Yahoo 2015 Annual Report Download - page 142

$2 billion. The March 2015 program, according to its terms, will expire in March 2018. The aggregate
amount available under the March 2015 repurchase program was $2 billion at December 31, 2015.
Repurchases under the repurchase programs may take place in the open market or in privately
negotiated transactions, including structured and derivative transactions such as accelerated share
repurchase transactions, and may be made under a Rule 10b5-1 plan.
During the year ended December 31, 2015, the Company repurchased approximately 4 million shares
of its common stock under its November 2013 program at an average price of $47.65 per share for a
total of $204 million.
In September and October 2014, the Company entered into two unrelated accelerated share
repurchase agreements (“ASR”) with a financial institution to repurchase shares of its common stock.
Under the September 2014 agreement, the Company prepaid $1.1 billion and approximately 15 million
shares were initially delivered to the Company on September 30, 2014 and are included in treasury
stock. Final settlement occurred on October 17, 2014, resulting in a total of approximately 23.5 million
shares, inclusive of shares initially delivered, repurchased for $933 million, all of which are included in
treasury stock. The Company received a return of cash for the remaining amount not settled in shares
of $167 million. Under the October 2014 agreement, the Company prepaid the maximum repurchase
amount of $1.0 billion and approximately 15 million shares were initially delivered on October 30,
2014. Final settlement occurred on December 9, 2014, resulting in a total of approximately 16 million
shares, inclusive of shares initially delivered, repurchased for $800 million, all of which are included in
treasury stock. The Company received a return of cash for the remaining amount not settled in shares
of $200 million. Both ASR agreements were entered into pursuant to the Company’s existing share
repurchase program.
The Company accounted for the September 2014 ASR as two separate transactions:
(i) approximately 15 million shares of common stock initially delivered to the Company, and $600
million was accounted for as a treasury stock transaction and (ii) the remaining $500 million
unsettled portion of the contract was determined to be a forward contract indexed to the Company’s
own common stock. The initial delivery of approximately 15 million shares resulted in an immediate
reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average
common shares outstanding for basic and diluted net income per share. The Company has
determined that the forward contract, indexed to its common stock, met all of the applicable criteria
for equity classification. The Company recorded $600 million as treasury stock and recorded $500
million, the implied value of the forward contract, in additional paid-in capital on the consolidated
balance sheets as of September 30, 2014. As the remainder of the shares were delivered to the
Company, in the fourth quarter of 2014, the forward contract was reclassified from additional paid-in
capital to treasury stock for the value of the additional shares received, and additional paid-in capital
was debited for the cash returned for the remaining amount of shares not settled.
During the year ended December 31, 2014, in addition to the repurchase under the ASR’s, the
Company repurchased approximately 62 million shares of its common stock under its stock
repurchase program at an average price of $39.30 per share for a total of approximately $2.4 billion.
During the year ended December 31, 2013, the Company repurchased approximately 129 million
shares of its common stock under a previous stock repurchase program approved by the Company’s
Board in May 2012 at an average price of $25.95 per share for a total of $3.3 billion. These
repurchases included the Company’s repurchase of 40 million shares of its common stock beneficially
owned by Third Point LLC on July 25, 2013. These shares were repurchased pursuant to a purchase
agreement entered into on July 22, 2013, prior to the market opening for trading in Yahoo stock, and
at $29.11 per share, which was the closing price of the Company’s common stock on July 19, 2013. The
total purchase price for these shares was $1.2 billion. The repurchase transaction was funded
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