9. Stockholders’ Equity

Equity Incentive Awards

As of October 30, 2015, we have outstanding certain equity incentive awards (awards), which include stock options, restricted stock units (RSUs), including time-based RSUs and performance-based RSUs (PBRSUs), and Employee Stock Purchase Plan (ESPP) awards.

Stock Options

The following table summarizes information related to our stock options (in millions, except exercise price and contractual term):

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding as of April 24, 2015		12		$	37.74
Exercised		(1	)	$	22.89
Forfeited and expired		(2	)	$	38.99
Outstanding as of October 30, 2015		9		$	38.90		2.86	$	12
Vested and expected to vest as of October 30, 2015		9		$	38.95		2.76	$	12
Exercisable as of October 30, 2015		7		$	39.54		2.29	$	11

The aggregate intrinsic value represents the pre-tax difference between the exercise price of stock options and the quoted market price of our stock on that day for all in-the-money options.

Additional information related to our stock options is summarized below (in millions):

	Six Months Ended
	October 30, 2015		October 24, 2014
Intrinsic value of exercises	$	8	$	38
Proceeds received from exercises	$	19	$	65
Fair value of options vested	$	7	$	19

Restricted Stock Units

In the six months ended October 30, 2015, we granted PBRSUs to certain of our executives, all of which were outstanding at the end of the period. Each PBRSU has performance-based vesting criteria (in addition to the service based vesting criteria) such that the PBRSU cliff-vests at the end of either an approximate two year or three year performance period, which began on the date specified in the grant agreement and ends the last day of fiscal 2017 or 2018, respectively. The number of shares of common stock that will be issued to settle the PBRSUs at the end of the applicable performance and service period will range from 0% to 200% of a target number of shares originally granted, and will depend upon our Total Stockholder Return (TSR) as compared to an index TSR (each expressed as a growth rate percentage) calculated as of the applicable period end date. The fair values of the PBRSUs were fixed at grant date using a Monte Carlo simulation model and the related aggregate compensation cost of $20 million is being recognized, adjusted for forfeitures, over the shorter of the remaining applicable performance or service periods.

RSUs are converted into common stock upon vesting. Time-based RSUs generally vest with only service-based criteria at 25% annually over four years, except for the PBRSUs described above and 4 million time-based RSUs granted in the six months ended October 30, 2015, which will vest at 50% annually over two years.

The following table summarizes information related to RSUs, including PBRSUs, (in millions, except for fair value):

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding as of April 24, 2015		13		$	36.58
Granted		6		$	31.32
Vested		(4	)	$	37.70
Forfeited		(2	)	$	35.32
Outstanding as of October 30, 2015		13		$	34.13

We primarily use the net share settlement approach upon vesting, where a portion of the shares are withheld as settlement of statutory employee withholding taxes, which decreases the shares issued to the employee by a corresponding value. The number and value of the shares netted for employee taxes are summarized in the table below (in millions):

	Six Months Ended
	October 30, 2015		October 24, 2014
Shares withheld for taxes		1		1
Fair value of shares withheld	$	44	$	43

Employee Stock Purchase Plan

The following table summarizes activity related to the purchase rights issued under the ESPP (in millions):

	Six Months Ended
	October 30, 2015		October 24, 2014
Shares issued under the ESPP		2		2
Proceeds from issuance of shares	$	50	$	49

Stock-Based Compensation Expense

Stock-based compensation expense is included in the condensed consolidated statements of operations as follows (in millions):

	Three Months Ended				Six Months Ended
	October 30, 2015		October 24, 2014		October 30, 2015		October 24, 2014
Cost of product revenues	$	1	$	2	$	3	$	3
Cost of hardware maintenance and other services revenues		4		3		10		8
Sales and marketing		26		30		57		57
Research and development		18		22		44		43
General and administrative		10		11		22		19
Total stock-based compensation expense	$	59	$	68	$	136	$	130

As of October 30, 2015, total unrecognized compensation expense related to our equity awards was $381 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.0 years.

Total income tax benefit associated with employee stock transactions and recognized in stockholders’ equity were as follows (in millions):

Six Months Ended

October 30,

2015

October 24,

2014

Income tax benefit associated with employee stock transactions

Stock Repurchase Program

As of October 30, 2015, our Board of Directors has authorized the repurchase of up to $9.6 billion of our common stock. Under this program, which we may suspend or discontinue at any time, we may purchase shares of our outstanding common stock through open market and privately negotiated transactions at prices deemed appropriate by our management.

The following table summarizes activity related to this program for the six months ended October 30, 2015 (in millions, except per share amounts):

Number of shares repurchased		19
Average price per share	$	31.70
Aggregate purchase price	$	613
Remaining authorization at end of period	$	1,847

The aggregate purchase price of our stock repurchases for the six months ended October 30, 2015 consisted of $613 million of open market purchases, of which $499 million and $114 million was allocated to additional paid-in capital and retained earnings, respectively.

Since the May 13, 2003 inception of our stock repurchase program through October 30, 2015, we repurchased a total of 233 million shares of our common stock at an average price of $33.33 per share, for an aggregate purchase price of $7.8 billion.

Dividends

The following is a summary of our activities related to dividends on our common stock (in millions, except per share amounts):

	Six Months Ended
	October 30, 2015		October 24, 2014
Dividends per share declared	$	0.360	$	0.330
Dividend payments allocated to additional paid-in capital	$	84	$	52
Dividend payments allocated to retained earnings	$	23	$	53

On November 18, 2015, we declared a cash dividend of $0.18 per share of common stock, payable on January 20, 2016 to holders of record as of the close of business on January 8, 2016. The timing and amount of future dividends will depend on market conditions, corporate business and financial considerations and regulatory requirements. All dividends declared have been determined by us to be legally authorized under the laws of the state in which we are incorporated.

Retained Earnings

A reconciliation of retained earnings is as follows (in millions):

Balance as of April 24, 2015	$	53
Net income		84
Repurchases of common stock		(114	)
Dividends		(23	)
Balance as of October 30, 2015	$	—

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) (AOCI) by component, net of tax, are summarized below (in millions):

	Foreign Currency Translation Adjustments			Defined Benefit Obligation Adjustments			Unrealized Gains (Losses) on Available- for-Sale Securities			Unrealized Gains (Losses) on Derivative Instruments			Total
Balance as of April 24, 2015	$	(23	)	$	(13	)	$	11		$	1		$	(24	)
OCI before reclassifications, net of tax		(2	)		—			(9	)		(3	)		(14	)
Amounts reclassified from AOCI, net of tax		—			2			(1	)		2			3
Total OCI		(2	)		2			(10	)		(1	)		(11	)
Balance as of October 30, 2015	$	(25	)	$	(11	)	$	1		$	—		$	(35	)

The amounts reclassified out of AOCI are as follows (in millions):

	Three Months Ended					Six Months Ended
	October 30, 2015			October 24, 2014		October 30, 2015			October 24, 2014
	Amounts Reclassified from AOCI					Amounts Reclassified from AOCI					Statements of Operations Location
Recognized losses on defined benefit obligations	$	1		$	—	$	2		$	—	Operating expenses
Realized gains on available-for-sale securities		(1	)		—		(1	)		—	Other income (expense), net
Realized losses on cash flow hedges		1			4		2			6	Net revenues
Total reclassifications	$	1		$	4	$	3		$	6