Computer Associates 2016 Annual Report Download - page 95

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Share-Based Compensation: The Company recognized share-based compensation in the following line items in the Consolidated
Statements of Operations for the periods indicated:
Year Ended March 31,
(in millions) 2016 2015 2014
Costs of licensing and maintenance $ 7 $ 5 $ 4
Cost of professional services 444
Selling and marketing 34 30 28
General and administrative 35 29 26
Product development and enhancements 17 19 19
Share-based compensation expense before tax $97$87$81
Income tax benefit (31) (28) (26)
Net share-based compensation expense $66$59$55
The tax benefit from share-based incentive awards provided to employees that was recorded for book purposes exceeded that
which was deductible for tax purposes by $1 million, $1 million and $5 million for fiscal years 2016, 2015 and 2014, respectively.
The tax effect of this temporary difference in tax expense was charged to “Additional paid-in capital” in the Consolidated
Balance Sheets and did not affect the Company’s Consolidated Statements of Operations.
The following table summarizes information about unrecognized share-based compensation costs at March 31, 2016:
Unrecognized
Share-Based
Compensation
Costs
Weighted
Average Period
Expected to be
Recognized
(in millions) (in years)
Stock option awards $ 4 1.8
Restricted stock units 16 1.9
Restricted stock awards 56 1.8
Performance share units 25 2.2
Total unrecognized share-based compensation costs $ 101 1.9
There were no capitalized share-based compensation costs at March 31, 2016, 2015 or 2014.
Stock Option Awards: Stock options are awards issued to employees that entitle the holder to purchase shares of the Company’s
stock at a fixed price. Stock option awards are generally granted at an exercise price equal to the Company’s fair market value
on the date of grant and with a contractual term of 10 years, unless the Compensation Committee establishes a shorter
expiration period or the stock options are forfeited. Stock option awards generally vest one-third per year and become fully
vested three years from the grant date.
At March 31, 2016, options outstanding that have vested and are expected to vest were as follows:
Number of
Shares
(in millions)
Weighted Average
Exercise Price
Weighted
Average
Remaining
Contractual Life
(in years)
Aggregate
Intrinsic
Value(1)
(in millions)
Vested 2.0 $ 26.16 6.5 $ 9.4
Expected to vest(2) 1.6 29.52 8.5 2.0
Total 3.6 $ 27.60 7.4 $ 11.4
(1) These amounts represent the difference between the exercise price and $30.79, the closing price of the Company’s common stock on March 31, 2016, the last trading day of the
Company’s fiscal year as reported on the NASDAQ Stock Market for all in-the-money options.
(2) Outstanding options expected to vest are net of estimated future forfeitures.
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