Apple plots what to do with US$97bn war chest

19 Mar 2012

Pictured: Apple CEO Tim Cook - 'We have used some of our cash to make great investments in our business'

Having amassed an embarrassingly large war chest of US$97bn in cash, Apple is to put it to use by instigating US$45bn worth of programmes ranging from dividends to share purchase programmes.

This afternoon Apple announced a dividend and share purchase programme that will start later this year.

The company plans to initiate a quarterly dividend of US$2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.

Apple’s board of directors has authorised a US$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 neutralising the impact of dilution from future employee equity grants and employee stock purchase programmes.

“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,” CEO Tim Cook explained.

“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 programme.”

Plans to use US$45bn in three years

“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 programmes,” said Peter Oppenheimer, Apple’s CFO.

“We are extremely confident in our future and see tremendous opportunities ahead.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years