Walgreens to repurchase $2 billion in stock

DEERFIELD, Ill. The board of directors of Walgreens announced it has authorized a new $2 billion share repurchase program. The program, which expires at the end of 2013, replaces the previous $1 billion plan announced in January 2007, which had approximately $655 million remaining. Since 2004, Walgreens has repurchased more than $1.3 billion of common stock.

The board also declared a regularly quarterly dividend of 13.75 cents per share, a 22.2% increase over the year-ago dividend, and set a long-term dividend payout target of 30% to 35% of net earnings.

“Walgreens generated a record $4.1 billion in cash flow from operations in fiscal 2009 as a result of its stronger operating performance and improved working capital. “We remain confident in our growth strategy and ability to drive earnings growth, increase return on invested capital and generate strong cash flow,” said Walgreens President and CEO Greg Wasson. “With that, we have outlined a capital policy to provide further clarity on our future uses of cash.”