Stockholders' Equity

3 Months Ended

May. 01, 2016

Notes to financial statements [Abstract]

Stockholders' Equity

Shareholders’ Equity

Capital Return Program

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock. In May 2015, the Board extended the previously authorized repurchase program through December 2018 and authorized an additional $1.62 billion under the repurchase program.

In March 2016, we entered into an accelerated share repurchase, or ASR, agreement with an investment bank, under which we made an upfront payment of $500 million to purchase shares of our common stock and received an initial delivery of 12 million shares. Upon final settlement of the ASR, we may either (1) receive additional shares of our common stock, or (2) be required to deliver shares of our common stock or elect to make a cash payment to the investment bank, based on the terms and conditions of the ASR agreement.

We accounted for the ASR program as two separate transactions: (i) the 12 million shares of common stock initially delivered to us were accounted for as a treasury stock transaction and (ii) the unsettled contract was determined to be a forward contract indexed to our own common stock. The initial delivery of 12 million shares resulted in an immediate reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share. We have determined that the forward contract met all of the applicable criteria for equity classification. As a result, we recorded $410 million as treasury stock and $90 million, the implied value of the forward contract, as additional paid-in-capital, or APIC, in our Condensed Consolidated Balance Sheets as of May 1, 2016. The remainder of the shares are anticipated to be delivered to us in the second quarter of fiscal year 2017 and, at that time, the forward contract will be reclassified from APIC to treasury stock.

During the three months ended May 1, 2016, we also paid $62 million in cash dividends to our shareholders, equivalent to $0.1150 per share. As a result, we returned $562 million to shareholders during the three months ended May 1, 2016 in the form of share repurchases and dividend payments.

Through May 1, 2016, we have repurchased an aggregate of 243 million shares under our share repurchase program for a total cost of $4.35 billion. All shares delivered from these repurchases have been placed into treasury stock. As of May 1, 2016, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $0.97 billion.

We intend to return approximately $1.00 billion to our shareholders in fiscal year 2017 through a combination of share repurchases and cash dividends. We also declared on May 12, 2016 that we would pay our next quarterly cash dividend of $0.1150 per share on June 20, 2016, to all shareholders of record on May 26, 2016.

Convertible Preferred Stock

As of May 1, 2016 and January 31, 2016, there were no shares of preferred stock outstanding.

Common Stock

We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value.