Annual report pursuant to Section 13 and 15(d)

Common Stock and Stock-Based Incentive Compensation Plans (Tables)

v3.10.0.1
Common Stock and Stock-Based Incentive Compensation Plans (Tables)
 12 Months Ended
Dec. 29, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense related to employee stock options, restricted stock units, including PRSUs and the ESPP, was allocated in the consolidated statements of operations as follows:
 
2018
 
2017
 
2016
 
(In millions)
Cost of sales
$
4

 
$
2

 
$
2

Research and development
91

 
57

 
49

Marketing, general, and administrative
42

 
38

 
35

Total stock-based compensation expense, net of tax of $0
$
137

 
$
97

 
$
86


Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
weighted-average grant date fair values of PRSUs granted during 2018, 2017 and 2016 were $21.67, $17.18 and $9.00, respectively, using the following assumptions:
 
2018
 
2017
 
2016
Stock price at valuation date
$12.02 - $32.72
 
$12.83
 
$5.14
Expected volatility
63.77% - 67.97%

 
64.39
%
 
57.83
%
Risk-free interest rate
2.06% - 2.82%

 
1.50
%
 
0.88
%
Expected dividends
—
%
 
—
%
 
—
%
Expected term (in years)
2.48 - 3.00

 
3.00

 
3.07

The weighted-average estimated fair value of employee stock options granted for the years ended December 29, 2018, December 30, 2017 and December 31, 2016 was $7.62, $5.46 and $3.10 per share, respectively, using the following assumptions:
 
2018
 
2017
 
2016
Expected volatility
51.51% - 60.46%

 
57.26
%
 
62.33
%
Risk-free interest rate
2.20% - 2.83%

 
1.68
%
 
1.02
%
Expected dividends
—
%
 
—
%
 
—
%
Expected life (in years)
3.92 - 3.94

 
3.92

 
3.98

Schedule of Share-based Compensation, Stock Options, Activity
The following table summarizes stock option activity and related information:
  
Outstanding Number
of Shares
 
Weighted-
Average
Exercise
Price
 
Aggregate Intrinsic Value
 
Weighted-Average Remaining Contractual Life (in years)
 
(In millions, except share price)
 
 
Balance as of December 30, 2017
17

 
$
4.32

 
$
104

 
3.75
Granted
1

 
$
18.35

 
 
 
 
Canceled
—


$
8.93

 
 
 
 
Exercised
(5
)
 
$
4.65

 
 
 
 
Balance as of December 29, 2018
13

 
$
5.33

 
$
152

 
3.49
Exercisable December 29, 2018
11

 
$
3.64

 
$
145

 
3.15
Schedule of Share-based Compensation, Restricted Stock Units, Activity
  
Number
of Shares
 
Weighted-
Average
Fair Value
 
(In millions except share price)
Unvested shares as of December 30, 2017
35

 
$
6.60

Granted
15

 
$
14.81

Forfeited
(2
)
 
$
8.74

Vested
(22
)
 
$
4.46

Unvested shares as of December 29, 2018
26

 
$
13.14

Schedule of Nonvested Performance-based Units Activity
The following table summarizes PRSU activity and related information:
 
(Shares in millions)
Unvested shares as of December 30, 2017
3

Granted
3

Forfeited
—

Vested
(4
)
Unvested shares as of December 29, 2018
2

Schedule of ESPP
ESPP. The Company uses the Black-Scholes model in determining the fair value of the ESPP. The weighted-average grant date fair value for the ESPP during 2018 and 2017 was within a range from $3.42 to $6.43 and $3.46 per share, respectively, using the following assumptions:
 
2018
 
2017
Expected volatility
45.88% - 66.66%

 
56.07
%
Risk-free interest rate
2.05% - 2.52%

 
1.36
%
Expected dividends
—
%
 
—
%
Expected term (in years)
0.49 - 0.50

 
0.49