Accounting for Share-Based Compensation

6 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

ACCOUNTING FOR SHARE-BASED COMPENSATION

NOTE M – ACCOUNTING FOR SHARE-BASED COMPENSATION

The Company recognized share-based compensation in the following line items in the Condensed Consolidated Statements of Operations for the periods indicated:

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
	(in millions)
Costs of licensing and maintenance	$	1		$	1		$	1		$	2
Cost of professional services	1			1			2			2
Selling and marketing	8			6			18			16
General and administrative	7			4			15			12
Product development and enhancements	4			4			8			9
Share-based compensation expense before tax	$	21		$	16		$	44		$	41
Income tax benefit	(8		)	(6		)	(16		)	(14		)
Net share-based compensation expense	$	13		$	10		$	28		$	27

The following table summarizes information about unrecognized share-based compensation costs at September 30, 2012:

	Unrecognized Compensation Costs		Weighted Average Period Expected to be Recognized
	(in millions)		(in years)
Stock option awards	$	7	2.3
Restricted stock units	19		2.1
Restricted stock awards	81		2.1
Performance share units	30		2.8
Total unrecognized share-based compensation costs	$	137	2.3

There were no capitalized share-based compensation costs for the three and six months ended September 30, 2012 or 2011.

Under the Company’s long-term incentive plans, the value of performance share unit (PSU) awards is determined using the closing price of the Company’s common stock on the last trading day of the quarter until the PSUs are granted. Compensation costs for the PSUs are amortized over the requisite service periods based on the expected level of achievement of the performance targets. At the conclusion of the performance periods for the PSUs, the applicable number of shares of restricted stock awards (RSAs), restricted stock units (RSUs) or unrestricted shares granted may vary based upon the level of achievement of the performance targets and the approval of the Company’s Compensation and Human Resources Committee (which may reduce any award for any reason in its discretion).

For the six months ended September 30, 2012 and 2011, the Company issued options for 0.7 million shares and 0.6 million shares, respectively. The weighted average fair values and assumptions used for the options granted were as follows:

	Six Months Ended September 30,
	2012		2011
Weighted average fair value	9.09		5.99
Dividend yield	3.96	%	0.91	%
Expected volatility factor (1)	59	%	33	%
Risk-free interest rate (2)	0.8	%	1.7	%
Expected life (in years) (3)	4.5		4.5

(1) Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market prices of the Company’s traded options.

(2) The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.

(3) The expected life is the number of years the Company estimates, based primarily on historical experience, that options will be outstanding prior to exercise. The Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term).

The table below summarizes all of the RSUs and RSAs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three and six months ended September 30, 2012 and 2011:

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012		2011
				(shares in millions)
RSUs
Shares	—		(1)	—			0.7		0.7
Weighted avg. grant date fair value (2)	$	23.63		$	—		$	24.29	$	24.08
RSAs
Shares	—		(1)	—		(1)	3.6		3.6
Weighted avg. grant date fair value (3)	$	25.54		$	22.47		$	26.23	$	24.65

(1) Less than 0.1 million.

(2) The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate.

(3) The fair value is based on the quoted market value of the Company’s common stock on the grant date.

Employee Stock Purchase Plan: The Company maintains the 2012 Employee Stock Purchase Plan (ESPP) for all eligible employees. The ESPP offer period is semi-annual and allows participants to purchase the Company’s common stock at 95% of the closing price of the stock on the last day of the offer period. The ESPP is non-compensatory. For the six-month offer period ending June 30, 2012, the Company issued approximately 0.1 million shares under the ESPP at an average price of $25.74 per share. As of September 30, 2012, approximately 29.9 million shares are available for future issuances under the ESPP.