MOT » Topics » Stock Repurchase Program

This excerpt taken from the MOT 10-Q filed Nov 2, 2006.
Stock Repurchase Program
 
In May 2005, the Company announced that its Board of Directors authorized the Company to purchase up to $4 billion of its outstanding common stock over a 36-month period ending in May 2008, subject to market conditions (the “2005 Stock Repurchase Program”). In July 2006, the Company entered into an accelerated stock buyback agreement to repurchase approximately $1.2 billion of its outstanding common stock (the “ASB”). During the quarter, the Company received a total of 49.2 million shares under the ASB, representing the minimum number of shares to be received under the ASB. On October 31, 2006, the Company received an additional 1.3 million shares as the final adjustment under the ASB. The total shares purchased under the ASB were 50.5 million shares.


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During the third quarter of 2006, the Company paid an aggregate of $1.5 billion, including transaction costs, to repurchase 62 million shares (including shares received under the ASB during the quarter). During the first nine months of 2006, the Company has paid $3.1 billion, including transaction costs, to repurchase 138 million shares. All repurchased shares have been retired. Repurchases under the ASB, together with all repurchases made prior to the date thereof, completed the repurchases authorized under the 2005 Stock Repurchase Program.
 
On July 24, 2006, the Company announced that its Board of Directors has authorized the Company to repurchase up to an additional $4.5 billion of its outstanding shares of common stock over a 36-month period ending on July 21, 2009, subject to market conditions (the “2006 Stock Repurchase Program”). Through the end of the third quarter, no shares have been repurchased under the 2006 Stock Repurchase Program.
 
5.   Income Taxes
 
On October 22, 2004, the American Jobs Creation Act of 2004 (“the Act”) was signed into law. The Act provides for a special one-time tax incentive for U.S. multinational companies to repatriate accumulated earnings from their foreign subsidiaries by providing an 85% dividends received deduction for certain qualifying dividends. The Company repatriated approximately $4.6 billion of accumulated foreign earnings under the Act during 2005 and recorded an associated net income tax benefit of $251 million and $14 million during the third and fourth quarters of 2005, respectively. The Company finalized certain actions maximizing the tax benefit attributable to the repatriation of foreign earnings under the provisions of the Act during 2006 and recognized an additional $68 million of net tax benefits relating to these actions during the second quarter of 2006.
 
Based on the Company’s current assessment of the realization of its deferred tax assets, the Company realized a tax benefit of $73 million relating to the reduction in its German deferred tax asset valuation allowance during the second quarter of 2006. At September 30, 2006, a partial valuation allowance of $200 million remains against its German deferred tax assets, including tax loss and credit carryforwards.
 
The Internal Revenue Service (“IRS”) is currently conducting its field examination of the Company’s 2001 through 2003 tax returns. In June 2006, in connection with this examination, the Company received notices of proposed adjustments for the 2001 and 2002 taxable years related to transfer pricing. These proposed adjustments are similar to those previously made by the IRS for the Company’s 1996 through 2000 taxable years. The Company is currently protesting the 1996 through 2000 adjustments at the appellate level of the IRS. The Company disagrees with all of these proposed transfer pricing-related adjustments and intends to vigorously dispute them through applicable IRS and judicial procedures, as appropriate. However, if the IRS were to ultimately prevail on these matters, it could result in: (i) additional taxable income for the years 1996 through 2000 of approximately $1.4 billion, which could result in additional income tax liability for the Company of approximately $500 million, and (ii) additional taxable income for the years 2001 and 2002 of approximately $800 million, which could result in additional income tax liability for the Company of approximately $300 million. Although the final resolution of these matters is uncertain, based on current information, in the opinion of the Company’s management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations. However, an unfavorable resolution could have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations in the periods in which these matters are ultimately resolved.


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6.   Employee Benefit and Incentive Plans
 
This excerpt taken from the MOT 10-Q filed Aug 3, 2006.
Stock Repurchase Program
 
On May 18, 2005, the Company announced that its Board of Directors authorized the Company to purchase up to $4 billion of its outstanding shares of common stock over a 36-month period ending on May 31, 2008, subject to market conditions (the “2005 Stock Repurchase Program”). During the three months and six months ended July 1, 2006, the Company paid $838 million and $1.7 billion, respectively, to repurchase 39 million and 76 million shares, respectively, pursuant to the 2005 Stock Repurchase Program. All repurchased shares have been retired.
 
On July 24, 2006, the Company announced that it had entered into an agreement to repurchase approximately $1.2 billion of its outstanding shares of common stock. This repurchase, which is accomplished through an accelerated stock repurchase agreement, together with all repurchases made prior to the date thereof, completes the repurchases authorized under the 2005 Stock Repurchase Program. The Company also announced on July 24, 2006


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that its Board of Directors has authorized the Company to repurchase up to an additional $4.5 billion of its outstanding shares of common stock over a 36-month period ending on July 21, 2009, subject to market conditions, pursuant to a new stock repurchase program.
 

EXCERPTS ON THIS PAGE:

10-Q
Nov 2, 2006
10-Q
Aug 3, 2006
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