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Share-based Compensation Plans (Tables)
12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-based Compensation Expense
The following table shows the total share-based compensation expense (see below for types of share-based awards) included in the Consolidated Statements of Operations:
 
 
For the years ended December 31,
(In millions)
2016
 
2015
 
2014
Cost of product sales
$
23.3

 
$
7.6

 
$
8.5

Research and development
46.9

 
28.6

 
22.2

Selling, general and administrative
67.1

 
37.4

 
35.9

Integration and acquisitions costs
181.2

 

 

Reorganization costs

 
26.7

 
30.4

Total
318.5

 
100.3

 
97.0

Less tax
(85.3
)
 
(28.4
)
 
(23.8
)
 
$
233.2

 
$
71.9

 
$
73.2

Share-based Awards Outstanding
The following awards were outstanding as of December 31, 2016:
 
 
Compensation type
 
Number of awards
 
Expiration period from date of issue
 
Vesting period
Stock-settled SARs
SARs
 
10,646,207

 
7 years
 
3 years graded vesting and/or 3 years cliff vesting subject to performance criteria for Executive Directors only
UK/Irish Sharesave Plans
Stock options
 
119,300

 
6 months after vesting
 
3 or 5 years
Global Employee Stock Purchase Plan
Stock options
 
411,900

 
On vesting date
 
1 to 5 years
Baxalta Replacement Options
Stock options
 
10,692,426

 
10 years
 
3 years graded vesting
Stock-settled SARs and stock options
 
21,869,833

 
 
 
 
RSUs, PSUs and PSAs
RSUs, PSUs and PSAs
 
2,346,511

 
3 years
 
3 years graded vesting, 3 years cliff vesting subject to performance criteria for Executive Directors and certain senior employees only 
Baxalta Replacement RSUs
RSU
 
1,630,146

 
3 years
 
3 years graded vesting
RSUs/PSUs and PSAs
 
3,976,657

 
 
 
 
Summary of Status of Stock Appreciation Rights and Stock Options
A summary of the status of the Company’s SARs and stock options including replacement awards as of December 31, 2016 and of the related activity during the period then ended is presented below:
 
Year ended December 31, 2016
Weighted average exercise price
 
Number of shares
 
Intrinsic value (In millions)
 
£
 
 
 
£
Outstanding as of beginning of period
52.02

 
7,796,496

 
 

Granted
42.37

 
6,506,762

 
 

Exercised
39.83

 
(4,717,106
)
 
 

Baxalta Replacement Options
34.30

 
13,328,592

 
 
Forfeited
48.49

 
(1,044,911
)
 
 

Outstanding as of end of period
38.98

 
21,869,833

 
76.6

Exercisable as of end of period
34.55

 
11,035,437

 
66.0

 
Schedule of Stock Appreciation Rights and Stock Options Outstanding, by Exercise Price Range
SARs and stock options including Baxalta Replacement Options, outstanding as of December 31, 2016 have the following characteristics:
 
Number of awards outstanding
 
Exercise prices
 
Weighted Average remaining contractual term (Years)
 
Weighted average exercise price of awards outstanding
 
Number of awards exercisable
 
Weighted average exercise price of awards exercisable
 
 
£
 
 
 
£
 
 
 
£
3,433,225

 
14.59-28.00
 
3.0
 
25.37

 
3,422,480

 
25.38

10,704,846

 
28.01-40.00
 
7.3
 
35.56

 
6,161,513

 
34.91

7,731,762

 
40.01-70.48
 
5.7
 
49.77

 
1,451,444

 
54.67

21,869,833

 
 
 
 
 
 
 
11,035,437

 
 
Schedule of Performance Share Awards
A summary of the status of the Company’s RSUs, PSUs and PSAs as of December 31, 2016 and of the related activity during the period then ended is presented below:
 
RSUs, PSUs and PSAs
Number of shares
 
Weighted average grant date fair value
 
Weighted average remaining life
 
 
 
£
 
 
Outstanding as of beginning of period
1,791,930

 
40.06

 
 
Granted
1,663,070

 
42.28

 
 
Exercised
(2,470,179
)
 
37.52

 
 
Baxalta Replacement RSUs
3,294,150

 
39.28

 
 
Forfeited
(302,314
)
 
48.47

 
 
Outstanding as of end of period
3,976,657

 
41.31

 
3.8
Exercisable as of end of period

 

 
N/A
 
Schedule of Share-based Payment Award, Valuation Assumptions
The fair value of share awards granted was estimated using the following assumptions:
 
 
Years ended December 31,
 
2016
 
2015
 
2014
Risk-free interest rate
0.29-1.6%
 
0.6-1.8%
 
0.3-1.8%
Expected dividend yield
0.3-0.5%
 
0.2-0.4%
 
0.2-0.4%
Expected life
1-4 years
 
1-4 years
 
1-4 years
Volatility
26-29%
 
23-26%
 
23-27%
Forfeiture rate
5-7%
 
5-7%
 
5-7%