CVS Caremark Corporation (NYSE: CVS) today announced that its Board of Directors has approved a new share repurchase program for up to $2.0 billion of its outstanding common stock. The share repurchase authorization, which is effective immediately and expires at the end of 2011, permits the Company to effect the repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase transactions, and/or other derivative transactions.
The Company also stated that during the second quarter of 2010 it repurchased approximately 16.7 million shares of common stock for approximately $613 million, completing the $2 billion repurchase program authorized in November 2009.
Dave Denton, Executive Vice President and Chief Financial Officer of CVS Caremark, stated, "We're very pleased with the Board's approval of this new share repurchase program and believe it reflects well-placed confidence in the future growth of CVS Caremark's business and an ongoing commitment to increase shareholder value. We're very focused on the efficient allocation of capital and we will continue to invest in internal projects that meet our return hurdles and use the rest of our remaining free cash flow to increase shareholder value."
Denton continued, "Over the next five years, we expect to generate significantly more free cash flow than what we've generated in the past five years and we expect to use the majority of that free cash flow in the near-term to enhance shareholder returns through dividends and share repurchases. We intend to continue to review our dividend annually and do share repurchases that are value enhancing."
There can be no assurance as to the amount, timing or prices of repurchases. The specific timing and amount of repurchases will vary based on market conditions and other factors. The share repurchase program may be modified, extended or terminated by the Board of Directors at any time.