Document and Entity Information
Document and Entity Information - shares shares in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 25, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 4, 2022 | |
Document Transition Report | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-02 | |
Entity File Number | 0-15175 | |
Entity Central Index Key | 0000796343 | |
Entity Registrant Name | ADOBE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0019522 | |
Entity Address, Address Line One | 345 Park Avenue | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95110-2704 | |
City Area Code | 408 | |
Local Phone Number | 536-6000 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | ADBE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 472.5 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 2,739 | $ 3,844 | [1] |
Short-term investments | 1,962 | 1,954 | [1] |
Trade receivables, net of allowances for doubtful accounts of $18 and $16, respectively | 1,685 | 1,878 | [1] |
Prepaid expenses and other current assets | 1,090 | 993 | [1] |
Total current assets | 7,476 | 8,669 | [1] |
Property and equipment, net | 1,703 | 1,673 | [1] |
Operating lease right-of-use assets, net | 435 | 443 | [1] |
Goodwill | 12,795 | 12,668 | [1] |
Other intangibles, net | 1,743 | 1,820 | [1] |
Deferred income taxes | 950 | 1,085 | [1] |
Other assets | 874 | 883 | [1] |
Total assets | 25,976 | 27,241 | [1] |
Current liabilities: | |||
Trade payables | 295 | 312 | [1] |
Accrued expenses | 1,333 | 1,736 | [1] |
Debt | 499 | 0 | [1] |
Deferred revenue | 4,894 | 4,733 | [1] |
Income taxes payable | 83 | 54 | [1] |
Operating lease liabilities | 93 | 97 | [1] |
Total current liabilities | 7,197 | 6,932 | [1] |
Long-term liabilities: | |||
Debt | 3,626 | 4,123 | [1] |
Deferred revenue | 125 | 145 | [1] |
Income taxes payable | 540 | 534 | [1] |
Deferred income taxes | 4 | 5 | [1] |
Operating lease liabilities | 447 | 453 | [1] |
Other liabilities | 262 | 252 | [1] |
Total liabilities | 12,201 | 12,444 | [1] |
Stockholders' equity: | |||
Preferred stock, $0.0001 par value; 2 shares authorized, none issued | 0 | 0 | [1] |
Common stock, $0.0001 par value; 900 shares authorized; 601 shares issued; 472 and 475 shares outstanding, respectively | 0 | 0 | |
Additional paid-in-capital | 8,750 | 8,428 | [1] |
Retained earnings | 24,961 | 23,905 | [1] |
Accumulated other comprehensive income (loss) | (177) | (137) | [1] |
Treasury stock, at cost (129 and 126 shares, respectively) | (19,759) | (17,399) | [1] |
Total stockholders’ equity | 13,775 | 14,797 | [1] |
Total liabilities and stockholders' equity | $ 25,976 | $ 27,241 | [1] |
[1] | The condensed consolidated balance sheet as of December 3, 2021 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 Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 |
Current assets: | ||
Allowances for doubtful accounts | $ 18 | $ 16 |
Stockholders' equity: | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2 | 2 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900 | 900 |
Common stock, shares issued | 601 | 601 |
Common stock, shares outstanding | 472 | 475 |
Treasury stock, shares | 129 | 126 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Revenue: | ||
Subscription | $ 3,958 | $ 3,584 |
Product | 145 | 155 |
Services and other | 159 | 166 |
Total revenue | 4,262 | 3,905 |
Cost of revenue: | ||
Subscription | 393 | 324 |
Product | 10 | 10 |
Services and other | 109 | 113 |
Total cost of revenue | 512 | 447 |
Gross profit | 3,750 | 3,458 |
Operating expenses: | ||
Research and development | 701 | 620 |
Sales and marketing | 1,158 | 1,049 |
General and administrative | 269 | 290 |
Amortization of intangibles | 42 | 45 |
Total operating expenses | 2,170 | 2,004 |
Operating income | 1,580 | 1,454 |
Non-operating income (expense): | ||
Interest expense | (28) | (30) |
Investment gains (losses), net | (9) | 5 |
Other income (expense), net | 0 | 4 |
Total non-operating income (expense), net | (37) | (21) |
Income before income taxes | 1,543 | 1,433 |
Provision for income taxes | 277 | 172 |
Net income | $ 1,266 | $ 1,261 |
Basic net income per share | $ 2.68 | $ 2.63 |
Shares used to compute basic net income per share | 472.6 | 478.8 |
Diluted net income per share | $ 2.66 | $ 2.61 |
Shares used to compute diluted net income per share | 475.4 | 482.9 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 04, 2022 | Mar. 05, 2021 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,266 | $ 1,261 | |
Other comprehensive income (loss), net of taxes: | |||
Unrealized gains / losses on available-for-sale securities | (14) | (3) | |
Derivatives designated as hedging instruments: | |||
Unrealized gains / losses on derivative instruments | 23 | 5 | |
Reclassification adjustment for realized gains / losses on derivative instruments | (15) | [1] | 12 |
Net increase (decrease) from derivatives designated as hedging instruments | 8 | 17 | |
Foreign currency translation adjustments | (34) | 3 | |
Other comprehensive income (loss), net of taxes | (40) | 17 | |
Total comprehensive income, net of taxes | $ 1,226 | $ 1,278 | |
[1] | Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense. |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | |
Beginning balances at Nov. 27, 2020 | $ 13,264 | $ 0 | $ 7,357 | $ 19,611 | $ (158) | $ (13,546) | |
Beginning balances, shares at Nov. 27, 2020 | 601 | ||||||
Beginning Treasury stock, shares at Nov. 27, 2020 | (122) | ||||||
Net income | 1,261 | 1,261 | |||||
Other comprehensive income (loss), net of taxes | 17 | 17 | |||||
Re-issuance of treasury stock under stock compensation plans | (304) | 0 | (351) | $ 47 | |||
Re-issuance of treasury stock under stock compensation plans, shares | 2 | ||||||
Repurchases of common stock | (950) | $ (950) | |||||
Repurchase of common stock, shares | (2) | ||||||
Stock-based compensation | 260 | 260 | |||||
Value of shares in deferred compensation plan | (2) | $ (2) | |||||
Ending balances at Mar. 05, 2021 | 13,546 | $ 0 | 7,617 | 20,521 | (141) | $ (14,451) | |
Ending balances, shares at Mar. 05, 2021 | 601 | ||||||
Ending Treasury stock, shares at Mar. 05, 2021 | (122) | ||||||
Beginning balances at Dec. 03, 2021 | 14,797 | [1] | $ 0 | 8,428 | 23,905 | (137) | $ (17,399) |
Beginning balances, shares at Dec. 03, 2021 | 601 | ||||||
Beginning Treasury stock, shares at Dec. 03, 2021 | (126) | ||||||
Net income | 1,266 | 1,266 | |||||
Other comprehensive income (loss), net of taxes | (40) | (40) | |||||
Re-issuance of treasury stock under stock compensation plans | (175) | 0 | (210) | $ 35 | |||
Re-issuance of treasury stock under stock compensation plans, shares | 1 | ||||||
Repurchases of common stock | $ (2,400) | $ (2,400) | |||||
Repurchase of common stock, shares | (3.8) | (4) | |||||
Stock-based compensation | $ 322 | 322 | |||||
Value of shares in deferred compensation plan | 5 | $ 5 | |||||
Ending balances at Mar. 04, 2022 | $ 13,775 | $ 0 | $ 8,750 | $ 24,961 | $ (177) | $ (19,759) | |
Ending balances, shares at Mar. 04, 2022 | 601 | ||||||
Ending Treasury stock, shares at Mar. 04, 2022 | (129) | ||||||
[1] | The condensed consolidated balance sheet as of December 3, 2021 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 Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 04, 2022 | Mar. 05, 2021 | ||
Cash flows from operating activities: | |||
Net income | $ 1,266 | $ 1,261 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and accretion | 213 | 196 | |
Stock-based compensation | 322 | 260 | |
Reduction of operating lease right-of-use assets | 22 | 19 | |
Deferred income taxes | 129 | 117 | |
Unrealized losses (gains) on investments, net | 17 | 0 | |
Other non-cash items | 2 | 2 | |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Trade receivables, net | 191 | (82) | |
Prepaid expenses and other assets | (187) | (242) | |
Trade payables | 6 | (59) | |
Accrued expenses and other liabilities | (389) | (200) | |
Income taxes payable | 36 | 29 | |
Deferred revenue | 141 | 471 | |
Net cash provided by operating activities | 1,769 | 1,772 | |
Cash flows from investing activities: | |||
Purchases of short-term investments | (288) | (289) | |
Maturities of short-term investments | 208 | 246 | |
Proceeds from sales of short-term investments | 54 | 39 | |
Acquisitions, net of cash acquired | (106) | (1,470) | |
Purchases of property and equipment | (100) | (59) | |
Purchases of long-term investments, intangibles and other assets | (28) | (25) | |
Net cash used for investing activities | (260) | (1,558) | |
Cash flows from financing activities: | |||
Repurchases of common stock | (2,400) | (950) | |
Proceeds from re-issuance of treasury stock | 91 | 87 | |
Taxes paid related to net share settlement of equity awards | (266) | (391) | |
Other financing activities, net | (29) | 10 | |
Net cash used for financing activities | (2,604) | (1,244) | |
Effect of foreign currency exchange rates on cash and cash equivalents | (10) | 4 | |
Net change in cash and cash equivalents | (1,105) | (1,026) | |
Cash and cash equivalents at beginning of period | 3,844 | [1] | 4,478 |
Cash and cash equivalents at end of period | 2,739 | 3,452 | |
Supplemental disclosures: | |||
Cash paid for income taxes, net of refunds | 59 | 91 | |
Cash paid for interest | $ 50 | $ 50 | |
[1] | The condensed consolidated balance sheet as of December 3, 2021 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 | 3 Months Ended |
Mar. 04, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 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 3, 2021 on file with the SEC (our “Annual Report”). Use of Estimates In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates. Fiscal Year Our fiscal year is a 52- or 53-week year that ends on the Friday closest to November 30. Our financial results for the three months ended March 5, 2021 benefited from an extra week in the first quarter of fiscal 2021 due to our 52/53 week financial calendar whereby fiscal 2022 is a 52-week year compared with fiscal 2021 which was a 53-week year. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. Adopted Accounting Guidance and Accounting Pronouncements Not Yet Effective There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 4, 2022 that are of significance or potential significance to us. |
Revenue
Revenue | 3 Months Ended |
Mar. 04, 2022 | |
Revenue [Abstract] | |
Revenue | REVENUE Segment Information Our segment results for the three months ended March 4, 2022 and March 5, 2021 were as follows: (dollars in millions) Digital Digital Publishing and Total Three months ended March 4, 2022 Revenue $ 3,110 $ 1,057 $ 95 $ 4,262 Cost of revenue 134 352 26 512 Gross profit $ 2,976 $ 705 $ 69 $ 3,750 Gross profit as a percentage of revenue 96 % 67 % 73 % 88 % Three months ended March 5, 2021 Revenue $ 2,859 $ 934 $ 112 $ 3,905 Cost of revenue 98 319 30 447 Gross profit $ 2,761 $ 615 $ 82 $ 3,458 Gross profit as a percentage of revenue 97 % 66 % 73 % 89 % Revenue by geographic area for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Americas $ 2,446 $ 2,224 EMEA 1,136 1,052 APAC 680 629 Total $ 4,262 $ 3,905 Revenue by major offerings in our Digital Media reportable segment for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Creative Cloud $ 2,548 $ 2,379 Document Cloud 562 480 Total $ 3,110 $ 2,859 Subscription revenue by segment for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Digital Media $ 2,995 $ 2,731 Digital Experience 932 812 Publishing and Advertising 31 41 Total $ 3,958 $ 3,584 Contract Balances A receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due. Included in trade receivables on the condensed consolidated balance sheets are unbilled receivable balances which have not yet been invoiced, and are typically related to license revenue or services which are delivered prior to invoicing. As of March 4, 2022, the balance of trade receivables, net of allowances for doubtful accounts, was $1.69 billion, inclusive of unbilled receivables of $92 million. As of December 3, 2021, the balance of trade receivables, net of allowances for doubtful accounts, was $1.88 billion, inclusive of unbilled receivables of $82 million. We maintain an allowance for doubtful accounts which reflects our best estimate of potentially uncollectible trade receivables and is based on both specific and general reserves. We maintain general reserves on a collective basis by considering factors such as historical experience, credit-worthiness, the age of the trade receivable balances, current economic conditions and a reasonable and supportable forecast of future economic conditions. The allowance for doubtful accounts was $18 million and $16 million as of March 4, 2022 and December 3, 2021, respectively. A contract asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract assets are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion on the condensed consolidated balance sheets. We regularly review contract asset balances for impairment, considering factors such as historical experience, credit-worthiness, age of the balance, current economic conditions and a reasonable and supportable forecast of future economic conditions. Contract asset impairments were not material for the three months ended March 4, 2022. Contract assets were $80 million and $85 million as of March 4, 2022 and December 3, 2021, respectively. Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription services, including non-cancellable and non-refundable committed funds and refundable customer deposits. Deferred revenue is recognized as revenue when transfer of control to customers has occurred. As of March 4, 2022, the balance of deferred revenue was $5.02 billion, which includes $68 million of refundable customer deposits. Arrangements with some of our enterprise customers with non-cancellable and non-refundable committed funds provide options to either renew monthly on-premise term-based licenses or use some or all funds to purchase other Adobe products or services. Non-cancellable and non-refundable committed funds related to these agreements comprised approximately 5% of the total deferred revenue. As of December 3, 2021, the balance of deferred revenue was $4.88 billion. During the three months ended March 4, 2022, approximately $2.15 billion of revenue was recognized that was included in the balance of deferred revenue as of December 3, 2021. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. As of March 4, 2022, remaining performance obligations were approximately $13.83 billion. Non-cancellable and non-refundable funds related to some of our enterprise customer agreements referred to in the paragraph above comprised approximately 5% of the total remaining performance obligations. Approximately 73% of the remaining performance obligations, excluding the aforementioned enterprise customer agreements, are expected to be recognized over the next 12 months with the remainder recognized thereafter. Incremental costs of obtaining a contract with a customer are capitalized if we expect the benefit of those costs to be longer than one year and primarily relate to sales commissions paid to our sales force personnel. Capitalized contract acquisition costs are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion on the condensed consolidated balance sheets. Capitalized contract acquisition costs were $624 million and $611 million as of March 4, 2022 and December 3, 2021, respectively. We record refund liabilities for amounts that may be subject to future refunds, which include sales returns reserves and customer rebates and credits. Refund liabilities are included in accrued expenses on the condensed consolidated balance sheets. Refund liabilities were $105 million and $128 million as of March 4, 2022 and December 3, 2021, respectively. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 04, 2022 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Frame.io On October 7, 2021, we completed the acquisition of Frame.io, a privately held company that provides a cloud-based video collaboration platform, for approximately $1.24 billion, primarily in cash consideration. The financial results of Frame.io have been included in our condensed consolidated financial statements since the date of the acquisition. Frame.io is reported as part of our Digital Media reportable segment. The table below represents the preliminary purchase price allocation to total identifiable intangible assets acquired and net liabilities assumed based on their respective estimated fair values as of October 7, 2021. During the three months ended March 4, 2022, we recorded purchase accounting adjustments that were not material based on changes to management’s estimates and assumptions in regards to the total purchase price and its related impact to goodwill. The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date. Fair values associated with the net tax liabilities assumed and their related impact to goodwill were pending finalization as of the reporting date. (dollars in millions) Amount Weighted Average Useful Life (years) Purchased technology $ 331 4 In-process research and development (1) 19 N/A Trademarks 4 3 Customer contracts and relationships 3 10 Total identifiable intangible assets 357 Net liabilities assumed (39) N/A Goodwill (2) 918 N/A Total purchase price $ 1,236 _________________________________________ (1) Capitalized as purchased technology and considered indefinite lived until completion or abandonment of the associated research and development efforts. (2) Non-deductible for tax-purposes. Workfront On December 7, 2020, we completed the acquisition of Workfront, a privately held company that provides a workflow platform, for approximately $1.52 billion of cash consideration. The financial results of Workfront have been included in our condensed consolidated financial statements since the date of the acquisition. Workfront is reported as part of our Digital Experience reportable segment. The table below represents the final purchase price allocation to total identifiable intangible assets acquired and net liabilities assumed based on their estimated fair values as of December 7, 2020 and the associated estimated useful lives at that date. (dollars in millions) Amount Weighted Average Useful Life (years) Customer contracts and relationships $ 290 10 Purchased technology 100 3 Backlog 40 2 Trademarks 30 5 Total identifiable intangible assets 460 Net liabilities assumed (31) N/A Goodwill (1) 1,095 N/A Total purchase price $ 1,524 _________________________________________ (1) Non-deductible for tax-purposes. Pro forma financial information has not been presented for these acquisitions as the impacts to our condensed consolidated financial statements were not material. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-Term Investments | 3 Months Ended |
Mar. 04, 2022 | |
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 highly liquid marketable securities with remaining maturities of three months or less at the date of purchase. We classify our investments in marketable debt securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and unrealized non-credit-related losses of marketable debt securities are included in accumulated other comprehensive income, net of taxes, in our condensed consolidated balance sheets. Unrealized credit-related losses are recorded to other income (expense), net in our condensed consolidated statements of income with a corresponding allowance for credit-related losses in our condensed consolidated balance sheets. Gains and losses are determined using the specific identification method and recognized when realized in our condensed consolidated statements of income. Cash, cash equivalents and short-term investments consisted of the following as of March 4, 2022: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 644 $ — $ — $ 644 Cash equivalents: Corporate debt securities 6 — — 6 Money market funds 1,979 — — 1,979 Time deposits 110 — — 110 Total cash equivalents 2,095 — — 2,095 Total cash and cash equivalents 2,739 — — 2,739 Short-term fixed income securities: Asset-backed securities 130 — (1) 129 Corporate debt securities 1,408 1 (11) 1,398 Foreign government securities 5 — — 5 Municipal securities 33 — — 33 U.S. Treasury securities 402 — (5) 397 Total short-term investments 1,978 1 (17) 1,962 Total cash, cash equivalents and short-term investments $ 4,717 $ 1 $ (17) $ 4,701 Cash, cash equivalents and short-term investments consisted of the following as of December 3, 2021: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 750 $ — $ — $ 750 Cash equivalents: Corporate debt securities 5 — — 5 Money market funds 2,914 — — 2,914 Time deposits 175 — — 175 Total cash equivalents 3,094 — — 3,094 Total cash and cash equivalents 3,844 — — 3,844 Short-term fixed income securities: Asset-backed securities 124 — — 124 Corporate debt securities 1,426 2 (3) 1,425 Municipal securities 28 — — 28 U.S. Treasury securities 378 — (1) 377 Total short-term investments 1,956 2 (4) 1,954 Total cash, cash equivalents and short-term investments $ 5,800 $ 2 $ (4) $ 5,798 See Note 5 for further information regarding the fair value of our financial instruments. The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of March 4, 2022: (in millions) Estimated Due within one year $ 840 Due between one and two years 678 Due between two and three years 417 Due after three years 27 Total $ 1,962 