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SHARE REPURCHASES
6 Months Ended
Nov. 29, 2015
Shares Repurchases [Abstract]  
Share Repurchases

(12) Share Repurchases

 

Share repurchases were as follows:

 Quarter Ended Six-Month Period Ended
In Millions Nov. 29, 2015 Nov. 23, 2014  Nov. 29, 2015 Nov. 23, 2014
Shares of common stock (a) 6.8 9.8  9.5 18.6
Aggregate purchase price$385.2$506.3 $537.3$968.8
(a) The number of shares repurchased during the quarter and six-month period ended November 29, 2015 includes 3.7 million shares repurchased under an ASR agreement.

During the second quarter of fiscal 2016, we entered into an accelerated share repurchase (ASR) agreement with an unrelated third party financial institution to repurchase an aggregate of $225.0 million of our outstanding common stock. The total aggregate number of shares to be repurchased pursuant to this agreement will be determined based on the capped volume weighted average price of our common stock during the purchase period, less a fixed discount. Under the ASR agreement, we paid $225.0 million to the financial institution and received 3.7 million shares of common stock with a fair value of $213.3 million during the second quarter of fiscal 2016. We will settle the remaining shares upon the completion of the ASR agreement in the third quarter of fiscal 2016. We recorded this transaction as an increase in treasury stock of $213.3 million, and recorded the remaining $11.7 million as a decrease to additional paid in capital on our Consolidated Balance Sheets as of November 29, 2015. We will reclassify the $11.7 million recorded in additional paid in capital to treasury stock at completion of the ASR agreement. This forward contract is indexed to, and potentially settled in, our common stock. In accordance with the terms of the ASR agreement, we have the option to settle our delivery obligation, if any, under the forward contract in cash or shares and we may be required to settle in cash in very limited circumstances that are under our control or that require the delivery of cash to all stockholders. Furthermore, the contract specifies a maximum number of shares that we could be required to deliver to the counterparty, and we have sufficient authorized and unissued shares available to deliver the maximum share amount. Based on these circumstances, the forward contract meets the requirements to be classified as permanent equity. The forward contract is accounted for as an equity instrument and does not require hedge or derivative accounting treatment. As long as the forward contract continues to meet the requirements to be classified as permanent equity, we will not record future changes in its fair value. The forward contract continued to meet those requirements as of November 29, 2015, and we expect it will continue to meet those requirements through the settlement date in the third quarter of fiscal 2016.

 

The initial delivery of 3.7 million shares of our common stock reduced our outstanding shares used to determine our weighted average shares outstanding for purposes of calculating basic and diluted earnings per share (EPS) for the second quarter and year-to-date periods of fiscal 2016. We have also evaluated the ASR agreement for the potential dilutive effects of any shares that may be received upon settlement and determined that the additional shares would be anti-dilutive and therefore were not included in our EPS calculations for fiscal 2016.