STOCKHOLDERS' EQUITY

6 Months Ended

Nov. 30, 2013

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 20, 2013, we announced that our Board of Directors approved an expansion of our stock repurchase program by an additional $12.0 billion. Approximately $8.3 billion remained available for stock repurchases as of November 30, 2013, pursuant to our stock repurchase program. We repurchased 176.1 million shares for $5.8 billion during the six months ended November 30, 2013 (including 2.7 million shares for $97 million that were repurchased but not settled) and 200.3 million shares for $6.1 billion during the six months ended November 30, 2012 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, 2013, our Board of Directors declared cash dividends of $0.24 per share of our outstanding common stock, which we paid during the same period.

In December 2013, our Board of Directors declared a quarterly cash dividend of $0.12 per share of our outstanding common stock payable on January 28, 2014 to stockholders of record as of the close of business on January 7, 2014. 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)	2013		2012		2013		2012
Sales and marketing	$	39	$	43	$	81	$	81
Software license updates and product support		5		5		11		10
Hardware systems products		1		1		3		1
Hardware systems support		1		1		3		2
Services		7		8		13		17
Research and development		87		89		184		172
General and administrative		42		41		83		82
Acquisition related and other		1		4		4		21
Total stock-based compensation	$	183	$	192	$	382	$	386

During the first half of fiscal 2014, we issued 120 million stock options (including our annual grant of stock options in our first quarter of fiscal 2014 and certain stock options assumed from companies that we acquired). These stock option-based award issuances were partially offset by forfeitures and cancellations of 17 million shares during the first half of fiscal 2014.

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 grant dates or at the acquisition dates 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, 2013 and 2012:

	Three Months Ended November 30,				Six Months Ended November 30,
	2013		2012		2013		2012
Expected life (in years)		4.7		4.7		5.1		5.1
Risk-free interest rate		1.3%		0.6%		1.4%		0.7%
Volatility		24%		30%		27%		31%
Dividend yield		1.5%		0.8%		1.6%		0.8%
Weighted-average fair value per share	$	6.28	$	11.66	$	6.62	$	7.99

The expected life input is based on historical exercise patterns and post-vesting termination behavior, the risk-free interest rate input is based on U.S. 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.