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Income Taxes
9 Months Ended
Jun. 30, 2017
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The Company’s income tax expense for the three and nine months ended June 30, 2017 was $155.5 million and $391.4 million, respectively, compared to $128.8 million and $317.8 million in the prior year periods. The effective tax rate was 35.0% and 35.1% for the three and nine months ended June 30, 2017, respectively, compared to 34.0% and 34.5% in the prior year periods. The effective tax rate for all periods includes an expense for state income taxes, reduced by tax benefits for the domestic production activities deduction and federal energy tax credits.

The Company previously filed three requests for advance consent for a change in tax accounting method with the Internal Revenue Service (IRS) relating to changes in the timing of income and expense recognition for tax purposes. The Company agreed to and signed consent agreements for two of the three requests during the quarter ended June 30, 2017. The impact of the approved tax accounting method changes on the consolidated financial statements as of June 30, 2017 was a reduction in income taxes payable of $58.2 million, a reduction in deferred tax assets of $63.5 million and income tax expense of $5.3 million. The third request for advance consent for a change in tax accounting method will be recognized in the period in which a consent agreement is issued by the IRS and agreed to and signed by the Company.

At June 30, 2017 and September 30, 2016, the Company had deferred tax assets, net of deferred tax liabilities, of $394.1 million and $486.6 million, respectively, partially offset by valuation allowances of $10.4 million and $10.3 million, respectively. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation of the Company’s deferred tax assets.

When assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income in future periods. The Company records a valuation allowance when it determines it is more likely than not that a portion of the deferred tax assets will not be realized. The valuation allowance for both periods relates to the Company’s state deferred tax assets for net operating loss (NOL) carryforwards. As of June 30, 2017, the Company believes it is more likely than not that a portion of its state NOL carryforwards will not be realized because some state NOL carryforward periods are too brief to realize the related deferred tax assets. The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance with respect to its remaining state NOL carryforwards.