Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 01, 2017 | Sep. 22, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ADOBE SYSTEMS INC | |
Entity Central Index Key | 796,343 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 1, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-01 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 492,943,014 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 02, 2016 | [1] |
Assets: | |||
Cash and cash equivalents | $ 1,774,550 | $ 1,011,315 | |
Short-term investments | 3,593,936 | 3,749,985 | |
Trade receivables, net of allowances for doubtful accounts of $9,112 and $6,214, respectively | 1,006,187 | 833,033 | |
Prepaid expenses and other current assets | 206,384 | 245,441 | |
Total current assets | 6,581,057 | 5,839,774 | |
Property and equipment, net | 939,809 | 816,264 | |
Goodwill | 5,820,656 | 5,406,474 | |
Purchased and other intangibles, net | 420,667 | 414,405 | |
Investment in lease receivable | 0 | 80,439 | |
Other Assets | 144,626 | 139,890 | |
Total assets | 13,906,815 | 12,697,246 | |
Current liabilities: | |||
Trade payables | 90,327 | 88,024 | |
Accrued expenses | 932,292 | 739,630 | |
Income taxes payable | 56,754 | 38,362 | |
Deferred revenue | 2,136,771 | 1,945,619 | |
Total current liabilities | 3,216,144 | 2,811,635 | |
Long-term liabilities: | |||
Debt | 1,889,218 | 1,892,200 | |
Deferred revenue | 68,093 | 69,131 | |
Income taxes payable | 173,023 | 184,381 | |
Deferred income taxes | 276,271 | 217,660 | |
Other liabilities | 113,632 | 97,404 | |
Total liabilities | 5,736,381 | 5,272,411 | |
Stockholders' equity: | |||
Preferred stock, $0.0001 par value; 2,000 shares authorized, none issued | 0 | 0 | |
Common stock, $0.0001 par value; 900,000 shares authorized; 600,834 shares issued; 492,874 and 494,254 shares outstanding, respectively | 61 | 61 | |
Additional paid-in-capital | 4,988,491 | 4,616,331 | |
Retained earnings | 9,072,321 | 8,114,517 | |
Accumulated other comprehensive income (loss) | (98,630) | (173,602) | |
Treasury stock, at cost (107,960 and 106,580 shares, respectively), net of reissuances | (5,791,809) | (5,132,472) | |
Total stockholders’ equity | 8,170,434 | 7,424,835 | |
Total liabilities and stockholders' equity | $ 13,906,815 | $ 12,697,246 | |
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 01, 2017 | Dec. 02, 2016 |
Current assets: | ||
Allowances for doubtful accounts | $ 9,112 | $ 6,214 |
Stockholders' equity: | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000 | 2,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000 | 900,000 |
Common stock, shares issued | 600,834 | 600,834 |
Common stock, shares outstanding | 492,874 | 494,254 |
Treasury stock, shares | 107,960 | 106,580 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |
Revenue: | ||||
Subscription | $ 1,570,336 | $ 1,168,602 | $ 4,437,882 | $ 3,322,560 |
Product | 158,961 | 180,960 | 513,891 | 578,572 |
Services and support | 111,777 | 114,405 | 343,137 | 344,879 |
Total revenue | 1,841,074 | 1,463,967 | 5,294,910 | 4,246,011 |
Cost of revenue: | ||||
Subscription | 168,915 | 116,990 | 452,830 | 339,664 |
Product | 11,709 | 15,435 | 41,530 | 51,490 |
Services and support | 82,298 | 70,276 | 245,259 | 212,198 |
Total cost of revenue | 262,922 | 202,701 | 739,619 | 603,352 |
Gross profit | 1,578,152 | 1,261,266 | 4,555,291 | 3,642,659 |
Operating expenses: | ||||
Research and development | 315,555 | 248,450 | 900,033 | 718,138 |
Sales and marketing | 550,093 | 477,475 | 1,623,488 | 1,415,155 |
General and administrative | 147,402 | 143,364 | 455,139 | 428,010 |
Amortization of purchased intangibles | 19,428 | 22,652 | 57,876 | 60,034 |
Total operating expenses | 1,032,478 | 891,941 | 3,036,536 | 2,621,337 |
Operating income | 545,674 | 369,325 | 1,518,755 | 1,021,322 |
Non-operating income (expense): | ||||
Interest and other income (expense), net | 13,539 | 2,725 | 25,899 | 12,995 |
Interest expense | (18,809) | (17,281) | (55,286) | (52,924) |
Investment gains (losses), net | 975 | 1,532 | 5,261 | (2,955) |
Total non-operating income (expense), net | (4,295) | (13,024) | (24,126) | (42,884) |
Income before income taxes | 541,379 | 356,301 | 1,494,629 | 978,438 |
Provision for income taxes | 121,810 | 85,513 | 302,224 | 209,269 |
Net income | $ 419,569 | $ 270,788 | $ 1,192,405 | $ 769,169 |
Basic net income per share | $ 0.85 | $ 0.54 | $ 2.41 | $ 1.54 |
Shares used to compute basic net income per share | 493,426 | 498,584 | 494,138 | 499,224 |
Diluted net income per share | $ 0.84 | $ 0.54 | $ 2.38 | $ 1.52 |
Shares used to compute diluted net income per share | 500,398 | 503,669 | 501,060 | 505,135 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net Income | $ 419,569 | $ 270,788 | $ 1,192,405 | $ 769,169 | |
Available-for-sale securities: | |||||
Unrealized gains / losses on available-for-sale securities | 3,545 | 3,055 | 13,234 | 21,677 | |
Reclassification adjustment for recognized gains / losses on available-for-sale securities | (488) | (869) | (894) | [1] | (1,982) |
Net increase (decrease) from available-for-sale securities | 3,057 | 2,186 | 12,340 | 19,695 | |
Derivatives designated as hedging instruments: | |||||
Unrealized gains / losses on derivative instruments | 1,483 | 13,233 | 3,613 | 9,089 | |
Reclassification adjustment for recognized gains / losses on derivative instruments | 30 | (3,656) | (31,219) | [2] | (9,964) |
Net increase (decrease) from derivatives designated as hedging instruments | 1,513 | 9,577 | (27,606) | (875) | |
Foreign currency translation adjustments | 43,552 | (12,828) | 90,238 | 16,149 | |
Other comprehensive income (loss), net of taxes | 48,122 | (1,065) | 74,972 | 34,969 | |
Total comprehensive income, net of taxes | $ 467,691 | $ 269,723 | $ 1,267,377 | $ 804,138 | |
[1] | Reclassification adjustments for gains / losses on available-for-sale securities are classified in interest and other income (expense), net. | ||||
[2] | Reclassification adjustments for loss on the interest rate lock agreement and gains / losses on other derivative instruments are classified in interest and other income (expense), net and revenue, respectively. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | ||
Cash flows from operating activities: | |||
Net income | $ 1,192,405 | $ 769,169 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and accretion | 244,763 | 249,675 | |
Stock-based compensation | 331,401 | 262,382 | |
Deferred income taxes | 47,859 | 44,164 | |
Unrealized losses (gains) on investments, net | (3,243) | 3,916 | |
Excess tax benefits from stock-based compensation | 0 | (69,269) | |
Other non-cash items | 2,606 | (124) | |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Trade receivables, net | 26,461 | (57,033) | |
Prepaid expenses and other current assets | 31,824 | (86,350) | |
Trade payables | (68,397) | (10,861) | |
Accrued expenses | 81,624 | (5,540) | |
Income taxes payable | 6,880 | 95,923 | |
Deferred revenue | 185,450 | 308,075 | |
Net cash provided by operating activities | 2,079,633 | 1,504,127 | |
Cash flows from investing activities: | |||
Purchases of short-term investments | (1,419,411) | (1,813,509) | |
Maturities of short-term investments | 601,130 | 557,769 | |
Proceeds from sales of short-term investments | 978,737 | 698,486 | |
Acquisitions, net of cash acquired | (459,626) | (48,427) | |
Purchases of property and equipment | (140,438) | (155,172) | |
Purchases of long-term investments and other assets | (25,669) | (56,413) | |
Proceeds from sale of long-term investments and other assets | 2,034 | 331 | |
Net cash used for investing activities | (463,243) | (816,935) | |
Cash flows from financing activities: | |||
Purchases of treasury stock | (800,000) | (775,000) | |
Proceeds from issuance of treasury stock | 157,682 | 139,823 | |
Taxes paid related to net share settlement of equity awards | (220,580) | (224,243) | |
Excess tax benefits from stock-based compensation | 0 | 69,269 | |
Repayment of capital lease obligations | (1,328) | (86) | |
Net cash used for financing activities | (864,226) | (790,237) | |
Effect of foreign currency exchange rates on cash and cash equivalents | 11,071 | (5,843) | |
Net increase (decrease) in cash and cash equivalents | 763,235 | (108,888) | |
Cash and cash equivalents at beginning of period | 1,011,315 | [1] | 876,560 |
Cash and cash equivalents at end of period | 1,774,550 | 767,672 | |
Supplemental disclosures: | |||
Cash paid for income taxes, net of refunds | 211,343 | 108,508 | |
Cash paid for interest | 59,769 | 58,182 | |
Non-cash investing activities: | |||
Investment in Lease Receivable Applied to Building Purchase | 80,439 | 0 | |
Issuance of common stock and stock awards assumed in business acquisitions | $ 10,348 | $ 0 | |
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 2, 2016 on file with the SEC (our “Annual Report”). Reclassifications Certain immaterial prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated balance sheets, condensed consolidated statements of income and condensed consolidated statements of cash flows. Recently Adopted Accounting Guidance On March 30, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. Tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We early adopted this standard during the first quarter of fiscal 2017. As required by the standard, excess tax benefits recognized on stock-based compensation expense were reflected in our condensed consolidated statements of income as a component of the provision for income taxes rather than paid-in capital on a prospective basis. Accordingly, we recorded excess tax benefits within our provision for income taxes, rather than additional paid-in capital upon adoption. The cumulative effect to retained earnings from previously unrecognized excess tax benefits, after offset by the related valuation allowance, was not significant to our condensed consolidated balance sheets. We also elected to prospectively apply the change in presentation of excess tax benefits wherein excess tax benefits recognized on stock-based compensation expense were classified as operating activities in our condensed consolidated statements of cash flows for the nine months ended September 1, 2017 . Prior period classification of cash flows related to excess tax benefits were not adjusted in our condensed consolidated statements of cash flows. Presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to all periods presented as such cash flows have historically been presented as financing activities. Further, we did not elect an accounting policy change to record forfeitures as they occur and thus we continue to estimate forfeitures at each period. Significant Accounting Policies There have been no other material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. Recent Accounting Pronouncements Not Yet Effective On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the full retrospective or modified retrospective transition method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for us in the first quarter of fiscal 2019. We expect to adopt this updated standard in the first quarter of fiscal 2019 on a modified retrospective basis. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. While we are continuing to assess all potential impacts of the new standard, we currently believe the most significant impact relates to our accounting for arrangements that include term-based software licenses bundled with maintenance and support. Under current GAAP, the revenue attributable to these software licenses is recognized ratably over the term of the arrangement because VSOE does not exist for the undelivered maintenance and support element as it is not sold separately. The requirement to have VSOE for undelivered elements to enable the separation of revenue for the delivered software licenses is eliminated under the new standard. Accordingly, under the new standard we will be required to recognize as revenue a portion of the arrangement fee upon delivery of the software license. We expect revenue related to our professional services and cloud offerings for business enterprises, individuals and teams to remain substantially unchanged. Due to the complexity of certain of our contracts, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and, therefore, may vary in some instances. On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The updated standard is effective for us beginning in the first quarter of fiscal 2020 and we do not plan to early adopt. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On August 28, 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging, requiring expanded hedge accounting for both non-financial and financial risk components and refining the measurement of hedge results to better reflect an entity's hedging strategies. The updated standard also amends the presentation and disclosure requirements and changes how entities assess hedge effectiveness. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The updated standard is effective for us beginning in the first quarter of fiscal 2020 and we do not plan to early adopt. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. With the exception of the new standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 1, 2017 , as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the fiscal year ended December 2, 2016 , that are of significance or potential significance to us. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 01, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On December 19, 2016 , we completed our acquisition of TubeMogul, a publicly held video advertising platform company. During the first quarter of fiscal 2017, we began integrating TubeMogul into our Digital Marketing reportable segment. Under the acquisition method of accounting, the total purchase price was preliminarily allocated to TubeMogul’s net tangible and intangible assets based upon their estimated fair values as of December 19, 2016 . During the third quarter of fiscal 2017, we recorded immaterial purchase accounting adjustments based on changes to management’s estimates and assumptions in regards to goodwill and liabilities assumed. The total purchase price for TubeMogul was $560.8 million which was preliminarily allocated to goodwill, that is non-deductible for tax purposes, for $349.0 million , to identifiable intangible assets for $113.1 million and to net assets acquired for $98.7 million . The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date and are considered preliminary pending finalization of valuation analyses pertaining to intangible assets acquired and tax liabilities assumed including calculation of deferred tax assets and liabilities. Pro forma financial information has not been presented for this acquisition as the impact to our condensed consolidated financial statements was not material. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-Term Investments | 9 Months Ended |
