Adobe 2007 Annual Report Download - page 60

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60
The financial institutions agree to deliver shares to us at periodic intervals during the contract term. The parameters used
to calculate the number of shares deliverable are: the total notional amount of the contract, the number of trading days in the
contract, the number of trading days in the interval, and the average VWAP of our stock during the interval less the agreed
upon discount.
For fiscal 2007, the prepayments were classified as treasury stock on our balance sheet at the payment date, though only
shares physically delivered to us by November 30, 2007 are excluded from the denominator in the computation of earnings
per share. All outstanding structured repurchase agreements as of November 30, 2007 under this program will expire on or
before June 19, 2008. As of November 30, 2007 approximately $422.6 million of up-front payments remained under the
agreements. During fiscal 2007, we repurchased 22.0 million shares at an average price of $40.04 through structured
repurchase agreements which included prepayments from fiscal 2006.
Subsequent to November 30, 2007, we entered into additional structured stock repurchase agreements with large
financial institutions whereupon we provided the financial institutions with prepayments of $150.0 million. The $150.0
million will be classified as treasury stock on our balance sheet. See Notes 12 and 21 of our Notes to Consolidated Financial
Statements for further information regarding our structured stock repurchase agreements.
Stock Repurchase Program II
In April 2007, we announced that our Board of Directors authorized a new stock repurchase program. Under the new
program, which is not subject to expiration, we are authorized to repurchase in aggregate up to 20.0 million shares of our
common stock. This program is in addition to our existing stock repurchase program designed to return value to our
shareholders and offset dilution from employee stock programs. During fiscal 2007, we had provided prepayments of $850.0
million under structured share repurchase agreements to large financial institutions under this program. During fiscal 2007,
we repurchased 17.7 million shares through structured share repurchase agreements at an average price of $40.50 and
approximately $133.7 million of up-front payments remained under these agreements. All outstanding structured repurchase
agreements as of November 30, 2007 under this program will expire on or before March 18, 2008.
As part of this program, in November 2007, the Board of Directors approved a 30 million share increase commencing in
fiscal 2008 to this Stock Repurchase Program II. This increases the authorization under this program from the original 20
million shares to 50 million shares. Subsequent to November 30, 2007, we entered into additional structured stock repurchase
agreements with large financial institutions whereupon we provided the financial institutions with prepayments of $1.0
billion. The $1.0 billion will be classified as treasury stock on our balance sheet. See Notes 12 and 21 of our Notes to
Consolidated Financial Statements for further information regarding our structured stock repurchase agreements.
Summary of Stock Repurchases for fiscal 2007, 2006 and 2005
(in thousands, except average amounts)
Board Approval Repurchases 2007 2006 2005
Date Under the Plan Shares Average Shares Average Shares Average
December 1997 . . . From employees(1) 39 $ 39.24 134 $ 37.10 7 $ 29.16
Open market — — 1,650 36.04 — —
Structured
repurchases(2) 22,012 40.04 36,792 34.00 18,708 30.61
April 2007.......
Structured
repurchases(2) 17,684 40.50 — — — —
Total shares...... 39,735 40.25 38,576 34.10 18,715 $ 30.61
Total cost........ $ 1,599,214 $ 1,315,317 $ 572,930
(1) The repurchases from employees represent shares cancelled 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” and
“Stock Repurchase Program II” above.