Shareholders' Equity

9 Months Ended

Apr. 03, 2020

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						Nine Months Ended
	April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019
	(in millions)
Options	$	1	$	3	$	5	$	12
Restricted and performance stock units	68		71		204		208
Employee stock purchase plan	9		10		23		22
Total	$	78	$	84	$	232	$	242


	Three Months Ended						Nine Months Ended
	April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019
	(in millions)
Cost of revenue	$	13	$	13	$	38	$	37
Research and development	41		41		123		122
Selling, general and administrative	24		30		71		83

Subtotal	78		84		232		242
Tax benefit	(9)		(14)		(32)		(39)
Total	$	69	$	70	$	200	$	203

Windfall tax benefits related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were immaterial for the periods presented.

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 April 3, 2020:


	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
Options	$	2	0.3
RSUs and PSUs ⁽¹⁾	610		2.6
ESPP	41		1.2
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 28, 2019	3.9	$	65.72


Exercised	(0.8)	43.39			$	11
Canceled or expired	(0.3)	92.67
Options outstanding at April 3, 2020	2.8	68.97		2.3	$	—
Exercisable at April 3, 2020	2.6	70.89		2.2	$	—

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	7.0	56.08

Vested	(4.2)	58.21		$	243
Forfeited	(1.1)	63.28
RSUs and PSUs outstanding at April 3, 2020	13.3	61.56

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 $5.0 billion of the Company’s common stock, which authorization is effective through July 25, 2023. For the nine months ended April 3, 2020, 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 April 3, 2020 was $4.5 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 nine months ended April 3, 2020, the Company declared aggregate cash dividends of $1.50 per share on its outstanding common stock totaling $448 million, of which $150 million was paid on April 17, 2020. The Company has since suspended its dividend to reinvest in the business and to support its ongoing deleveraging efforts.