Sep. 01, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. We classify all of our cash equivalents and short-term investments as “available-for-sale.” In general, these investments are free of trading restrictions. We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of taxes, are included in accumulated other comprehensive income, which is reflected as a separate component of stockholders’ equity in our condensed consolidated balance sheets. Gains and losses are recognized when realized in our condensed consolidated statements of income. When we have determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in income. Gains and losses are determined using the specific identification method. Cash, cash equivalents and short-term investments consisted of the following as of September 1, 2017 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 413,411 $ — $ — $ 413,411 Cash equivalents: Money market mutual funds 1,344,350 — — 1,344,350 Time deposits 16,789 — — 16,789 Total cash equivalents 1,361,139 — — 1,361,139 Total cash and cash equivalents 1,774,550 — — 1,774,550 Short-term fixed income securities: Asset-backed securities 99,295 51 (162 ) 99,184 Corporate bonds and commercial paper 2,427,062 8,962 (3,000 ) 2,433,024 Municipal securities 145,850 162 (51 ) 145,961 U.S. Treasury securities 917,426 14 (1,673 ) 915,767 Total short-term investments 3,589,633 9,189 (4,886 ) 3,593,936 Total cash, cash equivalents and short-term investments $ 5,364,183 $ 9,189 $ (4,886 ) $ 5,368,486 Cash, cash equivalents and short-term investments consisted of the following as of December 2, 2016 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 208,635 $ — $ — $ 208,635 Cash equivalents: Corporate bonds and commercial paper 1,249 — — 1,249 Money market mutual funds 782,210 — — 782,210 Municipal securities 1,301 — — 1,301 Time deposits 17,920 — — 17,920 Total cash equivalents 802,680 — — 802,680 Total cash and cash equivalents 1,011,315 — — 1,011,315 Short-term fixed income securities: Asset-backed securities 111,009 95 (190 ) 110,914 Corporate bonds and commercial paper 2,464,769 3,135 (9,554 ) 2,458,350 Municipal securities 134,710 37 (525 ) 134,222 U.S. agency securities 39,538 42 — 39,580 U.S. Treasury securities 1,008,195 194 (1,470 ) 1,006,919 Total short-term investments 3,758,221 3,503 (11,739 ) 3,749,985 Total cash, cash equivalents and short-term investments $ 4,769,536 $ 3,503 $ (11,739 ) $ 4,761,300 See Note 4 for further information regarding the fair value of our financial instruments. The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category, that have been in an unrealized loss position for less than twelve months, as of September 1, 2017 and December 2, 2016 (in thousands): 2017 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 710,735 $ (2,497 ) $ 1,282,076 $ (9,474 ) Asset-backed securities 62,235 (150 ) 54,063 (189 ) Municipal securities 6,387 (23 ) 114,810 (525 ) U.S. Treasury and agency securities 808,221 (1,400 ) 580,529 (1,470 ) Total $ 1,587,578 $ (4,070 ) $ 2,031,478 $ (11,658 ) There were 570 securities and 1,052 securities in an unrealized loss position for less than twelve months at September 1, 2017 and at December 2, 2016 , respectively. The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category, that were in a continuous unrealized loss position for more than twelve months, as of September 1, 2017 and December 2, 2016 (in thousands): 2017 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 94,397 $ (503 ) $ 39,162 $ (80 ) Asset-backed securities 1,495 (12 ) 1,331 (1 ) Municipal securities 10,077 (28 ) — — U.S. Treasury and agency securities 47,636 (273 ) — — Total $ 153,605 $ (816 ) $ 40,493 $ (81 ) There were 90 securities and 23 securities in an unrealized loss position for more than twelve months at September 1, 2017 and at December 2, 2016 , respectively. The following table summarizes the cost and estimated fair value of short-term fixed income securities classified as short-term investments based on stated effective maturities as of September 1, 2017 (in thousands): Amortized Cost Estimated Fair Value Due within one year $ 1,079,772 $ 1,079,092 Due between one and two years 1,353,653 1,353,378 Due between two and three years 776,048 778,726 Due after three years 380,160 382,740 Total $ 3,589,633 $ 3,593,936 We review our debt and marketable equity securities classified as short-term investments on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. We consider factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and our intent to sell, or whether it is more likely than not we will be required to sell the investment before recovery of the investment’s amortized cost basis. If we believe that an other-than-temporary decline exists in one of these securities, we write down these investments to fair value. For debt securities, the portion of the write-down related to credit loss would be recorded to interest and other income, net in our condensed consolidated statements of income. Any portion not related to credit loss would be recorded to accumulated other comprehensive income, which is reflected as a separate component of stockholders’ equity in our condensed consolidated balance sheets. For equity securities, the write-down would be recorded to investment gains (losses), net in our condensed consolidated statements of income. During the nine months ended September 1, 2017 and September 2, 2016 , we did not consider any of our investments to be other-than-temporarily impaired. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis We measure certain financial assets and liabilities at fair value on a recurring basis. There have been no transfers between fair value measurement levels during the nine months ended September 1, 2017 . The fair value of our financial assets and liabilities at September 1, 2017 was determined using the following inputs (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market mutual funds $ 1,344,350 $ 1,344,350 $ — $ — Time deposits 16,789 16,789 — — Short-term investments: Asset-backed securities 99,184 — 99,184 — Corporate bonds and commercial paper 2,433,024 — 2,433,024 — Municipal securities 145,961 — 145,961 — U.S. Treasury securities 915,767 — 915,767 — Prepaid expenses and other current assets: Foreign currency derivatives 11,559 — 11,559 — Other assets: Deferred compensation plan assets 52,554 1,622 50,932 — Interest rate swap derivatives 7,564 — 7,564 — Total assets $ 5,026,752 $ 1,362,761 $ 3,663,991 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 1,410 $ — $ 1,410 $ — Total liabilities $ 1,410 $ — $ 1,410 $ — The fair value of our financial assets and liabilities at December 2, 2016 was determined using the following inputs (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate bonds and commercial paper $ 1,249 $ — $ 1,249 $ — Money market mutual funds 782,210 782,210 — — Municipal securities 1,301 — 1,301 — Time deposits 17,920 17,920 — — Short-term investments: Asset-backed securities 110,914 — 110,914 — Corporate bonds and commercial paper 2,458,350 — 2,458,350 — Municipal securities 134,222 — 134,222 — U.S. agency securities 39,580 — 39,580 — U.S. Treasury securities 1,006,919 — 1,006,919 — Prepaid expenses and other current assets: Foreign currency derivatives 38,112 — 38,112 — Other assets: Deferred compensation plan assets 42,180 1,831 40,349 — Interest rate swap derivatives 13,117 — 13,117 — Total assets $ 4,646,074 $ 801,961 $ 3,844,113 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 5,246 $ — $ 5,246 $ — Total liabilities $ 5,246 $ — $ 5,246 $ — See Note 3 for further information regarding the fair value of our financial instruments. Our fixed income available-for-sale debt securities consist of high quality, investment grade securities from diverse issuers with a minimum credit rating of BBB- and a weighted average credit rating of AA-. We value these securities based on pricing from independent pricing vendors who use matrix pricing valuation techniques including market approach methodologies that model information generated by market transactions involving identical or comparable assets, as well as discounted cash flow methodologies. Inputs include quoted prices in active markets for identical assets or inputs other than quoted prices that are observable either directly or indirectly in determining fair value, including benchmark yields, issuer spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. We therefore classify all of our fixed income available-for-sale securities as Level 2. We perform routine procedures such as comparing prices obtained from multiple independent sources to ensure that appropriate fair values are recorded. The fair values of our money market mutual funds and time deposits are based on the closing price of these assets as of the reporting date. We classify our money market mutual funds and time deposits as Level 1. Our Level 2 over-the-counter foreign currency and interest rate swap derivatives are valued using pricing models and discounted cash flow methodologies based on observable foreign exchange and interest rate data at the measurement date. Our deferred compensation plan assets consist of money market mutual funds and other mutual funds. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We also have direct investments in privately held companies accounted for under the equity or cost method, which are periodically assessed for other-than-temporary impairment. If we determine that an other-than-temporary impairment has occurred, we write down the investment to its fair value. We estimate fair value of our direct investments considering available information such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. For the three and nine months ended September 1, 2017 and the three months ended September 2, 2016 , we determined there were no other-than-temporary impairments on our direct investments. For the nine months ended September 2, 2016 , we determined there were immaterial other-than-temporary impairments on certain of our cost method investments and wrote down the investments to fair value. The fair value of our senior notes was $2 billion as of September 1, 2017 , based on observable market prices in less active markets and categorized as Level 2. See Note 12 for further details regarding our debt. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES Hedge Accounting and Hedging Programs We recognize all derivative instruments as either assets or liabilities on our condensed consolidated balance sheets and measure them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. We evaluate hedge effectiveness at the inception of the hedge prospectively as well as retrospectively, and record any ineffective portion of the hedging instruments in interest and other income (expense), net in our condensed consolidated statements of income. The time value of purchased contracts is recorded in interest and other income (expense), net in our condensed consolidated statements of income. The bank counterparties to these contracts expose us to credit-related losses in the event of their nonperformance which are largely mitigated with collateral security agreements that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. In addition, the Company enters into master netting arrangements which have the ability to further limit credit-related losses with the same counterparty by permitting net settlement of transactions. Balance Sheet Hedging—Hedges of Foreign Currency Assets and Liabilities We hedge our net recognized foreign currency denominated assets and liabilities with foreign exchange forward contracts to reduce the risk that the value of these assets and liabilities will be adversely affected by changes in exchange rates. These contracts hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value with changes in the fair value recorded to interest and other income (expense), net in our condensed consolidated statements of income. These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged. Cash Flow Hedging—Hedges of Forecasted Foreign Currency Revenue and Interest Rate Risk In countries outside the United States, we transact business in U.S. Dollars and in various other currencies. We may use foreign exchange option contracts or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities of up to twelve months . We enter into these foreign exchange contracts to hedge a portion of our forecasted foreign currency denominated revenue in the normal course of business and accordingly, they are not speculative in nature. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. We record changes in the intrinsic value of these cash flow hedges in accumulated other comprehensive income (loss) on our condensed consolidated balance sheets, until the forecasted transaction occurs. When the forecasted transaction occurs, we reclassify the related gain or loss on the cash flow hedge to revenue. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, we reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensive income (loss) to interest and other income (expense), net in our condensed consolidated statements of income at that time. If we do not elect hedge accounting, or the contract does not qualify for hedge accounting treatment, the changes in fair value from period to period are recorded in interest and other income (expense), net in our condensed consolidated statements of income. Fair Value Hedging - Hedges of Interest Rate Risk During the third quarter of fiscal 2014, we entered into interest rate swaps designated as fair value hedges related to our $900 million of 4.75% fixed interest rate senior notes due February 1, 2020. In effect, the interest rate swaps convert the fixed interest rate on these senior notes to a floating interest rate based on LIBOR. Under the terms of the swaps, we will pay monthly interest at the one-month LIBOR interest rate plus a fixed number of basis points on the $900 million notional amount through February 1, 2020. In exchange, we will receive 4.75% fixed rate interest from the swap counterparties. See Note 12 for further details regarding our debt. The interest rate swaps are accounted for as fair value hedges and substantially offset the changes in fair value of the hedged portion of the underlying debt that are attributable to the changes in market risk. Therefore, the gains and losses related to changes in the fair value of the interest rate swaps are included in interest and other income (expense), net in our condensed consolidated statement of income. The fair value of the interest rate swaps is reflected as either an asset or liability on our condensed consolidated balance sheets. The fair value of derivative instruments on our condensed consolidated balance sheets as of September 1, 2017 and December 2, 2016 were as follows (in thousands): 2017 2016 Fair Value Asset Derivatives Fair Value Liability Derivatives Fair Value Asset Derivatives Fair Value Liability Derivatives Derivatives designated as hedging instruments: Foreign exchange option contracts (1) (3) $ 9,487 $ — $ 34,355 $ — Interest rate swap (2) 7,564 — 13,117 — Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) 2,072 1,410 3,757 5,246 Total derivatives $ 19,123 $ 1,410 $ 51,229 $ 5,246 _________________________________________ (1) Included in prepaid expenses and other current assets and accrued expenses for asset derivatives and liability derivatives, respectively, on our condensed consolidated balance sheets. (2) Included in other assets or other liabilities on our condensed consolidated balance sheets. (3) Hedging effectiveness expected to be recognized into income within the next twelve months. The effect of foreign currency derivative instruments designated as cash flow hedges and of foreign currency derivative instruments not designated as hedges in our condensed consolidated statements of income for the three and nine months ended September 1, 2017 was as follows (in thousands): Three Months Nine Months Foreign Foreign Foreign Foreign Derivatives in cash flow hedging relationships: Net gain (loss) recognized in OCI, net of tax (1) $ 1,483 $ — $ 3,613 $ — Net gain (loss) reclassified from accumulated OCI into income, net of tax (2) $ 221 $ — $ 31,845 $ — Net gain (loss) recognized in income (3) $ (6,190 ) $ — $ (21,842 ) $ — Derivatives not designated as hedging relationships: Net gain (loss) recognized in income (4) $ — $ 2,920 $ — $ 6,456 The effect of foreign currency derivative instruments designated as cash flow hedges and of foreign currency derivative instruments not designated as hedges in our condensed consolidated statements of income for the three and nine months ended September 2, 2016 was as follows (in thousands): Three Months Nine Months Foreign Foreign Foreign Foreign Derivatives in cash flow hedging relationships: Net gain (loss) recognized in OCI, net of tax (1) $ 13,233 $ — $ 9,089 $ — Net gain (loss) reclassified from accumulated OCI into income, net of tax (2) $ 3,904 $ — $ 10,732 $ — Net gain (loss) recognized in income (3) $ (7,733 ) $ — $ (19,242 ) $ — Derivatives not designated as hedging relationships: Net gain (loss) recognized in income (4) $ — $ 1,368 $ — $ (1,335 ) _________________________________________ (1) Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). (2) Effective portion classified as revenue. (3) Ineffective portion and amount excluded from effectiveness testing classified in interest and other income (expense), net. (4) Classified in interest and other income (expense), net. |
