SHARE-BASED COMPENSATION PLANS

Total share-based compensation expense was $10.4 and $12.4 for the three months ended March 31, 2017 and 2016, respectively, $22.7 and $29.3 for the nine months ended March 31, 2017 and 2016, respectively, which is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. As of March 31, 2017, the total unrecognized share-based compensation expense related to unvested stock options, Series A Preferred Stock, and restricted and other share awards is $27.1, $5.2 and $61.8, respectively. The unrecognized share-based compensation expense related to unvested stock options, Series A Preferred stock, and restricted and other share awards is expected to be recognized over a weighted-average period of 4.62, 4.02 and 3.20 years, respectively.

Restricted Share Units

The Company granted approximately nil and 2.8 million RSUs during the three and nine months ended March 31, 2017, respectively, with a weighted-average grant date fair value per share of $24.60, which vests on the fifth anniversary of the grant date. The RSUs granted are accompanied by dividend equivalent rights and, as such, were valued at the closing market price of the Company’s Class A Common Stock on the date of grant. The Company recognized share-based compensation expense of $4.4 and $12.7 for the three and nine months ended March 31, 2017, respectively. The Company recognized share-based compensation expense of $4.0 and $15.4 for the three and nine months ended March 31, 2016, respectively.

Series A Preferred Stock

The Company granted 1.5 million and 2.5 million shares of Series A Preferred Stock during the three and nine months ended March 31, 2017, respectively, which are accounted for partially as a liability and partially as equity. Refer to Note 18 — Equity for additional information about Series A Preferred grants during the period. The Company recognized share-based compensation expense of $4.0 and $3.3 for the three and nine months ended March 31, 2017, respectively. The Company recognized share-based compensation expense of $0.6 and $1.3 for the three and nine months ended March 31, 2016, respectively.

The Series A Preferred Stock have previously been accounted for using the Black-Scholes valuation model. During the nine months ended March 31, 2017, the Company granted Series A Preferred Stock that include cash bonus payments tied to the exercise of the awards. Due to the addition of cash bonus payments in connection with the grant of Series A Preferred Stock to certain executives in fiscal 2017, the Company began estimating the fair value of the Series A Preferred Stock using a binomial lattice model to value the equity and cash bonus components of the combined instrument as of March 31, 2017. The lattice structure the Company uses to value the exchange option consists of (i) a common stock lattice that models the possible stock price movements from the valuation date to the maturity date consistent with the stock price and estimated volatility on the valuation date; (ii) a share exchange lattice that calculates the value of the common stock received on conversion; (iii) a cash exchange lattice that calculates the value of the cash bonus; and (iv) a continuation value lattice that tracks the holding value of the combined instrument. The significant assumptions the Company uses in its binomial lattice model are further described below.



	March 31, 2017
Historical volatility	30.9%
Implied volatility	32.3%
Risk-free rate of return	1.94% - 2.22%
Dividend yield on Class A Common Stock	2.8%
Yield on cash	4.9%

Historical volatility - The Company calculates historical volatility based on volatility of the daily historical prices of the common stock for the longest look-back period with available data.

Implied volatility - The Company calculates implied volatility based on publicly traded at the market options maturing January 2019 that track the Company’s Class A Common Stock.

Risk-free rate of return - The Company bases the risk-free rate of return on the US Constant Maturity Treasury Rate.

Dividend yield on Class A Common Stock - The Company calculates the dividend yield on shares using the annualized dividend rate calculated based on the per share cash dividend paid quarterly and the stock price as of the valuation date.

Yield on cash - The Company calculates the yield of comparable securities with a similar credit rating to the Company.

Non-Qualified Stock Options

The Company granted nil and 8.2 million non-qualified stock options during the three and nine months ended March 31, 2017, respectively, with a weighted average grant date fair value of $6.42 per share. The options become exercisable five years from the date of the grant. The Company recognized share-based compensation expense of $2.0 and $6.7 for the three and nine months ended March 31, 2017, respectively. The Company recognized share-based compensation expense of $7.8 and $12.6 for the three and nine months ended March 31, 2016, respectively.