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 04, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis The fair value of our financial assets and liabilities at March 4, 2022 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate debt securities $ 6 $ — $ 6 $ — Money market funds 1,979 1,979 — — Time deposits 110 110 — — Short-term investments: Asset-backed securities 129 — 129 — Corporate debt securities 1,398 — 1,398 — Foreign government securities 5 — 5 — Municipal securities 33 — 33 — U.S. Treasury securities 397 — 397 — Prepaid expenses and other current assets: Foreign currency derivatives 94 — 94 — Other assets: Deferred compensation plan assets 160 160 — — Total assets $ 4,311 $ 2,249 $ 2,062 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 15 $ — $ 15 $ — The fair value of our financial assets and liabilities at December 3, 2021 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate debt securities $ 5 $ — $ 5 $ — Money market funds 2,914 2,914 — — Time deposits 175 175 — — Short-term investments: Asset-backed securities 124 — 124 — Corporate debt securities 1,425 — 1,425 — Municipal securities 28 — 28 — U.S. Treasury securities 377 — 377 — Prepaid expenses and other current assets: Foreign currency derivatives 98 — 98 — Other assets: Deferred compensation plan assets 151 151 — — Total assets $ 5,297 $ 3,240 $ 2,057 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 8 $ — $ 8 $ — See Note 4 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 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 funds, time deposits and deferred compensation plan assets, which consist of money market and other mutual funds, are based on quoted prices in active markets at the measurement date. Our over-the-counter foreign currency 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 other current financial assets and current financial liabilities have fair values that approximate their carrying values. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The fair value of our senior notes was $4.15 billion as of March 4, 2022, based on observable market prices in less active markets and categorized as Level 2. See Note 14 for further details regarding our debt. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 04, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We may use derivatives to partially offset our business exposure to foreign currency and interest rate risk on expected future cash flows and certain existing assets and liabilities. We do not use any of our derivative instruments for trading purposes. We enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. We do not offset fair value amounts recognized for derivative instruments under master netting arrangements. We also enter into collateral security agreements with certain of our counterparties to exchange cash collateral when the net fair value of certain derivative instruments fluctuates from contractually established thresholds. Collateral posted is included in prepaid expenses and other current assets and collateral received is included in accrued expenses on our condensed consolidated balance sheets. Cash Flow Hedges 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 a portion of our forecasted foreign currency denominated revenue. These foreign exchange contracts, carried at fair value, have maturities of up to 12 months. In June 2019, we entered into Treasury lock agreements with large financial institutions which fixed benchmark U.S. Treasury rates for an aggregate notional amount of $1 billion of our future debt issuance. These derivative instruments hedged the impact of changes in the benchmark interest rate to future interest payments and were settled upon debt issuance in the first quarter of fiscal 2020. We incurred a loss related to the settlement of the instruments which is amortized to interest expense over the term of our debt due February 1, 2030. See Note 14 for further details regarding our debt. As of March 4, 2022, we had net derivative gains on our foreign exchange option contracts expected to be recognized within the next 18 months, of which $63 million of gains are expected to be recognized into revenue within the next 12 months. In addition, we had net derivative losses on our Treasury lock agreements, of which $5 million is expected to be recognized into interest expense within the next 12 months. Non-Designated Hedges Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets and liabilities denominated in non-functional currencies. The fair value of derivative instruments on our condensed consolidated balance sheets as of March 4, 2022 and December 3, 2021 were as follows: (in millions) 2022 2021 Fair Value Fair Value Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange option contracts (1) $ 90 $ — $ 91 $ — Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) 4 15 7 8 Total derivatives $ 94 $ 15 $ 98 $ 8 _________________________________________ (1) Fair value asset derivatives are included in prepaid expenses and other current assets and fair value liability derivatives are included in accrued expenses on our condensed consolidated balance sheets. Gains and losses on derivative instruments, net of tax, recognized in our condensed consolidated statements of comprehensive income for the three months ended March 4, 2022 and March 5, 2021 were associated with our foreign exchange option contracts. For the three months ended March 4, 2022, we recognized $23 million of net gains in our condensed consolidated statements of comprehensive income. For the three months ended March 5, 2021, net gains recognized in our condensed consolidated statements of comprehensive income were not material. The effects of derivative instruments, net of tax, on our condensed consolidated statements of income for the three months ended March 4, 2022 and March 5, 2021 were primarily associated with foreign exchange option contracts. For the three months ended March 4, 2022 and March 5, 2021, we reclassified $16 million of net gain and $11 million of net loss, respectively, from accumulated other comprehensive income into revenue resulting from our foreign exchange option contracts. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 3 Months Ended |
Mar. 04, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES Goodwill as of March 4, 2022 and December 3, 2021 was $12.80 billion and $12.67 billion, respectively. The increase was primarily due to the completion of a business acquisition in the first quarter of fiscal 2022. Other intangible assets subject to amortization as of March 4, 2022 and December 3, 2021 were as follows: (in millions) 2022 2021 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer contracts and relationships $ 1,206 $ (404) $ 802 $ 1,213 $ (379) $ 834 Purchased technology 1,077 (396) 681 1,053 (344) 709 Trademarks 376 (139) 237 376 (128) 248 Other 60 (37) 23 60 (31) 29 Other intangibles, net $ 2,719 $ (976) $ 1,743 $ 2,702 $ (882) $ 1,820 Amortization expense related to other intangibles was $101 million and $90 million for the three months ended March 4, 2022 and March 5, 2021, respectively. Of these amounts, $59 million and $45 million were included in cost of revenue for the three months ended March 4, 2022 and March 5, 2021, respectively. As of March 4, 2022, the estimated aggregate amortization expense in future periods was as follows: (in millions) Other Intangibles (1) Remainder of 2022 $ 302 2023 373 2024 328 2025 292 2026 142 Thereafter 287 Total expected amortization expense $ 1,724 _________________________________________ (1) Excludes $19 million of capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 04, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses as of March 4, 2022 and December 3, 2021 consisted of the following: (in millions) 2022 2021 Accrued compensation and benefits $ 495 $ 490 Accrued bonuses 138 455 Refund liabilities 105 128 Accrued corporate marketing 127 96 Taxes payable 111 119 Accrued hosting fees 16 37 Royalties payable 39 40 Accrued interest expense 9 34 Other 293 337 Accrued expenses $ 1,333 $ 1,736 Other primarily includes collateral received related to master netting arrangements and general corporate accruals for local and regional expenses. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 04, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Restricted Stock Units Restricted stock unit activity for the three months ended March 4, 2022 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 6.6 $ 411.52 Awarded 2.6 $ 525.05 Released (1.0) $ 376.91 Forfeited (0.2) $ 417.01 Ending outstanding balance 8.0 $ 452.31 $ 3,609 Expected to vest 7.2 $ 448.43 $ 3,252 _________________________________________ (1) The aggregate fair value is calculated using the closing stock price as of March 4, 2022 of $452.13. The total fair value of restricted stock units vested during the three months ended March 4, 2022 was $512 million. Performance Shares In the first quarter of fiscal 2022, the Executive Compensation Committee of our Board of Directors (the “ECC”) approved the 2022 Performance Share Program. Shares approved under our 2022 Performance Share Program may be earned based on the achievement of (i) an objective relative total stockholder return measured over a three-year performance period, as well as (ii) revenue-based financial metrics measured over three one-year performance periods. Each type of performance goal is weighted 50% and achievement of each performance goal is determined independently of the other. Shares associated with each performance goal are not awarded until the corresponding performance targets are defined. Shares under our 2022 Performance Share Program will be earned and cliff-vest upon the later of (i) the three-year anniversary of the earliest vesting commencement date or (ii) the ECC’s certification of the level of achievement of the final performance period, contingent upon the participant’s continued service. Our performance share awards which are contingent upon on achievement of relative total stockholder return are valued using a Monte Carlo Simulation model, with compensation costs recognized over the longer of the remaining performance or service period. Our performance share awards which are contingent upon achievement of revenue-based financial metrics are valued based on the fair market value of the award on the grant date. The related compensation costs are recognized over the longer of the remaining performance or service period based upon the expected levels of achievement, which are assessed periodically until certification by the ECC. As of March 4, 2022, the shares awarded under our 2022, 2021 and 2020 Performance Share Programs remained outstanding and were yet to be earned. For information regarding our outstanding 2021 and 2020 Performance Share Programs, including the terms, see “Note 12. Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 3, 2021. Performance share activity for the three months ended March 4, 2022 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 0.6 $ 408.84 Awarded 0.3 $ 402.24 Released (0.4) $ 291.15 Forfeited — $ 486.19 Ending outstanding balance 0.5 $ 495.12 $ 208 Expected to vest 0.4 $ 494.19 $ 183 _________________________________________ (1) The aggregate fair value is calculated using the closing stock price as of March 4, 2022 of $452.13. Under our Performance Share Programs, participants generally have the ability to receive up to 200% of the target number of shares originally granted. Shares released during the three months ended March 4, 2022 resulted from 168% achievement of target for the 2019 Performance Share Program, as certified by the ECC in the first quarter of fiscal 2021. Shares awarded during the three months ended March 4, 2022 include 0.2 million additional shares awarded for the final achievement of the 2019 Performance Share Program. The remaining awarded shares were for the 2022 Performance Share Program. The total fair value of performance shares vested during the three months ended March 4, 2022 was $192 million. Employee Stock Purchase Plan Shares Employees purchased 0.2 million shares at an average price of $393.30 and 0.4 million shares at an average price of $241.52 for the three months ended March 4, 2022 and March 5, 2021, respectively. The intrinsic value of shares purchased during the three months ended March 4, 2022 and March 5, 2021 was $40 million and $93 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. Compensation Costs As of March 4, 2022, there was $3.23 billion of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock-based awards and purchase rights which will be recognized over a weighted average period of 2.54 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 March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Cost of revenue $ 21 $ 17 Research and development 161 135 Sales and marketing 93 73 General and administrative 47 56 Total $ 322 $ 281 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 04, 2022 | |
Stockholders' Equity Note [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows: (in millions) December 3, Increase / Decrease Reclassification Adjustments March 4, Net unrealized gains / losses on available-for-sale securities: Unrealized gains on available-for-sale securities $ 2 $ (1) $ — $ 1 Unrealized losses on available-for-sale securities (4) (13) — (17) Net unrealized gains / losses on available-for-sale securities (2) (14) — (1) (16) Net unrealized gains / losses on derivative instruments designated as hedging instruments 29 23 (15) (2) 37 Cumulative foreign currency translation adjustments (164) (34) — (198) Total accumulated other comprehensive income (loss), net of taxes $ (137) $ (25) $ (15) $ (177) _________________________________________ (1) Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net. (2) Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense. Taxes related to each component of other comprehensive income (loss) for the three and three months ended March 4, 2022 and March 5, 2021 were not material. |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 04, 2022 | |
Stock Repurchase Program [Abstract] | |
STOCK REPURCHASE PROGRAM | STOCK REPURCHASE PROGRAM To facilitate our stock repurchase program, designed to return value to our stockholders and minimize dilution from stock issuances, we may repurchase shares in the open market or enter into structured repurchase agreements with third parties. In December 2020, our Board of Directors granted authority to repurchase up to $15 billion in common stock through the end of fiscal 2024. During the three months ended March 4, 2022, we entered into an accelerated share repurchase agreement (“ASR”) with a large financial institution whereupon we provided them with a prepayment of $2.4 billion and received an initial delivery of 3.2 million shares of our common stock. The ASR is expected to settle during our third quarter of fiscal 2022. Under the terms of the ASR, the total number of shares delivered and average purchase price paid per share will be determined upon settlement based on the Volume Weighted Average Price (“VWAP”) over the term of the ASR, less an agreed upon discount. At settlement, the financial institution may be required to deliver additional shares of our common stock to us or, under certain circumstances, we may be required to make a cash payment or deliver shares of our common stock to the financial institution, with the method of settlement at our election. As of March 4, 2022, a portion of our ASR prepayment was evaluated as an unsettled forward contract indexed to our own stock, classified within stockholders’ equity. During the three months ended March 5, 2021, we entered into a structured stock repurchase agreement with a large financial institution, whereupon we provided them with a prepayment of $950 million. Under the terms of this structured stock repurchase agreement, the financial institution agreed to deliver shares to us at monthly intervals during the contract term, and the number of shares delivered each month was determined based on the VWAP over the applicable period, less an agreed upon discount. During the three months ended March 4, 2022, we repurchased a total of 3.8 million shares, including approximately 0.6 million shares at an average price of $635.15 through a structured repurchase agreement entered into during fiscal 2021, as well as 3.2 million shares through the ASR described above. During the three months ended March 5, 2021 we repurchased approximately 1.9 million shares at an average price of $478.14 through a structured repurchase agreement entered into during fiscal 2020 and the three months ended March 5, 2021. For the three months ended March 4, 2022, the prepayments were classified as treasury stock, a component of stockholders’ equity on our condensed consolidated balance sheets, at the payment date, though only shares physically delivered to us by March 4, 2022 were excluded from the computation of net income per share. Subsequent to March 4, 2022, as part of the December 2020 stock repurchase authority, we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of $1.2 billion. Upon completion of the $1.2 billion stock repurchase agreement, $9.5 billion remains under our December 2020 authority. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 04, 2022 | |
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 months ended March 4, 2022 and March 5, 2021: (in millions, except per share data) 2022 2021 Net income $ 1,266 $ 1,261 Shares used to compute basic net income per share 472.6 478.8 Dilutive potential common shares from stock plans and programs 2.8 4.1 Shares used to compute diluted net income per share 475.4 482.9 Basic net income per share $ 2.68 $ 2.63 Diluted net income per share $ 2.66 $ 2.61 Anti-dilutive potential common shares 0.9 — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 04, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Royalties We have royalty commitments associated with the licensing of certain offerings and products. Royalty expense is generally based on a dollar amount per unit 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. Although we have successfully defended or resolved past litigation and disputes, 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, including claims relating to commercial, employment and other matters, and investigations, including government investigations. Some of these disputes, legal proceedings and investigations 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 or 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 the Audit Committee of the Board of Directors. 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, results of operations or cash flows could be negatively affected 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, results of operations or cash flows could be negatively affected in any particular period by the resolution of one or more of these counter-claims. |
Debt
Debt | 3 Months Ended |
Mar. 04, 2022 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The carrying values of our borrowings as of March 4, 2022 and December 3, 2021 were as follows: (dollars in millions) Issuance Date Due Date Effective Interest Rate 2022 2021 1.70% 2023 Notes February 2020 February 2023 1.92% $ 500 $ 500 1.90% 2025 Notes February 2020 February 2025 2.07% 500 500 3.25% 2025 Notes January 2015 February 2025 3.67% 1,000 1,000 2.15% 2027 Notes February 2020 February 2027 2.26% 850 850 2.30% 2030 Notes February 2020 February 2030 2.69% 1,300 1,300 Total debt outstanding, at par $ 4,150 $ 4,150 Current portion of debt, at par (500) — Unamortized discount and debt issuance costs (24) (27) Carrying value of long-term debt $ 3,626 $ 4,123 Current portion of debt, at par $ 500 $ — Unamortized discount and debt issuance costs (1) — Carrying value of current debt $ 499 $ — Senior Notes In January 2015, we issued $1 billion of senior notes due February 1, 2025. The related discount and issuance costs are amortized to interest expense over the term of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on February 1 and August 1. In February 2020, we issued $500 million of senior notes due February 1, 2023, $500 million of senior notes due February 1, 2025, $850 million of senior notes due February 1, 2027 and $1.30 billion of senior notes due February 1, 2030. Our total proceeds of approximately $3.14 billion, net of issuance discount, were used for general corporate purposes including repayment of debt instruments due in fiscal 2020. The related discount and issuance costs are amortized to interest expense over the respective terms of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on February 1 and August 1. During the first quarter of fiscal 2022, we reclassified the senior notes due February 1, 2023 as current debt in our condensed consolidated balance sheets. As of March 4, 2022, the carrying value of our current debt was $499 million, net of the related discount and issuance costs. We intend to refinance the current portion of our debt on or before the due date. Our senior notes rank equally with our other unsecured and unsubordinated indebtedness. 