Apple Expands Capital Return Program, Implements 7:1 Stock Split

Tim Cook’s company is among the largest dividend payers in the world

Cash-cow Apple Inc. has announced another increase to the company’s program to return capital to shareholders, planning to use in excess of $130 billion (€94 billion) by the end of next year.

The Board of Directors at Apple has authorized the second major increase to the capital return program, upping the share repurchase authorization by $90 billion (€65 billion) from the $60 billion (€43.3 billion) level announced last year.

Apple will use $1 billion (€723,170,000) each year to net-share-settle vesting restricted stock units. The company’s quarterly dividend has been increased to 8, leading to a dividend of $3.29 (€2.38) per common share, which vest on May 15, 2014 for “shareholders of record as of the close of business on May 12, 2014,” according to the press release.

Dividends will increase annually, Apple said, adding that it is among the largest dividend payers in the world, with annual payments of $11 billion (€7.95 billion). The Mac maker also noted that it had spent $66 billion (€47.7 billion) in cash on its capital return program from August 2012 through March 2014.

“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,” the company noted.

CEO Tim Cook said, “We are announcing a significant increase to our capital return program. 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.”

Finally, the announcement includes a seven-for-one stock split that enables every Apple shareholder to receive six additional shares for every share held on June 2. According to the press release, trading will begin on a split-adjusted basis on June 9, just after the Worldwide Developers Conference draws to a close.

Yesterday, Apple reported record earnings for the quarter ended March 29, 2014, posting quarterly revenue of $45.6 billion (€32.9 billion) and quarterly net profit of $10.2 billion (€7.38 billion).

Tim Cook also said, “We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”

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