Stockholders' Equity

3 Months Ended

Dec. 26, 2015

Stockholders' Equity

Stockholders' Equity

16.Stockholders’ Equity

Stock Repurchase Program

On July 31, 2015, the Company Board authorized the repurchase of up to an additional $1.0 billion of the Company’s outstanding common stock over the next two years, at such times and prices as determined by the Company’s management (the “July 2015 repurchase authorization”).  At various times beginning in fiscal 2012, and including the July 2015 repurchase authorization, the Company Board has authorized the Company to repurchase a total of $3.5 billion of the Company’s common stock (the “repurchase program”).  Under the repurchase program,  the Company may purchase shares in the open market (including pursuant to pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or in privately negotiated transactions.

Under its repurchase program, on February 28, 2014, the Company entered into an accelerated share repurchase (“ASR”) agreement with a major financial institution (“Bank”).  The ASR allowed the Company to buy a large number of shares immediately at a purchase price determined by an average market price over a period of time.  Under the ASR, the Company agreed to purchase $700.0 million of its common stock, in total, with an initial delivery to the Company of 4,340,508 shares of the Company’s common stock by the Bank.  In the second quarter of fiscal 2015, the purchase period for the ASR ended and an additional 1,489,476 shares were delivered to the Company.  In total, 5,829,984 shares were repurchased under the ASR at an average repurchase price of $120.07 per share.  The shares were retired in the quarters they were delivered, and the up-front payment of $700.0 million was accounted for as a reduction to stockholders’ equity in the Company’s Consolidated Balance Sheet in the second quarter of fiscal 2014.

On March 3, 2015, the Company, under its repurchase program, completed the repurchase of 5,231,991 shares of common stock from Luigi Lavazza S.p.A. (“Lavazza”) for an aggregate purchase price of $623.6 million. The price per share was $119.18, which represented a 3.0% discount off the closing price of the Company’s common stock on February 20, 2015, which was the business day immediately preceding the entry into the stock repurchase agreement between the Company and Lavazza.

As of December 26, 2015, the Company had $914.5 million remaining under the repurchase program. Pursuant to the terms of the Merger Agreement, the Company may not repurchase any of its capital, except in connection with the payment of the exercise price or withholding taxes with respect to any award granted under the Company’s stock-based compensation plans. Accordingly, the Company will not purchase any shares in connection with the repurchase program prior to the merger or earlier termination of the Merger Agreement.

Summary of share repurchase activity under the repurchase program:

	Thirteen weeks ended
	December 26, 2015		Fiscal 2015
Number of shares acquired on the open market	4,364,186		4,307,488
Average price per share of open market acquired shares	$	53.86	$	95.13
Number of shares acquired from Lavazza	—		5,231,991
Average price per share of Lavazza acquired shares	$	—	$	119.18
Number of shares under February 2014 ASR	—		1,489,476
Average price per share of ASR shares(1)	$	—	$	120.07
Total cost of acquired shares (in thousands)	$	235,035	$	1,033,321

(1) Average price per share for total shares repurchased under February 2014 ASR.

Accumulated Other Comprehensive Income (Loss)

The following tables provide the changes in the components of accumulated other comprehensive income (loss), net of tax (in thousands):

	Thirteen weeks ended									Thirteen weeks ended
	December 26, 2015									December 27, 2014
	Cash Flow Hedges			Translation			Accumulated Other Comprehensive Income (Loss)			Cash Flow Hedges			Translation			Accumulated Other Comprehensive Income (Loss)
Balance, beginning of period	$	830		$	(200,132	)	$	(199,302	)	$	8,952		$	(63,003	)	$	(54,051	)
Other comprehensive gain (loss), before reclassifications	439			(26,224		)	(25,785		)	(232		)	(29,794		)	(30,026		)
Amounts reclassified from accumulated other comprehensive income (loss)	(558		)	—			(558		)	(329		)	—			(329		)
Foreign currency exchange impact on cash flow hedges	(9		)	—			(9		)	(2		)	—			(2		)
Net current period other comprehensive loss	(128		)	(26,224		)	(26,352		)	(563		)	(29,794		)	(30,357		)
Balance, end of period	$	702		$	(226,356	)	$	(225,654	)	$	8,389		$	(92,797	)	$	(84,408	)

The thirteen weeks ended December 26, 2015 and December 27, 2014 included unfavorable translation adjustments which were primarily due to the weakening of the Canadian dollar against the U.S. dollar.  See also Note 13, Derivative Financial Instruments.

Common Stock Dividends

During the first quarter of fiscal 2016, the Company declared a quarterly dividend of $0.325 per common share, or $48.5 million in the aggregate, payable on February 16, 2016 to stockholders of record on January 15, 2016. Pursuant to the terms of the Merger Agreement, the Company may not declare or pay any additional cash dividend or other distribution other than the regular quarterly dividend of $0.325 per share payable on February 16, 2016.

During the thirteen weeks ended December 26, 2015 and December 27, 2014, the Company paid dividends of approximately $44.0 million and $40.6 million, respectively.