Goodwill and Purchased and Othe
Goodwill and Purchased and Other Intangibles | 9 Months Ended |
Sep. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND PURCHASED AND OTHER INTANGIBLES | GOODWILL AND PURCHASED AND OTHER INTANGIBLES Goodwill as of September 1, 2017 and December 2, 2016 was $5.82 billion and $5.41 billion , respectively. The increase was due to our acquisition of TubeMogul and, to a lesser extent, foreign currency translation adjustments during the nine months ended September 1, 2017 . Purchased and other intangible assets subject to amortization as of September 1, 2017 and December 2, 2016 were as follows (in thousands): 2017 2016 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Purchased technology $ 240,901 $ (119,042 ) $ 121,859 $ 149,253 $ (82,091 ) $ 67,162 Customer contracts and relationships $ 577,887 $ (337,748 ) $ 240,139 $ 541,366 $ (274,380 ) $ 266,986 Trademarks 76,255 (54,088 ) 22,167 76,355 (46,846 ) 29,509 Acquired rights to use technology 72,167 (52,931 ) 19,236 87,403 (60,929 ) 26,474 Localization 1,047 (586 ) 461 631 (177 ) 454 Other intangibles 38,693 (21,888 ) 16,805 38,693 (14,873 ) 23,820 Total other intangible assets $ 766,049 $ (467,241 ) $ 298,808 $ 744,448 $ (397,205 ) $ 347,243 Purchased and other intangible assets, net $ 1,006,950 $ (586,283 ) $ 420,667 $ 893,701 $ (479,296 ) $ 414,405 Amortization expense related to purchased and other intangible assets was $39.1 million and $116.3 million for the three and nine months ended September 1, 2017 , respectively. Comparatively, amortization expense related to purchased and other intangible assets was $40.0 million and $115.4 million for the three and nine months ended September 2, 2016 , respectively. Of these amounts $19.5 million and $57.7 million were included in cost of sales for the three and nine months ended September 1, 2017 , respectively, and $16.9 million and $54.4 million for the three and nine months ended September 2, 2016 , respectively. As of September 1, 2017 , we expect amortization expense in future periods to be as follows (in thousands): Fiscal Year Purchased Technology Other Intangible Assets Remainder of 2017 $ 10,704 $ 26,673 2018 37,722 97,462 2019 33,749 69,445 2020 31,540 39,594 2021 7,078 17,279 Thereafter 1,066 48,355 Total expected amortization expense $ 121,859 $ 298,808 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 01, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses as of September 1, 2017 and December 2, 2016 consisted of the following (in thousands): 2017 2016 Accrued compensation and benefits $ 373,448 $ 339,487 Accrued media costs 129,602 5,144 Sales and marketing allowances 47,075 55,681 Accrued corporate marketing 54,921 55,218 Taxes payable 43,079 43,113 Royalties payable 39,666 25,089 Accrued interest expense 6,781 25,805 Other 237,720 190,093 Accrued expenses $ 932,292 $ 739,630 Accrued media costs primarily relate to our advertising platform offerings from TubeMogul. We accrue for media costs related to impressions purchased from third-party ad inventory sources. Other primarily includes general corporate accruals for local and regional expenses. Other is also comprised of deferred rent related to office locations with rent escalations and foreign currency liability derivatives. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 01, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Summary of Restricted Stock Units Restricted stock unit activity for the nine months ended September 1, 2017 and the fiscal year ended December 2, 2016 was as follows (in thousands): 2017 2016 Beginning outstanding balance 8,316 10,069 Awarded 4,675 4,440 Released (3,528 ) (5,471 ) Forfeited (615 ) (722 ) Increase due to acquisition 595 — Ending outstanding balance 9,443 8,316 Information regarding restricted stock units outstanding at September 1, 2017 and September 2, 2016 is summarized below: Number of Shares (thousands) Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (*) (millions) 2017 Restricted stock units outstanding 9,443 1.27 $ 1,464.2 Restricted stock units vested and expected to vest 8,636 1.22 $ 1,339.1 2016 Restricted stock units outstanding 8,398 1.25 $ 869.7 Restricted stock units vested and expected to vest 7,597 1.19 $ 775.2 _________________________________________ (*) The intrinsic value is calculated as the market value as of the end of the fiscal period. As reported by the NASDAQ Global Select Market, the market values as of September 1, 2017 and September 2, 2016 were $155.06 and $103.57 , respectively. Summary of Performance Shares Our 2017, 2016 and 2015 Performance Share Programs aim to help focus key employees on building stockholder value, provide significant award potential for achieving outstanding Company performance and enhance the ability of the Company to attract and retain highly talented and competent individuals. The Executive Compensation Committee of our Board of Directors approves the terms of each of our Performance Share Programs, including the award calculation methodology, under the terms of our 2003 Equity Incentive Plan. Shares may be earned based on the achievement of an objective relative total stockholder return measured over a three-year performance period. Performance share awards will be awarded and fully vest upon the Executive Compensation Committee's certification of the level of achievement following the three-year anniversary of each grant date. Program participants generally have the ability to receive up to 200% of the target number of shares originally granted. In the first quarter of fiscal 2017, the Executive Compensation Committee approved the 2017 Performance Share Program, the terms of which are similar to prior year performance share programs as discussed above. In the first quarter of fiscal 2017, the Executive Compensation Committee also certified the actual performance achievement of participants in the 2014 Performance Share Program. Actual performance resulted in participants achieving 198% of target or approximately 1.1 million shares. The shares granted and achieved under the 2014 Performance Share Program fully vested on the three-year anniversary of the grant on January 24, 2017, if not forfeited. In the first quarter of fiscal 2016, the Executive Compensation Committee certified the actual performance achievement of participants in the 2013 Performance Share Program. Actual performance resulted in participants achieving 198% of target or approximately 1.4 million shares. The shares granted and achieved under the 2013 Performance Share Program fully vested on the three-year anniversary of the grant on January 24, 2016, if not forfeited. As of September 1, 2017 , the shares awarded under our 2017, 2016 and 2015 Performance Share Programs are yet to be achieved. The following table sets forth the summary of performance share activity under our Performance Share Programs for the nine months ended September 1, 2017 and the fiscal year ended December 2, 2016 (in thousands): 2017 2016 Shares Granted Maximum Shares Eligible to Receive Shares Granted Maximum Shares Eligible to Receive Beginning outstanding balance 1,630 3,261 1,940 3,881 Awarded 1,082 (1 ) 1,040 1,206 (2 ) 1,053 Achieved (1,135 ) (1,147 ) (1,373 ) (1,387 ) Forfeited (43 ) (86 ) (143 ) (286 ) Ending outstanding balance 1,534 3,068 1,630 3,261 _________________________________________ (1) Included in the 1.1 million shares awarded during the nine months ended September 1, 2017 were 0.6 million shares awarded for the final achievement of the 2014 Performance Share program. The remaining awarded shares were for the 2017 Performance Share Program. (2) Included in the 1.2 million shares awarded during the fiscal year ended December 2, 2016 were 0.7 million shares awarded for the final achievement of the 2013 Performance Share program. The remaining awarded shares were for the 2016 Performance Share Program. Summary of Employee Stock Purchase Plan Shares The expected life of the ESPP shares is the average of the remaining purchase periods under each offering period. The assumptions used to value employee stock purchase rights during the three and nine months ended September 1, 2017 and September 2, 2016 were as follows: Three Months Nine Months 2017 2016 2017 2016 Expected life (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Volatility 25% - 27% 26% - 28% 22% - 27% 26% - 29% Risk free interest rate 1.12% - 1.41% 0.37% - 0.59% 0.62% - 1.41% 0.37% - 1.06% Employees purchased 1.9 million shares at an average price of $77.63 and 1.9 million shares at an average price of $66.13 for the nine months ended September 1, 2017 and September 2, 2016 , respectively. The intrinsic value of shares purchased during the nine months ended September 1, 2017 and September 2, 2016 was $97.7 million and $54.3 million , respectively. The intrinsic value is calculated as the difference between the market value on the date of purchase and the purchase price of the shares. Summary of Stock Options The Executive Compensation Committee of Adobe’s Board of Directors eliminated the use of stock option grants for all employees and the Board of Directors effective fiscal 2012 and fiscal 2014, respectively. As of September 1, 2017 and December 2, 2016 , we had 0.3 million and 0.6 million stock options outstanding, respectively. Compensation Costs As of September 1, 2017 , there was $782.8 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock-based awards which will be recognized over a weighted average period of 2.0 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. Total stock-based compensation costs included in our condensed consolidated statements of income for the three months ended September 1, 2017 and September 2, 2016 were as follows (in thousands): 2017 2016 Income Statement Classifications Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Cost of revenue—subscription $ 628 $ 3,633 $ 333 $ 1,554 Cost of revenue—services and support 1,626 2,409 1,221 1,861 Research and development 4,608 43,243 3,336 26,388 Sales and marketing 4,658 36,064 3,940 27,798 General and administrative 1,140 19,033 976 17,097 Total $ 12,660 $ 104,382 $ 9,806 $ 74,698 Total stock-based compensation costs included in our condensed consolidated statements of income for the nine months ended September 1, 2017 and September 2, 2016 were as follows (in thousands): 2017 2016 Income Statement Classifications Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Cost of revenue—subscription $ 1,899 $ 10,467 $ 1,119 $ 5,115 Cost of revenue—services and support 4,850 7,151 4,087 5,494 Research and development 12,884 119,068 10,961 81,280 Sales and marketing 13,832 103,982 12,953 85,123 General and administrative 3,623 56,972 3,423 53,049 Total $ 37,088 $ 297,640 $ 32,543 $ 230,061 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 01, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Retained Earnings The changes in retained earnings for the nine months ended September 1, 2017 were as follows (in thousands): Balance as of December 2, 2016 $ 8,114,517 Net income 1,192,405 Reissuance of treasury stock (234,601 ) Balance as of September 1, 2017 $ 9,072,321 We account for treasury stock under the cost method. When treasury stock is re-issued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital in our condensed consolidated balance sheets. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a component of additional paid-in-capital to the extent that there are treasury stock gains to offset the losses. If there are no treasury stock gains in additional paid-in-capital, the losses upon re-issuance of treasury stock are recorded as a reduction of retained earnings in our condensed consolidated balance sheets. The components of accumulated other comprehensive income (loss) and activity, net of related taxes, as of September 1, 2017 were as follows (in thousands): December 2, Increase / Decrease Reclassification Adjustments September 1, Net unrealized gains / losses on available-for-sale securities: Unrealized gains on available-for-sale securities $ 3,499 $ 6,872 $ (1,224 ) $ 9,147 Unrealized losses on available-for-sale securities (11,565 ) 6,362 330 (4,873 ) Total net unrealized gains / losses on available-for-sale securities (8,066 ) 13,234 (894 ) (1) 4,274 Net unrealized gains / losses on derivative instruments designated as hedging instruments 21,689 3,613 (31,219 ) (2) (5,917 ) Cumulative foreign currency translation adjustments (187,225 ) 90,238 — (96,987 ) Total accumulated other comprehensive income (loss), net of taxes $ (173,602 ) $ 107,085 $ (32,113 ) $ (98,630 ) _________________________________________ (1) Reclassification adjustments for gains / losses on available-for-sale securities are classified in interest and other income (expense), net. (2) Reclassification adjustments for loss on the interest rate lock agreement and gains / losses on other derivative instruments are classified in interest and other income (expense), net and revenue, respectively. The following table sets forth the taxes related to each component of other comprehensive income for the three and nine months ended September 1, 2017 and September 2, 2016 (in thousands): Three Months Nine Months 2017 2016 2017 2016 Available-for-sale securities: Unrealized gains / losses $ 235 $ (13 ) $ 523 $ (35 ) Reclassification adjustments (214 ) — (323 ) — Subtotal available-for-sale securities 21 (13 ) 200 (35 ) Derivatives designated as hedging instruments: Unrealized gains / losses on derivative instruments (1) — — — — Reclassification adjustments (1) (149 ) (151 ) (582 ) (466 ) Subtotal derivatives designated as hedging instruments (149 ) (151 ) (582 ) (466 ) Foreign currency translation adjustments 1,434 (463 ) 3,081 882 Total taxes, other comprehensive income $ 1,306 $ (627 ) $ 2,699 $ 381 _________________________________________ (1) Taxes related to derivative instruments other than the interest rate lock agreement were zero based on the tax jurisdiction where these derivative instruments were executed. 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. Our Board of Directors has approved our stock repurchase program wherein we were granted authority to repurchase common stock up to a specified amount and period. In the first quarter of fiscal 2017, the Board of Directors approved a new stock repurchase authority to repurchase up to $2.5 billion in common stock through the end of fiscal 2019. During the nine months ended September 1, 2017 and September 2, 2016 , we entered into several structured stock repurchase agreements with large financial institutions, whereupon we provided them with prepayments totaling $800 million and $775 million , respectively. Of the $800 million prepayment during the nine months ended September 1, 2017 , $300 million was under the new $2.5 billion stock repurchase authority and the remaining $500 million was under the previous $2 billion stock repurchase authority. 