Share-Based Compensation

9 Months Ended

Jun. 30, 2015

13. SHARE-BASED COMPENSATION

We have various share-based compensation programs, which include deferred stock units, stock options, and restricted stock. 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 30 June 2015, there were 5,115,244 shares available for future grant under our Long-Term Incentive Plan, which is shareholder approved.

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

			Three Months Ended				Nine Months Ended
			30 June				30 June
			2015		2014		2015		2014
	Before-Tax Share-Based Compensation Cost	$	12.5	$	9.1	$	37.3	$	32.5
	Income Tax Benefit		(4.4)		(3.2)		(13.1)		(11.4)
	After-Tax Share-Based Compensation Cost	$	8.1	$	5.9	$	24.2	$	21.1

Before-tax share-based compensation cost is primarily included in selling and administrative expense on our consolidated income statements. The amount of share-based compensation cost capitalized in 2015 and 2014 was not material.

Deferred Stock Units

During the nine months ended 30 June 2015, we granted 119,272 market-based deferred stock units. The market-based deferred stock units vest as long as the employee continues to be employed by the Company and upon the achievement of the performance target. The performance target, which is approved by the Compensation Committee, is the Company’s relative total shareholder return in relation to a defined peer group over the three-year performance period beginning 1 October 2014 and ending 30 September 2017.

The market-based deferred stock units had an estimated grant-date fair value of $194.51 per unit. The grant-date fair value was estimated using a Monte Carlo simulation model as these equity awards were tied to a market condition. 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	19.6	%
Risk-free interest rate	.9	%
Expected dividend yield	2.5	%

In addition, during the nine months ended 30 June 2015, we granted 138,010 time-based deferred stock units at a weighted-average grant-date fair value of $144.30.

Stock Options

During the nine months ended 30 June 2015, we granted 180,619 stock options at a weighted-average exercise price of $144.19 and an estimated fair value of $37.19 per option. The fair value of these options was estimated using a Black-Scholes option valuation model that used the following assumptions:


Expected volatility	30.3	%
Risk-free interest rate	2.2	%
Expected dividend yield	2.6	%
Expected life (in years)	7.5

Restricted Stock

During the nine months ended 30 June 2015, we issued 19,691 restricted shares at a weighted-average grant-date fair value of $144.09.