Tags: Disney | Boosts | Dividend | cliff

Disney Joins Others in Raising Dividend Ahead of Fiscal Cliff

Wednesday, 28 Nov 2012 04:38 PM

 

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Walt Disney Co., the world’s largest entertainment company, raised its annual dividend by 25 percent, joining other companies boosting their payouts ahead of an expected increase in tax rates.

The 75-cent-a-share payment will be made on Dec. 28 to shareholders as of Dec. 10, the Burbank, California-based company said Wednesday in a statement. Last year’s 60-cent annual dividend was announced paid to investors in January.

Disney had been expected to increase its dividend to 70 cents, based on Bloomberg Dividend Projections. The company joins others increasing and accelerating payouts to take advantage of current tax rates. The 15 percent levy on dividend income is set to rise to as high as 39.6 percent on Jan. 1 as Bush-era tax cuts expire. President Barack Obama and members of Congress are negotiating to avert the so-called fiscal cliff.

The move by Disney follows record revenue and profit in the fiscal year that ended Sept. 29, according to Chairman and Chief Executive Officer Robert A. Iger.

“Fiscal 2012 was another great year for the Walt Disney Company, creatively and financially,” Iger said in the statement.

Disney will pay out about $1.3 billion with the dividend. The Steven P. Jobs Trust, the company’s largest shareholder, will receive about $103 million, based on data compiled by Bloomberg. The 75-cent payment is more than twice the 35 cents paid in 2009.

Special Payouts

In addition to raising dividends and paying them sooner to beat the tax increase, companies are also declaring special dividends.

More than 70 companies in the Russell 3000 stock index have announced a one-time cash payment to shareholders since September, up from about 15 in the year-earlier quarter, according to data compiled by Bloomberg. More than a dozen said they acted due to pending tax increases.

Disney shares gained 1.2 percent to $49.20 Wednesday in New York. The shares have climbed 31 percent this year.

© Copyright 2014 Bloomberg News. All rights reserved.

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