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. During the nine months ended September 1, 2017 , we repurchased approximately 6.3 million shares at an average price of $126.58 through structured repurchase agreements entered into during fiscal 2016 and the nine months ended September 1, 2017 . During the nine months ended September 2, 2016 we repurchased approximately 7.3 million shares at an average price of $93.87 through structured repurchase agreements entered into during fiscal 2015 and the nine months ended September 2, 2016 . For the nine months ended September 1, 2017 , the prepayments were classified as treasury stock on our condensed consolidated balance sheets at the payment date, though only shares physically delivered to us by September 1, 2017 were excluded from the computation of earnings per share. As of September 1, 2017 , $98.8 million of prepayment remained under this agreement. Subsequent to September 1, 2017 , as part of the $2.5 billion stock repurchase authority approved in January 2017, we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of $300 million . This amount will be classified as treasury stock on our condensed consolidated balance sheets. Upon completion of the $300 million stock repurchase agreement, $1.9 billion remains under our current authority. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 01, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended September 1, 2017 and September 2, 2016 (in thousands, except per share data): Three Months Nine Months 2017 2016 2017 2016 Net income $ 419,569 $ 270,788 $ 1,192,405 $ 769,169 Shares used to compute basic net income per share 493,426 498,584 494,138 499,224 Dilutive potential common shares: Unvested restricted stock units and performance share awards 6,664 4,633 6,574 5,373 Stock options 308 452 348 538 Shares used to compute diluted net income per share 500,398 503,669 501,060 505,135 Basic net income per share $ 0.85 $ 0.54 $ 2.41 $ 1.54 Diluted net income per share $ 0.84 $ 0.54 $ 2.38 $ 1.52 For the three and nine months ended September 1, 2017 and September 2, 2016 , there were no options to purchase shares of common stock with exercise prices greater than the average fair market value of our stock of $145.96 and $129.77 , respectively, and $98.12 and $93.35 , respectively, that would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments We occupy three office buildings in San Jose, California where our corporate headquarters are located. We reference these office buildings as the Almaden, East and West Towers. During the nine months ended September 1, 2017, we exercised our option to purchase the Almaden Tower for a total purchase price of $103.6 million . Upon purchase, our investment in the lease receivable of $80.4 million was credited against the total purchase price. We capitalized the Almaden Tower as property and equipment on our condensed consolidated balance sheets at $104.2 million , the lesser of cost or fair value, which represented the total purchase price plus other direct costs associated with the purchase. As of September 1, 2017, we own the buildings that make up the Almaden, East and West Towers and the underlying land. Royalties We have royalty commitments associated with the licensing of certain offerings. Royalty expense is generally based on a dollar amount per unit sold or a percentage of the underlying revenue. Indemnifications In the ordinary course of business, we provide indemnifications of varying scope to customers and channel partners against claims of intellectual property infringement made by third parties arising from the use of our products and from time to time, we are subject to claims by our customers under these indemnification provisions. Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations. To the extent permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. Legal Proceedings In connection with disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent rights, we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation may be very costly and can be disruptive to our business operations by diverting the attention and energies of management and key technical personnel. We may not prevail in any ongoing or future litigation and disputes. Third-party intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from licensing certain of our products or offering certain of our services, subject us to injunctions restricting our sale of products or services, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers including contractual provisions under various license arrangements and service agreements. In addition to intellectual property disputes, we are subject to legal proceedings, claims and investigations in the ordinary course of business, including claims relating to commercial, employment and other matters. Some of these disputes and legal proceedings may include speculative claims for substantial or indeterminate amounts of damages. We consider all claims on a quarterly basis in accordance with GAAP and based on known facts assess whether potential losses are considered reasonably possible, probable and estimable. Based upon this assessment, we then evaluate disclosure requirements and whether to accrue for such claims in our financial statements. This determination is then reviewed and discussed with our Audit Committee and our independent registered public accounting firm. We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Unless otherwise specifically disclosed in this note, we have determined that no provision for liability nor disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. All legal costs associated with litigation are expensed as incurred. Litigation is inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending against us. It is possible, nevertheless, that our consolidated financial position, cash flows or results of operations could be negatively affected in any particular period by an unfavorable resolution of one or more of such proceedings, claims or investigations. In connection with our anti-piracy efforts, conducted both internally and through organizations such as the Business Software Alliance, from time to time we undertake litigation against alleged copyright infringers. Such lawsuits may lead to counter-claims alleging improper use of litigation or violation of other laws. We believe we have valid defenses with respect to such counter-claims; however, it is possible that our consolidated financial position, cash flows or results of operations could be negatively affected in any particular period by the resolution of one or more of these counter-claims. |
Debt
Debt | 9 Months Ended |
Sep. 01, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Notes In February 2010, we issued $900 million of 4.75% senior notes due February 1, 2020 (the “2020 Notes”). Our proceeds were $900 million and were net of an issuance discount of $5.5 million . In addition, we incurred issuance costs of $6.4 million . Both the discount and issuance costs are being amortized to interest expense over the term of the 2020 Notes using the effective interest method. The 2020 Notes rank equally with our other unsecured and unsubordinated indebtedness. The effective interest rate including the discount and issuance costs is 4.92% . Interest is payable semi-annually, in arrears, on February 1 and August 1, and commenced on August 1, 2010 . In June 2014, we entered into interest rate swaps with a total notional amount of $900 million designated as a fair value hedge related to our 2020 Notes. The interest rate swaps effectively convert the fixed interest rate on our 2020 Notes to a floating interest rate based on LIBOR. Under the terms of the swap, we will pay monthly interest at the one-month LIBOR interest rate plus a fixed number of basis points on the $900 million notional amount. In exchange, we will receive 4.75% fixed rate interest from the swap counterparties. See Note 5 for further details regarding our interest rate swap derivatives. In January 2015, we issued $1 billion of 3.25% senior notes due February 1, 2025 (the “2025 Notes”). Our proceeds were approximately $989.3 million which is net of an issuance discount of $10.7 million . In addition, we incurred issuance costs of $7.9 million . Both the discount and issuance costs are being amortized to interest expense over the term of the 2025 Notes using the effective interest method. The 2025 Notes rank equally with our other unsecured and unsubordinated indebtedness. The effective interest rate including the discount, issuance costs and interest rate agreement is 3.67% . Interest is payable semi-annually, in arrears on February 1 and August 1, and commenced on August 1, 2015 . A portion of the proceeds from this offering was used to repay $600 million in aggregate principal amount of previously outstanding senior notes plus accrued and unpaid interest due February 1, 2015 . The remaining proceeds were used for general corporate purposes. As of September 1, 2017 , our outstanding notes payable consist of the 2020 Notes and 2025 Notes (the “Notes”) with a total carrying value of $1.89 billion which includes the fair value of the interest rate swap and is net of debt issuance costs. Based on quoted prices in inactive markets, the total fair value of the Notes was $2.00 billion as of September 1, 2017 . The total fair value excludes the effect of the fair value hedge of the 2020 Notes for which we entered into interest rate swaps as described above. We may redeem the Notes at any time, subject to a make-whole premium. In addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase the Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The Notes also include covenants that limit our ability to grant liens on assets and to enter into sale and leaseback transactions, subject to significant allowances. As of September 1, 2017 , we were in compliance with all of the covenants. In February 2017 and August 2017, we made semi-annual interest payments on our 2020 and 2025 Notes each totaling $37.6 million . Credit Agreement On March 2, 2012, we entered into a five-year $1 billion senior unsecured revolving credit agreement (the “Credit Agreement”), providing for loans to us and certain of our subsidiaries. Pursuant to the terms of the Credit Agreement, we may, subject to the agreement of the applicable lenders, request up to an additional $500 million in commitments, for a maximum aggregate commitment of $1.5 billion . Loans under the Credit Agreement will bear interest at either (i) LIBOR plus a margin, based on our public debt ratings, ranging from 0.795% and 1.30% or (ii) the base rate, which is defined as the highest of (a) the agent’s prime rate, (b) the federal funds effective rate plus 0.50% or (c) LIBOR plus 1.00% plus a margin, based on our debt ratings, ranging from 0.00% to 0.30% . Commitment fees are payable quarterly at rates between 0.08% and 0.20% per year, also based on our debt ratings. Subject to certain conditions stated in the Credit Agreement, we and any of our subsidiaries designated as additional borrowers may borrow, prepay and re-borrow amounts under the revolving credit facility at any time during the term of the Credit Agreement. The Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including a financial covenant, events of default and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, certain merger and acquisition transactions, dispositions and other matters, all subject to certain exceptions. The financial covenant, based on a quarterly financial test, requires us not to exceed a maximum leverage ratio. On March 1, 2013, we exercised an option under the Credit Agreement to extend the maturity date of the Credit Agreement to March 2, 2018. On July 27, 2015, we entered into an amendment to further extend the maturity date to July 27, 2020 and reallocated the facility among the syndicate of lenders that are parties to the Credit Agreement. The facility will terminate and all amounts owing thereunder will be due and payable on the maturity date unless (a) the commitments are terminated earlier upon the occurrence of certain events, including an event of default, or (b) the maturity date is further extended upon our request, subject to the agreement of the lenders. As of September 1, 2017 , there were no outstanding borrowings under this Credit Agreement and we were in compliance with all covenants. |
Non-Operating Income (Expense)
Non-Operating Income (Expense) | 9 Months Ended |
Sep. 01, 2017 | |
Other Income and Expenses [Abstract] | |
NON-OPERATING INCOME (EXPENSE) | NON-OPERATING INCOME (EXPENSE) Non-operating income (expense) for the three and nine months ended September 1, 2017 and September 2, 2016 included the following (in thousands): Three Months Nine Months 2017 2016 2017 2016 Interest and other income (expense), net: Interest income $ 17,180 $ 11,849 $ 46,553 $ 34,010 Foreign exchange gains (losses) (4,140 ) (10,001 ) (21,620 ) (23,005 ) Realized gains on fixed income investment 574 943 1,224 2,487 Realized losses on fixed income investment (86 ) (74 ) (330 ) (505 ) Other 11 8 72 8 Interest and other income (expense), net $ 13,539 $ 2,725 $ 25,899 $ 12,995 Interest expense $ (18,809 ) $ (17,281 ) $ (55,286 ) $ (52,924 ) Investment gains (losses), net: Realized investment gains $ 681 $ 202 $ 3,071 $ 1,391 Realized investment losses — — — (5,120 ) Unrealized investment gains 294 1,330 2,190 774 Investment gains (losses), net $ 975 $ 1,532 $ 5,261 $ (2,955 ) Non-operating income (expense), net $ (4,295 ) $ (13,024 ) $ (24,126 ) $ (42,884 ) |
Segments
Segments | 9 Months Ended |
Sep. 01, 2017 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments. Our CEO, the chief operating decision maker, reviews revenue and gross margin information for each of our reportable segments, but does not review operating expenses on a segment by segment basis. In addition, with the exception of goodwill and intangible assets, we do not identify or allocate our assets by the reportable segments. We have the following reportable segments: • Digital Media— Our Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content anywhere. Our customers include traditional content creators, web application developers and digital media professionals, as well as their management in marketing departments and agencies, companies and publishers. Our customers also include knowledge workers who create, collaborate and distribute documents. • Digital Marketing— Our Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Our customers include digital marketers, advertisers, publishers, merchandisers, web analysts, chief marketing officers, chief information officers and chief revenue officers. • Print and Publishing— Our Print and Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to our legacy type and OEM printing businesses. Our segment results for the three months ended September 1, 2017 and September 2, 2016 were as follows (dollars in thousands): Digital Media Digital Marketing Print and Publishing Total Three months ended September 1, 2017 Revenue $ 1,270,215 $ 529,497 $ 41,362 $ 1,841,074 Cost of revenue 69,533 191,536 1,853 262,922 Gross profit $ 1,200,682 $ 337,961 $ 39,509 $ 1,578,152 Gross profit as a percentage of revenue 95 % 64 % 96 % 86 % Three months ended September 2, 2016 Revenue $ 989,969 $ 429,605 $ 44,393 $ 1,463,967 Cost of revenue 56,771 144,065 1,865 202,701 Gross profit $ 933,198 $ 285,540 $ 42,528 $ 1,261,266 Gross profit as a percentage of revenue 94 % 66 % 96 % 86 % Our segment results for the nine months ended September 1, 2017 and September 2, 2016 were as follows (dollars in thousands): Digital Media Digital Marketing Print and Publishing Total Nine months ended September 1, 2017 Revenue $ 3,620,282 $ 1,547,319 $ 127,309 $ 5,294,910 Cost of revenue 182,935 551,454 5,230 739,619 Gross profit $ 3,437,347 $ 995,865 $ 122,079 $ 4,555,291 Gross profit as a percentage of revenue 95 % 64 % 96 % 86 % Nine months ended September 2, 2016 Revenue $ 2,864,824 $ 1,248,023 $ 133,164 $ 4,246,011 Cost of revenue 169,490 427,984 5,878 603,352 Gross profit $ 2,695,334 $ 820,039 $ 127,286 $ 3,642,659 Gross profit as a percentage of revenue 94 % 66 % 96 % 86 % |
