Stock Based Compensation

3 Months Ended

Apr. 30, 2017

Employee Service Share-based Compensation, Aggregate Disclosures [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Our stock-based compensation expense is associated with stock options, restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.

Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:

	Three Months Ended
	April 30, 2017		May 1, 2016
	(In millions)
Cost of revenue	$	4	$	4
Research and development	41		29
Sales, general and administrative	31		20
Total	$	76	$	53

Equity Award Activity

The following is a summary of equity award transactions under our equity incentive plans:

	RSUs, PSUs, and Market-based PSUs Outstanding				Options Outstanding
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share		Number of Shares		Weighted Average Exercise Price Per Share
	(In millions, except per share data)
Balances, January 29, 2017	27		$	32.84	7		$	14.47
Granted (1) (2)	2		$	99.23	—		$	—
Exercised	—		$	—	(1	)	$	14.73
Vested restricted stock	(5	)	$	20.82	—		$	—
Canceled and forfeited	—		$	—	—		$	—
Balances, April 30, 2017	24		$	40.90	6		$	14.43

(1) Includes PSUs that will be issued and eligible to vest if the corporate financial performance maximum target level for fiscal year 2018 is achieved. Depending on the actual level of achievement of the corporate performance target at the end of fiscal year 2018, the PSUs issued could be up to 0.6 million shares.

(2) Includes market-based PSUs that will be issued and eligible to vest if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs issued could be up to 0.1 million shares.

Of the total fair value of equity awards granted during the first quarter of fiscalyears 2018 and 2017, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $27 million and $10 million, respectively.

The following summarizes the aggregate unearned stock-based compensation expense and estimated weighted average amortization period as of April 30, 2017 and January 29, 2017:

	April 30,		January 29,
	2017		2017
	(In millions)
Aggregate unearned stock-based compensation expense	$	708	$	627
Estimated weighted average remaining amortization period	(In years)
Stock options	0.4		0.5
RSUs, PSUs, and market-based PSUs	2.6		2.6
ESPP	0.6		0.6