Alongside its Q2 2013 financial results, Apple has unveiled ambitious plans for its substantial cash reserves through a recent press release.
Previously, in March 2012, Apple had declared the initiation of a quarterly dividend of $2.65 per share, with the inaugural payment dispatched to shareholders in August of the preceding year, as detailed on TUAW.
Fast forward to approximately a year later, Apple has decided to raise its quarterly dividend to $3.05 per share, with the forthcoming distribution slated for May 16, 2013.
Additionally, there has been a significant escalation in Apple’s stock buyback strategy.
The company’s Board has approved an increase in the share repurchase authorization to $60 billion from the previously stated $10 billion. This adjustment marks the largest single share repurchase authorization ever and is planned to be completed by the end of 2015.
Furthermore, Apple anticipates using approximately $1 billion annually to net-share-settle vesting restricted stock units.
When Apple initially launched its dividend and stock repurchase scheme last year, it was projected that these actions would consume about $45 billion of Apple’s cash reserves. With the revised, more robust plans, Apple now expects to allocate $100 billion of its reserves towards rewarding shareholders and repurchasing shares.
The revised program anticipates the utilization of $100 billion in cash by the end of 2015, reflecting a $55 billion enhancement over the previous plan.
This equates to an average expenditure of $30 billion annually from the initial dividend payment in August 2012 through December 2015.
This strategic shift in cash utilization marks a significant departure from the approach under Steve Jobs, where Apple was typically more conservative with its cash pile.
Apple CEO Tim Cook stated in a press release, “We are extremely privileged to have the opportunity to more than double the size of the capital return program we introduced last year. We are so confident that repurchasing our shares is a prudent use of our capital that we have allocated the majority of the increased capital return program towards share repurchases.”
The reaction from Wall Street to both Apple’s earnings and its expanded capital return program has been positive.
Steven Sande is a dedicated writer for TUAW, bringing years of experience and a deep love for all things Apple. With a keen eye for detail, Steven covers everything from the latest iPhone and iPad releases to the newest features in macOS and watchOS. His insightful articles and reviews help readers stay informed and make the most of their Apple products. When he’s not writing, Steven enjoys exploring new apps and tinkering with his MacBook Pro.
