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2008 Annual Report 71
Notes to Consolidated Financial Statements
11. Shareholders’ Equity
(a) Stock Repurchase Program
In September 2001, the Company’s Board of Directors authorized a stock repurchase program. As of July 26, 2008, the Company’s Board of
Directors had authorized an aggregate repurchase of up to $62 billion of common stock under this program and the remaining authorized
repurchase amount was $8.4 billion with no termination date. The stock repurchase activity under the stock repurchase program in fiscal
2007 and 2008 is summarized as follows (in millions, except per-share amounts):
Shares
Repurchased
Weighted-
Average Price
per Share
Amount
Repurchased
Cumulative balance at July 29, 2006 1,931 $ 18.36 $ 35,448
Repurchase of common stock(1) 297 26.12 7,781
Cumulative balance at July 28, 2007 2,228 $ 19.40 $ 43,229
Repurchase of common stock(1) 372 27.80 10,350
Cumulative balance at July 26, 2008 2,600 $ 20.60 $ 53,579
(1) Includes stock repurchases that were pending settlement as of period end.
The purchase price for the shares of the Company’s stock repurchased is reflected as a reduction to shareholders’ equity. In accordance
with Accounting Principles Board Opinion No. 6, “Status of Accounting Research Bulletins,” the Company is required to allocate the
purchase price of the repurchased shares as (i) a reduction to retained earnings until retained earnings are zero and then as an increase
to accumulated deficit and (ii) a reduction of common stock and additional paid-in capital. Issuance of common stock and the tax benefit
related to employee stock incentive plans are recorded as an increase to common stock and additional paid-in capital.
(b) Other Repurchases of Common Stock
The Company also repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock
or stock units.
(c) Preferred Stock
Under the terms of the Company’s Articles of Incorporation, the Board of Directors may determine the rights, preferences, and terms
of the Company’s authorized but unissued shares of preferred stock.
(d) Comprehensive Income
The components of comprehensive income are as follows (in millions):
Years Ended July 26, 2008 July 28, 2007 July 29, 2006
Net income $ 8,052 $ 7,333 $ 5,580
Other comprehensive income:
Change in unrealized gains and losses on investments, net of tax benefit of
$13, $43, and $57 in fiscal 2008, 2007, and 2006, respectively (22) 128 (64)
Cumulative translation adjustment and other 227 166 61
Comprehensive income before minority interest 8,257 7,627 5,577
Change in minority interest (39) (4) 1
Total $ 8,218 $ 7,623 $ 5,578
The Company consolidates its investment in a venture fund managed by SOFTBANK as the Company is the primary beneficiary as defined
under FIN 46(R). As a result, SOFTBANK’s interest in the change in the unrealized gains and losses on the investments in the venture fund
is recorded as a component of accumulated other comprehensive income and is reflected as a change in minority interest.