Apple holding Lion’s share of cash, gives back

Apple Inc held a conference call this morning with CEO Tim Cook and CFO Peter Oppenheimer. The only topic for discussion was the company’s decision on what to do with the $98 billion on hand.

Apple followed up the conference call with a press release on the matter. While much of the money is overseas and would be heavily taxed to bring it back stateside, Apple plans to use its domestic cash to initiate a quarterly dividend and a stock repurchase program.

Apple last paid a dividend in 1995 and proposes a quarterly dividend of $2.65 per share. This is yet to be declared by the board but is anticipated to begin starting in the September quarter. Apple shares are currently valued at $595.24.

Along with the planned dividend, Apple plans a share repurchase program beginning in fiscal year 2013 for three years. Apple’s Board of Directors have authorized $10 billion to be spent on the repurchase program with the intent to neutralize diluting the value of stock from “future employee equity grand 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.”

With QuickTime, you can listen to the webcast rebroadcast for the next two weeks at


Categories : Business
Posted by Jason Hamilton | March 19, 2012  |  No Comment

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