Stock-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2012

Stock-Based Compensation Expenses

The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of Operations:

	Years Ended September 30
	2012			2011			2010
	(Dollars in millions)
Cost of Sales	$	5		$	5		$	6
Selling and administrative expenses		9			9			11
Research and technical expenses		1			1			1
Stock-based compensation expense		15			15			18
Income tax benefit		(5	)		(5	)		(7	)
Net stock-based compensation expense	$	10		$	10		$	11

Equity Incentive Plan Activity

The following table summarizes the total stock option, restricted stock, and restricted stock unit activity in the equity incentive plans for fiscal 2012:

	September 30, 2012
	Stock Options							Restricted Stock					Restricted Stock Units
	Total Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Restricted Stock			Weighted Average Grant  Date Fair Value		Restricted Stock Units (1)			Weighted Average Grant Date Fair Value
	(Shares in thousands)
Outstanding at September 30, 2011		1,772		$	21.96		$6.06		3		$	9.56		866		$	28.89
Granted		284			32.95		11.64		—			—		405			33.15
Performance-based adjustment(2)		—			—		—		—			—		10			25.93
Exercised / Vested		(434	)		19.95		4.72		(1	)		9.56		(15	)		25.64
Cancelled / Forfeited		(43	)		33.64		8.26		—			—		(35	)		29.70
Outstanding at September 30, 2012		1,579			24.17		7.37		2			9.56		1,231			30.28
Exercisable at September 30, 2012		983			20.03
Expected to vest(3)		561			30.95

⁽¹⁾  The number “Granted” represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period.

⁽²⁾  Represents the net incremental number of shares issuable upon vesting of outstanding performance-based restricted stock units, based on the Company’s actual performance against the performance targets for the 2012 performance period of the outstanding units.

⁽³⁾  Stock options expected to vest in the future, net of estimated forfeitures, have a weighted average remaining contractual life of 8.3 years.

Stock Options Outstanding and Vested Options

The following table summarizes information related to the total outstanding options and the vested options on September 30, 2012:

	Total Options Outstanding		Exercisable Options
Aggregate Intrinsic Value (in millions)	$	20	$	16
Weighted Average Remaining Contractual Term (in years)		7.3		6.7

Weighted-Average Assumptions

The fair values on the grant date were calculated using the following weighted-average assumptions:

	Years Ended September 30
	2012			2011			2010
Expected stock price volatility		45	%		43	%		42	%
Risk free interest rate		1.3	%		1.8	%		2.8	%
Expected life of options (years)		6			6			6
Expected annual dividends per year	$	0.72		$	0.72		$	0.72