Share-Based Compensation

9 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The Company grants share-based awards under the 2004 Employee and Director Equity-Based Compensation Plan (the “2004 Plan”), which provides long-term incentive compensation to employees and directors. The Company believes that such awards align the interests of its employees and directors with those of its shareholders.

The fair values of stock appreciation rights granted during the annual share-based grants in November of 2016 and 2015, respectively, were estimated on the date of grant using a lattice-based binomial valuation model based on the following assumptions:



	2017			2016
Risk-free interest rate	2.33		%	2.17		%
Expected volatility	20.00		%	19.00		%
Expected dividend yield	1.71		%	1.76		%
Expected life	7.5 years			7.6 years
Fair value derived	$	33.81		$	27.69

The fair value of share-based payments is recognized as compensation expense in net income. Compensation expense charged to income was $39 million for the three months ended June 30, 2017 and 2016. Compensation expense charged to income for the nine months ended June 30, 2017 and 2016 was $138 million and $158 million, respectively.

The amount of unrecognized compensation expense for all non-vested share-based awards as of June 30, 2017 was approximately $216 million, which is expected to be recognized over a weighted-average remaining life of approximately 2.1 years.