Covidien plc (NYSE: COV) today announced that its Board of Directors has declared a 23% increase in the quarterly dividend rate, from $0.26 per ordinary share to $0.32 per ordinary share. “This increase reflects our good performance to date in 2013 and our confidence in further growth,” said José (Joe) E. Almeida, Chairman, President and CEO. “We remain committed to using our strong cash flow to fund business expansion, while returning at least 50% of our free cash flow to shareholders through dividends and share repurchases. In the last twelve months, we have exceeded this target, returning over 125% of our free cash flow to shareholders. “As we have previously announced, the Company intends to continue to increase its dividend and is targeting a dividend payout ratio -- dividends paid per share divided by adjusted earnings per share -- in excess of 35% over time,” Almeida added. "Because of this, we expect dividends to increase at or above the rate of earnings growth for the next several years." At the new rate, the annual dividend is $1.28 per ordinary share compared to the previous rate of $1.04 per ordinary share. The next quarterly dividend is payable on November 5, 2013, to shareholders of record on October 10, 2013. ABOUT COVIDIEN 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 products in medical devices and supplies. With 2012 revenue of $9.9 billion, Covidien has 38,000 employees worldwide in 70 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.
This non-GAAP financial measure should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The Company’s definition of this non-GAAP measure may differ from similarly titled measures used by others. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the twelve months ended June 28, 2013, net cash provided by operating activities of $2.175 billion, less capital expenditures of $517 million resulted in free cash flow of $1.658 billion.FORWARD-LOOKING STATEMENTS Any statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on our management's current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or Company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, our ability to effectively introduce and market new products or keep pace with advances in technology, the reimbursement practices of a small number of large public and private insurers, cost-containment efforts of customers, purchasing groups, third-party payors and governmental organizations, intellectual property rights disputes, complex and costly regulation, including healthcare fraud and abuse regulations and the Foreign Corrupt Practices Act, manufacturing or supply chain problems or disruptions, rising commodity costs, recalls or safety alerts and negative publicity relating to Covidien or its products, product liability losses and other litigation liability, divestitures of some of our businesses or product lines, our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses, competition, risks associated with doing business outside of the United States, foreign currency exchange rates and environmental remediation costs. These and other factors are identified and described in more detail in our Annual Report on Form 10-K for the fiscal year ended September 28, 2012, and in subsequent filings with the SEC. We disclaim any obligation to update these forward-looking statements other than as required by law.