Apple today answered the question on many analysts’ and investors’ minds – namely, what the company planned to do with its almost US$100 billion in cash. Later this year, Apple will begin paying out a dividend and will start buying back shares.
The dividend program, which will begin in the fourth quarter of its 2012 fiscal year, will see payments of US$2.65 per share to shareholders – pending official declaration by the company’s board of directors.
In addition, the company will begin repurchasing shares ultimately worth US$10 billion, beginning in its 2013 fiscal year, which starts September 30. Apple expects the process to take around three years, and says that the intention behind the program is “neutralising the impact of dilution from future employee equity grants and employee stock purchase programs.”
According to Apple CEO Tim Cook, the buyback and dividend programs won’t harm the company’s bottom line. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business,” he said in a statement published on Apple’s website. “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.”
In the same statement, Apple COO Peter Oppenheimer said that “Combining dividends, share repurchases and cash used to net-share-settle vesting RSUs, we anticipate utilising approximately [US]$45 billion of domestic cash in the first three years of our programs.