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 do not contain financial covenants but include covenants that limit our ability to grant liens on assets and to enter into sale and leaseback transactions, subject to significant allowances. Revolving Credit Agreement In October 2018, we entered into a credit agreement (“Revolving Credit Agreement”), providing for a five-year $1 billion senior unsecured revolving credit facility, which replaced our previous five-year $1 billion senior unsecured revolving credit agreement dated as of March 2, 2012 (as amended, the “Prior Revolving Credit Agreement”). In addition, we incurred issuance costs of $1 million which is amortized to interest expense over the term using the straight-line method. The Revolving Credit Agreement provides for loans to Adobe and certain of its subsidiaries that may be designated from time to time as additional borrowers. Pursuant to the terms of the Revolving Credit Agreement, we may, subject to the agreement of lenders to provide additional commitments, obtain up to an additional $500 million in commitments, for a maximum aggregate commitment of $1.5 billion. At our election, loans under the Revolving Credit Agreement will bear interest at either (i) LIBOR plus a margin, based on our debt ratings, ranging from 0.585% to 1.015% or (ii) a base rate, which is defined as the highest of (a) the agent’s prime rate, (b) the federal funds effective rate plus 0.500% or (c) LIBOR plus 1.00% plus a margin, based on our debt ratings, ranging from 0.000% to 0.015%. In addition, facility fees determined according to our debt ratings are payable on the aggregate commitments, regardless of usage, quarterly in an amount ranging from 0.04% to 0.11% per annum. We are permitted to permanently reduce the aggregate commitment under the Revolving Credit Agreement at any time. Subject to certain conditions stated in the Revolving Credit Agreement, Adobe and any of its subsidiaries designated as additional borrowers may borrow, prepay and re-borrow amounts at any time during the term of the Revolving Credit Agreement. The Revolving 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. As of March 4, 2022, we were in compliance with this covenant. 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 March 4, 2022, there were no outstanding borrowings under this Credit Agreement. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 04, 2022 | |
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 3, 2021 on file with the SEC (our “Annual Report”). |
Use of Estimates | Use of Estimates In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates. |
Fiscal Year | Fiscal Year Our fiscal year is a 52- or 53-week year that ends on the Friday closest to November 30. Our financial results for the three months ended March 5, 2021 benefited from an extra week in the first quarter of fiscal 2021 due to our 52/53 week financial calendar whereby fiscal 2022 is a 52-week year compared with fiscal 2021 which was a 53-week year. |
Significant Accounting Policies | Significant Accounting PoliciesThere have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. |
Adopted Accounting Guidance and Accounting Pronouncements Not Yet Effective | Adopted Accounting Guidance and Accounting Pronouncements Not Yet Effective There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 4, 2022 that are of significance or potential significance to us. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Revenue [Abstract] | |
Disaggregation of Revenue | Segment Information Our segment results for the three months ended March 4, 2022 and March 5, 2021 were as follows: (dollars in millions) Digital Digital Publishing and Total Three months ended March 4, 2022 Revenue $ 3,110 $ 1,057 $ 95 $ 4,262 Cost of revenue 134 352 26 512 Gross profit $ 2,976 $ 705 $ 69 $ 3,750 Gross profit as a percentage of revenue 96 % 67 % 73 % 88 % Three months ended March 5, 2021 Revenue $ 2,859 $ 934 $ 112 $ 3,905 Cost of revenue 98 319 30 447 Gross profit $ 2,761 $ 615 $ 82 $ 3,458 Gross profit as a percentage of revenue 97 % 66 % 73 % 89 % Revenue by geographic area for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Americas $ 2,446 $ 2,224 EMEA 1,136 1,052 APAC 680 629 Total $ 4,262 $ 3,905 Revenue by major offerings in our Digital Media reportable segment for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Creative Cloud $ 2,548 $ 2,379 Document Cloud 562 480 Total $ 3,110 $ 2,859 Subscription revenue by segment for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Digital Media $ 2,995 $ 2,731 Digital Experience 932 812 Publishing and Advertising 31 41 Total $ 3,958 $ 3,584 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Frame.io | |
Business Acquisition | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below represents the preliminary purchase price allocation to total identifiable intangible assets acquired and net liabilities assumed based on their respective estimated fair values as of October 7, 2021. During the three months ended March 4, 2022, we recorded purchase accounting adjustments that were not material based on changes to management’s estimates and assumptions in regards to the total purchase price and its related impact to goodwill. The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date. Fair values associated with the net tax liabilities assumed and their related impact to goodwill were pending finalization as of the reporting date. (dollars in millions) Amount Weighted Average Useful Life (years) Purchased technology $ 331 4 In-process research and development (1) 19 N/A Trademarks 4 3 Customer contracts and relationships 3 10 Total identifiable intangible assets 357 Net liabilities assumed (39) N/A Goodwill (2) 918 N/A Total purchase price $ 1,236 _________________________________________ (1) Capitalized as purchased technology and considered indefinite lived until completion or abandonment of the associated research and development efforts. (2) Non-deductible for tax-purposes. |
Workfront | |
Business Acquisition | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below represents the final purchase price allocation to total identifiable intangible assets acquired and net liabilities assumed based on their estimated fair values as of December 7, 2020 and the associated estimated useful lives at that date. (dollars in millions) Amount Weighted Average Useful Life (years) Customer contracts and relationships $ 290 10 Purchased technology 100 3 Backlog 40 2 Trademarks 30 5 Total identifiable intangible assets 460 Net liabilities assumed (31) N/A Goodwill (1) 1,095 N/A Total purchase price $ 1,524 _________________________________________ (1) Non-deductible for tax-purposes. |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-Term Investments (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
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 March 4, 2022: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 644 $ — $ — $ 644 Cash equivalents: Corporate debt securities 6 — — 6 Money market funds 1,979 — — 1,979 Time deposits 110 — — 110 Total cash equivalents 2,095 — — 2,095 Total cash and cash equivalents 2,739 — — 2,739 Short-term fixed income securities: Asset-backed securities 130 — (1) 129 Corporate debt securities 1,408 1 (11) 1,398 Foreign government securities 5 — — 5 Municipal securities 33 — — 33 U.S. Treasury securities 402 — (5) 397 Total short-term investments 1,978 1 (17) 1,962 Total cash, cash equivalents and short-term investments $ 4,717 $ 1 $ (17) $ 4,701 Cash, cash equivalents and short-term investments consisted of the following as of December 3, 2021: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 750 $ — $ — $ 750 Cash equivalents: Corporate debt securities 5 — — 5 Money market funds 2,914 — — 2,914 Time deposits 175 — — 175 Total cash equivalents 3,094 — — 3,094 Total cash and cash equivalents 3,844 — — 3,844 Short-term fixed income securities: Asset-backed securities 124 — — 124 Corporate debt securities 1,426 2 (3) 1,425 Municipal securities 28 — — 28 U.S. Treasury securities 378 — (1) 377 Total short-term investments 1,956 2 (4) 1,954 Total cash, cash equivalents and short-term investments $ 5,800 $ 2 $ (4) $ 5,798 |
Estimated Fair Value of Short-Term Fixed Income Debt Securities | The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of March 4, 2022: (in millions) Estimated Due within one year $ 840 Due between one and two years 678 Due between two and three years 417 Due after three years 27 Total $ 1,962 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
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 March 4, 2022 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate debt securities $ 6 $ — $ 6 $ — Money market funds 1,979 1,979 — — Time deposits 110 110 — — Short-term investments: Asset-backed securities 129 — 129 — Corporate debt securities 1,398 — 1,398 — Foreign government securities 5 — 5 — Municipal securities 33 — 33 — U.S. Treasury securities 397 — 397 — Prepaid expenses and other current assets: Foreign currency derivatives 94 — 94 — Other assets: Deferred compensation plan assets 160 160 — — Total assets $ 4,311 $ 2,249 $ 2,062 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 15 $ — $ 15 $ — The fair value of our financial assets and liabilities at December 3, 2021 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate debt securities $ 5 $ — $ 5 $ — Money market funds 2,914 2,914 — — Time deposits 175 175 — — Short-term investments: Asset-backed securities 124 — 124 — Corporate debt securities 1,425 — 1,425 — Municipal securities 28 — 28 — U.S. Treasury securities 377 — 377 — Prepaid expenses and other current assets: Foreign currency derivatives 98 — 98 — Other assets: Deferred compensation plan assets 151 151 — — Total assets $ 5,297 $ 3,240 $ 2,057 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 8 $ — $ 8 $ — |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
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 March 4, 2022 and December 3, 2021 were as follows: (in millions) 2022 2021 Fair Value Fair Value Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange option contracts (1) $ 90 $ — $ 91 $ — Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) 4 15 7 8 Total derivatives $ 94 $ 15 $ 98 $ 8 _________________________________________ (1) Fair value asset derivatives are included in prepaid expenses and other current assets and fair value liability derivatives are included in accrued expenses on our condensed consolidated balance sheets. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other intangible assets | Other intangible assets subject to amortization as of March 4, 2022 and December 3, 2021 were as follows: (in millions) 2022 2021 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer contracts and relationships $ 1,206 $ (404) $ 802 $ 1,213 $ (379) $ 834 Purchased technology 1,077 (396) 681 1,053 (344) 709 Trademarks 376 (139) 237 376 (128) 248 Other 60 (37) 23 60 (31) 29 Other intangibles, net $ 2,719 $ (976) $ 1,743 $ 2,702 $ (882) $ 1,820 |
