Share-Based Compensation (Tables)

12 Months Ended

Mar. 31, 2018

The components of share-based compensation expense and related tax benefits are as follows:



	Years Ended March 31,
(In millions)	2018			2017			2016
Restricted stock unit awards⁽¹⁾	$	46		$	79		$	88
Stock options	14			24			22
Employee stock purchase plan	9			12			13
Share-based compensation expense ⁽²⁾	69			115			123
Tax benefit for share-based compensation expense ⁽³⁾	(28		)	(92		)	(41		)
Share-based compensation expense, net of tax	$	41		$	23		$	82


(1)	Includes compensation expense recognized for RSUs, PeRSUs and TSRUs. Our TSRUs were awarded beginning in 2015.


(2)	2016 includes non-cash credits of $14 million representing the reversal of previously recognized share-based compensation expense, which was recorded due to employee terminations associated with the March 2016 Cost Alignment Plan.


(3)	Income tax benefit is computed using the tax rates of applicable tax jurisdictions. Additionally, a portion of pre-tax compensation expense is not tax-deductible. Income tax expense for 2018 and 2017 included discrete income tax benefits of $8 million and $54 million related to the adoption of the amended accounting guidance on share-based compensation.

The weighted-average assumptions used to estimate the fair value of TSRUs are as follows:



	Years Ended March 31,
	2018	2017	2016
Expected stock price volatility	29%	23%	18%
Expected dividend yield	0.8%	0.7%	0.4%
Risk-free interest rate	1.5%	1.1%	0.9%
Expected life (in years)	3	3	3

Weighted-average assumptions used to estimate the fair value of employee stock options were as follows:



	Years Ended March 31,
	2018	2017	2016
Expected stock price volatility	25%	21%	21%
Expected dividend yield	0.8%	0.7%	0.4%
Risk-free interest rate	1.7%	1.1%	1.4%
Expected life (in years)	4.5	4	4

The following is a summary of stock options outstanding at March 31, 2018:



					Options Outstanding				Options Exercisable
Range of Exercise Prices					Number of Options Outstanding at Year End (In millions)	Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Number of Options Exercisable at Year End (In millions)	Weighted- Average Exercise Price
$	76.55	–	$	158.24	1	2	$	108.17	1	$	106.05
158.25		–	239.93		2	4	190.18		1	199.13
					3				2

The following table summarizes stock option activity during 2018:



(In millions, except per share data)	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value⁽²⁾
Outstanding, March 31, 2017	4	$	145.76	4	$	97
Granted	1	157.45
Cancelled	(1)	180.79
Exercised	(1)	86.95
Outstanding, March 31, 2018	3	$	161.27	4	$	36

Vested and expected to vest⁽¹⁾	3	$	160.28	4	$	35
Vested and exercisable, March 31, 2018	2	147.76		2	35


(1)	The number of options expected to vest takes into account an estimate of expected forfeitures.


(2)	The intrinsic value is calculated as the difference between the period-end market price of the Company’s common stock and the exercise price of “in-the-money” options.

The following table provides data related to stock option activity:



	Years Ended March 31,
(In millions, except per share data)	2018		2017		2016
Weighted-average grant date fair value per stock option	$	34.24	$	32.19	$	44.04
Aggregate intrinsic value on exercise	$	60	$	97	$	107
Cash received upon exercise	$	77	$	54	$	47
Tax benefits realized related to exercise	$	22	$	38	$	42
Total fair value of stock options vested	$	20	$	18	$	18
Total compensation cost, net of estimated forfeitures, related to unvested stock options not yet recognized, pre-tax	$	15	$	21	$	20
Weighted-average period in years over which stock option compensation cost is expected to be recognized	2		2		2

The following table summarizes activity for restricted stock unit awards (RSUs, PeRSUs, and TSRUs) during 2018:



(In millions, except per share data)	Shares	Weighted- Average Grant Date Fair Value Per Share
Nonvested, March 31, 2017	2	$	188.54
Granted	1	159.49
Vested	(1)	172.02
Nonvested, March 31, 2018	2	$	176.74

The following table provides data related to restricted stock unit award activity:



	Years Ended March 31,
(In millions)	2018		2017		2016
Total fair value of shares vested	$	156	$	109	$	104
Total compensation cost, net of estimated forfeitures, related to nonvested restricted stock unit awards not yet recognized, pre-tax	$	97	$	99	$	144
Weighted-average period in years over which restricted stock unit award cost is expected to be recognized	2		2		2