Basis of Presentation and Sum21
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 2, 2016 on file with the SEC (our “Annual Report”). Reclassifications Certain immaterial prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated balance sheets, condensed consolidated statements of income and condensed consolidated statements of cash flows. |
Recent Accounting Pronouncements | Recently Adopted Accounting Guidance On March 30, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. Tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We early adopted this standard during the first quarter of fiscal 2017. As required by the standard, excess tax benefits recognized on stock-based compensation expense were reflected in our condensed consolidated statements of income as a component of the provision for income taxes rather than paid-in capital on a prospective basis. Accordingly, we recorded excess tax benefits within our provision for income taxes, rather than additional paid-in capital upon adoption. The cumulative effect to retained earnings from previously unrecognized excess tax benefits, after offset by the related valuation allowance, was not significant to our condensed consolidated balance sheets. We also elected to prospectively apply the change in presentation of excess tax benefits wherein excess tax benefits recognized on stock-based compensation expense were classified as operating activities in our condensed consolidated statements of cash flows for the nine months ended September 1, 2017 . Prior period classification of cash flows related to excess tax benefits were not adjusted in our condensed consolidated statements of cash flows. Presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to all periods presented as such cash flows have historically been presented as financing activities. Further, we did not elect an accounting policy change to record forfeitures as they occur and thus we continue to estimate forfeitures at each period. Significant Accounting Policies There have been no other material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. Recent Accounting Pronouncements Not Yet Effective On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the full retrospective or modified retrospective transition method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for us in the first quarter of fiscal 2019. We expect to adopt this updated standard in the first quarter of fiscal 2019 on a modified retrospective basis. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. While we are continuing to assess all potential impacts of the new standard, we currently believe the most significant impact relates to our accounting for arrangements that include term-based software licenses bundled with maintenance and support. Under current GAAP, the revenue attributable to these software licenses is recognized ratably over the term of the arrangement because VSOE does not exist for the undelivered maintenance and support element as it is not sold separately. The requirement to have VSOE for undelivered elements to enable the separation of revenue for the delivered software licenses is eliminated under the new standard. Accordingly, under the new standard we will be required to recognize as revenue a portion of the arrangement fee upon delivery of the software license. We expect revenue related to our professional services and cloud offerings for business enterprises, individuals and teams to remain substantially unchanged. Due to the complexity of certain of our contracts, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and, therefore, may vary in some instances. On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The updated standard is effective for us beginning in the first quarter of fiscal 2020 and we do not plan to early adopt. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On August 28, 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging, requiring expanded hedge accounting for both non-financial and financial risk components and refining the measurement of hedge results to better reflect an entity's hedging strategies. The updated standard also amends the presentation and disclosure requirements and changes how entities assess hedge effectiveness. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The updated standard is effective for us beginning in the first quarter of fiscal 2020 and we do not plan to early adopt. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. With the exception of the new standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 1, 2017 , as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the fiscal year ended December 2, 2016 , that are of significance or potential significance to us. |
Cash, Cash Equivalents and Sh22
Cash, Cash Equivalents and Short-Term Investments (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash Cash Equivalents and Short term Investments | Cash, cash equivalents and short-term investments consisted of the following as of September 1, 2017 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 413,411 $ — $ — $ 413,411 Cash equivalents: Money market mutual funds 1,344,350 — — 1,344,350 Time deposits 16,789 — — 16,789 Total cash equivalents 1,361,139 — — 1,361,139 Total cash and cash equivalents 1,774,550 — — 1,774,550 Short-term fixed income securities: Asset-backed securities 99,295 51 (162 ) 99,184 Corporate bonds and commercial paper 2,427,062 8,962 (3,000 ) 2,433,024 Municipal securities 145,850 162 (51 ) 145,961 U.S. Treasury securities 917,426 14 (1,673 ) 915,767 Total short-term investments 3,589,633 9,189 (4,886 ) 3,593,936 Total cash, cash equivalents and short-term investments $ 5,364,183 $ 9,189 $ (4,886 ) $ 5,368,486 Cash, cash equivalents and short-term investments consisted of the following as of December 2, 2016 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash $ 208,635 $ — $ — $ 208,635 Cash equivalents: Corporate bonds and commercial paper 1,249 — — 1,249 Money market mutual funds 782,210 — — 782,210 Municipal securities 1,301 — — 1,301 Time deposits 17,920 — — 17,920 Total cash equivalents 802,680 — — 802,680 Total cash and cash equivalents 1,011,315 — — 1,011,315 Short-term fixed income securities: Asset-backed securities 111,009 95 (190 ) 110,914 Corporate bonds and commercial paper 2,464,769 3,135 (9,554 ) 2,458,350 Municipal securities 134,710 37 (525 ) 134,222 U.S. agency securities 39,538 42 — 39,580 U.S. Treasury securities 1,008,195 194 (1,470 ) 1,006,919 Total short-term investments 3,758,221 3,503 (11,739 ) 3,749,985 Total cash, cash equivalents and short-term investments $ 4,769,536 $ 3,503 $ (11,739 ) $ 4,761,300 |
Continuous Unrealized Loss Position Less Than Twelve Months Related to Available-for-Sale Securities | The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category, that have been in an unrealized loss position for less than twelve months, as of September 1, 2017 and December 2, 2016 (in thousands): 2017 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 710,735 $ (2,497 ) $ 1,282,076 $ (9,474 ) Asset-backed securities 62,235 (150 ) 54,063 (189 ) Municipal securities 6,387 (23 ) 114,810 (525 ) U.S. Treasury and agency securities 808,221 (1,400 ) 580,529 (1,470 ) Total $ 1,587,578 $ (4,070 ) $ 2,031,478 $ (11,658 ) |
Continuous Unrealized Loss Position Twelve Months or Longer Related to Available-for-Sale-Securities | The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category, that were in a continuous unrealized loss position for more than twelve months, as of September 1, 2017 and December 2, 2016 (in thousands): 2017 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 94,397 $ (503 ) $ 39,162 $ (80 ) Asset-backed securities 1,495 (12 ) 1,331 (1 ) Municipal securities 10,077 (28 ) — — U.S. Treasury and agency securities 47,636 (273 ) — — Total $ 153,605 $ (816 ) $ 40,493 $ (81 ) |
Cost and Estimated Fair Value of Debt Securities | The following table summarizes the cost and estimated fair value of short-term fixed income securities classified as short-term investments based on stated effective maturities as of September 1, 2017 (in thousands): Amortized Cost Estimated Fair Value Due within one year $ 1,079,772 $ 1,079,092 Due between one and two years 1,353,653 1,353,378 Due between two and three years 776,048 778,726 Due after three years 380,160 382,740 Total $ 3,589,633 $ 3,593,936 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities at fair value on a recurring basis | The fair value of our financial assets and liabilities at September 1, 2017 was determined using the following inputs (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market mutual funds $ 1,344,350 $ 1,344,350 $ — $ — Time deposits 16,789 16,789 — — Short-term investments: Asset-backed securities 99,184 — 99,184 — Corporate bonds and commercial paper 2,433,024 — 2,433,024 — Municipal securities 145,961 — 145,961 — U.S. Treasury securities 915,767 — 915,767 — Prepaid expenses and other current assets: Foreign currency derivatives 11,559 — 11,559 — Other assets: Deferred compensation plan assets 52,554 1,622 50,932 — Interest rate swap derivatives 7,564 — 7,564 — Total assets $ 5,026,752 $ 1,362,761 $ 3,663,991 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 1,410 $ — $ 1,410 $ — Total liabilities $ 1,410 $ — $ 1,410 $ — The fair value of our financial assets and liabilities at December 2, 2016 was determined using the following inputs (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate bonds and commercial paper $ 1,249 $ — $ 1,249 $ — Money market mutual funds 782,210 782,210 — — Municipal securities 1,301 — 1,301 — Time deposits 17,920 17,920 — — Short-term investments: Asset-backed securities 110,914 — 110,914 — Corporate bonds and commercial paper 2,458,350 — 2,458,350 — Municipal securities 134,222 — 134,222 — U.S. agency securities 39,580 — 39,580 — U.S. Treasury securities 1,006,919 — 1,006,919 — Prepaid expenses and other current assets: Foreign currency derivatives 38,112 — 38,112 — Other assets: Deferred compensation plan assets 42,180 1,831 40,349 — Interest rate swap derivatives 13,117 — 13,117 — Total assets $ 4,646,074 $ 801,961 $ 3,844,113 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 5,246 $ — $ 5,246 $ — Total liabilities $ 5,246 $ — $ 5,246 $ — |
Derivatives and Hedging Activ24
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The fair value of derivative instruments on our condensed consolidated balance sheets as of September 1, 2017 and December 2, 2016 were as follows (in thousands): 2017 2016 Fair Value Asset Derivatives Fair Value Liability Derivatives Fair Value Asset Derivatives Fair Value Liability Derivatives Derivatives designated as hedging instruments: Foreign exchange option contracts (1) (3) $ 9,487 $ — $ 34,355 $ — Interest rate swap (2) 7,564 — 13,117 — Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) 2,072 1,410 3,757 5,246 Total derivatives $ 19,123 $ 1,410 $ 51,229 $ 5,246 _________________________________________ (1) Included in prepaid expenses and other current assets and accrued expenses for asset derivatives and liability derivatives, respectively, on our condensed consolidated balance sheets. (2) Included in other assets or other liabilities on our condensed consolidated balance sheets. (3) Hedging effectiveness expected to be recognized into income within the next twelve months. |
Effect of Derivative Instruments as Designated Cash Flow Hedges and Not Designated as Hedges | The effect of foreign currency derivative instruments designated as cash flow hedges and of foreign currency derivative instruments not designated as hedges in our condensed consolidated statements of income for the three and nine months ended September 1, 2017 was as follows (in thousands): Three Months Nine Months Foreign Foreign Foreign Foreign Derivatives in cash flow hedging relationships: Net gain (loss) recognized in OCI, net of tax (1) $ 1,483 $ — $ 3,613 $ — Net gain (loss) reclassified from accumulated OCI into income, net of tax (2) $ 221 $ — $ 31,845 $ — Net gain (loss) recognized in income (3) $ (6,190 ) $ — $ (21,842 ) $ — Derivatives not designated as hedging relationships: Net gain (loss) recognized in income (4) $ — $ 2,920 $ — $ 6,456 The effect of foreign currency derivative instruments designated as cash flow hedges and of foreign currency derivative instruments not designated as hedges in our condensed consolidated statements of income for the three and nine months ended September 2, 2016 was as follows (in thousands): Three Months Nine Months Foreign Foreign Foreign Foreign Derivatives in cash flow hedging relationships: Net gain (loss) recognized in OCI, net of tax (1) $ 13,233 $ — $ 9,089 $ — Net gain (loss) reclassified from accumulated OCI into income, net of tax (2) $ 3,904 $ — $ 10,732 $ — Net gain (loss) recognized in income (3) $ (7,733 ) $ — $ (19,242 ) $ — Derivatives not designated as hedging relationships: Net gain (loss) recognized in income (4) $ — $ 1,368 $ — $ (1,335 ) _________________________________________ (1) Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). (2) Effective portion classified as revenue. (3) Ineffective portion and amount excluded from effectiveness testing classified in interest and other income (expense), net. (4) Classified in interest and other income (expense), net. |
Goodwill and Purchased and Ot25
Goodwill and Purchased and Other Intangibles (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Purchased and other intangible assets | Purchased and other intangible assets subject to amortization as of September 1, 2017 and December 2, 2016 were as follows (in thousands): 2017 2016 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Purchased technology $ 240,901 $ (119,042 ) $ 121,859 $ 149,253 $ (82,091 ) $ 67,162 Customer contracts and relationships $ 577,887 $ (337,748 ) $ 240,139 $ 541,366 $ (274,380 ) $ 266,986 Trademarks 76,255 (54,088 ) 22,167 76,355 (46,846 ) 29,509 Acquired rights to use technology 72,167 (52,931 ) 19,236 87,403 (60,929 ) 26,474 Localization 1,047 (586 ) 461 631 (177 ) 454 Other intangibles 38,693 (21,888 ) 16,805 38,693 (14,873 ) 23,820 Total other intangible assets $ 766,049 $ (467,241 ) $ 298,808 $ 744,448 $ (397,205 ) $ 347,243 Purchased and other intangible assets, net $ 1,006,950 $ (586,283 ) $ 420,667 $ 893,701 $ (479,296 ) $ 414,405 |
Amortization expense in future periods | As of September 1, 2017 , we expect amortization expense in future periods to be as follows (in thousands): Fiscal Year Purchased Technology Other Intangible Assets Remainder of 2017 $ 10,704 $ 26,673 2018 37,722 97,462 2019 33,749 69,445 2020 31,540 39,594 2021 7,078 17,279 Thereafter 1,066 48,355 Total expected amortization expense $ 121,859 $ 298,808 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses as of September 1, 2017 and December 2, 2016 consisted of the following (in thousands): 2017 2016 Accrued compensation and benefits $ 373,448 $ 339,487 Accrued media costs 129,602 5,144 Sales and marketing allowances 47,075 55,681 Accrued corporate marketing 54,921 55,218 Taxes payable 43,079 43,113 Royalties payable 39,666 25,089 Accrued interest expense 6,781 25,805 Other 237,720 190,093 Accrued expenses $ 932,292 $ 739,630 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Restricted Stock Unit Activity | Restricted stock unit activity for the nine months ended September 1, 2017 and the fiscal year ended December 2, 2016 was as follows (in thousands): 2017 2016 Beginning outstanding balance 8,316 10,069 Awarded 4,675 4,440 Released (3,528 ) (5,471 ) Forfeited (615 ) (722 ) Increase due to acquisition 595 — Ending outstanding balance 9,443 8,316 |
