Microsoft

Microsoft Corporation Annual Report 2008

Financial Review

NOTES TO FINANCIAL STATEMENTS

NOTE 16  STOCKHOLDERS’ EQUITY

Shares of common stock outstanding were as follows:

(In millions)
Year Ended June 30, 2008 2007 2006
Balance, beginning of year 9,380 10,062 10,710
Issued 173 289 106
Repurchased (402) (971) (754)
Balance, end of year 9,151 9,380 10,062

On July 20, 2006, we announced the completion of the repurchase program initially approved by our Board of Directors on July 20, 2004 to buy back up to $30.0 billion in Microsoft common stock.

On July 20, 2006, we also announced that our Board of Directors authorized two new share repurchase programs: a $20.0 billion tender offer, which was completed on August 17, 2006; and authorization for up to an additional $20.0 billion ongoing share repurchase program with an expiration of June 30, 2011. Under the tender offer, we repurchased approximately 155 million shares of common stock, or 1.5% of our common shares outstanding, for approximately $3.8 billion at a price per share of $24.75. On August 18, 2006, we announced that the authorization for the $20.0 billion ongoing share repurchase program had been increased by approximately $16.2 billion. As a result, we were authorized to repurchase additional shares in an amount up to $36.2 billion through June 30, 2011. As of June 30, 2008, approximately $2.7 billion remained of the $36.2 billion approved repurchase amount. Under these repurchase plans, we have made the following share repurchases:

(In millions)
Year Ended June 30, 2008(1) 2007(2) 2006(3)
  Shares Amount Shares Amount Shares Amount
First quarter 81 ,2,348 285 $)6,965 114 $)3,029
Second quarter 120 4,081 205 6,037 283 7,666
Third quarter 30 1,020 238 6,744 181 4,879
Fourth quarter 171 4,975 243 7,367 176 4,175
Total 402 $12,424 971 $27,113 754 $19,749

(1) All amounts repurchased in fiscal year 2008 were repurchased under the repurchase plan approved by our Board of Directors on July 20, 2006.

(2) Approximately 155 million shares of common stock for approximately $3.8 billion were repurchased under our tender offer in the first quarter of fiscal year 2007. All other amounts repurchased were repurchased under the repurchase plan approved by our Board of Directors on July 20, 2006.

(3) All amounts repurchased in fiscal year 2006 were repurchased under the repurchase plan approved by our Board of Directors on July 20, 2004.

In fiscal year 2008, our Board of Directors declared the following dividends:

Declaration Date Dividend Per Share Record Date Total Amount
(in millions)
Payment Date
September 12, 2007 $    0.11 November 15, 2007 $   )1,034 December 13, 2007
December 19, 2007 $    0.11 February 21, 2008 $   )1,023 March 13, 2008
March 17, 2008 $    0.11 May 15, 2008 $   )1,020 June 12, 2008
June 11, 2008 $    0.11 August 21, 2008 $ 1,007(1) September 11, 2008

(1) The dividend declared on June 11, 2008 will be paid after the filing date of this report on Form 10-K and was included in other current liabilities as of June 30, 2008.

In fiscal year 2007, our Board of Directors declared the following dividends:

Declaration Date Dividend Per Share Record Date Total Amount
(in millions)
Payment Date
September 13, 2006 $    0.10 November 16, 2006 $    )980 December 14, 2006
December 20, 2006 $    0.10 February 15, 2007 $    )978 March 8, 2007
March 26, 2007 $    0.10 May 17, 2007 $    )952 June 14, 2007
June 27, 2007 $    0.10 August 16, 2007 $  938(1) September 13, 2007

(1) The dividend declared on June 27, 2007 was included in other current liabilities as of June 30, 2007.