Stock Repurchase Program

3 Months Ended

Mar. 04, 2022

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 December 2020, our Board of Directors granted authority to repurchase up to $15 billion in common stock through the end of fiscal 2024.

During the three months ended March 4, 2022, we entered into an accelerated share repurchase agreement (“ASR”) with a large financial institution whereupon we provided them with a prepayment of $2.4 billion and received an initial delivery of 3.2 million shares of our common stock. The ASR is expected to settle during our third quarter of fiscal 2022. Under the terms of the ASR, the total number of shares delivered and average purchase price paid per share will be determined upon settlement based on the Volume Weighted Average Price (“VWAP”) over the term of the ASR, less an agreed upon discount. At settlement, the financial institution may be required to deliver additional shares of our common stock to us or, under certain circumstances, we may be required to make a cash payment or deliver shares of our common stock to the financial institution, with the method of settlement at our election. As of March 4, 2022, a portion of our ASR prepayment was evaluated as an unsettled forward contract indexed to our own stock, classified within stockholders’ equity.

During the three months ended March 5, 2021, we entered into a structured stock repurchase agreement with a large financial institution, whereupon we provided them with a prepayment of $950 million. Under the terms of this structured stock repurchase agreement, the financial institution agreed to deliver shares to us at monthly intervals during the contract term, and

the number of shares delivered each month was determined based on the VWAP over the applicable period, less an agreed upon discount.

During the three months ended March 4, 2022, we repurchased a total of 3.8 million shares, including approximately 0.6 million shares at an average price of $635.15 through a structured repurchase agreement entered into during fiscal 2021, as well as 3.2 million shares through the ASR described above. During the three months ended March 5, 2021 we repurchased approximately 1.9 million shares at an average price of $478.14 through a structured repurchase agreement entered into during fiscal 2020 and the three months ended March 5, 2021.

For the three months ended March 4, 2022, the prepayments were classified as treasury stock, a component of stockholders’ equity on our condensed consolidated balance sheets, at the payment date, though only shares physically delivered to us by March 4, 2022 were excluded from the computation of net income per share.

Subsequent to March 4, 2022, as part of the December 2020 stock repurchase authority, we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of $1.2 billion. Upon completion of the $1.2 billion stock repurchase agreement, $9.5 billion remains under our December 2020 authority.