Yahoo 2005 Annual Report Download - page 93

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87
ended December 31, 2005, the Company repurchased 6.8 million shares of common stock at an average
price of $32.90 per share, for total consideration of $223 million.
In total for the year ended December 31, 2005, under the expired and current stock repurchase programs,
the Company repurchased 11.7 million shares of common stock at an average price of $33.20 per share, for
total consideration of $388 million. On a cumulative basis, the Company has repurchased 44.6 million
shares, which are recorded as part of treasury stock. Treasury stock is accounted for under the cost method.
Structured Stock Repurchases. During the year ended December 31, 2004, the Company entered into
$150 million in structured stock repurchase transactions which settle in cash or stock depending on the
market price of Yahoo!’s common stock on the date of maturity. Of these transactions, $75 million settled
in 2004 resulting in the Company receiving $80 million in cash. The remaining $75 million settled in 2005,
resulting in the Company receiving $82 million in cash.
During the year ended December 31, 2005 the Company entered into $1,395 million in structured stock
repurchase transactions. Of these transactions, $650 million settled in 2005 resulting in the Company
receiving $702 million in cash.
As of December 31, 2005, the outstanding structured stock repurchase tranches totaling $745 million will
mature as follows:
• In the first quarter of 2006, a $250 million tranche will mature and if the market price of Yahoo!
common stock is at or above $33.98 the Company will have its investment returned with a premium.
If the market price is below $33.98 the Company will repurchase 8.0 million shares of its common
stock.
• In the first quarter of 2006, a $110 million tranche will mature and if the market price of Yahoo!
common stock is at or above $38.66 the Company will have its investment returned with a premium.
If the market price is below $38.66 the Company will repurchase 3.0 million shares of its common
stock.
• In the second quarter of 2006, a $250 million tranche will mature and if the market price of Yahoo!
common stock is at or above $33.99 the Company will have its investment returned with a premium.
If the market price is below $33.99 the Company will repurchase 8.3 million shares of its common
stock.
• In the second quarter of 2006, a $135 million tranche will mature and if the market price of Yahoo!
common stock is at or above $38.66 the Company will have its investment returned with a premium.
If the market price is below $38.66 the Company will repurchase 3.8 million shares of its common
stock.
The outstanding structured stock repurchase transactions as of the balance sheet dates are recorded in
stockholders’ equity on the consolidated balance sheets. See Note 17 — “Subsequent Events” for
additional information.
Note 12 EMPLOYEE BENEFITS
Benefit Plans. The Company maintains a Yahoo! Inc. 401(k) Plan (the “401(k) Plan”) for its full-time
employees in the United States. The 401(k) Plan allows employees of the Company to contribute up to the
Internal Revenue Code prescribed maximum amount. Employees may elect to contribute from 1 percent
to 50 percent of their annual compensation to the 401(k) Plan. The Company matches employee
contributions at a rate of 25 percent. Employee contributions are fully vested, whereas vesting in matching
Company contributions occurs at a rate of 33 percent per year of employment. During 2003, 2004, and
2005, the Company’s contributions to the 401(k) Plan amounted to approximately $5 million, $8 million