XML 40 R19.htm IDEA: XBRL DOCUMENT
v3.19.2

Stockholders' Equity | 12 Months Ended
--- | ---
Apr. 26, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stockholders' Equity | 11. Stockholders’ Equity Equity Incentive Programs The 1999 Plan — As most recently amended on September 13, 2018, the 1999 Stock Option Plan (the Plan) comprises five separate equity incentive programs: (i) the Discretionary Option Grant Program under which options may be granted to eligible individuals at a fixed price per share; (ii) the Stock Appreciation Rights Program under which eligible persons may be granted stock appreciation rights that allow individuals to receive the appreciation in fair market value of the shares; (iii) the Stock Issuance Program under which eligible individuals may be issued shares of common stock directly; (iv) the Performance Share and Performance Unit Program under which eligible persons may be granted performance shares or performance units which result in payment to the participant only if performance goals or other vesting criteria are achieved and (v) the Automatic Award Program under which nonemployee board members automatically receive equity grants at designated intervals over their period of board service. The Plan expires in August 2019, though activities required to extend it are currently in progress. Under the Plan, the Board of Directors may grant to employees, nonemployee directors, consultants and independent advisors options to purchase shares of our common stock during their period of service. The exercise price for an incentive stock option and a nonstatutory option cannot be less than 100% of the fair market value of the common stock on the grant date. Options granted under the Plan generally vest over a four-year period. Options granted generally have a term of seven years after the grant date, subject to earlier termination upon the occurrence of certain events. The Plan prohibits the repricing of any outstanding stock option or stock appreciation right after it has been granted or to cancel any outstanding stock option or stock appreciation right and immediately replace it with a new stock option or stock appreciation right with a lower exercise price unless approved by stockholders. RSUs granted under the Plan include time-based RSUs that generally vest over a four-year period with 25% vesting on each anniversary of the grant date. The Compensation Committee of the Board of Directors (the Compensation Committee) has the discretion to use different vesting schedules. In addition, performance-based RSUs may be granted under the Plan and are subject to performance criteria and vesting terms specified by the Compensation Committee. Under the Plan, the number of shares reserved for issuance is reduced by two shares for every share subject to a full value award, which are specified to be grants that are in the form of performance shares and/or performance unit awards, stock, restricted stock or restricted stock units. The Plan (i) limits the number of shares that may be granted pursuant to awards under the Stock Issuance Program to a participant in any calendar year to 1 million, (ii) limits the initial value of performance units a participant may receive to not more than $5 million and (iii) limits the number of performance shares a participant may receive in a calendar year to 1 million. During fiscal 2019, the shares reserved for issuance under the Plan were increased by 9 million shares of common stock. As of April 26, 2019, 28 million shares were available for grant under the Plan. Stock Options The following table summarizes information related to our stock options (in millions, except exercise price and contractual term):
|  | Number of Shares |  |  | Weighted- Average Exercise Price |
Outstanding as of April 29, 2016 |  |  | 9 |  |  | $ | 34.01 |
Exercised |  |  | (3 | ) |  | $ | 25.61 |
Forfeited and expired |  |  | (2 | ) |  | $ | 39.36 |
Outstanding as of April 28, 2017 |  |  | 4 |  |  | $ | 35.76 |
Exercised |  |  | (2 | ) |  | $ | 36.99 |
Forfeited and expired |  |  | (1 | ) |  | $ | 40.50 |
Outstanding as of April 27, 2018 |  |  | 1 |  |  | $ | 31.19 |
Exercised |  |  | (1 | ) |  | $ | 32.50 |
Forfeited and expired |  |  | — |  |  | N/A |
Outstanding as of April 26, 2019 |  |  | — |  |  | N/A |
Exercisable as of April 26, 2019 |  |  | — |  |  | N/A |
__________________ N/A - Not Applicable Additional information related to our stock options is summarized below (in millions):
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
Intrinsic value of exercises |  | $ | 31 |  |  | $ | 37 |  |  | $ | 26 |
Proceeds received from exercises |  | $ | 25 |  |  | $ | 88 |  |  | $ | 60 |
Fair value of options vested |  | $ | 2 |  |  | $ | 8 |  |  | $ | 15 |
