Apple has announced plans to initiate a dividend and share repurchase program commencing later this year. When you combine dividends, share repurchases, and cash used to net-share-settle vesting RSUs, Apple anticipates using approximately $45 billion of domestic cash in the first three years of their programs. At first glance this seems like a large investment, but you will notice that Apple talks about expecting to spend the $45 billion over 3 years. During this time period, Apple will more than likely release 3 new version of its highly popular iPad and iPhone lines which should continue to add to the companies ridiculous cash holdings. So basically, if Apple maintains their current pace then this will actually have a very minimal effect on their total amount of cash on hand. Look at it this way, if Apple evenly distributes this over 3 years, that would be $15 billion a year which would still leave their available cash somewhere in the $90 billion range. The company has been under ever increasing pressure to come off a significant portion of their cash war chest and even though this doesn’t really do that over the long term it should get investors off their backs.
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.