Share-Based Compensation

9 Months Ended

Jun. 30, 2026

Share-Based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

Our share-based compensation program includes performance and time-based deferred stock units. We issue shares from treasury stock upon the payout of deferred stock units. As of 30 June 2026, there were 0.6 million shares available for future grant under our Long-Term Incentive Plan ("LTIP"), which is shareholder approved.

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


	Three Months Ended		Nine Months Ended
	30 June		30 June
	2026	2025	2026	2025
Before-tax share-based compensation cost(A)	$12.3	$11.0	$38.6	$65.8
Income tax benefit	(2.9)	(2.8)	(9.1)	(15.8)
After-tax share-based compensation cost	$9.4	$8.2	$29.5	$50.0

(A)Fiscal year 2025 includes noncash executive separation costs of $22.4 to accelerate vesting of share-based awards. Refer to the "Shareholder Activism-Related Costs" disclosure in Note 17, Supplemental Information, for additional information.

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 the first nine months of fiscal years 2026 and 2025 was not material.

Deferred Stock Units

During the nine months ended 30 June 2026, we granted 100,048 performance shares to be earned over the performance period beginning 1 October 2025 and ending 30 September 2028.

The award conditions are equally weighted between market-based conditions, which consider total shareholder return ("TSR") measured against a fixed group of companies that comprise the S&P 500 Industrials Index and the S&P Materials Index, and an internal performance measure for return on capital.

The fair value of the portion of the awards subject to the achievement of return on capital targets were valued based on the closing stock price of $260.86 on the grant date. The portion of the awards subject to market conditions were valued using a Monte Carlo simulation on the date of grant with an estimated grant-date fair value of $275.21 per unit. 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.

The calculation of the fair value of market-based deferred stock units used the following assumptions:


Expected volatility	34.5	%
Risk-free interest rate	3.6	%
Expected dividend yield	2.7	%

In addition, during the nine months ended 30 June 2026, we granted 132,946 time-based deferred stock units at a weighted average grant-date fair value of $261.00.

We generally expense the grant-date fair value of these awards on a straight-line basis over the applicable vesting period. For the portion of performance shares subject to the achievement of return on capital, we consider the probability of meeting performance targets when recording compensation expense throughout the performance period.