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55
Stock Repurchase Program
We are currently repurchasing common stock under our $2.0 billion authority granted by our Board of Directors in April
2012.
Subsequent to November 28, 2014, 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 $200.0 million. This
amount will be classified as treasury stock on our Consolidated Balance Sheets. Upon completion of the $200.0 million stock
repurchase agreement, there is no remaining balance under our current authority.
Subsequent to November 28, 2014, the Board of Directors approved a new stock repurchase program granting the company
authority to repurchase up to $2.0 billion in common stock through the end of fiscal 2017. The new stock repurchase program
approved by our Board of Directors is similar to our previous $2.0 billion stock repurchase program.
During fiscal 2014, 2013 and 2012, we entered into structured stock repurchase agreements with large financial institutions,
whereupon we provided them with prepayments totaling $600.0 million, $1.1 billion and $405.0 million, respectively. The $600.0
million and $1.1 billion prepayments during fiscal 2014 and 2013, respectively, 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. 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 2014, we repurchased approximately 10.9 million shares at an average price of $63.48 through structured
repurchase agreements entered into during fiscal 2014. 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 per share of $32.29 through structured repurchase
agreements entered into during fiscal 2012.
For fiscal 2014, 2013 and 2012, 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 28, 2014, November 29, 2013 and November 30,
2012 were excluded from the computation of earnings per share. As of November 28, 2014, $40.3 million of prepayments remained
under the agreement. See Note 13 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 28, 2014.
Summary of Stock Repurchases for Fiscal 2014, 2013 and 2012
(in thousands, except average amounts)
Board Approval
Date Repurchases
Under the Plan
2014 2013 2012
Shares Average Shares Average Shares Average
June 2010........... Structured repurchases(1) — $ — — $ — 9,482 $ 32.17
April 2012.......... Structured repurchases(1) 10,852 $ 63.48 21,603 $ 46.47 2,038 $ 32.87
Total shares........ 10,852 $ 63.48 21,603 $ 46.47 11,520 $ 32.29
Total cost ........... $688,902 $1,003,794 $371,995
_________________________________________
(1) Stock repurchase agreements executed with large financial institutions. See Stock Repurchase Program above.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Our principal commitments as of November 28, 2014 consist of obligations under operating leases, capital leases, royalty
agreements and various service agreements. See Note 15 of our Notes to Consolidated Financial Statements for additional
information regarding our contractual commitments.