Income Taxes

6 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 12—Income Taxes

For the three and six months ended March 31, 2022, the effective income tax rates were 20% and 19%, respectively, and for the three and six months ended March 31, 2021, the effective income tax rates were 17%. The difference in the effective tax rates is primarily due to $66 million and $147 million of tax benefits recognized during the three and six months ended March 31, 2021, respectively, as a result of the conclusion of audits by taxing authorities.

During the three and six months ended March 31, 2022, the Company’s gross unrecognized tax benefits increased by $65 million and $143 million, respectively. The Company’s net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate, increased by $17 million and $46 million, respectively. The change in unrecognized tax benefits is primarily related to various tax positions across several jurisdictions.

The Company’s tax filings are subject to examination by U.S. federal, state and foreign taxing authorities. The timing and outcome of the final resolutions of the various ongoing income tax examinations are highly uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next twelve months.