Income Taxes |
6 Months Ended |
|---|---|
Mar. 31, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. During the three months ended March 31, 2016 and 2015, the effective income tax rate from continuing operations was 26.8 percent and 32.4 percent, respectively. The lower current year effective income tax rate from continuing operations was primarily due to the permanent extension of the Federal R&D Tax Credit, which had previously expired on December 31, 2014, and the early adoption of the new share-based compensation guidance. The new guidance requires the recognition of all excess tax benefits or shortfalls related to share-based compensation as a component of income tax expense, rather than in equity. During the six months ended March 31, 2016 and 2015, the effective income tax rate from continuing operations was 22.2 percent and 27.7 percent, respectively. The lower current year effective income tax rate from continuing operations was primarily due to the permanent extension of the Federal R&D Tax Credit and the early adoption of the new share-based compensation guidance. The Company's U.S. Federal income tax returns for the tax year ended September 30, 2011 and prior years have been audited by the IRS and are closed to further adjustments by the IRS. The IRS is currently auditing the Company's tax returns for the years ended September 30, 2012 and 2013. An acquired subsidiary is also under examination by the IRS for calendar years 2009 and 2012 legacy tax filings. The Company is also currently under audit in various U.S. states and non-U.S. jurisdictions. The U.S. states and non-U.S. jurisdictions have statutes of limitations generally ranging from 3 to 5 years. The Company believes it has adequately provided for any tax adjustments that may result from the various audits. The Company had net income tax payments of $31 million and $78 million during the six months ended March 31, 2016 and 2015, respectively. The Company has gross unrecognized tax benefits recorded within Other Liabilities in the Condensed Consolidated Statement of Financial Position of $47 million and $39 million as of March 31, 2016 and September 30, 2015, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate was $16 million and $11 million as of March 31, 2016 and September 30, 2015, respectively. Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months a reduction in unrecognized tax benefits may occur in the range of $0 to $13 million, based on the outcome of tax examinations or as a result of the expiration of various statutes of limitations. The Company includes interest and penalties related to unrecognized tax benefits in income tax expense. The total amount of interest and penalties recognized within Other Liabilities in the Condensed Consolidated Statement of Financial Position was $2 million and $1 million as of March 31, 2016 and September 30, 2015, respectively. The total amount of interest and penalties recorded as an expense or (income) within Income tax expense in the Condensed Consolidated Statement of Operations was $0 million for each of the six months ended March 31, 2016 and 2015. |