10. Stockholders’ Equity

Equity Incentive Awards

As of July 28, 2017, we have certain equity incentive awards (awards) outstanding, 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 28, 2017		4	$	35.76
Outstanding as of July 28, 2017		4	$	36.87		2.91	$	34
Exercisable as of July 28, 2017		3	$	41.07		2.18	$	17

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):

	Three Months Ended
	July 28, 2017		July 29, 2016
Intrinsic value of exercises	$	5	$	3
Proceeds received from exercises	$	6	$	1
Fair value of options vested	$	3	$	5

Restricted Stock Units

In the three months ended July 28, 2017, we granted PBRSUs to certain of our executives. 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 the second or third fiscal year, respectively, following the grant date. 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 over the shorter of the remaining applicable performance or service periods.

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

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding as of April 28, 2017		11		$	28.81
Granted		4		$	38.42
Vested		(4	)	$	31.06
Forfeited		(1	)	$	26.96
Outstanding as of July 28, 2017		10		$	31.52

We primarily use the net share settlement approach upon vesting, where a portion of the shares are withheld as settlement of 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):

	Three Months Ended
	July 28, 2017		July 29, 2016
Shares withheld for taxes		1		1
Fair value of shares withheld	$	57	$	33

Employee Stock Purchase Plan

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

	Three Months Ended
	July 28, 2017		July 29, 2016
Shares issued under the ESPP		2		2
Proceeds from issuance of shares	$	42	$	42

Stock-Based Compensation Expense

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

	Three Months Ended
	July 28, 2017		July 29, 2016
Cost of product revenues	$	1	$	1
Cost of hardware maintenance and other services revenues		3		4
Sales and marketing		21		23
Research and development		15		15
General and administrative		8		9
Total stock-based compensation expense	$	48	$	52
Income tax benefit for stock-based compensation	$	9	$	9

As of July 28, 2017, total unrecognized compensation expense related to our equity awards was $304 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.5 years.

Stock Repurchase Program

As of July 28, 2017, 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 three months ended July 28, 2017 (in millions, except per share amounts):

Number of shares repurchased		4
Average price per share	$	40.56
Aggregate purchase price	$	150
Remaining authorization at end of period	$	644

The aggregate purchase price of our stock repurchases for the three months ended July 28, 2017 consisted of $150 million of open market purchases, of which $38 million and $112 million were allocated to additional paid-in capital and retained earnings, respectively.

Since the May 13, 2003 inception of our stock repurchase program through July 28, 2017, we repurchased a total of 273 million shares of our common stock at an average price of $32.94 per share, for an aggregate purchase price of $9.0 billion.

Dividends

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

	Three Months Ended
	July 28, 2017		July 29, 2016
Dividends per share declared	$	0.20	$	0.19
Dividend payments allocated to additional paid-in capital	$	—	$	50
Dividend payments allocated to retained earnings	$	54	$	3

On August 16, 2017, we declared a cash dividend of $0.20 per share of common stock, payable on October 25, 2017 to holders of record as of the close of business on October 6, 2017. 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 28, 2017	$	40
Net income		136
Repurchases of common stock		(112	)
Dividends		(54	)
Balance as of July 28, 2017	$	10

Accumulated Other Comprehensive Income (Loss)

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

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available- for-Sale Securities		Total
Balance as of April 28, 2017	$	(29	)	$	—	$	(29	)
Other comprehensive income, net of tax		10			6		16
Balance as of July 28, 2017	$	(19	)	$	6	$	(13	)