XML 73 R55.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2023

The following table details the total income tax provision/(benefit) allocation for each respective period.


	Year ended September 30,
$ in millions	2023		2022		2021
Recorded in:
Net income	$	541	$	513	$	388
Equity, arising from available-for-sale securities recorded through OCI	3		(311)		(32)
Equity, arising from cash flow hedges recorded through OCI	—		24		8
Equity, arising from currency translations, net of the impact of net investment hedges recorded through OCI	(4)		23		(10)
Total provision for income taxes	$	540	$	249	$	354

Provision (Benefit) for Income Taxes

The following table details our provision/(benefit) for income taxes included in net income for each respective period.


	Year ended September 30,
$ in millions	2023		2022		2021
Current:
Federal	$	468	$	406	$	321
State and local	122		91		79
Foreign	39		32		25
Total current	$	629	$	529	$	425
Deferred:
Federal	(59)		(10)		(28)
State and local	(16)		(3)		(6)
Foreign	(13)		(3)		(3)
Total deferred	$	(88)	$	(16)	$	(37)
Total provision for income taxes	$	541	$	513	$	388

Reconciliation Between Income Tax Expense and the Amount Computed by Applying the Statutory Federal Income Tax Rate

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is detailed in the following table.


	Year ended September 30,
	2023		2022		2021
Provision calculated at statutory rate	21.0	%	21.0	%	21.0	%
State income tax, net of federal benefit	3.9	%	3.6	%	3.6	%
Nondeductible fines and penalties	0.8	%	—	%	—	%
Nondeductible executive compensation	0.6	%	0.4	%	0.3	%
Foreign tax rate differential	0.4	%	0.2	%	0.2	%
General business tax credits (1)	(1.0)	%	(1.2)	%	(1.0)	%
(Gains)/losses on company-owned life insurance policies which are not subject to tax	(1.0)	%	1.8	%	(1.8)	%
Excess tax benefits related to share-based compensation	(0.9)	%	(1.1)	%	(0.2)	%
Solar and LIHTC investment amortization, net of tax credits received (2)	(0.4)	%	—	%	—	%
Change in uncertain tax positions	(0.1)	%	0.3	%	(0.1)	%
Other, net	0.4	%	0.4	%	(0.3)	%
Total provision for income tax	23.7	%	25.4	%	21.7	%

(1) General business tax credits consist of credits related to foreign withholdings, research and development, wage credits, certain historic tax credits, certain LIHTC credits, and various state credits.

(2) During the year ended September 30, 2023, we made an investment in a solar entity which qualified for tax credits and is accounted for under the proportional amortization method. For the year ended September 30, 2023, amortization of this investment, which was included in our provision for income taxes, was $86 million, and we recognized an offsetting $81 million of tax credits and $9 million of other tax benefits. The amortization of LIHTC investments accounted for under the proportional amortization method was $3 million for the year ended September 30, 2023, and the related offsetting tax credits received from LIHTC investments were $3 million. There was no such investment amortization in either of the years ended September 30, 2022 or 2021.

U.S. and Foreign Components of Income Before Income Taxes

The following table presents our U.S. and foreign components of pre-tax income for each respective period.


	Year ended September 30,
$ in millions	2023		2022		2021
U.S.	$	2,193	$	1,907	$	1,701
Foreign	87		115		90
Pre-tax income	$	2,280	$	2,022	$	1,791

Deferred Tax Asset/(Liability) Items

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements. These temporary differences result in taxable or deductible amounts in future years. The cumulative effects of temporary differences that give rise to significant portions of the deferred tax asset/(liability) items are detailed in the following table.


	September 30,
$ in millions	2023		2022
Deferred tax assets:
Deferred compensation	$	338	$	272
Unrealized loss associated with available-for-sale securities	310		343
Allowances for credit losses	140		106
Lease liabilities	135		121
Accrued expenses	56		54
Unrealized loss associated with loan portfolios	46		34
Net operating losses and credit carryforwards	19		8
Unrealized loss associated with foreign currency translations	5		27




Other	16		27
Total deferred tax assets	1,065		992
Less: valuation allowance	(5)		(2)
Total deferred tax assets, net of valuation allowance	1,060		990
Deferred tax liabilities:
Lease ROU assets	(141)		(118)
Goodwill and identifiable intangible assets	(131)		(126)
Property and equipment	(68)		(110)

Unrealized gain associated with cash flow hedges	(16)		(15)

Other	(1)		(5)
Total deferred tax liabilities	(357)		(374)
Net deferred tax assets	$	703	$	616

Classified as follows in the Consolidated Statements of Financial Condition:
Deferred income taxes, net	$	711	$	630
Other payables	(8)		(14)
Net deferred tax assets	$	703	$	616

The following table presents deferred tax assets and valuation allowances relating to carryforwards for the periods indicated.


	Year ended September 30,
$ in millions	2023		2022		Expires beginning of fiscal year
Deferred tax asset:
U.S. Federal net operating losses (1)	$	8	$	5	Indefinitely
U.S. State net operating losses (1)	4		2		2026
Foreign net operating losses	7		1		2040
Total deferred tax asset related to carryforwards	$	19	$	8

Valuation allowance:
U.S. Federal net operating losses	$	1	$	1
U.S. State net operating losses	4		1
Net valuation allowance	$	5	$	2

(1) Both the federal and state net operating loss carryfowards relate to separate company entity filings. As a result, these losses are not able to be utilized in our consolidated filings.

Aggregate Changes in Liability for Unrecognized Tax Benefits

The following table presents the aggregate changes in the balances for uncertain tax positions.


	Year ended September 30,
$ in millions	2023		2022		2021
Uncertain tax positions beginning of year	$	43	$	36	$	45
Increases for tax positions related to the current year	5		5		5
Increases for tax positions related to prior years	4		10		2
Decreases for tax positions related to prior years	(2)		(1)		(7)
Decreases due to lapsed statute of limitations	(8)		(7)		(5)
Decreases related to settlements	(1)		—		(4)
Uncertain tax positions end of year	$	41	$	43	$	36