Microsoft 2009 Annual Report Download - page 32

PAGE 32
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Share Repurchases
On September 22, 2008, we announced the completion of the two repurchase programs approved by our Board of
Directors during the first quarter of fiscal year 2007 to buy back up to $40.0 billion of Microsoft common stock. On
September 22, 2008, we also announced that our Board of Directors approved a new share repurchase program
authorizing up to $40.0 billion in share repurchases with an expiration date of September 30, 2013. We repurchased
318 million shares for $8.2 billion during the fiscal year ended June 30, 2009; 101 million shares were repurchased
for $2.7 billion under the repurchase program approved by our Board of Directors during the first quarter of fiscal
year 2007 and 217 million shares were repurchased for $5.5 billion under the repurchase program approved by our
Board of Directors during the first quarter of fiscal year 2009. As of June 30, 2009, approximately $34.5 billion
remained of the $40.0 billion approved repurchase amount. All repurchases were made using cash resources. The
repurchase program may be suspended or discontinued at any time without notice.
Dividends
During fiscal years 2009 and 2008, our Board of Directors declared the following dividends:
Declaration Date Per Share Dividend Record Date
T
otal Amount
Payment Date
(in millions)
(Fiscal year 2009)
September 19, 2008 $0.13 November 20, 2008 $1,157 December 11, 2008
December 10, 2008 $0.13 February 19, 2009 $1,155 March 12, 2009
March 9, 2009 $0.13 May 21, 2009 $1,158 June 18, 2009
June 10, 2009 $0.13 August 20, 2009 $1,158 September 10, 2009
(Fiscal year 2008)
September 12, 2007 $0.11 November 15, 2007 $1,034 December 13, 2007
December 19, 2007 $0.11 February 21, 2008 $1,023 March 13, 2008
March 17, 2008 $0.11 May 15, 2008 $1,020 June 12, 2008
June 11, 2008 $0.11 August 21, 2008 $ 998 September 11, 2008
We believe existing cash, cash equivalents, and short-term investments, together with funds generated from
operations, should be sufficient to meet operating requirements, regular quarterly dividends, debt repayment
schedules, and share repurchases. Our philosophy regarding the maintenance of a balance sheet with a large
component of cash and cash equivalents, short-term investments, and equity and other investments, reflects our
views on potential future capital requirements relating to research and development, creation and expansion of sales
distribution channels, investments and acquisitions, share dilution management, legal risks, and challenges to our
business model. We regularly assess our investment management approach in view of our current and potential
future needs.
Off-Balance Sheet Arrangements
We provide indemnifications of varying scope and size to certain customers against claims of intellectual property
infringement made by third parties arising from the use of our products and certain other matters. We evaluate
estimated losses for these indemnifications under SFAS No. 5, Accounting for Contingencies, as interpreted by
Financial Accounting Standards Board Interpretation (“FIN”) No. 45, Guarantor’s Accounting and Disclosure
Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others. We consider such factors
as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount
of loss. To date, we have not encountered significant costs as a result of these obligations and have not accrued any
liabilities related to these indemnifications in our financial statements.