Accounting for Share-Based Compensation

3 Months Ended

Jun. 30, 2012

Accounting for Share-Based Compensation [Abstract]

ACCOUNTING FOR SHARE-BASED COMPENSATION

NOTE L – 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 June 30,
	2012			2011
Costs of licensing and maintenance	$	—		$	1
Cost of professional services		1			1
Selling and marketing		10			10
General and administrative		8			8
Product development and enhancements		4			5
Share-based compensation expense before tax		23			25
Income tax benefit		(8	)		(8	)
Net share-based compensation expense	$	15		$	17

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

	Unrecognized Compensation Costs		Weighted Average Period Expected to be Recognized
	(in millions)		(in years)
Stock option awards	$	8		2.5
Restricted stock units		22		2.3
Restricted stock awards		94		2.3
Performance share units		42		3.0
Total unrecognized share-based compensation costs	$	166		2.5

There were no capitalized share-based compensation costs for the three months ended June 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 three months ended June 30, 2012 and 2011, the Company issued options for approximately 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:

	Three Months Ended June 30,
	2012			2011
Weighted average fair value	$	9.09		$	6.00
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 1-year PSU awards for the fiscal year 2012 and 2011 incentive plan years under the Company’s long-term incentive plans were granted in the first quarter of fiscal years 2013 and 2012, respectively. The table below summarizes the RSAs and RSUs granted under these PSUs:

		RSAs		RSUs
Incentive Plans for Fiscal Years	Performance Period	Shares (in millions)	Weighted Average Grant Date Fair Value	Shares (in millions)	Weighted Average Grant Date Fair Value
2012	1-year	1.2	$ 26.39	0.2	$ 25.40
2011	1-year	1.1	$ 24.68	0.1	$ 24.48

The 3-year PSUs for the fiscal year 2010 and 2009 incentive plan years under the Company’s long-term incentive plans were granted in the first quarter of fiscal years 2013 and 2012, respectively. Unrestricted shares of common stock were issued in settlement immediately upon grant as follows:

Incentive Plans for Fiscal Years	Performance Period	Unrestricted Shares (in millions)	Weighted Average Grant Date Fair Value
2010	3-year	0.2	$ 26.39
2009	3-year	0.2	$ 24.68

Share-based awards were granted under the Company’s fiscal year 2012 and 2011 Sales Retention Equity Programs in the first quarter of fiscal years 2013 and 2012, respectively. These awards vest at the end of a three-year period beginning on the first anniversary of the grant date. The table below summarizes the RSAs and RSUs granted under these programs:

		RSAs		RSUs
Incentive Plans for Fiscal Years	Performance Period	Shares (in millions)	Weighted Average Grant Date Fair Value	Shares (in millions)	Weighted Average Grant Date Fair Value
2012	1-year	0.2	$ 26.39	0.1	$ 23.41
2011	1-year	0.3	$ 24.68	0.1	$ 24.09

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 months ended June 30, 2012 and 2011:

	Three Months Ended June 30,
	2012		2011
	(shares in millions)
RSUs
Shares		0.7		0.6
Weighted Avg. Grant Date Fair Value ( 1 )	$	24.30	$	24.27
RSAs
Shares		3.5		3.5
Weighted Avg. Grant Date Fair Value ( 2 )	$	26.23	$	24.66

⁽¹⁾  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.

⁽²⁾  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 June 30, 2012, approximately 29.9 million shares are available for future issuances under the ESPP.