Yahoo 2008 Annual Report Download - page 53

years from the date of authorization, depending on market conditions, stock price, and other factors. We
repurchase our common stock from time to time primarily to reduce the dilutive effects of our stock options,
awards, and employee stock purchase plan. 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, during the year ended December 31, 2008, we repurchased 3.4 million shares of common
stock at an average price of $23.39 per share. Total cash consideration for the repurchased stock was $79 million.
In addition, upon the vesting of certain restricted stock awards during the year ended December 31, 2008, we
reacquired 1.1 million shares of such vested stock to satisfy tax withholding obligations. These repurchased
shares were recorded as $27 million of treasury stock and reduced the number of common shares outstanding by
1.1 million, accordingly. Treasury stock is accounted for under the cost method. See Note 11—“Stockholders’
Equity” in the Notes to the consolidated financial statements for additional information.
Capital expenditures
Capital expenditures are generally comprised of purchases of computer hardware, software, server equipment,
furniture and fixtures, and real estate. Capital expenditures, net were $675 million in 2008, compared to $602
million in 2007 and $689 million in 2006, which included $112 million for a land purchase in Santa Clara,
California. Our capital expenditures in the first quarter of 2009 are expected to be consistent with the first quarter
of 2008.
Contractual obligations and commitments
The following table presents certain payments due under contractual obligations with minimum firm
commitments as of December 31, 2008 (in millions):
Payments Due by Period
Total
Due in
2009
Due in
2010-2011
Due in
2012-2013 Thereafter
Operating lease obligations(1) .......................... 861 149 235 178 299
Capital lease obligation(2) ............................. 82 7 14 15 46
Affiliate commitments(3) .............................. 360 142 218 — —
Non-cancelable obligations(4) .......................... 178 92 67 15 4
FIN 48 obligations including interest and penalties(5) ....... 358 6 — — 352
Total contractual obligations ...................... $1,839 $396 $534 $208 $701
(1) We have entered into various non-cancelable operating lease agreements for our offices throughout the U.S.
and for our international subsidiaries with original lease periods up to 23 years, expiring between 2009 and
2027. See Note 13—“Commitments and Contingencies” in the Notes to the consolidated financial statements
for additional information.
(2) During the year ended December 31, 2008, we entered into an 11 year lease agreement for a data center in the
western U.S. Of the total expected minimum lease commitment of $105 million, $21 million is classified as
an operating lease for real estate and $84 million is classified as a capital lease for equipment. We have the
option to renew this lease for up to an additional 10 years.
(3) We are obligated to make minimum payments under contracts to provide sponsored search and/or display
advertising services to our Affiliates, which represent TAC.
(4) We are obligated to make payments under various arrangements with vendors and other business partners,
principally for marketing, bandwidth, and content arrangements.
(5) As of December 31, 2008, unrecognized tax benefits and potential interest and penalties resulted in accrued
liabilities of $358 million, of which $6 million is classified as accrued expenses and other current liabilities
and $352 million is classified as deferred and other long-term tax liabilities, net on our consolidated balance
sheets. As of December 31, 2008, the settlement period for the $352 million long-term income tax liabilities
cannot be determined; however, the liabilities are not expected to become due within the next twelve months.
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