Income Taxes (Tables)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Selected income tax data (in millions):

	2023		2022		2021
Components of Income before income taxes
United States	$	794.2	$	371.3	$	885.1
Non-United States	814.3		702.3		641.1
Total	$	1,608.5	$	1,073.6	$	1,526.2

Schedule of Components of Income Tax Expense (Benefit)

Components of Income tax provision
Current
United States	$	221.3	$	71.6	$	149.6
Non-United States	160.6		102.9		190.7
State and local	48.7		13.6		25.7
Total current	430.6		188.1		366.0
Deferred
United States	(84.6)		(10.7)		(154.7)
Non-United States	6.0		(13.0)		(19.0)
State and local	(21.5)		(9.9)		(10.4)
Total deferred	(100.1)		(33.6)		(184.1)
Income tax provision	$	330.5	$	154.5	$	181.9
Total income taxes paid	$	344.9	$	340.2	$	329.3

Schedule of Effective Income Tax Rate Reconciliation

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

	2023		2022		2021
Statutory tax rate	21.0	%	21.0	%	21.0	%
State and local income taxes	1.5		0.5		1.4
Non-United States taxes	(4.7)		(5.4)		(3.8)
Repatriation of foreign earnings	0.9		1.1		0.9
Foreign-derived intangible income	(0.6)		(0.5)		(2.8)
Settlements with taxing authorities	0.3		—		(1.0)
Change in valuation allowance (1)	4.1		(0.5)		(1.7)
Share-based compensation	(0.6)		(1.0)		(1.1)
Research and development tax credit	(1.3)		(1.0)		(0.6)
Other	(0.1)		0.2		(0.4)
Effective income tax rate	20.5	%	14.4	%	11.9	%

(1) During fiscal 2021, we reversed our valuation allowance against deferred tax assets associated with the change in fair value of the PTC Shares. This resulted in a decrease to the effective tax rate of 1.7% and no remaining valuation allowance related to PTC Shares, as described further in the table below. During fiscal year 2023, the effective tax rate increased by 4.1% resulting from a valuation allowance recorded on certain deferred tax assets of our Sensia joint venture and tax effects of the related goodwill impairment.

Schedule of Deferred Tax Assets and Liabilities

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

	2023		2022
Deferred income tax assets
Compensation and benefits	$	35.0	$	26.7
Inventory	15.5		10.4
Returns, rebates, and incentives	75.1		61.7
Retirement benefits	85.4		80.7
Environmental remediation and other site-related costs	23.6		23.6
Share-based compensation	22.7		21.5
Other accruals and reserves	333.3		249.9
Net operating loss carryforwards	60.8		85.2
Tax credit carryforwards	9.2		19.3
Capital loss carryforwards	14.4		13.0
Other	48.1		10.7
Subtotal	723.1		602.7
Valuation allowance	(89.1)		(23.1)
Net deferred income tax assets	634.0		579.6
Deferred income tax liabilities
Property	(44.1)		(36.9)
Intangible assets	(144.8)		(149.8)
Investments	—		(26.0)
Unremitted earnings of foreign subsidiaries	(27.2)		(20.0)
Other	(1.8)		(2.1)
Deferred income tax liabilities	(217.9)		(234.8)
Total net deferred income tax assets	$	416.1	$	344.8

Schedule of Tax Attributes and Valuation Allowances

Tax attributes and related valuation allowances at September 30, 2023 consists of (in millions):

Tax attributes and related valuation allowances	Tax Benefit Amount		Valuation Allowance		Carryforward Period Ends
Non-United States net operating loss carryforward	$	5.9	$	2.5	2024	-	9/30/2030
Non-United States net operating loss carryforward	46.1		39.3		Indefinite
Non-United States capital loss carryforward	14.4		14.4		Indefinite
United States credit carryforward	0.9		—		2030	-	2041
United States net operating loss carryforward	0.1		—		2024	-	2036
State and local net operating loss carryforward	8.7		1.0		2024	-	2040
State tax credit carryforward	8.3		—		2024	-	2037
Subtotal	84.4		57.2
Other deferred tax assets	31.9		31.9		Indefinite
Total	$	116.3	$	89.1

Schedule of Gross Unrecognized Tax Benefits

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

	2023		2022		2021
Gross unrecognized tax benefits balance at beginning of year	$	3.9	$	4.3	$	25.5
Additions based on tax positions related to the current year	3.9		0.1		0.1
Additions based on tax positions related to prior years	3.2		—		0.4
Reductions related to settlements with taxing authorities	(1.0)		(0.5)		(18.1)
Reductions related to lapses of statute of limitations	(0.2)		—		(3.6)
Gross unrecognized tax benefits balance at end of year	$	9.8	$	3.9	$	4.3