The ASR process:
- Apple enters into an ASR agreement with an investment bank and pays full cash amount upfront.
- The bank borrows AAPL shares from portfolios of its brokerage clients and/or other brokerage houses, using the cash from Apple as collateral. The investment bank is now effectively SHORT.
- The investment bank delivers Apple the borrowed shares, equal to 85% of the payment, and outstanding shares are reduced immediately.
- The investment bank goes out to the open market and buys AAPL shares to cover its short position returning shares that it borrowed.
- When the ASR is complete, the bank settles with Apple the net remaining shares owed, further reducing outstanding shares.
We should expect to see a significant reduction in Apple's share count when it reports 2Q19 results. The effect on EPS is less known since the share count used in the calculation is a weighted average of outstanding shares over the quarter. However, it will be quite lower, and the ASR does not reflect the shares Apple might be buying back on its own using a 10b-5 plan.