NOTE J – 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 December 31,						Nine Months Ended December 31,
	2017			2016			2017			2016
	(in millions)
Costs of licensing and maintenance	$	1		$	2		$	5		$	5
Cost of professional services	1			1			2			3
Selling and marketing	9			9			29			28
General and administrative	10			8			33			27
Product development and enhancements	7			6			20			17
Share-based compensation expense before tax	$	28		$	26		$	89		$	80
Income tax benefit	(7		)	(8		)	(27		)	(26		)
Net share-based compensation expense	$	21		$	18		$	62		$	54

There were no capitalized share-based compensation costs for the three and nine months ended December 31, 2017 and 2016.

The following table summarizes the unrecognized share-based compensation costs at December 31, 2017:



	Unrecognized Share-Based Compensation Costs		Weighted Average Period Expected to be Recognized
	(in millions)		(in years)
Stock option awards	$	5	1.9
Restricted stock units (RSUs)	21		1.9
Restricted stock awards (RSAs)	78		1.9
Performance share units	37		2.4
Total unrecognized share-based compensation costs	$	141	2.1

For the nine months ended December 31, 2017 and 2016, the Company issued stock options for approximately 1.0 million shares and 1.1 million shares, respectively. The weighted average fair values and assumptions used for the options granted were as follows:



	Nine Months Ended December 31,
	2017			2016
Weighted average fair value	$	4.72		$	4.42
Dividend yield	3.17		%	3.56		%
Expected volatility factor ⁽¹⁾	21		%	22		%
Risk-free interest rate ⁽²⁾	2.1		%	1.5		%
Expected life (in years) ⁽³⁾	6.0			6.0


(1)	Expected volatility is measured using historical daily price changes of the Company’s common 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 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 RSAs and RSUs granted, including grants made pursuant to the Company’s long-term incentive plans, during the three and nine months ended December 31, 2017 and 2016:



	Three Months Ended December 31,						Nine Months Ended December 31,
	2017			2016			2017		2016
	(shares in millions)
RSAs:
Shares	0.1			—		⁽³⁾	3.0		2.9
Weighted average grant date fair value ⁽¹⁾	$	32.12		$	31.99		$	31.70	$	31.56
RSUs:
Shares	—		⁽³⁾	—			1.1		1.0
Weighted average grant date fair value ⁽²⁾	$	30.14		$	—		$	30.35	$	30.16


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


(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)	Less than 0.1 million.

Employee Stock Purchase Plan: For the six-month offer period ended June 30, 2017, the Company issued approximately 0.1 million shares under the Employee Stock Purchase Plan (ESPP) at $32.75 per share. For the six-month offer period ended December 31, 2017, the Company issued approximately 0.1 million shares under the Employee Stock Purchase Plan (ESPP) at $31.62 per share. As of December 31, 2017, approximately 28.8 million shares were available for future issuances under the ESPP.