Stock-Based Compensation

Our stock-based compensation expense is associated with restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.

Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts allocated to inventory, as follows:



	Three Months Ended
	April 28, 2019		April 29, 2018
	(In millions)
Cost of revenue	$	4	$	8
Research and development	114		74
Sales, general and administrative	60		47
Total	$	178	$	129

Equity Award Activity

The following is a summary of equity award transactions under our equity incentive plans:



	RSUs, PSUs, and Market-based PSUs Outstanding
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
	(In millions, except per share data)
Balances, January 27, 2019	16		$	129.92
Granted (1) (2)	6		$	183.83
Vested restricted stock	(3	)	$	53.97
Canceled and forfeited	(1	)	$	191.92
Balances, April 28, 2019	18		$	159.28


(1)	Includes the number of PSUs granted that will be issued and eligible to vest if the maximum corporate financial performance goal for fiscal year 2020 is achieved. Depending on the actual level of the corporate performance achievement at the end of fiscal year 2020, the PSUs issued could be up to 0.4 million shares.


(2)	Includes the number of market-based PSUs granted that will be issued and eligible to vest if the maximum goal for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to those of the companies comprising the Standard & Poor’s 500 Index during that period, the market-based PSUs issued could be up to 60 thousand shares.

Of the total fair value of equity awards granted during the first quarter of fiscal year 2020, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $85 million.

As of April 28, 2019, there was $2.27 billion of aggregate unearned stock-based compensation expense. This amount is expected to be recognized over a weighted average period of 2.7 years for RSUs, PSUs, and market-based PSUs, and 1.3 years for ESPP.