has also announced a seven-for-one stock split.
Each Apple shareholder of record at the close of business on June 2,
2014 will receive six additional shares for every share held on the
record date, and trading will begin on a split-adjusted basis on June 9,
2014.
AAPL is currently up over 7% in after market trading.
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