Annual report pursuant to Section 13 and 15(d)

Capital Stock

v2.4.0.6
Capital Stock
 12 Months Ended
Sep. 30, 2012
Notes to Financial Statements [Abstract]  
Note 5 - Capital Stock
Note 5. Capital Stock
Preferred Stock. The Company has 8,000,000 shares of preferred stock authorized for issuance in one or more series, at a par value of $0.0001 per share. In conjunction with the distribution of preferred share purchase rights, 4,000,000 shares of preferred stock are designated as Series A Junior Participating Preferred Stock, and such shares are reserved for issuance upon exercise of the preferred share purchase rights. At September 30, 2012 and September 25, 2011, no shares of preferred stock were outstanding.
Preferred Share Purchase Rights Agreement. The Company has a Preferred Share Purchase Rights Agreement (Rights Agreement) to protect stockholders’ interests in the event of a proposed takeover of the Company. Under the original Rights Agreement, adopted on September 26, 1995, the Company declared a dividend of one preferred share purchase right (a Right) for each share of the Company’s common stock outstanding. Pursuant to the Rights Agreement, as amended and restated on December 7, 2006, each Right entitles the registered holder to purchase from the Company a one one-thousandth share of Series A Junior Participating Preferred Stock, $0.0001 par value per share, subject to adjustment for subsequent stock splits, at a purchase price of $180. The Rights are exercisable only if a person or group (an Acquiring Person) acquires beneficial ownership of 20% or more of the Company’s outstanding shares of common stock without approval of the Board of Directors. Upon exercise, holders, other than an Acquiring Person, will have the right, subject to termination, to receive the Company’s common stock or other securities, cash or other assets having a market value, as defined, equal to twice such purchase price. The Rights, which expire on September 25, 2015, are redeemable in whole, but not in part, at the Company’s option prior to the time such Rights are triggered for a price of $0.001 per Right. 
Stock Repurchase Program. On March 6, 2012, the Company announced that it had been authorized to repurchase up to $4.0 billion of the Company’s common stock. The stock repurchase program has no expiration date. The $4.0 billion stock repurchase program replaced a $3.0 billion stock repurchase program, of which $948 million remained authorized for repurchase, net of put options outstanding. Any shares repurchased are retired, and the amount paid in excess of par value is recorded to paid-in capital. During fiscal 2012, 2011 and 2010, the Company repurchased and retired 23,893,000, 2,878,000 and 79,789,000 shares of common stock, respectively, for $1.3 billion, $142 million and $3.0 billion, respectively, before commissions. At September 30, 2012, approximately $2.8 billion remained authorized for repurchase under the Company’s stock repurchase program. Since September 30, 2012, the Company repurchased 4,132,000 shares of common stock for $240 million.
In connection with the Company’s stock repurchase program, the Company sold three put options on its own stock during fiscal 2011, of which all expired unexercised during fiscal 2012. The fair values of the put options of $80 million at September 25, 2011 were recorded in other current liabilities. During fiscal 2012 and 2011, the Company recognized gains of $80 million and losses of $5 million, respectively, in net investment income due to changes in the fair values of the put options. No put options were outstanding during fiscal 2010.
Dividends. The Company announced increases in its quarterly dividend per share of common stock from $0.17 to $0.19 on March 1, 2010, from $0.19 to $0.215 on March 8, 2011, and from $0.215 to $0.25 on March 6, 2012. Dividends charged to retained earnings in fiscal 2012, 2011 and 2010 were as follows (in millions, except per share data):
 
2012
 
2011
 
2010
 
Per Share
 
Total
 
Per Share
 
Total
 
Per Share
 
Total
First quarter
$
0.215

 
$
368

 
$
0.190

 
$
314

 
$
0.170

 
$
284

Second quarter
0.215

 
377

 
0.190

 
319

 
0.170

 
279

Third quarter
0.250

 
429

 
0.215

 
360

 
0.190

 
309

Fourth quarter
0.250

 
438

 
0.215

 
368

 
0.190

 
305

 
$
0.930

 
$
1,612

 
$
0.810

 
$
1,361

 
$
0.720

 
$
1,177


On October 17, 2012, the Company announced a cash dividend of $0.25 per share of common stock, payable on December 21, 2012 to stockholders of record as of December 7, 2012, which will be reflected in the consolidated financial statements in the first quarter of fiscal 2013.