DEERFIELD, Ill., July 25, 2012 - Baxter International Inc. (NYSE:BAX) today announced a 34 percent increase in its dividend rate and a new share repurchase program.
Baxter's Board of Directors declared a quarterly dividend of $0.45 per Baxter common share, payable on October 1, 2012 to shareholders of record as of the close of business on September 7, 2012. This represents an annual dividend rate of $1.80 per share, and an increase of more than 34 percent over the previous annual rate of $1.34. With this increase, Baxter's current payout ratio increases from approximately 30 percent to approximately 40 percent.
Baxter's Board of Directors also approved a new share repurchase authorization of up to $2.0 billion of the company's common stock. The company has approximately $450 million of remaining authorization under a previous $2.5 billion share repurchase program approved in December 2010. Shares will be repurchased in the open market at times and amounts determined by the company based on its evaluation of market conditions and other factors.
"Baxter remains committed to a disciplined capital allocation strategy, which includes returning value to shareholders through both dividends and share repurchases," said Robert J. Hombach, chief financial officer. "With our strong balance sheet and sustained ability to generate significant cash flow, our company continues to have flexibility to invest in opportunities that will enhance long-term growth and create value for our shareholders."
Baxter continues to generate strong cash flow and has returned significant value to shareholders in the form of dividends and share repurchases. Over the last five years (2007-2011), Baxter has generated an average of $2.7 billion in cash flow annually and has returned more than $11.4 billion cumulatively to shareholders through dividends and share repurchases.
Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.
This release includes forward-looking statements concerning the company's dividend and share repurchase authorization. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: continued strength in the company's financial position, including cash flows; future decisions of the board of directors of the company with respect to the repurchase of shares and the payment of dividends relative to alternative uses of funds; and other risks identified in the company's most recent filing on Form 10-K and other SEC filings, all of which are available on the company's website. The company does not undertake to update its forward-looking statements.