Restricted Stock Units In fiscal 2019, 2018 and 2017, we granted PBRSUs to certain of our executives. Each PBRSU has performance-based vesting criteria (in addition to the service based vesting criteria) such that the PBRSU cliff-vests at the end of either an approximate two year or three year performance period, which began on the date specified in the grant agreement and ends on the last day of the second or third fiscal year, respectively, following the grant date. The number of shares of common stock that will be issued to settle the PBRSUs at the end of the applicable performance and service period will range from 0% to 200% of a target number of shares originally granted. For half of the PBRSUs granted in fiscal 2019, and all of the PBRSUs granted in fiscal 2018 and 2017, the number of shares issued will depend upon our Total Stockholder Return (TSR) as compared to the TSR of an index that includes benchmark peers (each expressed as a growth rate percentage) calculated as of the applicable period end date. The fair values of these PBRSUs were fixed at grant date using a Monte Carlo simulation model. For the remaining PBRSUs granted in fiscal 2019, the number of shares issued will depend upon our achievement against a cumulative Adjusted Operating Income (AOI) target, as defined in the grant agreements, for the three-year period from fiscal 2019 through 2021. The fair values of these PBRSUs were established consistent with our methodology for valuing time-based RSUs, while compensation cost is being recognized based on the probable outcome of the performance condition. The aggregate grant date fair value of all PBRSUs granted in fiscal 2019, 2018 and 2017 was $24 million, $20 million and $15 million, respectively, and these amounts are being recognized to expense over the shorter of the remaining applicable performance or service periods. As of April 26, 2019 and April 27, 2018, there were approximately 1 million PBRSUs outstanding. The following table summarizes information related to RSUs, including PBRSUs, (in millions, except for fair value):
|  | Number of Shares |  |  | Weighted- Average Grant Date Fair Value |
Outstanding as of April 29, 2016 |  |  | 13 |  |  | $ | 32.46 |
Granted |  |  | 5 |  |  | $ | 24.99 |
Vested |  |  | (5 | ) |  | $ | 32.03 |
Forfeited |  |  | (2 | ) |  | $ | 31.66 |
Outstanding as of April 28, 2017 |  |  | 11 |  |  | $ | 28.81 |
Granted |  |  | 4 |  |  | $ | 39.74 |
Vested |  |  | (5 | ) |  | $ | 30.59 |
Forfeited |  |  | (1 | ) |  | $ | 29.54 |
Outstanding as of April 27, 2018 |  |  | 9 |  |  | $ | 32.91 |
Granted |  |  | 3 |  |  | $ | 63.40 |
Vested |  |  | (3 | ) |  | $ | 32.02 |
Forfeited |  |  | (1 | ) |  | $ | 36.61 |
Outstanding as of April 26, 2019 |  |  | 8 |  |  | $ | 45.68 |
We primarily use the net share settlement approach upon vesting, where a portion of the shares are withheld as settlement of employee withholding taxes, which decreases the shares issued to the employee by a corresponding value. The number and value of the shares netted for employee taxes are summarized in the table below (in millions):
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
Shares withheld for taxes |  |  | 1 |  |  |  | 2 |  |  |  | 2 |
Fair value of shares withheld |  | $ | 96 |  |  | $ | 75 |  |  | $ | 48 |
Employee Stock Purchase Plan Eligible employees are offered shares through a 24-month offering period, which consists of four consecutive 6-month purchase periods. Employees may purchase a limited number of shares of the Company’s stock at a discount of up to 15% of the lesser of the market value at the beginning of the offering period or the end of each 6-month purchase period. On September 13, 2018, the ESPP was amended to increase the shares reserved for issuance by 2 million shares of common stock. As of April 26, 2019, 7 million shares were available for issuance. The following table summarizes activity related to the purchase rights issued under the ESPP (in millions):
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
Shares issued under the ESPP |  |  | 3 |  |  |  | 4 |  |  |  | 4 |
Proceeds from issuance of shares |  | $ | 96 |  |  | $ | 85 |  |  | $ | 80 |
Stock-Based Compensation Expense Stock-based compensation expense is included in the consolidated statements of operations as follows (in millions):
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
Cost of product revenues |  | $ | 4 |  |  | $ | 3 |  |  | $ | 4 |
Cost of hardware maintenance and other services revenues |  |  | 10 |  |  |  | 10 |  |  |  | 13 |
Sales and marketing |  |  | 67 |  |  |  | 68 |  |  |  | 84 |
Research and development |  |  | 48 |  |  |  | 49 |  |  |  | 59 |
General and administrative |  |  | 29 |  |  |  | 31 |  |  |  | 35 |
Total stock-based compensation expense |  | $ | 158 |  |  | $ | 161 |  |  | $ | 195 |
Income tax benefit for stock-based compensation |  | $ | 15 |  |  | $ | 29 |  |  | $ | 41 |
As of April 26, 2019, total unrecognized compensation expense related to our equity awards was $285 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.1 years. Valuation Assumptions The valuation of RSUs and ESPP purchase rights and the underlying weighted-average assumptions are summarized as follows:
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
RSUs: |  |  |  |  |  |  |  |  |  |  |  |
Risk-free interest rate |  |  | 2.6 | % |  |  | 1.4 | % |  |  | 1.0 | %
Expected dividend yield |  |  | 2.4 | % |  |  | 2.0 | % |  |  | 3.1 | %
Weighted-average fair value per share granted |  | $ | 63.40 |  |  | $ | 39.74 |  |  | $ | 24.99 |