Restricted Stock Units Outstanding | Information regarding restricted stock units outstanding at September 1, 2017 and September 2, 2016 is summarized below: Number of Shares (thousands) Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (*) (millions) 2017 Restricted stock units outstanding 9,443 1.27 $ 1,464.2 Restricted stock units vested and expected to vest 8,636 1.22 $ 1,339.1 2016 Restricted stock units outstanding 8,398 1.25 $ 869.7 Restricted stock units vested and expected to vest 7,597 1.19 $ 775.2 _________________________________________ (*) The intrinsic value is calculated as the market value as of the end of the fiscal period. As reported by the NASDAQ Global Select Market, the market values as of September 1, 2017 and September 2, 2016 were $155.06 and $103.57 , respectively. |
Performance Share Activity | The following table sets forth the summary of performance share activity under our Performance Share Programs for the nine months ended September 1, 2017 and the fiscal year ended December 2, 2016 (in thousands): 2017 2016 Shares Granted Maximum Shares Eligible to Receive Shares Granted Maximum Shares Eligible to Receive Beginning outstanding balance 1,630 3,261 1,940 3,881 Awarded 1,082 (1 ) 1,040 1,206 (2 ) 1,053 Achieved (1,135 ) (1,147 ) (1,373 ) (1,387 ) Forfeited (43 ) (86 ) (143 ) (286 ) Ending outstanding balance 1,534 3,068 1,630 3,261 _________________________________________ (1) Included in the 1.1 million shares awarded during the nine months ended September 1, 2017 were 0.6 million shares awarded for the final achievement of the 2014 Performance Share program. The remaining awarded shares were for the 2017 Performance Share Program. (2) Included in the 1.2 million shares awarded during the fiscal year ended December 2, 2016 were 0.7 million shares awarded for the final achievement of the 2013 Performance Share program. The remaining awarded shares were for the 2016 Performance Share Program. |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | The expected life of the ESPP shares is the average of the remaining purchase periods under each offering period. The assumptions used to value employee stock purchase rights during the three and nine months ended September 1, 2017 and September 2, 2016 were as follows: Three Months Nine Months 2017 2016 2017 2016 Expected life (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Volatility 25% - 27% 26% - 28% 22% - 27% 26% - 29% Risk free interest rate 1.12% - 1.41% 0.37% - 0.59% 0.62% - 1.41% 0.37% - 1.06% |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Total stock-based compensation costs included in our condensed consolidated statements of income for the three months ended September 1, 2017 and September 2, 2016 were as follows (in thousands): 2017 2016 Income Statement Classifications Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Cost of revenue—subscription $ 628 $ 3,633 $ 333 $ 1,554 Cost of revenue—services and support 1,626 2,409 1,221 1,861 Research and development 4,608 43,243 3,336 26,388 Sales and marketing 4,658 36,064 3,940 27,798 General and administrative 1,140 19,033 976 17,097 Total $ 12,660 $ 104,382 $ 9,806 $ 74,698 Total stock-based compensation costs included in our condensed consolidated statements of income for the nine months ended September 1, 2017 and September 2, 2016 were as follows (in thousands): 2017 2016 Income Statement Classifications Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Option Grants and Stock Purchase Rights Restricted Stock Units and Performance Share Awards Cost of revenue—subscription $ 1,899 $ 10,467 $ 1,119 $ 5,115 Cost of revenue—services and support 4,850 7,151 4,087 5,494 Research and development 12,884 119,068 10,961 81,280 Sales and marketing 13,832 103,982 12,953 85,123 General and administrative 3,623 56,972 3,423 53,049 Total $ 37,088 $ 297,640 $ 32,543 $ 230,061 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended | |
Sep. 01, 2017 | ||
Stockholders' Equity Note [Abstract] | ||
Retained Earnings | The changes in retained earnings for the nine months ended September 1, 2017 were as follows (in thousands): Balance as of December 2, 2016 $ 8,114,517 Net income 1,192,405 Reissuance of treasury stock (234,601 ) Balance as of September 1, 2017 $ 9,072,321 | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of accumulated other comprehensive income (loss) and activity, net of related taxes, as of September 1, 2017 were as follows (in thousands): December 2, Increase / Decrease Reclassification Adjustments September 1, Net unrealized gains / losses on available-for-sale securities: Unrealized gains on available-for-sale securities $ 3,499 $ 6,872 $ (1,224 ) $ 9,147 Unrealized losses on available-for-sale securities (11,565 ) 6,362 330 (4,873 ) Total net unrealized gains / losses on available-for-sale securities (8,066 ) 13,234 (894 ) (1) 4,274 Net unrealized gains / losses on derivative instruments designated as hedging instruments 21,689 3,613 (31,219 ) (2) (5,917 ) Cumulative foreign currency translation adjustments (187,225 ) 90,238 — (96,987 ) Total accumulated other comprehensive income (loss), net of taxes $ (173,602 ) $ 107,085 $ (32,113 ) $ (98,630 ) _________________________________________ (1) Reclassification adjustments for gains / losses on available-for-sale securities are classified in interest and other income (expense), net. (2) Reclassification adjustments for loss on the interest rate lock agreement and gains / losses on other derivative instruments are classified in interest and other income (expense), net and revenue, respectively. | [1],[2] |
Other Comprehensive Income, Tax [Table Text Block] | The following table sets forth the taxes related to each component of other comprehensive income for the three and nine months ended September 1, 2017 and September 2, 2016 (in thousands): Three Months Nine Months 2017 2016 2017 2016 Available-for-sale securities: Unrealized gains / losses $ 235 $ (13 ) $ 523 $ (35 ) Reclassification adjustments (214 ) — (323 ) — Subtotal available-for-sale securities 21 (13 ) 200 (35 ) Derivatives designated as hedging instruments: Unrealized gains / losses on derivative instruments (1) — — — — Reclassification adjustments (1) (149 ) (151 ) (582 ) (466 ) Subtotal derivatives designated as hedging instruments (149 ) (151 ) (582 ) (466 ) Foreign currency translation adjustments 1,434 (463 ) 3,081 882 Total taxes, other comprehensive income $ 1,306 $ (627 ) $ 2,699 $ 381 _________________________________________ (1) Taxes related to derivative instruments other than the interest rate lock agreement were zero based on the tax jurisdiction where these derivative instruments were executed. | [2] |
[1] | Reclassification adjustments for gains / losses on available-for-sale securities are classified in interest and other income (expense), net. | |
[2] | Reclassification adjustments for loss on the interest rate lock agreement and gains / losses on other derivative instruments are classified in interest and other income (expense), net and revenue, respectively. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended September 1, 2017 and September 2, 2016 (in thousands, except per share data): Three Months Nine Months 2017 2016 2017 2016 Net income $ 419,569 $ 270,788 $ 1,192,405 $ 769,169 Shares used to compute basic net income per share 493,426 498,584 494,138 499,224 Dilutive potential common shares: Unvested restricted stock units and performance share awards 6,664 4,633 6,574 5,373 Stock options 308 452 348 538 Shares used to compute diluted net income per share 500,398 503,669 501,060 505,135 Basic net income per share $ 0.85 $ 0.54 $ 2.41 $ 1.54 Diluted net income per share $ 0.84 $ 0.54 $ 2.38 $ 1.52 |
Non-Operating Income (Expense)
Non-Operating Income (Expense) (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Other Income and Expenses [Abstract] | |
Non-Operating Income (Expense) | Non-operating income (expense) for the three and nine months ended September 1, 2017 and September 2, 2016 included the following (in thousands): Three Months Nine Months 2017 2016 2017 2016 Interest and other income (expense), net: Interest income $ 17,180 $ 11,849 $ 46,553 $ 34,010 Foreign exchange gains (losses) (4,140 ) (10,001 ) (21,620 ) (23,005 ) Realized gains on fixed income investment 574 943 1,224 2,487 Realized losses on fixed income investment (86 ) (74 ) (330 ) (505 ) Other 11 8 72 8 Interest and other income (expense), net $ 13,539 $ 2,725 $ 25,899 $ 12,995 Interest expense $ (18,809 ) $ (17,281 ) $ (55,286 ) $ (52,924 ) Investment gains (losses), net: Realized investment gains $ 681 $ 202 $ 3,071 $ 1,391 Realized investment losses — — — (5,120 ) Unrealized investment gains 294 1,330 2,190 774 Investment gains (losses), net $ 975 $ 1,532 $ 5,261 $ (2,955 ) Non-operating income (expense), net $ (4,295 ) $ (13,024 ) $ (24,126 ) $ (42,884 ) |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 01, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Our segment results for the three months ended September 1, 2017 and September 2, 2016 were as follows (dollars in thousands): Digital Media Digital Marketing Print and Publishing Total Three months ended September 1, 2017 Revenue $ 1,270,215 $ 529,497 $ 41,362 $ 1,841,074 Cost of revenue 69,533 191,536 1,853 262,922 Gross profit $ 1,200,682 $ 337,961 $ 39,509 $ 1,578,152 Gross profit as a percentage of revenue 95 % 64 % 96 % 86 % Three months ended September 2, 2016 Revenue $ 989,969 $ 429,605 $ 44,393 $ 1,463,967 Cost of revenue 56,771 144,065 1,865 202,701 Gross profit $ 933,198 $ 285,540 $ 42,528 $ 1,261,266 Gross profit as a percentage of revenue 94 % 66 % 96 % 86 % Our segment results for the nine months ended September 1, 2017 and September 2, 2016 were as follows (dollars in thousands): Digital Media Digital Marketing Print and Publishing Total Nine months ended September 1, 2017 Revenue $ 3,620,282 $ 1,547,319 $ 127,309 $ 5,294,910 Cost of revenue 182,935 551,454 5,230 739,619 Gross profit $ 3,437,347 $ 995,865 $ 122,079 $ 4,555,291 Gross profit as a percentage of revenue 95 % 64 % 96 % 86 % Nine months ended September 2, 2016 Revenue $ 2,864,824 $ 1,248,023 $ 133,164 $ 4,246,011 Cost of revenue 169,490 427,984 5,878 603,352 Gross profit $ 2,695,334 $ 820,039 $ 127,286 $ 3,642,659 Gross profit as a percentage of revenue 94 % 66 % 96 % 86 % |
Acquisitions (Details)
Acquisitions (Details) - TubeMogul [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2017 | Dec. 19, 2016 | |
Business Acquisition [Line Items] | ||
Business Combination Purchase Price | $ 560.8 | |
Purchase price allocation, goodwill | $ 349 | |
Purchase price allocation, identifiable intangible assets | 113.1 | |
Purchase price allocation, net assets acquired | $ 98.7 |
Cash, Cash Equivalents and Sh33
Cash, Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 02, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 5,364,183 | $ 4,769,536 |
Unrealized Gains | 9,189 | 3,503 |
Unrealized Losses | (4,886) | (11,739) |
Estimated Fair Value, Total cash, cash equivalents and short-term investments | 5,368,486 | 4,761,300 |
Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,774,550 | 1,011,315 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Cash and Cash Equivalents, Fair Value Disclosure | 1,774,550 | 1,011,315 |
Cash [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 413,411 | 208,635 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Cash and Cash Equivalents, Fair Value Disclosure | 413,411 | 208,635 |
Cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,361,139 | 802,680 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Cash and Cash Equivalents, Fair Value Disclosure | 1,361,139 | 802,680 |
Cash equivalents [Member] | Corporate Bonds And Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,249 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Cash and Cash Equivalents, Fair Value Disclosure | 1,249 | |
Cash equivalents [Member] | Money Market Funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,344,350 | 782,210 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Cash and Cash Equivalents, Fair Value Disclosure | 1,344,350 | 782,210 |
Cash equivalents [Member] | Municipal Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,301 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Cash and Cash Equivalents, Fair Value Disclosure | 1,301 | |
Cash equivalents [Member] | Time deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16,789 | 17,920 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Cash and Cash Equivalents, Fair Value Disclosure | 16,789 | 17,920 |
Short-term fixed income securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,589,633 | 3,758,221 |
Unrealized Gains | 9,189 | 3,503 |
Unrealized Losses | (4,886) | (11,739) |
Estimated Fair Value, short-term investments | 3,593,936 | 3,749,985 |
Short-term fixed income securities [Member] | Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 99,295 | 111,009 |
Unrealized Gains | 51 | 95 |
Unrealized Losses | (162) | (190) |
Estimated Fair Value, short-term investments | 99,184 | 110,914 |
Short-term fixed income securities [Member] | Corporate Bonds And Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,427,062 | 2,464,769 |
Unrealized Gains | 8,962 | 3,135 |
Unrealized Losses | (3,000) | (9,554) |
Estimated Fair Value, short-term investments | 2,433,024 | 2,458,350 |
Short-term fixed income securities [Member] | Municipal Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 145,850 | 134,710 |
Unrealized Gains | 162 | 37 |
Unrealized Losses | (51) | (525) |
Estimated Fair Value, short-term investments | 145,961 | 134,222 |
Short-term fixed income securities [Member] | U.S. agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 39,538 | |
Unrealized Gains | 42 | |
Unrealized Losses | 0 | |
Estimated Fair Value, short-term investments | 39,580 | |
Short-term fixed income securities [Member] | U.S. Treasury securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 917,426 | 1,008,195 |
Unrealized Gains | 14 | 194 |
Unrealized Losses | (1,673) | (1,470) |
Estimated Fair Value, short-term investments | $ 915,767 | $ 1,006,919 |
Cash, Cash Equivalents and Sh34
Cash, Cash Equivalents and Short-Term Investments (Details 1) $ in Thousands | Sep. 01, 2017USD ($)securities | Dec. 02, 2016USD ($)securities |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 1,587,578 | $ 2,031,478 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (4,070) | (11,658) |
Available-for-sale securities in a continuous unrealized loss position for more than twelve months, fair value | 153,605 | 40,493 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (816) | (81) |
Fair Value and Gross Unrealized Losses Related to Available-For-Sale Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | $ 5,364,183 | $ 4,769,536 |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | securities | 570 | 1,052 |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | securities | 90 | 23 |
Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 62,235 | $ 54,063 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (150) | (189) |
Available-for-sale securities in a continuous unrealized loss position for more than twelve months, fair value | 1,495 | 1,331 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (12) | (1) |
Corporate Bonds And Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 710,735 | 1,282,076 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (2,497) | (9,474) |
Available-for-sale securities in a continuous unrealized loss position for more than twelve months, fair value | 94,397 | 39,162 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (503) | (80) |
Municipal Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 6,387 | 114,810 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (23) | (525) |
