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Covidien plc (NYSE: COV) today announced that its Board of Directors has declared a 16% increase in the quarterly dividend rate, from $0.225 per ordinary share to $0.26 per ordinary share.
“This increase reflects our good performance to date in 2012, our commitment to enhance shareholder value and the Board’s confidence in our future growth prospects,” said José (Joe) E. Almeida, Chairman, President and CEO. “Both the Board and our senior management team are confident that our expected cash flow generation over the next several years will support future dividend increases and a higher dividend payout ratio.
“This increase is consistent with our commitment to balance cash return to shareholders with reinvestment in our business,” Almeida added. “In the last twelve months, we have returned 83% of our free cash flow to shareholders through dividends and stock buybacks, well above our recently increased target of 50%. We intend to expand the dividend payout ratio and are planning future dividend increases which exceed expected EPS growth.”
At the new rate, the annual dividend is $1.04 per ordinary share compared to the previous rate of $0.90 per ordinary share. The next quarterly dividend is payable on November 5, 2012, to shareholders of record on October 11, 2012.
Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in three segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2011 revenue of $11.6 billion, Covidien has 43,000 employees worldwide in more than 65 countries, and its products are sold in over 140 countries. Please visit
www.covidien.com to learn more about our business.
NON-GAAP FINANCIAL MEASURES
This press release contains a financial measure, free cash flow, which is considered a “non-GAAP” financial measure under applicable Securities & Exchange Commission rules and regulations.