Shareholders' Equity

3 Months Ended

Oct. 04, 2019

Share-based Payment Arrangement [Abstract]

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
	October 4, 2019		September 28, 2018
	(in millions)
Options	$	2	$	5
Restricted and performance stock units	66		67
Employee stock purchase plan	9		7
Total	$	77	$	79



	Three Months Ended
	October 4, 2019			September 28, 2018
	(in millions)
Cost of revenue	$	12		$	11
Research and development	41			39
Selling, general and administrative	24			29
Subtotal	77			79
Tax benefit	(12		)	(11		)
Total	$	65		$	68

Compensation cost related to unvested stock options, restricted stock units (“RSUs”), performance-based stock units (“PSUs”), and rights to purchase shares of common stock under 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 October 4, 2019:



	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
Options	$	5	0.8
RSUs and PSUs ⁽¹⁾	722		2.9
ESPP	56		1.7
Total unamortized compensation cost	$	783


⁽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 28, 2019	3.9		65.72
Exercised	(0.6	)	43.50			$	7
Canceled or expired	(0.2	)	94.55
Options outstanding at October 4, 2019	3.1		$	67.75	2.8	$	21
Exercisable at October 4, 2019	2.6		$	71.51	2.6	$	15

RSUs and PSUs

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 28, 2019	11.6		62.07
Granted	5.4		59.31
Vested	(3.1	)	63.67		$	177
Forfeited	(0.4	)	62.66
RSUs and PSUs outstanding at October 4, 2019	13.5		$	61.01

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 has authorized a stock repurchase program for the repurchase of up to $5.00 billion of the Company’s common stock, which authorization is effective through July 25, 2023. For the three months ended October 4, 2019, the Company did not make any stock repurchases. The remaining amount available to be repurchased under the Company’s current stock repurchase program as of October 4, 2019 was $4.50 billion. Repurchases under the stock repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. The Company expects stock repurchases to be funded principally by operating cash flows.

Dividends to Shareholders

Since the first quarter of 2013, the Company has issued a quarterly cash dividend. During the three months ended October 4, 2019, the Company declared aggregate cash dividends of $0.50 per share on its outstanding common stock totaling $149 million, which was paid on October 22, 2019. The Company may modify, suspend or cancel its cash dividend policy in any manner and at any time.