Adobe 2012 Annual Report Download - page 73

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prepayments during fiscal 2010, $250.0 million was under the stock repurchase program prior to the program amendment and the
remaining $600.0 million was under our $1.6 billion authority. We enter into these agreements in order to take advantage of
repurchasing shares at a guaranteed discount to the Volume Weighted Average Price (“VWAP”) of our common stock over a
specified period of time. We only enter into such transactions when the discount that we receive is higher than the foregone return
on our cash prepayments to the financial institutions. There were no explicit commissions or fees on these structured repurchases.
Under the terms of the agreements, there is no requirement for the financial institutions to return any portion of the prepayment
to us.
The financial institutions agree to deliver shares to us at monthly 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. During fiscal 2012, we repurchased approximately 11.5 million shares at an average price of $32.29 through structured
repurchase agreements entered into during fiscal 2012. During fiscal 2011, we repurchased approximately 21.8 million shares at
an average price of $31.81 through structured repurchase agreements entered into during fiscal 2011. During fiscal 2010, we
repurchased approximately 31.2 million shares at an average price per share of $29.19 through structured repurchase agreements
entered into during fiscal 2009 and fiscal 2010.
For fiscal 2012, 2011 and 2010, the prepayments were classified as treasury stock on our Consolidated Balance Sheets at
the payment date, though only shares physically delivered to us by November 30, 2012, December 2, 2011 and December 3, 2010
were excluded from the computation of earnings per share. As of November 30, 2012, $33.0 million of prepayments remained
under the agreement. As of December 2, 2011 and December 3, 2010, no prepayments remained under the agreements.
Subsequent to November 30, 2012, as part of our $2.0 billion stock repurchase program, we entered into a structured stock
repurchase agreement with a large financial institution whereupon we provided them with a prepayment of $100.0 million. This
amount will be classified as treasury stock on our Consolidated Balance Sheets. Upon completion of the $100.0 million stock
repurchase agreement, $1.8 billion remains under our current authority. See Notes 13 and 20 of our Notes to Consolidated Financial
Statements for further discussion of our stock repurchase programs.
See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
for share repurchases during the quarter ended November 30, 2012.
Summary of Stock Repurchases for fiscal 2012, 2011 and 2010
(in thousands, except average amounts)
Board Approval
Date Repurchases Under the Plan
2012 2011 2010
Shares Average Shares Average Shares Average
December 1997.. From employees(1) 1 $ 33.57 1 $ 35.66
Structured repurchases(2) — $ — — $ — 9,358 $ 33.11
June 2010........... Structured repurchases(2) 9,482 $ 32.17 21,849 $ 31.81 21,807 $ 27.51
April 2012.......... Structured repurchases(2) 2,038 $ 32.87 — $ — — $ —
Total shares........ 11,520 $ 32.29 21,850 $ 31.81 31,166 $ 29.19
Total cost ........... $ 371,995 $ 695,015 $ 909,900
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(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 above.
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