Yahoo 2007 Annual Report Download - page 95

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Company is subject to tax. Over the next twelve months, the Company’s existing tax positions are expected to
generate an increase in total unrecognized tax benefits.
The Company’s federal income tax returns for the years ended December 31, 2003 and December 31, 2004 are
under examination by the Internal Revenue Service.
Note 11 STOCKHOLDERS’EQUITY
Stockholder Rights Plan. The Company adopted a stockholder rights plan and initially declared a dividend
distribution of one right for each outstanding share of common stock to stockholders of record as of March 20, 2001.
As a result of the Company’s two-for-one stock split effective May 11, 2004, each share of common stock is now
associated with one-half of one right. Each right entitles the holder to purchase one unit consisting of one one-
thousandth of a share of the Company’s Series A Junior Participating Preferred Stock for $250 per unit. Under
certain circumstances, if a person or group acquires 15 percent or more of the Company’s outstanding common
stock, holders of the rights (other than the person or group triggering their exercise) will be able to purchase, in
exchange for the $250 exercise price, shares of its common stock or of any company into which the Company is
merged having a value of $500. The rights expire on March 1, 2011, unless extended by the Company’s Board of
Directors. Because the rights may substantially dilute the stock ownership of a person or group attempting to take
over without the approval of the Board of Directors, the Company’s rights plan could make it more difficult for a
third-party to acquire the Company (or a significant percentage of its outstanding capital stock) without first
negotiating with the Board of Directors regarding that acquisition.
In addition, the Board of Directors has the authority to issue up to 10 million shares of Preferred Stock (of which
2 million shares have been designated as Series A Junior Participating Preferred Stock) and to determine the price,
rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or
action by the stockholders. The stockholder rights plan was not adopted in response to any effort to acquire control
of the Company.
Stock Repurchases. In March 2005, the Company’s Board of Directors authorized the repurchase of up to
$3.0 billion of its outstanding shares of common stock over the next five years, dependent on market conditions,
share price, and other factors. Under this program, during the year ended December 31, 2005, 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. During the year ended December 31, 2006, the Company repurchased 93.1 million shares of common
stock at an average price of $29.84 per share, including 31.6 million shares received upon the maturity of structured
stock repurchase transactions. Total cash consideration for the stock repurchases in 2006 was $2.8 billion which
consisted of $1.8 billion direct stock repurchases, $0.5 billion as a result of settlements of structured stock
repurchase transactions entered into in 2005, and $0.5 billion as a result of settlements of structured stock
repurchase transactions entered into in 2006. Including the $250 million structured stock transaction settled in
October 2006, the Company had substantially completed the $3.0 billion authorized stock repurchase program as of
September 30, 2006.
In October 2006, the Company’s Board of Directors authorized a new stock repurchase program allowing it to
repurchase up to $3.0 billion of its outstanding shares of common stock from time to time over the next five years,
dependent on market conditions, share price, and other factors. Repurchases may take place in the open market or in
privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.
Under this program, in the year ended December 31, 2007, the Company repurchased 57.9 million shares of
common stock directly at an average price of $27.34 per share. Total cash consideration for the repurchased stock
was $1.6 billion.
In addition, upon the vesting of certain restricted stock awards during the year ended December 31, 2007,
70,000 shares of such vested stock were reacquired by the Company to satisfy tax withholding obligations. These
93
Yahoo! Inc.
Notes to Consolidated Financial Statements — (Continued)