Shareholders' Equity

9 Months Ended

Apr. 01, 2022

Share-based Payment Arrangement [Abstract]

Shareholders’ Equity

Stock-based Compensation Expense

The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., 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				Nine Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
	(in millions)

RSUs and PSUs	$	75	$	73	$	220	$	212
ESPP	11		10		29		27
Total	$	86	$	83	$	249	$	239


	Three Months Ended				Nine Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
	(in millions)
Cost of revenue	$	13	$	14	$	36	$	41
Research and development	43		41		126		120
Selling, general and administrative	30		28		87		78

Subtotal	86		83		249		239
Tax benefit	(9)		(11)		(37)		(35)
Total	$	77	$	72	$	212	$	204

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 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 April 1, 2022:


	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)

RSUs and PSUs (1)	$	589	2.3
ESPP	70		1.5
Total unamortized compensation cost	$	659

(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 April 1, 2022:


	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	(0.2)	43.52			3
Canceled or expired	(0.4)	98.24
Options outstanding at April 1, 2022	0.9	65.97		0.77	2

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	5.5	62.53

Vested	(4.9)	53.93		$	301
Forfeited	(1.7)	51.77
RSUs and PSUs outstanding at April 1, 2022	15.0	53.33

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 $5.0 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 nine months ended April 1, 2022 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 April 1, 2022 was $4.5 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.