Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Incentive Compensation Plans (Notes)

v3.2.0.727
Stock-Based Incentive Compensation Plans (Notes)
 6 Months Ended
Jun. 27, 2015
Share-based Compensation [Abstract]  
Stock-Based Incentive Compensation Plans
Stock-Based Incentive Compensation Plans
The following table summarizes stock-based compensation expense related to employee stock options and restricted stock units, which is allocated within the Company’s condensed consolidated statements of operations as follows:
 
Three Months Ended
Six Months Ended
 
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
 
(In millions)
Cost of sales
$
1

 
$
1

 
$
2

 
$
2

Research and development
10

 
11

 
20

 
23

Marketing, general and administrative
6

 
9

 
12

 
19

Stock-based compensation expense, net of tax of $0
$
17

 
$
21

 
$
34

 
$
44


For all periods presented, the Company did not realize any excess tax benefit related to stock-based compensation and therefore did not record any related financing cash flows.
Stock Options
The weighted average assumptions applied in the lattice-binomial model that the Company uses to estimate the fair value employee stock options are as follows:
 
 
Three Months Ended
 
Six Months Ended
 
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
Expected volatility
54.86
%
 
51.68
%
 
54.43
%
 
53.36
%
Risk-free interest rate
1.15
%
 
1.12
%
 
1.21
%
 
1.09
%
Expected dividends
0.00
%
 
0.00
%
 
0.00
%
 
0.00
%
Expected life
3.91 years

 
3.86 years

 
3.91 years

 
3.86 years


In the second quarters of 2015 and 2014, the Company granted 0.5 million and 0.1 million shares of employee stock options, respectively, with weighted average grant date fair value per share of $1.06 and $1.66, respectively. For the six months ended June 27, 2015 and June 28, 2014, the Company granted 0.7 million and 0.2 million employee stock options, respectively, with weighted average grant date fair values per share of $1.12 and 1.65, respectively.
Restricted Stock Units
In the second quarters of 2015 and 2014, the Company granted 4.1 million and 1.7 million restricted stock units, respectively, with weighted average grant date fair values per share of $2.46 and $4.00, respectively. For the six months ended June 27, 2015 and June 28, 2014, the Company granted 9.4 million and 2.2 million restricted stock units, respectively, with weighted average grant date fair values per share of $2.50 and $3.96, respectively.