Microsoft 2010 Annual Report Download - page 65

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64
rejected our appeal and affirmed the trial court’s judgment and injunction, except that the court of appeals modified
the effective date of the injunction to January 11, 2010. On April 1, 2010, the court of appeals denied our request for
a rehearing. We intend to seek review by the U.S. Supreme Court.
In 2007, VirnetX Inc. brought suit in U.S. District Court in Texas claiming that various Microsoft products including
Windows client and server operating systems software and communications software infringe two patents related to
technology for securely communicating over the Internet. This case was tried by a jury in March 2010. The jury
returned a verdict that Microsoft willfully infringed both patents, and found damages of approximately $106 million. In
March 2010, VirnetX filed a new lawsuit in the Eastern District of Texas alleging that additional Microsoft products
and services including Windows 7 and Windows Server 2008 R2 infringe the same two patents. The parties have
reached an agreement to settle both lawsuits.
There are over 50 other patent infringement cases pending against Microsoft, 10 of which are set for trial in fiscal
year 2010.
Other
We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our
business. Although management currently believes that resolving claims against us, individually or in aggregate, will
not have a material adverse impact on our financial statements, these matters are subject to inherent uncertainties
and management’s view of these matters may change in the future.
As of June 30, 2010, we had accrued aggregate liabilities of approximately $1.0 billion in other current liabilities and
approximately $236 million in other long-term liabilities for all of the contingent matters described in this note. While
we intend to vigorously defend these matters, there exists the possibility of adverse outcomes that we estimate could
reach approximately $800 million in aggregate beyond recorded amounts. Were unfavorable final outcomes to occur,
there exists the possibility of a material adverse impact on our financial statements for the period in which the effects
become reasonably estimable.
NOTE 18 — STOCKHOLDERS’ EQUITY
Shares Outstanding
Shares of common stock outstanding were as follows:
(In millions)
Y
ear Ended June 30, 2010
2009 2008
Balance, beginning of year 8,908
9,151 9,380
Issued 140
75 173
Repurchased (380 )
(318) (402)
Balance, end of year 8,668
8,908 9,151
SHARE REPURCHASES AND DIVIDENDS
Share Repurchases
On September 22, 2008, we announced the completion of the two repurchase programs approved by our Board of
Directors during the first quarter of fiscal year 2007 to buy back up to $40.0 billion of Microsoft common stock. On
September 22, 2008, we also announced that our Board of Directors approved a new share repurchase program
authorizing up to $40.0 billion in share repurchases with an expiration date of September 30, 2013. As of June 30,
2010, approximately $23.7 billion remained of the $40.0 billion approved repurchase amount. The repurchase
program may be suspended or discontinued at any time without prior notice.