STOCKHOLDERS' EQUITY

6 Months Ended

Nov. 30, 2012

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

10. STOCKHOLDERS’ EQUITY

Stock Repurchases

Our Board of Directors has approved a program for us to repurchase shares of our common stock. On June 18, 2012, we announced that our Board of Directors approved an expansion of our stock repurchase program by an additional $10.0 billion. Approximately $7.0 billion remained available for stock repurchases as of November 30, 2012 pursuant to our stock repurchase program. We repurchased 200.3 million shares for $6.1 billion during the six months ended November 30, 2012 (including 4.7 million shares for $150 million that were repurchased but not settled) and 60.6 million shares for $1.8 billion during the six months ended November 30, 2011 under the stock repurchase program.

Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such as our working capital needs, our cash requirements for acquisitions and dividend payments, our debt repayment obligations or repurchase of our debt, our stock price, and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.

Dividends on Common Stock

During the six months ended November 30, 2012, our Board of Directors declared cash dividends of $0.12 per share of our outstanding common stock, which we paid during the same period.

In December 2012, our Board of Directors declared an accelerated second, third and fourth quarter of fiscal 2013 cash dividend totaling $0.18 per share of outstanding common stock payable on December 21, 2012 to stockholders of record as of the close of business on December 14, 2012.  This accelerated dividend is intended by our Board of Directors to be in lieu of quarterly dividends that we would have otherwise announced with our quarterly earnings results for the second, third and fourth quarters of fiscal 2013, and that would have been paid in calendar year 2013. The next opportunity for our Board of Directors to consider and approve the declaration of a dividend will be when we announce our earnings results for the first quarter of fiscal 2014, which ends on August 31, 2013. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors.

Stock-Based Compensation Expense and Valuation of Stock Options

Stock-based compensation is included in the following operating expense line items in our condensed consolidated statements of operations:

	Three Months Ended November 30,				Six Months Ended November 30,
(in millions)	2012		2011		2012		2011
Sales and marketing	$	43	$	29	$	81	$	55
Software license updates and product support		5		5		10		8
Hardware systems products		1		—		1		1
Hardware systems support		1		2		2		3
Services		8		6		17		10
Research and development		89		68		172		139
General and administrative		41		40		82		79
Acquisition related and other		4		2		21		3
Total stock-based compensation	$	192	$	152	$	386	$	298

During the first half of fiscal 2013, we issued 114 million stock options (including our annual grant of stock options in our first quarter of fiscal 2013 and certain stock options assumed from companies that we acquired). These stock option-based award issuances were partially offset by forfeitures and cancellations of 10 million shares during the first half of fiscal 2013.

We estimate the fair values of our share-based payments using the Black-Scholes-Merton option-pricing model, which was developed for use in estimating the fair values of stock options. Option valuation models, including the Black-Scholes-Merton option-pricing model, require the input of assumptions, including stock price volatility. Changes in the input assumptions can materially affect the fair value estimates and ultimately how much we recognize as stock-based compensation expense. We recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally four years. The fair values of our stock options were estimated at the date of grant or date of acquisition for options assumed in a business combination. The weighted average input assumptions used and resulting fair values of our stock options were as follows for the three and six months ended November 30, 2012 and 2011:

	Three Months Ended November 30,				Six Months Ended November 30,
	2012		2011		2012		2011
Expected life (in years)		4.7		4.7		5.1		5.1
Risk-free interest rate		0.6%		0.8%		0.7%		1.7%
Volatility		30%		34%		31%		30%
Dividend yield		0.8%		0.8%		0.8%		0.7%
Weighted-average fair value per share	$	11.66	$	9.60	$	7.99	$	8.80

The expected life input is based on historical exercise patterns and post-vesting termination behavior, the risk-free interest rate input is based on United States Treasury instruments, the annualized dividend yield input is based on the per share dividend declared by our Board of Directors and the volatility input is calculated based on the implied volatility of our publicly traded options.