Adobe 2013 Annual Report Download - page 94

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94
The following table sets forth the taxes related to each component of other comprehensive income for fiscal 2013, 2012
and 2011 (in thousands):
2013 2012 2011
Available-for-sale securities:
Unrealized gains / losses on available-for-sale securities $ 169 $ (686) $ 20
Reclassification adjustments (2)(1) 185
Subtotal available-for-sale securities 167 (687) 205
Derivatives designated as hedging instruments:
Unrealized gains on derivative instruments* — — —
Reclassification adjustments* — — —
Subtotal derivatives designated as hedging instruments — — —
Foreign currency translation adjustments 2,789 (1,314) 2,208
Total taxes, other comprehensive income $ 2,956 $ (2,001) $ 2,413
_________________________________________
(*) Taxes related to derivative instruments were zero for all fiscal years based on the tax jurisdiction where the derivative
instruments were executed.
Stock Repurchase Program
To facilitate our stock repurchase program, designed to return value to our stockholders and minimize dilution from stock
issuances, we repurchase shares in the open market and also enter into structured repurchase agreements with third-parties.
We currently have authority granted by our Board of Directors to repurchase up to $2.0 billion in common stock through
the end of fiscal 2015. The new stock repurchase program approved by our Board of Directors is similar to our previous $1.6
billion stock repurchase program authorized by the Board of Directors in fiscal 2010.
During fiscal 2013, 2012 and 2011, we entered into several structured stock repurchase agreements with large financial
institutions, whereupon we provided them with prepayments totaling $1.1 billion, $405.0 million and $695.0 million, respectively.
The $1.1 billion prepayments during fiscal 2013 were under the $2.0 billion stock repurchase authority. Of the $405.0 million of
prepayments during fiscal 2012, $100.0 million were under the $2.0 billion stock repurchase program and the remaining $305.0
million were under our previous $1.6 billion stock repurchase authority. The $695.0 million of prepayments during fiscal 2011
were under the $1.6 billion stock repurchase 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 2013, we repurchased approximately 21.6 million shares at an average price of $46.47 through structured
repurchase agreements entered into during fiscal 2013 and fiscal 2012. 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 per share of $31.81 through structured repurchase
agreements entered into during fiscal 2011.
For fiscal 2013, 2012 and 2011, 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 29, 2013, November 30, 2012 and December 2,
2011 were excluded from the computation of earnings per share. As of November 29, 2013, $129.2 million of prepayments remained
under the agreement.
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)