Stockholders' Equity

3 Months Ended

Feb. 28, 2014

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Retained Earnings

The changes in retained earnings for the three months ended February 28, 2014 were as follows (in thousands): 

Balance as of November 29, 2013	$	6,928,964
Net income	47,046
Re-issuance of treasury stock	(241,309		)
Balance as of February 28, 2014	$	6,734,701

We account for treasury stock under the cost method. When treasury stock is re-issued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital in our Condensed Consolidated Balance Sheets. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a component of additional paid-in-capital to the extent that there are treasury stock gains to offset the losses. If there are no treasury stock gains in additional paid-in-capital, the losses upon re-issuance of treasury stock are recorded as a component of retained earnings in our Condensed Consolidated Balance Sheets.

The components of accumulated other comprehensive income and activity, net of related taxes, as of February 28, 2014 was as follows (in thousands):

	November 29, 2013			Increase / Decrease			Reclassification Adjustments				February 28, 2014
Net unrealized gains on available-for-sale securities:
Unrealized gains on available-for-sale securities	$	10,178		$	1,271		$	(670	)		$	10,779
Unrealized losses on available-for-sale securities	(937		)	239			33				(665		)
Net unrealized gains on available-for-sale securities	9,241			1,510			(637		)	(1)	10,114
Net unrealized gains on derivative instruments designated as hedging instruments	5,367			(29		)	(2,798		)	(2)	2,540
Cumulative foreign currency translation adjustments	31,495			12,443			—				43,938
Total accumulated other comprehensive income, net of taxes	$	46,103		$	13,924		$	(3,435	)		$	56,592

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⁽¹⁾  Classified in interest and other income (expense), net.

⁽²⁾  Classified as revenue.

The following table sets forth the taxes related to each component of other comprehensive income for the three months ended February 28, 2014 and March 1, 2013 (in thousands):

	Three Months
	2014			2013
Available-for-sale securities:
Unrealized gains / losses	$	(20	)	$	9
Reclassification adjustments	(1		)	—
Subtotal available-for-sale securities	(21		)	9
Derivatives designated as hedging instruments:
Unrealized gains on derivative instruments*	—			—
Reclassification adjustments*	—			—
Subtotal derivatives designated as hedging instruments	—			—
Foreign currency translation adjustments	1			—
Total taxes, other comprehensive income	$	(20	)	$	9

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^(*)   Taxes related to derivative instruments were zero 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 may repurchase shares in the open market or enter into structured repurchase agreements with third parties. We are currently repurchasing common stock under our $2.0 billion authority granted by our Board of Directors in April 2012, which can be used through the end of fiscal 2015.

During the three months ended February 28, 2014 and March 1, 2013, we entered into several structured stock repurchase agreements with large financial institutions, whereupon we provided them with prepayments totaling $200.0 million and $100.0 million, respectively. 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 the three months ended February 28, 2014, we repurchased approximately 4.5 million shares at an average price of $58.27 through structured repurchase agreements entered into during fiscal 2013 and the three month ended February 28, 2014. During the three months ended March 1, 2013, we repurchased approximately 2.7 million shares at an average price of $37.32 through structured repurchase agreements entered into during 2012 and the three months ended March 1, 2013.

As of February 28, 2014, the prepayments were classified as treasury stock on our Condensed Consolidated Balance Sheets at the payment date, though only shares delivered to us by the financial statement date were excluded from the computation of earnings per share. As of February 28, 2014, $66.6 million of prepayment remained under this agreement.

Subsequent to February 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 $150.0 million. This amount will be classified as treasury stock on our Condensed Consolidated Balance Sheets. Upon completion of the $150.0 million stock repurchase agreement, $450.0 million remains under our current authority.