Microsoft 2005 Annual Report Download - page 53

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
PAGE 52
As discussed in Note 14 – Employee Stock and Savings Plans, 345 million options were transferred to JPMorgan Chase Bank
(JPMorgan) under the stock option transfer program. The options transferred to JPMorgan were amended and restated upon
transfer to contain terms and conditions typical of equity option transactions entered into between sophisticated financial
counterparties at arm’s length using standard terms and definitions for equity derivatives. As of June 30, 2005, the options
have strike prices ranging from $28.83 to $89.58 per share and have expiration dates between December 2005 and December
2006.
On July 20, 2004, our Board of Directors approved a plan to buy back up to $30 billion of Microsoft common stock over the
succeeding four years. The specific timing and amount of repurchases will vary based on market conditions, securities law
limitations, and other factors. The repurchases will be made using our cash resources. The repurchase program may be
suspended or discontinued at any time without previous notice. In any period, cash used in financing activities related to
common stock repurchased may differ from the comparable change in stockholders’ equity, reflecting timing differences
between the recognition of share repurchase transactions and their settlement for cash. Our Board of Directors had previously
approved a program to repurchase shares of our common stock to reduce the dilutive effect of our stock option and stock
purchase plans. Under these repurchase plans, we have made the following share repurchases:
(share amounts in millions, dollars in billions)(1)
Fiscal year 2003 2004 2005(1)
Shares Amoun
t
Shares Amount Shares Amount
First quarter 120.6 $3.0 43.3 $1.2 22.8 $0.6
Second quarter 38.8 1.0
30.5 0.8 23.6 0.7
Third quarter 30.7 0.7 49.9 1.4 95.1 2.4
Fourth quarter 48.1 1.2 – – 170.7 4.3
Total 238.2 $5.9 123.7 $3.4 312.2 $8.0
(1) All amounts repurchased in fiscal year 2005 were repurchased under the repurchase plan approved by our Board of
Directors on July 20, 2004.
In addition, as part of our authorized stock repurchase program, we have purchased call options on 25 million shares of our
common stock with strike prices ranging from $27.00 – $27.50. The call options have maturities ranging from July 15, 2005 to
January 20, 2006 and are reflected in stockholders’ equity.
In fiscal year 2005, our Board of Directors approved the following dividends:
Approval Date Per
share
dividend Date of record
Total amoun
t
(in millions) Payment date
July 20, 2004 $ 0.08 August 25, 2004 $ 870 September 14, 2004
July 20, 2004
3.00 November 17, 2004 32,640 December 2, 2004
September 15, 2004 0.08 November 17, 2004 871 December 2, 2004
December 8, 2004 0.08 February 17, 2005 868 March 10, 2005
March 23, 2005 0.08 May 18, 2005 860 June 9, 2005
June 15, 2005 0.08 August 17,2005 (1) September 8, 2005
(1) The dividend approved on June 15, 2005 will be paid after the filing date of this report on Form 10-K. The accrued liability
for the dividend approved on June 15, 2005 of $857 million is included in other current liabilities.
On January 16 and September 12, 2003, our Board of Directors declared annual dividends on our common stock of $0.08
and $0.16 per share, respectively. The dividends were paid on March 7 and November 7, 2003, respectively, to shareholders of
record at the close of business on February 21, and October 17, 2003.