Stock-Based Compensation

Our stock-based compensation expense is associated with 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 allocated to inventory, as follows:



	Three Months Ended				Nine Months Ended
	October 28, 2018		October 29, 2017		October 28, 2018		October 29, 2017
	(In millions)
Cost of revenue	$	5	$	6	$	21	$	14
Research and development	88		61		237		146
Sales, general and administrative	47		40		142		105
Total	$	140	$	107	$	400	$	265

Equity Award Activity

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



	RSUs, PSUs, and Market-based PSUs Outstanding
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
	(In millions, except per share data)
Balances, January 28, 2018	22		$	66.72
Granted (1) (2)	4		$	262.44
Vested restricted stock	(10	)	$	47.61
Canceled and forfeited	—		$	—
Balances, October 28, 2018	16		$	127.89


(1)	Includes the number of PSUs granted that will be issued and eligible to vest if the maximum corporate financial performance goal for fiscal year 2019 is achieved. Depending on the actual level of the corporate performance achievement at the end of fiscal year 2019, the PSUs issued could be up to 0.3 million shares.


(2)	Includes the number of market-based PSUs granted that will be issued and eligible to vest if the maximum goal for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to those of the companies comprising the Standard & Poor’s 500 Index during that period, the market-based PSUs issued could be up to 45 thousand shares.

Of the total fair value of equity awards granted during the third quarter and first nine months of fiscal year 2019, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $73 million and $89 million, respectively. Of the total fair value of equity awards granted during the third quarter and first nine months of fiscal year 2018, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $105 million and $144 million, respectively.

The following summarizes the aggregate unearned stock-based compensation expense and estimated weighted average amortization period as of October 28, 2018 and January 28, 2018:



	October 28,		January 28,
	2018		2018
	(In millions)
Aggregate unearned stock-based compensation expense	$	1,608	$	1,091

Estimated weighted average remaining amortization period	(In years)
RSUs, PSUs, and market-based PSUs	2.4		2.3
ESPP	0.9		0.7