Shareholders’ Equity

Stock-based Compensation Expense

The following tables present the Company’s stock-based compensation for equity-settled awards by type and financial statement line as well as the related tax benefit included in the Company’s Condensed Consolidated Statements of Operations:



	Three Months Ended						Six Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
	(in millions)
Options	$	6		$	11		$	13		$	23
Restricted and performance stock units	88			90			171			169
Employee stock purchase plan	5			1			12			9
Subtotal	99			102			196			201
Tax benefit	(10		)	(29		)	(34		)	(54		)
Total	$	89		$	73		$	162		$	147



	Three Months Ended						Six Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
	(in millions)
Cost of revenue	$	13		$	11		$	26		$	24
Research and development	45			43			89			87
Selling, general and administrative	41			43			81			85
Employee termination, asset impairment, and other charges	—			5			—			5
Subtotal	99			102			196			201
Tax benefit	(10		)	(29		)	(34		)	(54		)
Total	$	89		$	73		$	162		$	147

Compensation cost related to unvested stock options, restricted stock unit awards (“RSU”), performance-based restricted stock unit awards (“PSU”) and the Company’s Employee Stock Purchase Plan (“ESPP”) will generally be amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of December 29, 2017.



	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
Options	$	38	2.1
RSUs and PSUs ⁽¹⁾	600		2.2
ESPP	15		0.6
Total unamortized compensation cost	$	653


⁽¹⁾	Weighted average service period assumes the performance metrics are met for the PSUs.

Plan Activities

Stock Options

The following table summarizes stock option activity under the Company’s incentive plans:



	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in millions)				(in years)	(in millions)
Options outstanding at June 30, 2017	7.4		$	58.14
Exercised	(1.0	)	43.16			$	46
Canceled or expired	(0.2	)	63.44
Options outstanding at December 29, 2017	6.2		$	60.39	4.1	$	145
Exercisable at December 29, 2017	3.6		$	64.14	3.4	$	77

RSU and PSU

The following table summarizes RSU and PSU activity under the Company’s incentive plans:



	Number of Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value at Vest Date
	(in millions)				(in millions)
RSUs and PSUs outstanding at June 30, 2017	13.7		$	45.01
Granted	4.0		84.95
Vested	(2.4	)	53.31		$	206
Forfeited	(0.7	)	47.75
RSUs and PSUs outstanding at December 29, 2017	14.6		$	53.41

RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units.

Stock Repurchase Program

The Company’s Board of Directors (the “Board”) has authorized $5.00 billion for the repurchase of the Company’s common stock. The stock repurchase program is effective until February 3, 2020. The Company did not repurchase any shares of common stock during the three months ended December 29, 2017. The remaining amount available to be purchased under the Company’s stock repurchase program as of December 29, 2017 was $2.10 billion.

Dividends to Shareholders

On September 13, 2012, the Company announced that the Board had authorized the adoption of a quarterly cash dividend policy. Under the cash dividend policy, holders of the Company’s common stock receive dividends when and as declared by the Board.

On November 1, 2017, the Board declared a cash dividend of $0.50 per share of the Company’s common stock. The cash dividend aggregating $149 million was paid on January 16, 2018 to the Company’s shareholders of record as of December 29, 2017. On January 27, 2018, the Board declared a cash dividend of $0.50 per share to shareholders of record as of March 30, 2018, which will be paid on April 16, 2018. The Company may modify, suspend or cancel its cash dividend policy in any manner and at any time.