Dividends under this program are subject to a declaration of a dividend by the Board of Directors. Subject to this declaration, a quarterly dividend of $0.40 per share would be paid in September 2012 and implies an annual dividend rate of $1.60 per share. On an annual basis, this represents a cash outflow of over $100 million dollars resulting in a payout ratio of approximately 25% of our expected fiscal 2012 net earnings. This level represents a payout ratio of over 40% of the roughly $250 million per year of US cash flow that we generate. And we believe this is a prudent level of which to initiate such a policy.
We believe that initiating a dividend at this level will be meaningful to our shareholders and provides sufficient financial possibility to continue making opportunistic share repurchases and bolt-on acquisitions. Accordingly our board has also approved a share repurchase authorization of 10 million shares. The decision to initiate a dividend and the payout level was given careful consideration. We listen to our shareholders in order to better understand their review of Energizer and how we can best deliver their value back to them.
As you know capital allocation policy is an important element in delivering value and historically we have relied solely on an opportunistic repurchases in this regard. We believe that now is the appropriate time to augment our share buyback program with a dividend in order to enhance the overall value delivered to our shareholders. This will provide an element of yield and certainty of return which is highly valued by our investors today. Now I will turn the call over to Dan.
Dan SescleiferThanks Ward. Before reviewing the second quarter results I would like to first highlight an important internal initiative that is underway. Over the past year we conducted a study to evaluate our networking capital levels and identifying opportunities for improvement. Historically our working capital metrics have not compared favorably with many companies in our peer group. There are a number of structural reasons why our working capital is higher than other HPC companies. Read the rest of this transcript for free on seekingalpha.com