Earnings per Share

6 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

Basic earnings per share is calculated using the weighted average number of shares outstanding during each period. Diluted earnings per share calculation includes the impact of dilutive common stock options, restricted stock, performance share awards and convertible securities, if applicable.

A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions):

	Three Months Ended March 31,		Six Months Ended March 31,
	2014	2013	2014	2013
Basic average common shares outstanding	97.6	97.2	97.5	96.9
Impact of stock options	—	—	—	—
Impact of restricted and performance shares	—	—	1.7	—
Diluted average common shares outstanding	97.6	97.2	99.2	96.9

On November 7, 2013, the Board of Directors approved a grant of performance restricted share units to all executives eligible to participate in the long-term incentive plan. Each performance share unit represents the right to receive one share of common stock upon achievement of certain performance and time vesting criteria. The fair value of each share unit is $7.97, the company’s share price on the grant date of December 1, 2013.

The actual number of performance units that will vest will depend upon the company’s performance relative to the established M2016 goals for the three-year performance period of October 1, 2013 to September 30, 2016, measured at the end of the performance period. The number of shares that vest will be between 0% and 200% of the estimated grant date amount of 1.5 million shares. For both the three and six months ended March 31, 2014, compensation cost recognized related to the performance shares was $1 million.

For the three and six months ended March 31, 2014 and 2013, options to purchase 0.8 million and 0.5 million shares of common stock, respectively, were excluded from the computation of diluted earnings per share because their exercise price exceeded the average market price for the period and thus their inclusion would be anti-dilutive. The potential effect of 2 million restricted and performance shares is excluded from the diluted earnings per share calculation for the three months ended March 31, 2014 because inclusion in a loss from continuing operations period would reduce the loss per share from continuing operations attributable to common shareholders. The potential effects of restricted shares and share units were excluded from the diluted earnings per share calculation for the three and six months ended March 31, 2013 because their inclusion in a net loss period would reduce the net loss per share. The company’s convertible senior unsecured notes are excluded from the computation of diluted earnings per share, as the company's average stock price during each period is less than the conversion price.