XML 50 R22.htm IDEA: XBRL DOCUMENT
v3.19.2

Share-Based Compensation | 12 Months Ended
--- | ---
Jun. 30, 2019
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation | 16. Share-Based Compensation We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors and employees. At June 30, 2019, 16 million shares remain available for future grants under the Amended Cardinal Health, Inc. 2011 Long-Term Incentive Plan ("2011 LTIP"). Under the 2011 LTIP's fungible share counting provisions, stock options are counted against the plan as one share for every share issued; awards other than stock options are counted against the plan as two and one-half shares for every share issued. This means that only 6 million shares could be issued under awards other than stock options while 16 million shares could be issued under stock options. Shares are issued out of treasury shares when stock options are exercised and when restricted share units and performance share units vest. The following table provides total share-based compensation expense by type of award:
(in millions) | 2019 |  | 2018 |  | 2017
Restricted share unit expense | $ | 63 |  |  | $ | 73 |  |  | $ | 69 |
Employee stock option expense | 10 |  |  | 22 |  |  | 19 |
Performance share unit expense | 9 |  |  | (10 | ) |  | 8 |
Total share-based compensation expense | $ | 82 |  |  | $ | 85 |  |  | $ | 96 |
The total tax benefit related to share-based compensation was $16 million, $23 million and $34 million for fiscal 2019, 2018 and 2017, respectively. Restricted Share Units Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards. The following table summarizes all transactions related to restricted share units under the Plans:
(in millions, except per share amounts) | Restricted Share Units |  | Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2017 | 2 |  |  | $ | 76.72 |
Granted | 1 |  |  | 65.97 |
Vested | (1 | ) |  | 78.92 |
Canceled and forfeited | — |  |  | — |
Nonvested at June 30, 2018 | 2 |  |  | 71.58 |
Granted | 2 |  |  | 50.13 |
Vested | (1 | ) |  | 74.52 |
Canceled and forfeited | (1 | ) |  | 62.32 |
Nonvested at June 30, 2019 | 2 |  |  | $ | 51.65 |
The following table provides additional data related to restricted share unit activity:
(in millions) | 2019 |  | 2018 |  | 2017
Total compensation cost, net of estimated forfeitures, related to nonvested restricted share and share unit awards not yet recognized, pre-tax | $ | 75 |  |  | $ | 78 |  |  | $ | 73 |
Weighted-average period in years over which restricted share and share unit cost is expected to be recognized (in years) | 2 |  |  | 2 |  |  | 2 |
Total fair value of shares vested during the year | $ | 68 |  |  | $ | 65 |  |  | $ | 64 |
Stock Options Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for a period up to ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date. The following table summarizes all stock option transactions under the Plans:
(in millions, except per share amounts) | Stock Options |  | Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2017 | 6 |  |  | $ | 63.44 |
Granted | 2 |  |  | 66.39 |
Exercised | (1 | ) |  | 43.12 |
Canceled and forfeited | — |  |  | — |
Outstanding at June 30, 2018 | 7 |  |  | 64.50 |
Granted | — |  |  | — |
Exercised | — |  |  | — |
Canceled and forfeited | (1 | ) |  | 72.54 |
Outstanding at June 30, 2019 | 6 |  |  | $ | 63.78 |
Exercisable at June 30, 2019 | 6 |  |  | $ | 62.74 |
The following table provides additional detail related to stock options:
(in millions, except per share amounts) | 2019 |  | 2018 |  | 2017
Aggregate intrinsic value of outstanding options at period end | $ | 10 |  |  | $ | 13 |  |  | $ | 109 |
Aggregate intrinsic value of exercisable options at period end | 10 |  |  | 13 |  |  | 106 |
Aggregate intrinsic value of exercised options | 1 |  |  | 14 |  |  | 73 |
Net proceeds/(withholding) from share-based compensation | 3 |  |  | (3 | ) |  | 26 |
Excess tax benefits from share based compensation | 7 |  |  | 10 |  |  | 34 |
Total compensation cost, net of estimated forfeitures, related to unvested stock options not yet recognized, pre-tax | 5 |  |  | 17 |  |  | 22 |
Total fair value of shares vested during the year | 20 |  |  | 19 |  |  | 19 |
Weighted-average grant date fair value per stock option | $ | 8.34 |  |  | $ | 13.50 |  |  | $ | 16.67 |
(in years) | 2019 |  | 2018 |  | 2017
Weighted-average remaining contractual life of outstanding options | 5 |  | 7 |  | 7
Weighted-average remaining contractual life of exercisable options | 5 |  | 5 |  | 6
Weighted-average period over which stock option compensation cost is expected to be recognized | 1 |  | 2 |  | 2
Until the end of fiscal 2018, stock options were granted to our officers and certain employees. The fair values were estimated on the grant date using a lattice valuation model. We believe the lattice model provides reasonable estimates because it has the ability to take into account individual exercise patterns based on changes in our stock price and other variables, and it provides for a range of input assumptions, which are disclosed in the table below. The risk-free rate is based on the U.S. Treasury yield curve at the time of the grant. We analyzed historical data to estimate option exercise behaviors and employee terminations to be used within the lattice model. The expected life of the options granted was calculated from the option valuation model and represents the length of time in years that the options granted are expected to be outstanding. Expected volatilities are based on implied volatility from traded options on our common shares and historical volatility over a period of time commensurate with the contractual term of the option grant (up to ten years). There were no stock options granted to employees during fiscal year 2019. The following table provides the range of assumptions used to estimate the fair value of stock options:
| 2018 |  | 2017
Risk-free interest rate | 2.1% |  | 1.4% | - | 2.0%
Expected volatility | 25% |  | 24%
Dividend yield | 2.7% | - | 2.8% |  | 2.2% | - | 2.5%
Expected life in years | 7 |  | 7
Performance Share Units Performance share units generally vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 240 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards. The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):
(in millions, except per share amounts) | Performance Share Units |  | Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2017 | 0.6 |  |  | $ | 77.83 |
Granted | 0.2 |  |  | 66.43 |
Vested (1) | (0.2 | ) |  | 71.57 |
Canceled and forfeited | (0.2 | ) |  | — |
Nonvested at June 30, 2018 | 0.4 |  |  | 66.13 |
Granted | 0.6 |  |  | 50.96 |
Vested | — |  |  | — |
Canceled and forfeited | (0.1 | ) |  | 52.20 |
Nonvested at June 30, 2019 | 0.9 |  |  | $ | 51.45 |
(1) Vested at 133 percent of the target performance share units granted. The following table provides additional data related to performance share unit activity:
(in millions) | 2019 |  | 2018 |  | 2017
Total compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized, pre-tax | $ | 12 |  |  | $ | 1 |  |  | $ | 13 |
Weighted-average period over which performance share unit cost is expected to be recognized (in years) | 2 |  |  | 2 |  |  | 2 |
Total fair value of shares vested during the year | $ | — |  |  | $ | 14 |  |  | $ | 19 |
Employee Retirement Savings Plans Substantially all of our domestic non-union employees are eligible to be enrolled in our company-sponsored contributory retirement savings plans, which include features under Section 401(k) of the Internal Revenue Code of 1986, and provide for matching and profit sharing contributions by us. Our contributions to the plans are determined by the Board of Directors subject to certain minimum requirements as specified in the plans. The total expense for our employee retirement savings plans was $99 million, $129 million and $49 million for fiscal 2019, 2018 and 2017, respectively.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration