Shareholders' Equity

6 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Shareholders' Equity

Shareholders’ Equity

Stock-based Compensation Expense

The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., stock options, restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”), and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”)) 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 31, 2021		January 1, 2021		December 31, 2021		January 1, 2021
	(in millions)
RSUs and PSUs	$	78	$	72	$	145	$	139
ESPP	9		8		18		17
Total	$	87	$	80	$	163	$	156

	Three Months Ended				Six Months Ended
	December 31, 2021		January 1, 2021		December 31, 2021		January 1, 2021
	(in millions)
Cost of revenue	$	14	$	15	$	23	$	27
Research and development	43		40		83		79
Selling, general and administrative	30		25		57		50
Subtotal	87		80		163		156
Tax benefit	(13)		(9)		(28)		(20)
Total	$	74	$	71	$	135	$	136

Windfall tax benefits and tax deficiencies for shortfalls related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were not material for the periods presented.

Compensation cost related to unvested stock options, RSUs, PSUs, and rights to purchase shares of common stock under the 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 31, 2021:

	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
RSUs and PSUs (1)	$	664	2.5
ESPP	81		1.7
Total unamortized compensation cost	$	745

(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. All outstanding options were exercisable at December 31, 2021:

	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 July 2, 2021	1.5	$	72.84	1.2	$	15
Exercised	(0.1)	43.57			2
Canceled or expired	(0.4)	98.85
Options outstanding at December 31, 2021	1.0	66.15		1.0	9

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 July 2, 2021	16.1	$	50.12
Granted	5.1	63.39
Vested	(4.6)	53.93		$	285
Forfeited	(1.2)	51.71
RSUs and PSUs outstanding at December 31, 2021	15.4	53.32

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. The Company did not make any stock repurchases during the six months ended December 31, 2021 and has not repurchased any shares of its common stock pursuant to its stock repurchase program since the first quarter of fiscal 2019. The remaining amount available to be repurchased under the Company’s current stock repurchase program as of December 31, 2021 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.