Available-for-sale securities in a continuous unrealized loss position for more than twelve months, fair value | 10,077 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (28) | 0 |
US Treasury and Government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 808,221 | 580,529 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (1,400) | (1,470) |
Available-for-sale securities in a continuous unrealized loss position for more than twelve months, fair value | 47,636 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (273) | 0 |
Fixed Income Investments [Member] | ||
Fair Value and Gross Unrealized Losses Related to Available-For-Sale Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | 3,589,633 | 3,758,221 |
Fixed Income Investments [Member] | Asset-backed Securities [Member] | ||
Fair Value and Gross Unrealized Losses Related to Available-For-Sale Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | 99,295 | 111,009 |
Fixed Income Investments [Member] | Corporate Bonds And Commercial Paper [Member] | ||
Fair Value and Gross Unrealized Losses Related to Available-For-Sale Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | 2,427,062 | 2,464,769 |
Fixed Income Investments [Member] | Municipal Notes [Member] | ||
Fair Value and Gross Unrealized Losses Related to Available-For-Sale Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | $ 145,850 | $ 134,710 |
Cash, Cash Equivalents and Sh35
Cash, Cash Equivalents and Short-Term Investments (Details 2) $ in Thousands | Sep. 01, 2017USD ($) |
Amortized cost of short-term fixed Income Securities [Abstract] | |
Due within one year, Amortized Cost | $ 1,079,772 |
Due between one and two years, Amortized Cost | 1,353,653 |
Due between two and three years, Amortized Cost | 776,048 |
Due after three years, Amortized Cost | 380,160 |
Total, Amortized Cost | 3,589,633 |
Estimated Fair Value of Short-term fixed Income Securities [Abstract] | |
Due within one year, Estimated Fair value | 1,079,092 |
Due between one and two years, Estimated Fair value | 1,353,378 |
Due between two and three years, Estimated Fair value | 778,726 |
Due after three years, Estimated Fair value | 382,740 |
Total, Estimated Fair value | $ 3,593,936 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Sep. 01, 2017USD ($) |
Notes 2020 and 2025 [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |
Debt Instrument, Fair Value Disclosure | $ 2,000 |
Fair Value Measurements (Deta37
Fair Value Measurements (Details 1) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 02, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | $ 11,559 | $ 38,112 |
Deferred Compensation Plan Assets | 52,554 | 42,180 |
Interest Rate Derivative Assets, at Fair Value | 7,564 | 13,117 |
Assets, Fair Value Disclosure | 5,026,752 | 4,646,074 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 1,410 | 5,246 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 1,410 | 5,246 |
Corporate Bonds And Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,249 | |
Estimated Fair Value, short-term investments | 2,433,024 | 2,458,350 |
Asset-backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 99,184 | 110,914 |
Money Market Funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,344,350 | 782,210 |
Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 16,789 | 17,920 |
U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 39,580 | |
U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 915,767 | 1,006,919 |
Municipal Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,301 | |
Estimated Fair Value, short-term investments | 145,961 | 134,222 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 0 | 0 |
Deferred Compensation Plan Assets | 1,622 | 1,831 |
Interest Rate Derivative Assets, at Fair Value | 0 | 0 |
Assets, Fair Value Disclosure | 1,362,761 | 801,961 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | 0 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Corporate Bonds And Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | |
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Asset-backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,344,350 | 782,210 |
Fair Value, Inputs, Level 1 [Member] | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 16,789 | 17,920 |
Fair Value, Inputs, Level 1 [Member] | U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 0 | |
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Municipal Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | |
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 11,559 | 38,112 |
Deferred Compensation Plan Assets | 50,932 | 40,349 |
Interest Rate Derivative Assets, at Fair Value | 7,564 | 13,117 |
Assets, Fair Value Disclosure | 3,663,991 | 3,844,113 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 1,410 | 5,246 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 1,410 | 5,246 |
Fair Value, Inputs, Level 2 [Member] | Corporate Bonds And Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,249 | |
Estimated Fair Value, short-term investments | 2,433,024 | 2,458,350 |
Fair Value, Inputs, Level 2 [Member] | Asset-backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 99,184 | 110,914 |
Fair Value, Inputs, Level 2 [Member] | Money Market Funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 39,580 | |
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 915,767 | 1,006,919 |
Fair Value, Inputs, Level 2 [Member] | Municipal Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,301 | |
Estimated Fair Value, short-term investments | 145,961 | 134,222 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 0 | 0 |
Deferred Compensation Plan Assets | 0 | 0 |
Interest Rate Derivative Assets, at Fair Value | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | 0 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Corporate Bonds And Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | |
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Money Market Funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 0 | |
Fair Value, Inputs, Level 3 [Member] | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Estimated Fair Value, short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Municipal Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | |
Estimated Fair Value, short-term investments | $ 0 | $ 0 |
Derivatives and Hedging Activ38
Derivatives and Hedging Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 01, 2017 | Dec. 02, 2016 | Jun. 13, 2014 | Feb. 28, 2010 | ||
Derivative, Fair Value, Net [Abstract] | |||||
Fair value asset derivatives | $ 19,123 | $ 51,229 | |||
Fair value liability derivatives | 1,410 | 5,246 | |||
Derivatives designated as hedging instruments [Member] | Foreign Exchange Option Contracts [Member] | |||||
Derivative, Fair Value, Net [Abstract] | |||||
Fair value asset derivatives | [1],[2] | 9,487 | 34,355 | ||
Fair value liability derivatives | [1],[2] | 0 | 0 | ||
Derivatives designated as hedging instruments [Member] | Interest Rate Swap [Member] | |||||
Derivative, Fair Value, Net [Abstract] | |||||
Fair value asset derivatives | [3] | 7,564 | 13,117 | ||
Fair value liability derivatives | [3] | 0 | 0 | ||
Derivatives not designated as hedging instruments [Member] | Foreign Exchange Forward Contracts [Member] | |||||
Derivative, Fair Value, Net [Abstract] | |||||
Fair value asset derivatives | [2] | 2,072 | 3,757 | ||
Fair value liability derivatives | [2] | $ 1,410 | $ 5,246 | ||
Notes 2020 [Member] | |||||
Derivative, Fair Value, Net [Abstract] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | ||||
Senior Notes | $ 900,000 | ||||
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | |||||
Derivative, Fair Value, Net [Abstract] | |||||
Maximum Remaining Maturity of Foreign Currency Derivatives | 12 months | ||||
Fair Value Hedging [Member] | |||||
Derivative, Fair Value, Net [Abstract] | |||||
Derivative, Notional Amount | $ 900,000 | ||||
Derivative, Fixed Interest Rate | 4.75% | ||||
[1] | Hedging effectiveness expected to be recognized into income within the next twelve months. | ||||
[2] | Included in prepaid expenses and other current assets and accrued expenses for asset derivatives and liability derivatives, respectively, on our condensed consolidated balance sheets. | ||||
[3] | Included in other assets or other liabilities on our condensed consolidated balance sheets. |
Derivatives and Hedging Activ39
Derivatives and Hedging Activities (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | ||
Foreign Exchange Option Contracts [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | [1] | $ 0 | $ 0 | $ 0 | $ 0 |
Foreign Exchange Forward Contracts [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | [1] | 2,920 | 1,368 | 6,456 | (1,335) |
Cash Flow Hedging [Member] | Foreign Exchange Option Contracts [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | [2] | 1,483 | 13,233 | 3,613 | 9,089 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [3] | 221 | 3,904 | 31,845 | 10,732 |
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | [4] | (6,190) | (7,733) | (21,842) | (19,242) |
Cash Flow Hedging [Member] | Foreign Exchange Forward Contracts [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | [2] | 0 | 0 | 0 | 0 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [3] | 0 | 0 | 0 | 0 |
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | [4] | $ 0 | $ 0 | $ 0 | $ 0 |
[1] | Classified in interest and other income (expense), net. | ||||
[2] | Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”). | ||||
[3] | Effective portion classified as revenue. | ||||
[4] | Ineffective portion and amount excluded from effectiveness testing classified in interest and other income (expense), net. |
Goodwill and Purchased and Ot40
Goodwill and Purchased and Other Intangibles (Details) - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 02, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 1,006,950 | $ 893,701 | |
Accumulated Amortization | (586,283) | (479,296) | |
Net | 420,667 | 414,405 | [1] |
Purchased technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 240,901 | 149,253 | |
Accumulated Amortization | (119,042) | (82,091) | |
Net | 121,859 | 67,162 | |
Total other intangible assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 766,049 | 744,448 | |
Accumulated Amortization | (467,241) | (397,205) | |
Net | 298,808 | 347,243 | |
Customer contracts and relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 577,887 | 541,366 | |
Accumulated Amortization | (337,748) | (274,380) | |
Net | 240,139 | 266,986 | |
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 76,255 | 76,355 | |
Accumulated Amortization | (54,088) | (46,846) | |
Net | 22,167 | 29,509 | |
Acquired rights to use technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 72,167 | 87,403 | |
Accumulated Amortization | (52,931) | (60,929) | |
Net | 19,236 | 26,474 | |
Localization [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 1,047 | 631 | |
Accumulated Amortization | (586) | (177) | |
Net | 461 | 454 | |
Other intangibles [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 38,693 | 38,693 | |
Accumulated Amortization | (21,888) | (14,873) | |
Net | $ 16,805 | $ 23,820 | |
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Goodwill and Purchased and Ot41
Goodwill and Purchased and Other Intangibles (Details 1) $ in Thousands | Sep. 01, 2017USD ($) |
Purchased technology [Member] | |
Amortization Expense in Future Periods [Abstract] | |
Remainder of 2017 | $ 10,704 |
2,018 | 37,722 |
2,019 | 33,749 |
2,020 | 31,540 |
2,021 | 7,078 |
Thereafter | 1,066 |
Total expected amortization expense | 121,859 |
Other intangibles [Member] | |
Amortization Expense in Future Periods [Abstract] | |
Remainder of 2017 | 26,673 |
2,018 | 97,462 |
2,019 | 69,445 |
2,020 | 39,594 |
2,021 | 17,279 |
Thereafter | 48,355 |
Total expected amortization expense | $ 298,808 |
Goodwill and Purchased and Ot42
Goodwill and Purchased and Other Intangibles (Details Numeric) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | Dec. 02, 2016 | [1] | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Goodwill | $ 5,820,656 | $ 5,820,656 | $ 5,406,474 | |||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization of purchased and other intangible assets | 39,100 | $ 40,000 | 116,300 | $ 115,400 | ||
Amortization expense included in cost of sales | $ 19,500 | $ 16,900 | $ 57,700 | $ 54,400 | ||
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 02, 2016 | |
Accrued Expense [Abstract] | |||
Accrued compensation and benefits | $ 373,448 | $ 339,487 | |
Accrued Media Spend | 129,602 | 5,144 | |
Sales and marketing allowances | 47,075 | 55,681 | |
Accrued corporate marketing | 54,921 | 55,218 | |
Taxes payable | 43,079 | 43,113 | |
Royalties payable | 39,666 | 25,089 | |
Accrued interest expense | 6,781 | 25,805 | |
Other | 237,720 | 190,093 | |
Accrued expenses | $ 932,292 | $ 739,630 | [1] |
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares shares in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 01, 2017 | Dec. 02, 2016 | |
Restricted Stock Unit [Member] | ||
Shares Activity | ||
Beginning outstanding balance | 8,316 | 10,069 |
Awarded, Shares | 4,675 | 4,440 |
Released, Shares | (3,528) | (5,471) |
Forfeited, Shares | (615) | (722) |
Due To Acquisition | 595 | 0 |
Ending outstanding balance | 9,443 | 8,316 |
Performance Shares [Member] | Shares Granted [Member] | ||
Shares Activity | ||
Beginning outstanding balance | 1,630 | 1,940 |
Awarded, Shares | 1,082 | 1,206 |
Achieved, Shares | (1,135) | (1,373) |
Forfeited, Shares | (43) | (143) |
Ending outstanding balance | 1,534 | 1,630 |
Performance Shares [Member] | Maximum Shares Eligible to Receive [Member] | ||
Shares Activity | ||
Beginning outstanding balance | 3,261 | 3,881 |
Awarded, Shares | 1,040 | 1,053 |
Achieved, Shares | (1,147) | (1,387) |
Forfeited, Shares | (86) | (286) |
Ending outstanding balance | 3,068 | 3,261 |
Performance Shares [Member] | Program 2014 [Member] | ||
Shares Activity | ||
Awarded, Shares | 600 | |
Performance Shares [Member] | Program 2013 [Member] | ||
Shares Activity | ||
Awarded, Shares | 700 |
Stock-Based Compensation (Det45
Stock-Based Compensation (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | ||||
Sep. 01, 2017 | Sep. 02, 2016 | Dec. 02, 2016 | Nov. 27, 2015 | ||
Restricted stock units outstanding | |||||
Share Price | $ 155.06 | $ 103.57 | |||
Restricted Stock Unit [Member] | |||||
Restricted stock units outstanding | |||||
Number of shares outstanding | 9,443 | 8,398 | 8,316 | 10,069 | |
Outstanding weighted average remaining contractual life (in years) | 1 year 3 months 7 days | 1 year 3 months | |||
Shares outstanding aggregate intrinsic value | [1] | $ 1,464.2 | $ 869.7 | ||
Number of shares vested and expected to vest | 8,636 | 7,597 | |||
Weighted Average Remaining Contractual Life Vested And Expected To Vest | 1 year 2 months 19 days | 1 year 2 months 9 days | |||
Vested and expected to vest aggregate intrinsic value | [1] | $ 1,339.1 | $ 775.2 | ||
[1] | The intrinsic value is calculated as the market value as of the end of the fiscal period. As reported by the NASDAQ Global Select Market, the market values as of September 1, 2017 and September 2, 2016 were $155.06 and $103.57, respectively. |
Stock-Based Compensation (Det46
Stock-Based Compensation (Details 2) - Employee Stock Purchase Plan [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |
Valuation Assumptions Volatility Range [Abstract] | ||||
From | 25.00% | 26.00% | 22.00% | 26.00% |
To | 27.00% | 28.00% | 27.00% | 29.00% |
Valuation Assumptions Risk Free Interest Rate Range [Abstract] | ||||
From | 1.12% | 0.37% | 0.62% | 0.37% |
To | 1.41% | 0.59% | 1.41% | 1.06% |
Minimum [Member] | ||||
Valuation Assumptions Expected Life (In Years) | ||||
Expected life (in years) | 6 months | 6 months | 6 months | 6 months |
