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						Six Months Ended
	December 28, 2018			December 29, 2017			December 28, 2018			December 29, 2017
	(in millions)
Options	$	4		$	6		$	9		$	13
Restricted and performance stock units	70			88			137			171
Employee stock purchase plan	5			5			12			12
Subtotal	79			99			158			196
Tax benefit	(14		)	(10		)	(25		)	(34		)
Total	$	65		$	89		$	133		$	162



	Three Months Ended						Six Months Ended
	December 28, 2018			December 29, 2017			December 28, 2018			December 29, 2017
	(in millions)
Cost of revenue	$	13		$	13		$	24		$	26
Research and development	42			45			81			89
Selling, general and administrative	24			41			53			81
Subtotal	79			99			158			196
Tax benefit	(14		)	(10		)	(25		)	(34		)
Total	$	65		$	89		$	133		$	162

Compensation cost related to unvested stock options, restricted stock unit awards (“RSUs”), performance-based restricted stock unit awards (“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 December 28, 2018:



	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
Options	$	15	1.4
RSUs and PSUs ⁽¹⁾	657		2.5
ESPP	71		1.9
Total unamortized compensation cost	$	743


⁽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 29, 2018	4.8		$	64.23
Exercised	(0.2	)	37.64			$	—
Canceled or expired	(0.3	)	79.73
Options outstanding at December 28, 2018	4.3		$	64.73	3.3	$	1
Exercisable at December 28, 2018	3.1		$	69.86	2.9	$	1

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 29, 2018	12.6		$	58.31
Granted	6.6		59.42
Vested	(3.1	)	61.96		$	211
Forfeited	(0.7	)	56.05
RSUs and PSUs outstanding at December 28, 2018	15.4		$	59.51

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 previously authorized $5.00 billion for the repurchase of the Company’s common stock. On July 25, 2018, the Company’s Board of Directors authorized a new $5.00 billion share repurchase program that is effective through July 25, 2023, replacing all prior programs. For the three months ended December 28, 2018, the Company did not make any stock repurchases. For the six months ended December 28, 2018, the Company repurchased 0.8 million shares for a total cost of $61 million under the previous authorization and 7.6 million shares for a total cost of $502 million under the new authorization. Therefore, the Company’s stock repurchases under all stock repurchase authorizations in effect for the six months ended December 28, 2018 totaled $563 million. The remaining amount available to be repurchased under the Company’s current stock repurchase program as of December 28, 2018 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.

Dividends to Shareholders

Since the first quarter of 2013, the Company has issued a quarterly cash dividend. During the six months ended December 28, 2018, the Company declared aggregate cash dividends of $1.00 per share on its outstanding common stock totaling $290 million, of which $146 million was paid on January 14, 2019.