Adobe 2006 Annual Report Download - page 57

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57
Summary of Stock Repurchases for fiscal 2006, 2005 and 2004
(in thousands, except average amounts)
Board Approval Repurchases 2006 2005 2004
Date Under the Plan Shares Average Shares Average Shares Average
December 1997 From employees(1) 134 $ 37.10 7 $ 29.16 10 $ 25.65
Open market 1,650 36.04 — — 12,414 20.82
Structured
repurchases(2) 36,792 34.00 18,708 30.61 9,532 23.33
Total shares 38,576 34.10 18,715 $ 30.61 21,956 $ 21.91
Total cost $ 1,315,317 $ 572,930 $ 481,075
(1) The repurchases from employees represent shares canceled when surrendered in lieu of cash payments for the option exercise price or
withholding taxes due.
(2) Stock repurchase agreements executed with large financial institutions. See “Stock Repurchase Program I – On-going Dilution
Coverage” above.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Our principal commitments as of December 1, 2006, consist of obligations under operating leases, royalty
agreements and various service agreements. We expect to fulfill all of the following commitments from our
working capital.
Lease Commitments
The two lease agreements discussed in Note 15 of our Notes to Consolidated Financial Statements are subject
to standard financial covenants. As of December 1, 2006 we were in compliance with all of our financial
covenants. We expect to remain within compliance in the next 12 months. We are comfortable with these
limitations and believe they will not impact our credit or cash in the coming year or restrict our ability to execute
our business plan. See Note 15 of our Notes to Consolidated Financial Statements for further information
regarding our lease commitments.
The following table summarizes our contractual commitments as of December 1, 2006:
Less than Ove
r
Total 1 year 1 – 3 years 3-5
y
ears 5
y
ears
Total non-cancelable operating
leases, net of sublease income*.............
.
$ 201.4
$ 47.2
$ 73.9
$ 26.4
$ 53.9
* These amounts are net of sublease income. See Note 15 of Notes to Consolidated Statements for further detail regarding
our future commitments under these non-cancelable operating leases.
Royalties
We have certain royalty commitments associated with the shipment and licensing of certain products.
Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue.
Guarantees
The lease agreements for our corporate headquarters provide for residual value guarantees. Under FIN 45, the
fair value of a residual value guarantee in lease agreements entered into after December 31, 2002, must be
recognized as a liability on our consolidated balance sheet. As such, we recognized a $5.2 million liability related
to the East and West towers lease that was extended in August 2004. This liability is recorded in other long-term
liabilities with the offsetting entry recorded as prepaid rent in other assets. The balance will be amortized to the
income statement over the life of the lease. As of December 1, 2006, the unamortized portion of the fair value of
the residual value guarantee remaining in other long-term liabilities and prepaid rent was $2.8 million.