Share-Based Compensation

6 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

We have various share-based compensation programs, which include deferred stock units, stock options, and restricted stock. During the six months ended 31 March 2022, we granted market-based and time-based deferred stock units. Under all programs, the terms of the awards are fixed at the grant date. We issue shares from treasury stock upon the payout of deferred stock units, the exercise of stock options, and the issuance of restricted stock awards. As of 31 March 2022, there were 1.3 million shares available for future grant under our Long-Term Incentive Plan ("LTIP").

Share-based compensation cost recognized on the consolidated income statements is summarized below:


	Three Months Ended		Six Months Ended
	31 March		31 March
	2022	2021	2022	2021
Before-tax share-based compensation cost	$10.5	$12.9	$27.3	$22.4
Income tax benefit	(2.6)	(3.1)	(6.7)	(5.4)
After-tax share-based compensation cost	$7.9	$9.8	$20.6	$17.0

Before-tax share-based compensation cost is primarily included in "Selling and administrative" on our consolidated income statements. The amount of share-based compensation cost capitalized in the first six months of fiscal years 2022 and 2021 was not material.

Deferred Stock Units

During the six months ended 31 March 2022, we granted 74,364 market-based deferred stock units. The market-based deferred stock units are earned over the performance period beginning 1 October 2021 and ending 30 September 2024, conditioned on the level of our total shareholder return in relation to a defined peer group over the three-year performance period.

The market-based deferred stock units had an estimated grant-date fair value of $427.23 per unit, which was estimated using a Monte Carlo simulation model. The model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the grant and calculates the fair value of the awards. We generally expense the grant-date fair value of these awards on a straight-line basis over the vesting period. The calculation of the fair value of market-based deferred stock units used the following assumptions:


Expected volatility	30.5	%
Risk-free interest rate	0.8	%
Expected dividend yield	2.1	%

In addition, during the six months ended 31 March 2022, we granted 106,721 time-based deferred stock units at a weighted average grant-date fair value of $283.34.