Yahoo 2008 Annual Report Download - page 99

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
In addition, the Board 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. The Company repurchases its common stock from time to time primarily to reduce the dilutive
effects of the Company’s stock options, awards, and employee stock purchase plan.
Stock Repurchases. In March 2005, the Board 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, stock 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 Board 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 from the date of
authorization, dependent on market conditions, stock 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. Under this program, in the year ended December 31, 2008, the Company repurchased
3.4 million shares of common stock directly at an average price of $23.39 per share, for total consideration of
$79 million. The remaining authorization under the Company’s share repurchase program is approximately
$1.1 billion.
In addition, upon the vesting of certain restricted stock awards during the year ended December 31, 2008,
1.1 million shares of such vested stock were reacquired by the Company to satisfy tax withholding obligations.
These repurchased shares were recorded as $27 million of treasury stock and accordingly reduced the number of
common shares outstanding by 1.1 million.
Structured Stock Repurchases. During the year ended December 31, 2006, the Company had settlements of
structured stock repurchase transactions for a total amount of $0.5 billion which the Company entered into in
2005 resulting in repurchases of 15.1 million shares at an average price of $32.88 per share. A structured stock
repurchase transaction for the amount of $250 million that the Company entered into in 2005 was settled in cash
resulting in cash proceeds of $272 million in 2006. The Company also entered into structured stock repurchase
transactions for a total amount of $0.5 billion in 2006. All of these transactions were settled in stock during the
year ended December 31, 2006 resulting in the repurchase of 16.5 million shares at an average price of $30.25
per share. During the year ended December 31, 2007, the Company entered into a $250 million structured stock
repurchase transaction. This transaction matured and settled in 2007. The Company received 8.4 million shares
of its common stock at an effective buy-back price of $29.80 per share. The structured stock repurchase
transactions were recorded in stockholders’ equity on the consolidated balance sheets. During the year ended
December 31, 2008, the Company had no structured stock repurchase transactions.
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