WOONSOCKET, R.I. — CVS Caremark’s board of directors has approved a new share repurchase program for up to $4 billion of the company's outstanding common stock.
The share repurchase authorization, which is effective immediately, enables the pharmacy retailer to affect 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.
"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,” CVS Caremark EVP and CFO Dave Denton said.
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, the company noted.