CVS Caremark Corporation (NYSE: CVS) today announced that its board of directors has approved a new share repurchase program for up to $4.0 billion of the company's outstanding common stock. The share repurchase authorization, which is effective immediately, 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 it intends to complete its $2 billion share repurchase program, authorized in June 2010, this year as expected. In addition, the company intends to repurchase approximately $1 billion under the new authorization by the end of this year.
Dave Denton, executive vice president and chief financial officer of CVS Caremark, stated, "We're very pleased with the board's decision. We believe it reflects their continued confidence in the future growth of CVS Caremark as well as an ongoing commitment to increase shareholder value."
Denton continued, "Over the next several years, we expect to generate significantly more free cash flow than what we've generated in the past several years. We have a disciplined approach to capital allocation that encompasses investing in internal projects that meet our return hurdles and utilizing our remaining free cash flow to increase shareholder value through dividends and share repurchases. We intend to continue to review our dividend annually and to 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.