ESPP: |  |  |  |  |  |  |  |  |  |  |  |
Expected term in years |  |  | 1.2 |  |  |  | 1.2 |  |  |  | 1.2 |
Risk-free interest rate |  |  | 2.6 | % |  |  | 1.4 | % |  |  | 0.8 | %
Expected volatility |  |  | 31 | % |  |  | 28 | % |  |  | 30 | %
Expected dividend yield |  |  | 2.4 | % |  |  | 2.0 | % |  |  | 3.1 | %
Weighted-average fair value per right granted |  | $ | 18.07 |  |  | $ | 12.34 |  |  | $ | 7.85 |
Stock Repurchase Program As of April 26, 2019, our Board of Directors has authorized the repurchase of up to $13.6 billion of our common stock under our stock repurchase program . Under this program, which we may suspend or discontinue at any time, we may purchase shares of our outstanding common stock through solicited or unsolicited transactions in the open market, in privately negotiated transactions, through accelerated share repurchase programs, pursuant to a Rule 10b5-1 plan or in such other manner as deemed appropriate by our management. The following table summarizes activity related to this program (in millions, except per share amounts):
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
Number of shares repurchased |  |  | 29 |  |  |  | 15 |  |  |  | 22 |
Average price per share |  | $ | 72.87 |  |  | $ | 51.57 |  |  | $ | 32.72 |
Aggregate purchase price |  | $ | 2,111 |  |  | $ | 794 |  |  | $ | 705 |
Remaining authorization at end of period |  | $ | 1,889 |  |  | $ | 4,000 |  |  | $ | 794 |
The aggregate purchase price of our stock repurchases for fiscal 2019 consisted of $2.1 billion of open market purchases of which $1.0 billion and $1.1 billion were allocated to additional paid-in capital and retained earnings (accumulated deficit), respectively. Since the May 13, 2003 inception of our stock repurchase program through April 26, 2019, we repurchased a total of 313 million shares of our common stock at an average price of $37.46 per share, for an aggregate purchase price of $11.7 billion. Preferred Stock Our Board of Directors has the authority to issue up to 5 million shares of preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without any further vote or action by the stockholders. No shares of preferred stock were issued or outstanding in any period presented. Dividends The following is a summary of our fiscal 2019, 2018 and 2017 activities related to dividends on our common stock (in millions, except per share amounts).
|  | Year Ended |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |
Dividends per share declared |  | $ | 1.60 |  |  | $ | 0.80 |  |  | $ | 0.76 |
Dividend payments allocated to additional paid-in capital |  | $ | 403 |  |  | $ | 106 |  |  | $ | 88 |
Dividend payments allocated to retained earnings (accumulated deficit) |  | $ | — |  |  | $ | 108 |  |  | $ | 120 |
On May 22, 2019, we declared a cash dividend of $0.48 per share of common stock, payable on July 24, 2019 to shareholders of record as of the close of business on July 5, 2019. The timing and amount of future dividends will depend on market conditions, corporate business and financial considerations and regulatory requirements. All dividends declared have been determined by the Company to be legally authorized under the laws of the state in which we are incorporated. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) (AOCI) by component, net of tax, are summarized below (in millions):
|  | Foreign Currency Translation Adjustments |  |  | Defined Benefit Obligation Adjustments |  |  | Unrealized Gains (Losses) on Available- for-Sale Securities |  |  | Unrealized Gains (Losses) on Derivative Instruments |  |  | Total |
Balance as of April 28, 2017 |  | $ | (29 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (29 | )
OCI before reclassifications, net of tax |  |  | 2 |  |  |  | 1 |  |  |  | (43 | ) |  |  | — |  |  |  | (40 | )
Amounts reclassified from AOCI, net of tax |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | (1 | )
Total OCI |  |  | 2 |  |  |  | — |  |  |  | (43 | ) |  |  | — |  |  |  | (41 | )
Balance as of April 27, 2018 |  |  | (27 | ) |  |  | — |  |  |  | (43 | ) |  |  | — |  |  |  | (70 | )
OCI before reclassifications, net of tax |  |  | (7 | ) |  |  | (2 | ) |  |  | 36 |  |  |  | 2 |  |  |  | 29 |
Amounts reclassified from AOCI, net of tax |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (1 | ) |  |  | (2 | )
Total OCI |  |  | (7 | ) |  |  | (3 | ) |  |  | 36 |  |  |  | 1 |  |  |  | 27 |
Balance as of April 26, 2019 |  | $ | (34 | ) |  | $ | (3 | ) |  | $ | (7 | ) |  | $ | 1 |  |  | $ | (43 | )
The amounts reclassified out of AOCI are as follows (in millions):
|  | Year Ended |  |  |
|  | April 26, 2019 |  |  | April 27, 2018 |  |  | April 28, 2017 |  |  |
|  | Amounts Reclassified from AOCI |  |  | Statements of Operations Classification
Recognized (gains) losses on defined benefit obligations |  | $ | (2 | ) |  | $ | (2 | ) |  |  | 1 |  |  | Operating expenses
Realized gains on cash flow hedges |  |  | (1 | ) |  |  | — |  |  |  | (6 | ) |  | Net revenues
Total reclassifications |  | $ | (3 | ) |  | $ | (2 | ) |  | $ | (5 | ) |  |

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration