Income Taxes (Tables)

12 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Selected income tax data (in millions):

	2019		2018		2017
Components of income before income taxes:
United States	$	280.8	$	721.6	$	547.2
Non-United States	620.2		609.2		490.2
Total	$	901.0	$	1,330.8	$	1,037.4

Schedule of Components of Income Tax Expense (Benefit)

Components of the income tax provision:
Current:
United States	$	105.6		$	475.3	$	67.3
Non-United States	112.1			131.4		109.9
State and local	16.5			18.1		0.7
Total current	234.2			624.8		177.9
Deferred:
United States	(27.0		)	118.6		44.6
Non-United States	(0.1		)	48.0		(14.1		)
State and local	(1.9		)	3.9		3.3
Total deferred	(29.0		)	170.5		33.8
Income tax provision	$	205.2		$	795.3	$	211.7
Total income taxes paid	$	293.3		$	222.9	$	211.9

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation between the U.S. federal statutory rate and our effective tax rate was:

	2019		2018		2017
Statutory tax rate	21.0	%	24.5	%	35.0	%
State and local income taxes	0.1		1.0		0.7
Non-United States taxes	(4.8	)	(4.4	)	(9.3	)
Repatriation of foreign earnings	2.8		4.2		0.5
Foreign-derived intangible income	(1.6	)	—		—
Impact of the Tax Act	—		36.6		—
Foreign currency transaction loss	—		—		(1.9	)
Change in valuation allowance(a)	7.6		0.7		0.1
Share-based compensation	(0.9	)	(1.3	)	(2.8	)
Research and development tax credit	(1.2	)	(1.3	)	(0.6	)
Other	(0.2	)	(0.2	)	(1.3	)
Effective income tax rate	22.8	%	59.8	%	20.4	%

^(a) During fiscal year 2019, we recorded a valuation allowance against deferred tax assets associated with the loss in fair value of the PTC Shares. This resulted in an increase to the effective tax rate of 7.5% and a corresponding valuation allowance of $67.3 million, as described further in the table below.

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to our net deferred income tax assets (liabilities) were (in millions):

	2019			2018
Deferred income tax assets:
Compensation and benefits	$	6.0		$	6.5
Inventory	11.1			11.5
Returns, rebates and incentives	29.8			34.0
Retirement benefits	298.5			141.5
Environmental remediation and other site-related costs	26.2			20.7
Share-based compensation	21.6			19.6
Other accruals and reserves	46.9			49.7
Investments	69.6			—
Net operating loss carryforwards	18.5			19.6
Tax credit carryforwards	16.5			17.9
Capital loss carryforwards	9.5			10.0
Other	10.7			4.6
Subtotal	564.9			335.6
Valuation allowance	(93.8		)	(27.0		)
Net deferred income tax assets	471.1			308.6
Deferred income tax liabilities:
Property	(55.8		)	(54.7		)
Intangible assets	(24.4		)	(25.3		)
Investments	—			(21.7		)
Unremitted earnings of foreign subsidiaries	(25.5		)	(22.7		)
Other	(1.3		)	(4.6		)
Deferred income tax liabilities	(107.0		)	(129.0		)
Total net deferred income tax assets	$	364.1		$	179.6

Schedule of Tax Attributes and Valuation Allowances

Tax attributes and related valuation allowances at September 30, 2019 were (in millions):

Tax attributes and related valuation allowances	Tax Benefit Amount		Valuation Allowance		Carryforward Period Ends
Non-United States net operating loss carryforward	$	7.2	$	7.2	2020	-	2028
Non-United States net operating loss carryforward	3.3		3.1		Indefinite
Non-United States capital loss carryforward	9.5		9.5		Indefinite
United States net operating loss carryforward	0.4		—		2020	-	2036
State and local net operating loss carryforward	7.6		1.4		2020	-	2037
State tax credit carryforward	16.5		0.7		2020	-	2034
Subtotal	44.5		21.9
Other deferred tax assets	71.9		71.9		Indefinite
Total	$	116.4	$	93.8

Schedule of Gross Unrecognized Tax Benefits

A reconciliation of our gross unrecognized tax benefits, excluding interest and penalties, is as follows (in millions):

	2019			2018			2017
Gross unrecognized tax benefits balance at beginning of year	$	20.1		$	31.1		$	32.4
Additions based on tax positions related to the current year	—			—			1.9
Additions based on tax positions related to prior years	—			3.0			10.8
Reductions based on tax positions related to prior years	—			(1.1		)	(0.1		)
Reductions related to settlements with taxing authorities	—			(11.3		)	(7.7		)
Reductions related to lapses of statute of limitations	(0.2		)	(1.6		)	(6.3		)
Effect of foreign currency translation	—			—			0.1
Gross unrecognized tax benefits balance at end of year	$	19.9		$	20.1		$	31.1