Income Taxes (Tables)

12 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense

Income tax expense consisted of the following for the years ended September 30:

(In millions)	2021		2020		2019
Current
Federal	$	36	$	16	$	10
State	14		11		5
Non-U.S.	25		15		19
	75		42		34
Deferred
Federal	42		62		24
State	8		26		—
Non-U.S.	(2)		4		(1)
	48		92		23
Income tax expense	$	123	$	134	$	57

Schedule and Reconciliation of the Statutory Federal Income Tax

The following presents pre-tax income and the principal components of the reconciliation between the effective tax rate and the U.S. federal statutory income tax rate in effect for the years ended September 30:

(In millions)	2021			2020			2019
Income before income taxes
United States	$	483		$	399		$	212
Non-U.S.	60			52			53
Total income before income taxes	$	543		$	451		$	265
U.S. statutory tax rate	21.0		%	21.0		%	21.0		%
Income taxes computed at U.S. statutory tax rate	$	114		$	95		$	56
(Decrease) increase in amount computed resulting from:
Unrecognized tax benefits	(5)			1			5
State taxes, net of federal benefit	19			16			9
International rate differential	3			2			2
Permanent items	(6)			(4)			(3)
Remeasurement of net deferred taxes	—			1			(4)
Return-to-provision adjustments	—			(2)			(6)
Change in valuation allowances	1			29			(4)
Tax Matters Agreement activity	(6)			(6)			1
Other	3			2			1
Income tax expense	$	123		$	134		$	57
Effective tax rate	22.7		%	29.7		%	21.5		%

Schedule of Deferred Tax Assets and Liabilities

A summary of the deferred tax assets and liabilities included in the Consolidated Balance Sheets follows as of September 30:

(In millions)	2021		2020
Deferred tax assets
Non-U.S. net operating loss carryforwards (a)	$	2	$	2
State net operating loss carryforwards (b)	18		18
Employee benefit obligations	46		79
Compensation accruals	29		26
Credit carryforwards (c)	12		11
Operating lease liabilities	98		69
Other	23		17
Valuation allowances (d)	(32)		(30)
Net deferred tax assets	196		192
Deferred tax liabilities
Goodwill and other intangibles	16		11
Property, plant and equipment	109		75
Operating lease assets	78		67
Undistributed earnings	5		6
Total deferred tax liabilities	208		159
Total net deferred tax (liabilities) assets (e)	$	(12)	$	33

(a)Gross non-U.S. net operating loss carryforwards of $7 million expire in fiscal years 2023 to 2040.

(b)Apportioned gross state net operating loss carryforwards of $361 million expire in fiscal years 2023 through 2034.

(c)Credit carryforwards consist primarily of U.S. tax credits that generally expire in fiscal years 2025 through 2036.

(d)Valuation allowances at September 30, 2021 primarily relate to state net operating loss carryforwards and certain other federal legacy tax attributes that are not expected to be realized or realizable.

(e)Balances are presented in the Consolidated Balance Sheets based on the net position of each tax jurisdiction.

Schedule of Gross Unrecognized Tax Benefits

The aggregate changes in the balance of gross unrecognized tax benefits were as follows for the years ended September 30:

(In millions)	2021		2020		2019
Gross unrecognized tax benefits as of October 1	$	15	$	14	$	10
Increases related to tax positions from prior years	2		1		5
Decreases related to tax positions from prior years	(1)		—		—
Increases related to tax positions taken during the current year	1		1		—
Settlements with tax authorities	(4)		—		—
Lapses of statutes of limitation	(1)		(1)		(1)
Gross unrecognized tax benefits as of September 30 (a)	$	12	$	15	$	14

(a)These unrecognized tax benefits would favorably impact the effective income tax rate, if recognized. Accruals for interest and penalties were $2 million as of September 30, 2021 and 2020.