Maximum [Member] | ||||
Valuation Assumptions Expected Life (In Years) | ||||
Expected life (in years) | 2 years | 2 years | 2 years | 2 years |
Stock-Based Compensation (Det47
Stock-Based Compensation (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |
Option Grants and Stock Purchase Rights [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | $ 12,660 | $ 9,806 | $ 37,088 | $ 32,543 |
Restricted Stock Units and Performance Share Awards [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 104,382 | 74,698 | 297,640 | 230,061 |
Cost of Subscription Revenue [Member] | Option Grants and Stock Purchase Rights [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 628 | 333 | 1,899 | 1,119 |
Cost of Subscription Revenue [Member] | Restricted Stock Units and Performance Share Awards [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 3,633 | 1,554 | 10,467 | 5,115 |
Cost of Service and Support Revenue [Member] | Option Grants and Stock Purchase Rights [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 1,626 | 1,221 | 4,850 | 4,087 |
Cost of Service and Support Revenue [Member] | Restricted Stock Units and Performance Share Awards [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 2,409 | 1,861 | 7,151 | 5,494 |
Research and Development Expense [Member] | Option Grants and Stock Purchase Rights [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 4,608 | 3,336 | 12,884 | 10,961 |
Research and Development Expense [Member] | Restricted Stock Units and Performance Share Awards [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 43,243 | 26,388 | 119,068 | 81,280 |
Sales and Marketing [Member] | Option Grants and Stock Purchase Rights [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 4,658 | 3,940 | 13,832 | 12,953 |
Sales and Marketing [Member] | Restricted Stock Units and Performance Share Awards [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 36,064 | 27,798 | 103,982 | 85,123 |
General and Administrative [Member] | Option Grants and Stock Purchase Rights [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | 1,140 | 976 | 3,623 | 3,423 |
General and Administrative [Member] | Restricted Stock Units and Performance Share Awards [Member] | ||||
Total stock-based compensation costs [Abstract] | ||||
Stock-based compensation costs | $ 19,033 | $ 17,097 | $ 56,972 | $ 53,049 |
Stock-Based Compensation (Det48
Stock-Based Compensation (Details Numeric) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Dec. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 155.06 | $ 103.57 | |
Stock Based Compensation (Numeric) [Abstract] | |||
Unrecognized compensation cost, non-vested awards | $ 782.8 | ||
Period for recognition, unrecognized compensation cost | 2 years 4 days | ||
Performance Shares [Member] | |||
Stock Based Compensation (Numeric) [Abstract] | |||
Maximum Target Percentage Allowed Under Program | 200.00% | ||
Stock Options [Member] | |||
Stock Based Compensation (Numeric) [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0.3 | 0.6 | |
Employee Stock Purchase Plan [Member] | |||
Stock Based Compensation (Numeric) [Abstract] | |||
Shares Purchased, ESPP | 1.9 | 1.9 | |
Average purchase price of shares, ESPP | $ 77.63 | $ 66.13 | |
Total Intrinsic Value Of Shares Purchased | $ 97.7 | $ 54.3 | |
Program 2014 [Member] | Performance Shares [Member] | |||
Stock Based Compensation (Numeric) [Abstract] | |||
Actual Percentage Achieved | 198.00% | ||
Achieved, Shares | 1.1 | ||
Program 2013 [Member] | Performance Shares [Member] | |||
Stock Based Compensation (Numeric) [Abstract] | |||
Actual Percentage Achieved | 198.00% | ||
Achieved, Shares | 1.4 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | ||
Changes in retained earnings [Abstract] | |||||
Beginning Balance | [1] | $ 8,114,517 | |||
Net income | $ 419,569 | $ 270,788 | 1,192,405 | $ 769,169 | |
Re-issuance of treasury stock | (234,601) | ||||
Ending Balance | $ 9,072,321 | $ 9,072,321 | |||
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |||
Gross unrealized gains, available-for-sale securities [Abstract] | ||||||
Beginning balance, unrealized gains on available-for-sale securities | $ 3,499 | |||||
Gross unrealized gains on available for sale securities, increase or decrease | 6,872 | |||||
Gross unrealized gains on available for sale securities, reclassification adjustments | (1,224) | |||||
Ending balance, unrealized gains on available-for-sale securities | $ 9,147 | 9,147 | ||||
Gross unrealized losses, available-for-sale securities [Abstract] | ||||||
Beginning balance, unrealized losses on available-for-sale securities | (11,565) | |||||
Gross unrealized losses on available for sale securities increase or decrease | 6,362 | |||||
Gross unrealized losses on available for sale securities, reclassification adjustments | 330 | |||||
Ending balance, unrealized losses on available-for-sale securities | (4,873) | (4,873) | ||||
Net unrealized gains on available-for-sale securities [Abstract] | ||||||
Beginning Balance, net unrealized gains on available-for-sale securities | (8,066) | |||||
Net unrealized gains on available for sale securities, increase or decrease | 3,545 | $ 3,055 | 13,234 | $ 21,677 | ||
Net unrealized gains on available for sale securities, reclassification adjustments | (488) | (869) | (894) | [1] | (1,982) | |
Ending Balance, net unrealized gains on available-for-sale securities | 4,274 | 4,274 | ||||
Net unrealized gains on derivatives designated as hedging instuments [Abstract] | ||||||
Beginning balance, net unrealized gains on derivative instruments designated as hedging instruments | 21,689 | |||||
Net unrealized gains on derivative instruments designated as hedging instruments, increase or decrease | 1,483 | 13,233 | 3,613 | 9,089 | ||
Net unrealized gains on derivative instruments designated as hedging instruments, reclassification adjustments | 30 | (3,656) | (31,219) | [2] | (9,964) | |
Ending balance, net unrealized gains on derivative instruments designated as hedging instruments | (5,917) | (5,917) | ||||
Cumulative foreign currency translation adjustments [Abstract] | ||||||
Beginning balance, cumulative foreign currency translation adjustments | (187,225) | |||||
Cumulative foreign currency translation adjustment, increase or decrease | 43,552 | $ (12,828) | 90,238 | $ 16,149 | ||
Cumulative foreign currency translation adjustment, reclassification adjustments | 0 | |||||
Ending balance, cumulative foreign currency translation adjustments | (96,987) | (96,987) | ||||
Accumulated other comprehensive income totals [Abstract] | ||||||
Beginning balance, total accumulated other comprehensive income, net of taxes | [3] | (173,602) | ||||
Accumulated other comprehensive income, increase or decrease | 107,085 | |||||
Accumulated other comprehensive income, reclassification adjustments | (32,113) | |||||
Ending balance, total accumulated other comprehensive income, net of taxes | $ (98,630) | $ (98,630) | ||||
[1] | Reclassification adjustments for gains / losses on available-for-sale securities are classified in interest and other income (expense), net. | |||||
[2] | Reclassification adjustments for loss on the interest rate lock agreement and gains / losses on other derivative instruments are classified in interest and other income (expense), net and revenue, respectively. | |||||
[3] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | ||
Tax, Available-for-sale Securities | |||||
Unrealized gains / losses | $ 235 | $ (13) | $ 523 | $ (35) | |
Reclassification adjustments | (214) | 0 | (323) | 0 | |
Subtotal, Available-for-sale Securities | 21 | (13) | 200 | (35) | |
Tax, Derivatives Designated as Hedging Instruments | |||||
Unrealized gains / losses on derivative instruments | [1] | 0 | 0 | 0 | 0 |
Reclassification adjustments | [1] | (149) | (151) | (582) | (466) |
Subtotal derivatives designated as hedging instruments | (149) | (151) | (582) | (466) | |
Foreign currency translation adjustments | 1,434 | (463) | 3,081 | 882 | |
Total taxes, other comprehensive income | $ 1,306 | $ (627) | $ 2,699 | $ 381 | |
[1] | Taxes related to derivative instruments other than the interest rate lock agreement were zero based on the tax jurisdiction where these derivative instruments were executed. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Numeric) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 9 Months Ended | |||
Sep. 27, 2017 | Sep. 01, 2017 | Sep. 02, 2016 | Jan. 20, 2017 | Feb. 27, 2015 | |
Payments for Repurchase of Common Stock | $ 800,000 | $ 775,000 | |||
Repurchased Shares | 6.3 | 7.3 | |||
Repurchased Shares, Average Price | $ 126.58 | $ 93.87 | |||
Up-Front Payments Remaining | $ 98,800 | ||||
Stock repurchase Program 2015 [Member] | |||||
Stock Repurchase Program, Authorized Amount | $ 2,000,000 | ||||
Payments for Repurchase of Common Stock | 500,000 | $ 775,000 | |||
Stock repurchase Program 2017 [Member] | |||||
Stock Repurchase Program, Authorized Amount | $ 2,500,000 | ||||
Payments for Repurchase of Common Stock | $ 300,000 | ||||
Subsequent Event [Member] | Stock repurchase Program 2017 [Member] | |||||
Payments for Repurchase of Common Stock | $ 300,000 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,900,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 419,569 | $ 270,788 | $ 1,192,405 | $ 769,169 |
Shares used to compute basic net income per share | 493,426 | 498,584 | 494,138 | 499,224 |
Dilutive potential common shares: | ||||
Unvested restricted stock and performance share awards | 6,664 | 4,633 | 6,574 | 5,373 |
Stock options | 308 | 452 | 348 | 538 |
Shares used to compute diluted net income per share | 500,398 | 503,669 | 501,060 | 505,135 |
Basic net income per share | $ 0.85 | $ 0.54 | $ 2.41 | $ 1.54 |
Diluted net income per share | 0.84 | 0.54 | 2.38 | 1.52 |
Average Fair Market Value Limit for Options to be Anti-dilutive | $ 145.96 | $ 98.12 | $ 129.77 | $ 93.35 |
Commitments and Contingencies (
Commitments and Contingencies (Details Numeric) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017USD ($) | Jun. 02, 2017USD ($) | Sep. 01, 2017USD ($)buildings | Sep. 02, 2016USD ($) | |
Property Subject to Operating Lease [Line Items] | ||||
Number of Corporate Headquarter Office Buildings | buildings | 3 | |||
Investment in Lease Receivable Applied to Building Purchase | $ 80,439 | $ 0 | ||
Almaden Tower [Member] | ||||
Property Subject to Operating Lease [Line Items] | ||||
Investment in Lease Receivable Applied to Building Purchase | $ 80,400 | |||
Option to Purchase Buildings | $ 103,600 | |||
Capitalized Amount for Building Purchase | $ 104,200 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
Feb. 28, 2010 | Sep. 01, 2017 | Feb. 27, 2015 | Mar. 02, 2012 | Dec. 02, 2016 | [1] | Jan. 21, 2015 | Jun. 13, 2014 | |
Debt Instrument [Line Items] | ||||||||
Long-term Debt | $ 1,889,218 | $ 1,892,200 | ||||||
Line of Credit Facility [Abstract] | ||||||||
Total senior unsecured revolving credit facility | $ 1,000,000 | |||||||
Option to request additional commitments on credit facility | 500,000 | |||||||
Maximum aggregate, credit facility | $ 1,500,000 | |||||||
Line of Credit Facility, Amount Outstanding | 0 | |||||||
From [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.08% | |||||||
To [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.20% | |||||||
Notes 2020 and 2025 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Periodic Payment, Interest | 37,600 | |||||||
Fair value of the Notes | $ 2,000,000 | |||||||
Repurchase notes at price of their principal amount, plus accrued and unpaid interest | 101.00% | |||||||
Notes 2020 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior notes, issued | $ 900,000 | |||||||
Senior notes, interest rate | 4.75% | |||||||
Proceeds from debt issuance | $ 900,000 | |||||||
Issuance discount | 5,500 | |||||||
Issuance cost | $ 6,400 | |||||||
Effective Interest rate | 4.92% | |||||||
Notes 2025 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior notes, issued | $ 1,000,000 | |||||||
Senior notes, interest rate | 3.25% | |||||||
Proceeds from Issuance of Debt | $ 989,300 | |||||||
Issuance discount | $ 10,700 | |||||||
Issuance cost | $ 7,900 | |||||||
Effective Interest rate | 3.67% | |||||||
Notes 2015 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Annual Principal Payment | $ 600,000 | |||||||
Scenario i [Member] | Line of Credit [Member] | From [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.795% | |||||||
Scenario i [Member] | Line of Credit [Member] | To [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.30% | |||||||
Scenario ii [Member] | Line of Credit [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Percentage Added to Federal Funds Effective Rate in Determining Interest Rate | 0.50% | |||||||
Percentage Added to LIBOR in Determining Interest Rate | 1.00% | |||||||
Scenario ii [Member] | Line of Credit [Member] | From [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Margin Added to LIBOR in Determining Interest Rate | 0.00% | |||||||
Scenario ii [Member] | Line of Credit [Member] | To [Member] | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Margin Added to LIBOR in Determining Interest Rate | 0.30% | |||||||
Fair Value Hedging [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Derivative, Notional Amount | $ 900,000 | |||||||
Derivative, Fixed Interest Rate | 4.75% | |||||||
[1] | The condensed consolidated balance sheet as of December 2, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Non-Operating Income (Expense56
Non-Operating Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |
Interest and other income (expense), net: | ||||
Interest income | $ 17,180 | $ 11,849 | $ 46,553 | $ 34,010 |
Foreign exchange gains (losses) | (4,140) | (10,001) | (21,620) | (23,005) |
Realized gains on fixed income investment | 574 | 943 | 1,224 | 2,487 |
Realized losses on fixed income investment | (86) | (74) | (330) | (505) |
Other | 11 | 8 | 72 | 8 |
Interest and other income (expense), net | 13,539 | 2,725 | 25,899 | 12,995 |
Interest expense | (18,809) | (17,281) | (55,286) | (52,924) |
Investment gains (losses), net: | ||||
Realized investment gains | 681 | 202 | 3,071 | 1,391 |
Realized investment losses | 0 | 0 | 0 | (5,120) |
Unrealized investment gains | 294 | 1,330 | 2,190 | 774 |
Investment gains (losses), net | 975 | 1,532 | 5,261 | (2,955) |
Non-operating income (expense), net | $ (4,295) | $ (13,024) | $ (24,126) | $ (42,884) |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 01, 2017 | Sep. 02, 2016 | Sep. 01, 2017 | Sep. 02, 2016 | |
Segment Reporting [Abstract] | ||||
Revenue | $ 1,841,074 | $ 1,463,967 | $ 5,294,910 | $ 4,246,011 |
Cost of revenue | 262,922 | 202,701 | 739,619 | 603,352 |
Gross profit | $ 1,578,152 | $ 1,261,266 | $ 4,555,291 | $ 3,642,659 |
Gross profit as a percentage of revenue | 86.00% | 86.00% | 86.00% | 86.00% |
Digital Media [Member] | ||||
Segment Reporting [Abstract] | ||||
Revenue | $ 1,270,215 | $ 989,969 | $ 3,620,282 | $ 2,864,824 |
Cost of revenue | 69,533 | 56,771 | 182,935 | 169,490 |
Gross profit | $ 1,200,682 | $ 933,198 | $ 3,437,347 | $ 2,695,334 |
Gross profit as a percentage of revenue | 95.00% | 94.00% | 95.00% | 94.00% |
Digital Marketing [Member] | ||||
Segment Reporting [Abstract] | ||||
Revenue | $ 529,497 | $ 429,605 | $ 1,547,319 | $ 1,248,023 |
Cost of revenue | 191,536 | 144,065 | 551,454 | 427,984 |
Gross profit | $ 337,961 | $ 285,540 | $ 995,865 | $ 820,039 |
Gross profit as a percentage of revenue | 64.00% | 66.00% | 64.00% | 66.00% |
Print And Publishing [Member] | ||||
Segment Reporting [Abstract] | ||||
Revenue | $ 41,362 | $ 44,393 | $ 127,309 | $ 133,164 |
Cost of revenue | 1,853 | 1,865 | 5,230 | 5,878 |
Gross profit | $ 39,509 | $ 42,528 | $ 122,079 | $ 127,286 |
Gross profit as a percentage of revenue | 96.00% | 96.00% | 96.00% | 96.00% |