Amortization expense in future periods | As of March 4, 2022, the estimated aggregate amortization expense in future periods was as follows: (in millions) Other Intangibles (1) Remainder of 2022 $ 302 2023 373 2024 328 2025 292 2026 142 Thereafter 287 Total expected amortization expense $ 1,724 _________________________________________ (1) Excludes $19 million of capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses as of March 4, 2022 and December 3, 2021 consisted of the following: (in millions) 2022 2021 Accrued compensation and benefits $ 495 $ 490 Accrued bonuses 138 455 Refund liabilities 105 128 Accrued corporate marketing 127 96 Taxes payable 111 119 Accrued hosting fees 16 37 Royalties payable 39 40 Accrued interest expense 9 34 Other 293 337 Accrued expenses $ 1,333 $ 1,736 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Restricted Stock Unit Activity | Restricted stock unit activity for the three months ended March 4, 2022 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 6.6 $ 411.52 Awarded 2.6 $ 525.05 Released (1.0) $ 376.91 Forfeited (0.2) $ 417.01 Ending outstanding balance 8.0 $ 452.31 $ 3,609 Expected to vest 7.2 $ 448.43 $ 3,252 _________________________________________ |
Performance Share Activity | Performance share activity for the three months ended March 4, 2022 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 0.6 $ 408.84 Awarded 0.3 $ 402.24 Released (0.4) $ 291.15 Forfeited — $ 486.19 Ending outstanding balance 0.5 $ 495.12 $ 208 Expected to vest 0.4 $ 494.19 $ 183 _________________________________________ |
Stock-Based Compensation, Income Statement Location | Total stock-based compensation costs included in our condensed consolidated statements of income for the three months ended March 4, 2022 and March 5, 2021 were as follows: (in millions) 2022 2021 Cost of revenue $ 21 $ 17 Research and development 161 135 Sales and marketing 93 73 General and administrative 47 56 Total $ 322 $ 281 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows: (in millions) December 3, Increase / Decrease Reclassification Adjustments March 4, Net unrealized gains / losses on available-for-sale securities: Unrealized gains on available-for-sale securities $ 2 $ (1) $ — $ 1 Unrealized losses on available-for-sale securities (4) (13) — (17) Net unrealized gains / losses on available-for-sale securities (2) (14) — (1) (16) Net unrealized gains / losses on derivative instruments designated as hedging instruments 29 23 (15) (2) 37 Cumulative foreign currency translation adjustments (164) (34) — (198) Total accumulated other comprehensive income (loss), net of taxes $ (137) $ (25) $ (15) $ (177) _________________________________________ (1) Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net. (2) Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
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 months ended March 4, 2022 and March 5, 2021: (in millions, except per share data) 2022 2021 Net income $ 1,266 $ 1,261 Shares used to compute basic net income per share 472.6 478.8 Dilutive potential common shares from stock plans and programs 2.8 4.1 Shares used to compute diluted net income per share 475.4 482.9 Basic net income per share $ 2.68 $ 2.63 Diluted net income per share $ 2.66 $ 2.61 Anti-dilutive potential common shares 0.9 — |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 04, 2022 | |
Debt Disclosure [Abstract] | |
Carrying value of outstanding debt | The carrying values of our borrowings as of March 4, 2022 and December 3, 2021 were as follows: (dollars in millions) Issuance Date Due Date Effective Interest Rate 2022 2021 1.70% 2023 Notes February 2020 February 2023 1.92% $ 500 $ 500 1.90% 2025 Notes February 2020 February 2025 2.07% 500 500 3.25% 2025 Notes January 2015 February 2025 3.67% 1,000 1,000 2.15% 2027 Notes February 2020 February 2027 2.26% 850 850 2.30% 2030 Notes February 2020 February 2030 2.69% 1,300 1,300 Total debt outstanding, at par $ 4,150 $ 4,150 Current portion of debt, at par (500) — Unamortized discount and debt issuance costs (24) (27) Carrying value of long-term debt $ 3,626 $ 4,123 Current portion of debt, at par $ 500 $ — Unamortized discount and debt issuance costs (1) — Carrying value of current debt $ 499 $ — |
Revenue (Details 1)
Revenue (Details 1) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Segment Reporting Information | ||
Revenue | $ 4,262 | $ 3,905 |
Cost of revenue | 512 | 447 |
Gross profit | $ 3,750 | $ 3,458 |
Gross profit as a percentage of revenue | 88.00% | 89.00% |
Digital Media | ||
Segment Reporting Information | ||
Revenue | $ 3,110 | $ 2,859 |
Cost of revenue | 134 | 98 |
Gross profit | $ 2,976 | $ 2,761 |
Gross profit as a percentage of revenue | 96.00% | 97.00% |
Digital Experience | ||
Segment Reporting Information | ||
Revenue | $ 1,057 | $ 934 |
Cost of revenue | 352 | 319 |
Gross profit | $ 705 | $ 615 |
Gross profit as a percentage of revenue | 67.00% | 66.00% |
Publishing and Advertising | ||
Segment Reporting Information | ||
Revenue | $ 95 | $ 112 |
Cost of revenue | 26 | 30 |
Gross profit | $ 69 | $ 82 |
Gross profit as a percentage of revenue | 73.00% | 73.00% |
Revenue (Details 2)
Revenue (Details 2) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Revenue | ||
Revenue | $ 4,262 | $ 3,905 |
Americas | ||
Revenue | ||
Revenue | 2,446 | 2,224 |
EMEA | ||
Revenue | ||
Revenue | 1,136 | 1,052 |
APAC | ||
Revenue | ||
Revenue | $ 680 | $ 629 |
Revenue (Details 3)
Revenue (Details 3) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Revenue | ||
Revenue | $ 4,262 | $ 3,905 |
Digital Media | ||
Revenue | ||
Creative Cloud | 2,548 | 2,379 |
Document Cloud | 562 | 480 |
Revenue | $ 3,110 | $ 2,859 |
Revenue (Details 4)
Revenue (Details 4) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Disaggregation of Revenue | ||
Subscription revenue | $ 3,958 | $ 3,584 |
Digital Media | ||
Disaggregation of Revenue | ||
Subscription revenue | 2,995 | 2,731 |
Digital Experience | ||
Disaggregation of Revenue | ||
Subscription revenue | 932 | 812 |
Publishing and Advertising | ||
Disaggregation of Revenue | ||
Subscription revenue | $ 31 | $ 41 |
Revenue (Details Numeric)
Revenue (Details Numeric) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 04, 2022 | Dec. 03, 2021 | ||
Trade receivables, net of allowances for doubtful accounts | $ 1,685 | $ 1,878 | [1] |
Unbilled receivables included in balance of trade receivables, net | 92 | 82 | |
Allowances for doubtful accounts | 18 | 16 | |
Contract assets | 80 | 85 | |
Deferred revenue | $ 5,020 | 4,880 | |
Non-Cancellable Committed Funds, Deferred Revenue, Percentage | 5.00% | ||
Revenue recognized that was included in the beginning balance of deferred revenue | $ 2,150 | ||
Remaining performance obligations | $ 13,830 | ||
Non-Cancellable Comitted Funds, Remaining Performance Obligation, Percentage | 5.00% | ||
Percent of remaining performance obligations expected to be recognized in next 12 months | 73.00% | ||
Capitalized contract acquisition costs | $ 624 | 611 | |
Refund liabilities | 105 | $ 128 | |
Refundable customer deposits | |||
Deferred revenue | $ 68 | ||
[1] | The condensed consolidated balance sheet as of December 3, 2021 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. |
Acquisitions (Details 1)
Acquisitions (Details 1) - Frame.io $ in Millions | Oct. 07, 2021USD ($) | |
Schedule of acquired assets and liabilities | ||
Purchased technology | $ 331 | |
In-process research and development | 19 | [1] |
Trademarks | 4 | |
Customer contracts and relationships | 3 | |
Total identifiable intangible assets | 357 | |
Net liabilities assumed | (39) | |
Goodwill | 918 | [2] |
Total purchase price | $ 1,236 | |
Purchased technology | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 4 years | |
Trademarks | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 3 years | |
Customer contracts and relationships | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 10 years | |
[1] | Capitalized as purchased technology and considered indefinite lived until completion or abandonment of the associated research and development efforts. | |
[2] | Non-deductible for tax-purposes. |
Acquisitions (Details 2)
Acquisitions (Details 2) - Workfront $ in Millions | Dec. 07, 2020USD ($) | |
Schedule of acquired assets and liabilities | ||
Customer contracts and relationships | $ 290 | |
Purchased technology | 100 | |
Backlog | 40 | |
Trademarks | 30 | |
Total identifiable intangible assets | 460 | |
Net liabilities assumed | (31) | |
Goodwill | 1,095 | [1] |
Total purchase price | $ 1,524 | |
Customer contracts and relationships | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 10 years | |
Purchased technology | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 3 years | |
Backlog | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 2 years | |
Trademarks | ||
Schedule of acquired assets and liabilities | ||
Acquired Finite-lived Intangible Assets, Useful Life | 5 years | |
[1] | Non-deductible for tax-purposes. |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 4,717 | $ 5,800 |
Unrealized Gains | 1 | 2 |
Unrealized Losses | (17) | (4) |
Estimated Fair Value | 4,701 | 5,798 |
Cash and cash equivalents | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 2,739 | 3,844 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 2,739 | 3,844 |
Cash | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 644 | 750 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 644 | 750 |
Cash equivalents | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 2,095 | 3,094 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 2,095 | 3,094 |
Cash equivalents | Corporate debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 6 | 5 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 6 | 5 |
Cash equivalents | Money market funds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1,979 | 2,914 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 1,979 | 2,914 |
Cash equivalents | Time deposits | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 110 | 175 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 110 | 175 |
Short-term investments | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1,978 | 1,956 |
Unrealized Gains | 1 | 2 |
Unrealized Losses | (17) | (4) |
Estimated Fair Value | 1,962 | 1,954 |
Short-term fixed income securities | Corporate debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1,408 | 1,426 |
Unrealized Gains | 1 | 2 |
Unrealized Losses | (11) | (3) |
Estimated Fair Value | 1,398 | 1,425 |
Short-term fixed income securities | Asset-backed securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 130 | 124 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | 0 |
