Cisco 2009 Annual Report Download - page 67

Notes to Consolidated Financial Statements
12. Shareholders’ Equity
(a) Stock Repurchase Program
In September 2001, the Company’s Board of Directors authorized a stock repurchase program. As of July 25, 2009, 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 $4.8 billion with no termination date. The stock repurchase activity under the stock repurchase program
in fiscal 2008 and 2009 is summarized as follows (in millions, except per-share amounts):
Shares
Repurchased
Weighted-
Average Price
per Share
Amount
Repurchased
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
Repurchase of common stock(1) 202 17.89 3,600
Cumulative balance at July 25, 2009 2,802 $ 20.41 $ 57,179
(1) Includes stock repurchases that were pending settlement as of the end of the respective fiscal years.
The purchase price for the shares of the Company’s stock repurchased is reflected as a reduction to shareholders’ equity. 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 25, 2009 July 26, 2008 July 28, 2007
Net income $ 6,134 $ 8,052 $ 7,333
Other comprehensive income:
Change in unrealized gains and losses on investments, net of tax benefit of $43, $13, and
$43 in fiscal 2009, 2008, and 2007, respectively (22) (22) 128
Change in derivative instruments, net of tax benefit of $16 in fiscal 2009 (49) —5
Change in cumulative translation adjustment and other (192) 227 161
Comprehensive income before minority interest 5,871 8,257 7,627
Change in minority interest 19 (39) (4)
Total $ 5,890 $ 8,218 $ 7,623
The Company consolidates its investment in a venture fund managed by SOFTBANK, as the Company is the primary beneficiary. 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 AOCI and is reflected as a change in minority interest.
The components of AOCI, net of tax, are summarized as follows (in millions):
July 25, 2009 July 26, 2008 July 28, 2007
Net unrealized gains on investments $ 154 $ 206 $ 267
Net unrealized (losses) gains on derivative instruments (37) 12 12
Cumulative translation adjustment and other 318 510 283
Total $ 435 $ 728 $ 562
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