Stock Repurchase Program

12 Months Ended

Nov. 29, 2019

Stock Repurchase Program [Abstract]

STOCK REPURCHASE PROGRAM

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. In May 2018, our Board of Directors granted us an authority to repurchase up to $8 billion in common stock through the end of fiscal 2021.

During fiscal 2019, 2018 and 2017, we entered into several structured stock repurchase agreements with large financial institutions, whereupon we provided them with prepayments totaling $2.75 billion, $2.05 billion, and $1.10 billion, 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. We repurchased approximately 9.9 million shares at an average price of $270.23 per share in fiscal 2019, 8.7 million shares at an average price of $230.43 per share in fiscal 2018, and 8.2 million shares at an average price of $134.20 per share in fiscal 2017.

For fiscal 2019, 2018 and 2017, 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, 2019, November 30, 2018 and December 1, 2017 were excluded from the computation of earnings per share. As of November 29, 2019, $229.2 million of prepayments remained under the agreement.

Subsequent to November 29, 2019, we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of $850 million. This amount will be classified as treasury stock on our Consolidated Balance Sheets. Upon completion of the $850 million stock repurchase agreement, $4.25 billion remains under our May 2018 authority.