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						Nine Months Ended
	March 30, 2018			March 31, 2017			March 30, 2018			March 31, 2017
	(in millions)
Options	$	6		$	10		$	19		$	33
Restricted and performance stock units	89			85			260			254
Employee stock purchase plan	8			7			20			16
Subtotal	103			102			299			303
Tax benefit	(17		)	(26		)	(51		)	(80		)
Total	$	86		$	76		$	248		$	223



	Three Months Ended						Nine Months Ended
	March 30, 2018			March 31, 2017			March 30, 2018			March 31, 2017
	(in millions)
Cost of revenue	$	11		$	13		$	37		$	37
Research and development	45			45			134			132
Selling, general and administrative	46			40			127			125
Employee termination, asset impairment, and other charges	1			4			1			9
Subtotal	103			102			299			303
Tax benefit	(17		)	(26		)	(51		)	(80		)
Total	$	86		$	76		$	248		$	223

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 March 30, 2018.



	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
Options	$	32	2.0
RSUs and PSUs ⁽¹⁾	528		2.2
ESPP	15		0.5
Total unamortized compensation cost	$	575


⁽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	(2.0	)	44.74			$	91
Canceled or expired	(0.3	)	61.95
Options outstanding at March 30, 2018	5.1		$	63.29	4.0	$	158
Exercisable at March 30, 2018	2.9		$	69.85	3.3	$	74

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 30, 2017	13.7		$	45.01
Granted	5.0		79.10
Vested	(6.0	)	44.99		$	529
Forfeited	(0.9	)	48.72
RSUs and PSUs outstanding at March 30, 2018	11.8		$	57.62

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 had made repurchases aggregating $2.88 billion prior to fiscal 2018. The Company repurchased 1.78 million shares for a total cost of $155 million during the three and nine months ended March 30, 2018. The remaining amount available to be purchased under the Company’s stock repurchase program as of March 30, 2018 was $1.97 billion.

Dividends to Shareholders

Since the first quarter of 2013, the Company has issued a quarterly cash dividend. During the nine months ended March 30, 2018, the Company declared aggregate cash dividends of $1.50 per share on its outstanding common stock totaling $446 million, of which $296 million was paid during the period and $150 million was paid on April 16, 2018.

On May 2, 2018, the Board declared a cash dividend of $0.50 per share to shareholders of record as of June 29, 2018, which will be paid on July 16, 2018. The Company may modify, suspend or cancel its cash dividend policy in any manner and at any time.