Income Taxes (Tables)

12 Months Ended

Sep. 30, 2016

Components of income tax expense (benefit)

The components of the Company’s income tax expense are as follows:



	Year Ended September 30,
	2016		2015			2014
	(In millions)
Current tax expense:
Federal	$	376.0	$	356.4		$	253.6
State	15.9		13.2			9.1
	391.9		369.6			262.7
Deferred tax expense (benefit):
Federal	47.6		(3.1		)	2.9
State	27.7		6.2			15.1
	75.3		3.1			18.0
Total income tax expense	$	467.2	$	372.7		$	280.7

Comparison of income tax expense (benefit) and tax computed at the statutory rate

Differences between income tax expense and tax computed by applying the federal statutory rate of 35% to income before income taxes during each year is due to the following:



	Year Ended September 30,
	2016			2015			2014
	(In millions)
Income taxes at federal statutory rate	$	473.7		$	393.2		$	285.0
Increase (decrease) in tax resulting from:
State income taxes, net of federal benefit	38.6			37.0			24.9
Domestic production activities deduction	(36.3		)	(35.7		)	(22.4		)
Uncertain tax positions	—			—			(6.4		)
Valuation allowance	0.2			(21.0		)	0.1
Tax credits	(15.9		)	(2.2		)	(0.9		)
Other	6.9			1.4			0.4
Total income tax expense	$	467.2		$	372.7		$	280.7

Components of deferred tax assets and liabilities

Components of deferred income taxes are summarized as follows:



	September 30,
	2016			2015
	(In millions)
Deferred tax assets:
Inventory costs	$	87.6		$	113.7
Inventory impairments	128.3			180.4
Warranty and construction defect costs	138.8			127.1
Net operating loss carryforwards	40.1			58.5
Tax credit carryforwards	2.9			7.6
Incentive compensation plans	82.2			79.3
Deferral of profit on home sales	2.2			2.0
Other	11.1			14.4
Total deferred tax assets	493.2			583.0
Valuation allowance	(10.3		)	(10.1		)
Total deferred tax assets, net of valuation allowance	482.9			572.9
Deferred tax liabilities	6.6			14.8
Deferred income taxes, net	$	476.3		$	558.1