Cisco 2010 Annual Report Download - page 68

Notes to Consolidated Financial Statements
12. Shareholders’ Equity
(a) Stock Repurchase Program
In September 2001, the Company’s Board of Directors authorized a stock repurchase program. As of July 31, 2010, the Company’s
Board of Directors had authorized an aggregate repurchase of up to $72 billion of common stock under this program and the
remaining authorized repurchase amount was $7.0 billion with no termination date. A summary of the stock repurchase activity
under the stock repurchase program, reported based on the trade date, is summarized as follows (in millions, except per-share
amounts):
Shares
Repurchased
Weighted-
Average Price
per Share
Amount
Repurchased
Cumulative balance at July 26, 2008 2,600 $ 20.60 $ 53,579
Repurchase of common stock under the stock repurchase program 202 17.89 3,600
Cumulative balance at July 25, 2009 2,802 $ 20.41 $ 57,179
Repurchase of common stock under the stock repurchase program 325 24.02 7,803
Cumulative balance at July 31, 2010 3,127 $ 20.78 $ 64,982
The purchase price for the shares of the Company’s stock repurchased is reflected as a reduction to shareholders’ equity. The
Company is required to allocate the purchase price of the repurchased shares as (i) a reduction to retained earnings until retained
earnings are zero and then as an increase to accumulated deficit and (ii) a reduction of common stock and additional paid-in
capital. Issuance of common stock and the tax benefit related to employee stock incentive plans are recorded as an increase to
common stock and additional paid-in capital.
(b) Other Repurchases of Common Stock
For the years ended July 31, 2010 and July 25, 2009, the Company repurchased approximately 5.6 million and 1.1 million shares,
respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock or stock units.
(c) Preferred Stock
Under the terms of the Company’s Articles of Incorporation, the Board of Directors may determine the rights, preferences, and
terms of the Company’s authorized but unissued shares of preferred stock.
(d) Comprehensive Income
The components of comprehensive income, net of tax, are as follows (in millions):
Years Ended July 31, 2010 July 25, 2009 July 26, 2008
Net income $ 7,767 $ 6,134 $ 8,052
Net change in unrealized gains/losses on available-for-sale investments:
Change in net unrealized gains (losses), net of tax effects of $199, $(33), and $17,
respectively 334 (71) 57
Net unrealized (gains) losses reclassified into earnings, net of tax effects of $17, $10, and
$30, respectively (151) 33 (79)
Net change in unrealized gains/losses on derivative instruments:
Change in derivative instruments, net of tax effects of $9,$(16), and $0, respectively 46 (141) 60
Net unrealized (gains) losses reclassified into earnings, net of tax effects 2108 (60)
Net change in cumulative translation adjustment and other, net of tax effects (55) (192) 227
Comprehensive income 7,943 5,871 8,257
Comprehensive loss (income) attributable to noncontrolling interests 12 19 (39)
Comprehensive income attributable to Cisco Systems, Inc. $ 7,955 $ 5,890 $ 8,218
The components of AOCI, net of tax, are summarized as follows (in millions):
July 31, 2010 July 25, 2009 July 26, 2008
Net unrealized gains on investments $ 333 $ 138 $ 206
Net unrealized gains (losses) on derivative instruments 27 (21) 12
Cumulative translation adjustment and other 263 318 510
Total $ 623 $ 435 $ 728
66 Cisco Systems, Inc.