Estimated Fair Value | 129 | 124 |
Short-term fixed income securities | Foreign government debt | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 5 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Estimated Fair Value | 5 | |
Short-term fixed income securities | Municipal securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 33 | 28 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 33 | 28 |
Short-term fixed income securities | U.S. Treasury securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 402 | 378 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (5) | (1) |
Estimated Fair Value | $ 397 | $ 377 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short-Term Investments (Details 1) $ in Millions | Mar. 04, 2022USD ($) |
Estimated fair value of short-term fixed income securities | |
Due within one year, Estimated Fair value | $ 840 |
Due between one and two years, Estimated Fair value | 678 |
Due between two and three years, Estimated Fair value | 417 |
Due after three years, Estimated Fair Value | 27 |
Estimated fair value of short-term investments, Total | $ 1,962 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred Compensation Plan Assets | $ 160 | $ 151 |
Assets, Fair Value Disclosure | 4,311 | 5,297 |
Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 129 | 124 |
Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 6 | 5 |
Short-Term Investments, Fair Value Disclosure | 1,398 | 1,425 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,979 | 2,914 |
Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 110 | 175 |
Foreign government debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 5 | |
Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 33 | 28 |
U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 397 | 377 |
Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 94 | 98 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 15 | 8 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred Compensation Plan Assets | 160 | 151 |
Assets, Fair Value Disclosure | 2,249 | 3,240 |
Fair Value, Inputs, Level 1 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 1,979 | 2,914 |
Fair Value, Inputs, Level 1 | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 110 | 175 |
Fair Value, Inputs, Level 1 | Foreign government debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 1 | Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 0 | 0 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred Compensation Plan Assets | 0 | 0 |
Assets, Fair Value Disclosure | 2,062 | 2,057 |
Fair Value, Inputs, Level 2 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 129 | 124 |
Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 6 | 5 |
Short-Term Investments, Fair Value Disclosure | 1,398 | 1,425 |
Fair Value, Inputs, Level 2 | 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 | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | Foreign government debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 5 | |
Fair Value, Inputs, Level 2 | Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 33 | 28 |
Fair Value, Inputs, Level 2 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 397 | 377 |
Fair Value, Inputs, Level 2 | Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 94 | 98 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | 15 | 8 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred Compensation Plan Assets | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | 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 | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreign government debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 3 | Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-Term Investments, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign Currency Contracts, Asset, Fair Value Disclosure | 0 | 0 |
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ 0 | $ 0 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details Numeric) $ in Millions | Mar. 04, 2022USD ($) |
Outstanding Notes | Fair Value, Nonrecurring | Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Senior Notes, Fair Value | $ 4,150 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details Numeric 1) - Cash Flow Hedging - USD ($) $ in Millions | Mar. 04, 2022 | Jun. 07, 2019 |
Foreign Exchange Contract | ||
Derivatives and Hedging | ||
Maximum Remaining Maturity of Foreign Currency Derivatives | 12 months | |
Designated as Hedging Instrument | Treasury Lock | ||
Derivatives and Hedging | ||
Derivative, Notional Amount | $ 1,000 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 5 | |
Designated as Hedging Instrument | Foreign exchange option contracts | ||
Derivatives and Hedging | ||
Maximum Length of Time, Foreign Currency Cash Flow Hedge | 18 months | |
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months | $ 63 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details) - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 | |
Derivative, Fair Value, Net | |||
Fair value asset derivatives | $ 94 | $ 98 | |
Fair value liability derivatives | 15 | 8 | |
Designated as Hedging Instrument | Foreign exchange option contracts | |||
Derivative, Fair Value, Net | |||
Fair value asset derivatives | [1] | 90 | 91 |
Fair value liability derivatives | [1] | 0 | 0 |
Derivatives not designated as hedging instruments | Foreign exchange forward contracts | |||
Derivative, Fair Value, Net | |||
Fair value asset derivatives | [1] | 4 | 7 |
Fair value liability derivatives | [1] | $ 15 | $ 8 |
[1] | Fair value asset derivatives are included in prepaid expenses and other current assets and fair value liability derivatives are included in accrued expenses on our condensed consolidated balance sheets. |
Derivative Financial Instrume_5
Derivative Financial Instruments (Details Numeric 2) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Derivative Instruments, Gain (Loss) | ||
Unrealized gains / losses on derivative instruments | $ 23 | $ 5 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign exchange option contracts | ||
Derivative Instruments, Gain (Loss) | ||
Unrealized gains / losses on derivative instruments | 23 | |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign exchange option contracts | Revenue | ||
Derivative Instruments, Gain (Loss) | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 16 | $ (11) |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles (Details) - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 |
Finite-Lived Intangible Assets | ||
Cost | $ 2,719 | $ 2,702 |
Accumulated Amortization | (976) | (882) |
Net | 1,743 | 1,820 |
Customer contracts and relationships | ||
Finite-Lived Intangible Assets | ||
Cost | 1,206 | 1,213 |
Accumulated Amortization | (404) | (379) |
Net | 802 | 834 |
Purchased technology | ||
Finite-Lived Intangible Assets | ||
Cost | 1,077 | 1,053 |
Accumulated Amortization | (396) | (344) |
Net | 681 | 709 |
Trademarks | ||
Finite-Lived Intangible Assets | ||
Cost | 376 | 376 |
Accumulated Amortization | (139) | (128) |
Net | 237 | 248 |
Other | ||
Finite-Lived Intangible Assets | ||
Cost | 60 | 60 |
Accumulated Amortization | (37) | (31) |
Net | $ 23 | $ 29 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles (Details 1) $ in Millions | Mar. 04, 2022USD ($) | |
Amortization Expense in Future Periods | ||
Capitalized indefinite-lived in-process research and development | $ 19 | |
Other intangibles | ||
Amortization Expense in Future Periods | ||
Remainder of 2022 | 302 | |
2023 | 373 | |
2024 | 328 | |
2025 | 292 | |
2026 | 142 | |
Thereafter | 287 | |
Total expected amortization expense | $ 1,724 | [1] |
[1] | Excludes $19 million of capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts. |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles (Details Numeric) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 04, 2022 | Mar. 05, 2021 | Dec. 03, 2021 | [1] | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 12,795 | $ 12,668 | ||
Finite-Lived Intangible Assets | ||||
Amortization of other intangible assets | 101 | $ 90 | ||
Amortization included in cost of sales | $ 59 | $ 45 | ||
[1] | The condensed consolidated balance sheet as of December 3, 2021 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 Millions | Mar. 04, 2022 | Dec. 03, 2021 | |
Accrued Expense | |||
Accrued compensation and benefits | $ 495 | $ 490 | |
Accrued bonuses | 138 | 455 | |
Refund liabilities | 105 | 128 | |
Accrued corporate marketing | 127 | 96 | |
Taxes payable | 111 | 119 | |
Accrued hosting fees | 16 | 37 | |
Royalties payable | 39 | 40 | |
Accrued interest expense | 9 | 34 | |
Other | 293 | 337 | |
Accrued expenses | $ 1,333 | $ 1,736 | [1] |
[1] | The condensed consolidated balance sheet as of December 3, 2021 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 1) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 04, 2022USD ($)$ / sharesshares | ||
Other | ||
Share Price | $ 452.13 | |
Restricted Stock Units | ||
Share Activity | ||
Beginning outstanding balance, Shares | shares | 6.6 | |
Awarded, Shares | shares | 2.6 | |
Released, Shares | shares | (1) | |
Forfeited, Shares | shares | (0.2) | |
Ending outstanding balance, Shares | shares | 8 | |
Expected to vest, Shares | shares | 7.2 | |
Weighted Average Grant Date Fair Value | ||
Beginning outstanding balance, Weighted average grant date fair value | $ 411.52 | |
Awarded, Weighted average grant date fair value | 525.05 | |
Released, Weighted average grant date fair value | 376.91 | |
Forfeited, Weighted average grant date fair value | 417.01 | |
Ending outstanding balance, Weighted average grant date fair value | 452.31 | |
Expected to vest, Weighted average grant date fair value | $ 448.43 | |
Aggregate Fair Value | ||
Ending outstanding balance, Aggregate fair value | $ | $ 3,609 | [1] |
Expected to vest, Aggregate fair value | $ | 3,252 | [1] |
Other | ||
Total fair value of restricted stock units vested | $ | $ 512 | |
[1] | The aggregate fair value is calculated using the closing stock price as of March 4, 2022 of $452.13. |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 2) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 04, 2022USD ($)$ / sharesshares | ||
Other | ||
Share Price | $ / shares | $ 452.13 | |
Performance Shares | ||
Share Activity | ||
Beginning outstanding balance, Shares | shares | 0.6 | |
Awarded, Shares | shares | 0.3 | |
Released, Shares | shares | (0.4) | |
Forfeited, Shares | shares | 0 | |
Ending outstanding balance, Shares | shares | 0.5 | |
Expected to vest, Shares | shares | 0.4 | |
Weighted Average Grant Date Fair Value | ||
