Adobe 2010 Annual Report Download - page 75

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During fiscal 2009, we accrued total restructuring charges of approximately $44.7 million of which approximately
$31.0 million related to ongoing termination benefits and contract terminations which were substantially paid during fiscal
2010. The remaining $13.7 million related to the cost of closing redundant facilities that are expected to be paid through
2013. During fiscal 2009, we made payments related to the above restructuring plans totaling approximately $49.7 million
which consisted of approximately $37.6 million related to termination benefits and contract terminations and approximately
$12.1 million related to the cost of closing redundant facilities.
Other Liquidity and Capital Resources Considerations
Our existing cash, cash equivalents and investment balances may fluctuate during fiscal 2011 due to changes in our
planned cash outlay, including changes in incremental costs such as direct and integration costs related to our acquisitions.
Cash from operations could also be affected by various risks and uncertainties, including, but not limited to the risks detailed
in Part I, Item 1A titled “Risk Factors.” However, based on our current business plan and revenue prospects, we believe that
our existing balances, our anticipated cash flows from operations and our available credit facility will be sufficient to meet
our working capital and operating resource expenditure requirements for the next twelve months.
As of December 3, 2010, the amount outstanding under the Notes was $1.5 billion. On February 1, 2010, we used $1.0
billion of the proceeds from this offering to pay the outstanding balance on our credit facility. The remainder of the proceeds
from the Notes are available for general corporate purposes. There is no outstanding balance under our credit facility and the
entire $1.0 billion credit line remains available for borrowing.
We use professional investment management firms to manage a large portion of our invested cash. External investment
firms managed, on average, 79% of our consolidated invested balances during the fourth quarter of fiscal 2010. The fixed
income portfolio is primarily invested in U.S. Treasury securities, U.S. agency securities, municipal securities, corporate
bonds and foreign government securities.
Stock Repurchase Program I
To facilitate our stock repurchase program, designed to return value to our stockholders and minimize dilution from
stock issuances, we repurchase shares in the open market and also enter into structured repurchases with third-parties.
Authorization to repurchase shares to cover on-going dilution was not subject to expiration. However, this repurchase
program was limited to covering net dilution from stock issuances and was subject to business conditions and cash flow
requirements as determined by our Board of Directors from time to time.
During the third quarter of fiscal 2010, our Board of Directors approved an amendment to our stock repurchase program
authorized in April 2007 from a non-expiring share-based authority to a time-constrained dollar-based authority. As part of
this amendment, the Board of Directors granted authority to repurchase up to $1.6 billion in common stock through the end
of fiscal 2012. This amended program did not affect the $250.0 million structured stock repurchase agreement entered into
during March 2010. As of December 3, 2010, no prepayments remain under that agreement.
During fiscal 2010, 2009 and 2008 we entered into several structured repurchase agreements with large financial
institutions, whereupon we provided the financial institutions with prepayments of $850.0 million, $350.0 million and $525.0
million, respectively. Of the $850.0 million of prepayments during fiscal 2010, $250.0 million was under the stock
repurchase program prior to the program amendment and the remaining $600.0 million was under the amended $1.6 billion
time-constrained dollar-based authority. We entered into these agreements in order to take advantage of repurchasing shares
at a guaranteed discount to the Volume Weighted Average Price (“VWAP”) of our common stock over a specified period of
time. We only enter into such transactions when the discount that we receive is higher than the foregone return on our cash
prepayments to the financial institutions. There were no explicit commissions or fees on these structured repurchases. Under
the terms of the agreements, there is no requirement for the financial institutions to return any portion of the prepayment to
us.
The financial institutions agree to deliver shares to us at monthly intervals during the contract term. The parameters used
to calculate the number of shares deliverable are: the total notional amount of the contract, the number of trading days in the
contract, the number of trading days in the interval, and the average VWAP of our stock during the interval less the agreed
upon discount. During fiscal 2010, we repurchased approximately 31.2 million shares at an average price of $29.19 through
structured repurchase agreements entered into during fiscal 2009 and fiscal 2010. During fiscal 2009, we repurchased
approximately 15.2 million shares at an average price per share of $27.89 through structured repurchase agreements entered
into during fiscal 2008 and fiscal 2009. During fiscal 2008, we repurchased 22.4 million shares at an average price of $36.26
through structured repurchase agreements which included prepayments from fiscal 2007.