Beginning outstanding balance, Weighted average grant date fair value | $ / shares | $ 408.84 | |
Awarded, Weighted average grant date fair value | $ / shares | 402.24 | |
Released, Weighted average grant date fair value | $ / shares | 291.15 | |
Forfeited, Weighted average grant date fair value | $ / shares | 486.19 | |
Ending outstanding balance, Weighted average grant date fair value | $ / shares | 495.12 | |
Expected to vest, Weighted average grant date fair value | $ / shares | $ 494.19 | |
Aggregate Fair Value | ||
Ending outstanding balance, Aggregate fair value | $ | $ 208 | [1] |
Expected to vest, Aggregate fair value | $ | $ 183 | [1] |
Other | ||
Maximum Target Percentage Allowed Under Program | 200.00% | |
Total fair value of performance shares vested | $ | $ 192 | |
Performance Shares | Program 2019 [Member] | ||
Other | ||
Actual Percentage Achieved | 168.00% | |
Additional shares awarded upon achievement | shares | 0.2 | |
[1] | The aggregate fair value is calculated using the closing stock price as of March 4, 2022 of $452.13 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 3) - Employee Stock Purchase Plan - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Shares Purchased, ESPP | 0.2 | 0.4 |
Average purchase price of shares, ESPP | $ 393.30 | $ 241.52 |
Total intrinsic value of shares purchased, ESPP | $ 40 | $ 93 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details 4) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Total stock-based compensation costs | ||
Stock-based compensation costs | $ 322 | $ 281 |
Cost of Revenue | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | 21 | 17 |
Research and Development | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | 161 | 135 |
Sales and Marketing | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | 93 | 73 |
General and Administrative | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | $ 47 | $ 56 |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details Numeric) $ in Millions | Mar. 04, 2022USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award | |
Unrecognized compensation cost, non-vested awards | $ 3,230 |
Period for recognition, unrecognized compensation cost | 2 years 6 months 14 days |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details 1) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 04, 2022 | Mar. 05, 2021 | |||
Gross unrealized gains, available-for-sale securities | ||||
Beginning balance, unrealized gains on available-for-sale securities | $ 2 | |||
Gross unrealized gains on available for sale securities, increase or decrease | (1) | |||
Gross unrealized gains on available for sale securities, reclassification adjustments | 0 | |||
Ending balance, unrealized gains on available-for-sale securities | 1 | |||
Gross unrealized losses on available-for-sale securities | ||||
Beginning balance, unrealized losses on available-for-sale securities | (4) | |||
Gross unrealized losses on available for sale securities increase or decrease | (13) | |||
Gross unrealized losses on available for sale securities, reclassification adjustments | 0 | |||
Ending balance, unrealized losses on available-for-sale securities | (17) | |||
Net unrealized gains / losses on available-for-sale securities | ||||
Beginning balance, net unrealized gains / losses on available-for-sale securities | (2) | |||
Net unrealized gains / losses on available-for-sale securities, increase or decrease | (14) | $ (3) | ||
Reclassification adjustment for recognized gains / losses on available-for-sale securities | [1] | 0 | ||
Ending balance, net unrealized gains / losses on available-for-sale securities | (16) | |||
Net unrealized gains on derivatives designated as hedging instruments | ||||
Beginning balance, net unrealized gains / losses on derivative instruments designated as hedging instruments | 29 | |||
Net unrealized gains / losses on derivative instruments designated as hedging instruments, increase or decrease | 23 | 5 | ||
Net unrealized gains / losses on derivative instruments designated as hedging instruments, reclassification adjustments | (15) | [2] | 12 | |
Ending balance, net unrealized gains / losses on derivative instruments designated as hedging instruments | 37 | |||
Cumulative foreign currency translation adjustments | ||||
Beginning balance, cumulative foreign currency translation adjustments | (164) | |||
Cumulative foreign currency translation adjustment, increase or decrease | (34) | $ 3 | ||
Cumulative foreign currency translation adjustment, reclassification adjustments | 0 | |||
Ending balance, cumulative foreign currency translation adjustments | (198) | |||
Accumulated other comprehensive income totals | ||||
Beginning balance, total accumulated other comprehensive income, net of taxes | [3] | (137) | ||
Accumulated other comprehensive income, increase or decrease | (25) | |||
Accumulated other comprehensive income, reclassification adjustments | (15) | |||
Ending balance, total accumulated other comprehensive income, net of taxes | $ (177) | |||
[1] | Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net. | |||
[2] | Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense. | |||
[3] | The condensed consolidated balance sheet as of December 3, 2021 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 Repurchase Program (Detai
Stock Repurchase Program (Details Numeric) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Mar. 30, 2022 | Mar. 04, 2022 | Mar. 05, 2021 | Dec. 10, 2020 | |
Stock Repurchase Program, Authorized Amount | $ 15,000 | |||
Payments for Repurchase of Common Stock | $ 2,400 | $ 950 | ||
Repurchase of common stock, Shares, Acquired | 3.8 | |||
Accelerated Share Repurchase Agreement | ||||
Payments for Repurchase of Common Stock | $ 2,400 | |||
Repurchase of common stock, Shares, Acquired | 3.2 | |||
Structured Stock Repurchase Agreement | ||||
Payments for Repurchase of Common Stock | $ 950 | |||
Repurchase of common stock, Shares, Acquired | 0.6 | 1.9 | ||
Treasury Stock Acquired, Average Cost Per Share | $ 635.15 | $ 478.14 | ||
Subsequent Event | ||||
Payments for Repurchase of Common Stock | $ 1,200 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 9,500 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 04, 2022 | Mar. 05, 2021 | |
Earnings Per Share [Abstract] | ||
Net income | $ 1,266 | $ 1,261 |
Shares used to compute basic net income per share | 472.6 | 478.8 |
Dilutive potential common shares from stock plans and programs | 2.8 | 4.1 |
Shares used to compute diluted net income per share | 475.4 | 482.9 |
Basic net income per share | $ 2.68 | $ 2.63 |
Diluted net income per share | $ 2.66 | $ 2.61 |
Anti-dilutive potential common shares | 0.9 | 0 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 03, 2021 | Feb. 03, 2020 | Jan. 21, 2015 | |
Debt Instrument | |||||
Total debt outstanding, at par | $ 4,150 | $ 4,150 | |||
Unamortized discount and debt issuance costs, long-term | (24) | (27) | |||
Carrying value of Long-term Debt | 3,626 | 4,123 | [1] | ||
Current portion of debt, at par | 500 | 0 | |||
Unamortized discount and debt issuance costs, current | (1) | 0 | |||
Carrying value of current debt | 499 | 0 | [1] | ||
Notes 2023 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 500 | 500 | $ 500 | ||
Debt Instrument, Interest Rate, Effective Percentage | 1.92% | ||||
Notes 1.90% 2025 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 500 | 500 | 500 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.07% | ||||
Notes 3.25% 2025 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 1,000 | 1,000 | $ 1,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.67% | ||||
Notes 2027 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 850 | 850 | 850 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.26% | ||||
Notes 2030 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 1,300 | $ 1,300 | $ 1,300 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.69% | ||||
[1] | The condensed consolidated balance sheet as of December 3, 2021 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. |
Debt (Details Numeric 1)
Debt (Details Numeric 1) - USD ($) $ in Millions | Feb. 03, 2020 | Mar. 04, 2022 | Dec. 03, 2021 | Jan. 21, 2015 | |
Debt Instrument | |||||
Carrying value of current debt | $ 499 | $ 0 | [1] | ||
Outstanding Notes | |||||
Debt Instrument | |||||
Repurchase notes at price of their principal amount plus accrued and unpaid interest | 101.00% | ||||
Notes 2023 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 500 | $ 500 | 500 | ||
Debt Instrument, Interest Rate, Effective Percentage | 1.92% | ||||
Notes 1.90% 2025 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | 500 | $ 500 | 500 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.07% | ||||
Notes 3.25% 2025 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | $ 1,000 | 1,000 | $ 1,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.67% | ||||
Notes 2027 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | 850 | $ 850 | 850 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.26% | ||||
Notes 2030 | |||||
Debt Instrument | |||||
Debt Instrument, Face Amount | 1,300 | $ 1,300 | $ 1,300 | ||
Debt Instrument, Interest Rate, Effective Percentage | 2.69% | ||||
Notes 2023, 1.90% 2025, 2027, and 2030 | |||||
Debt Instrument | |||||
Proceeds from issuance of debt | $ 3,140 | ||||
[1] | The condensed consolidated balance sheet as of December 3, 2021 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. |
Debt (Details Numeric 2)
Debt (Details Numeric 2) - Revolving Credit Facility - USD ($) $ in Millions | Oct. 17, 2018 | Mar. 04, 2022 | Mar. 02, 2012 |
Debt Instrument | |||
Revolving Credit Agreement, Borrowing Capacity | $ 1,000 | $ 1,000 | |
Unamortized Debt Issuance Expense | 1 | ||
Option To Request Additional Commitments On Credit Facility | 500 | ||
Revolving Credit Agreement, Maximum Borrowing Capacity | $ 1,500 | ||
Revolving Credit Agreement, Outstanding borrowings | $ 0 | ||
Minimum | |||
Debt Instrument | |||
Commitment Fee Percentage | 0.04% | ||
Maximum | |||
Debt Instrument | |||
Commitment Fee Percentage | 0.11% | ||
Scenarioi | Minimum | |||
Debt Instrument | |||
Margin Added to LIBOR to Determine Interest Rate | 0.585% | ||
Scenarioi | Maximum | |||
Debt Instrument | |||
Margin Added to LIBOR to Determine Interest Rate | 1.015% | ||
Scenarioii | |||
Debt Instrument | |||
Percentage Added to Effective Funds Rate in Determining Interest Rate | 0.50% | ||
Percentage Added to LIBOR in Determining Interest Rate | 1.00% | ||
Scenarioii | Minimum | |||
Debt Instrument | |||
Margin Added to LIBOR to Determine Interest Rate | 0.00% | ||
Scenarioii | Maximum | |||
Debt Instrument | |||
Margin Added to LIBOR to Determine Interest Rate | 0.015% |