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INCOME TAXES
 12 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 7 INCOME TAXES
Income Tax (Benefit) Provision and Rate
The components of the provision (benefit) for income taxes are as follows:
Year Ended September 30,
(in thousands)202320222021
Current:
Federal$150,273 $40,245 $(15,466)
Foreign12,883 10,703 772 
State16,523 1,906 725 
179,679 52,854 (13,969)
Deferred:
Federal(20,337)(32,382)(81,760)
Foreign(1,254)(1,310)4,106 
State1,191 5,204 (12,098)
(20,400)(28,488)(89,752)
Total provision (benefit)$159,279 $24,366 $(103,721)
Prior to the fiscal year ended September 30, 2023, Income from discontinued operations was presented as a separate line item on our Consolidated Statements of Operations. To conform with the current fiscal year presentation, we reclassified amounts previously presented in Income from discontinued operations to Other within Other income (expense) on our Consolidated Statements of Operations for the years ended September 30, 2022 and September 30, 2021. Thus, the September 30, 2022 and September 30, 2021 amounts of domestic and foreign income (loss) before income taxes and the September 30, 2022 and September 30, 2021 reconciliation of our effective income tax rates to the U.S. Federal income tax rates have been revised to conform with the current fiscal year presentation.
The amounts of domestic and foreign income (loss) before income taxes are as follows:
Year Ended September 30,
(in thousands)202320222021
Domestic$584,891 $(14,411)$(412,556)
Foreign8,488 45,730 (17,315)
$593,379 $31,319 $(429,871)
The reconciliation of our effective income tax rates to the U.S. Federal income tax rate is as follows:
Year Ended September 30,
202320222021
U.S. Federal income tax rate21.0 %21.0 %21.0 %
Effect of foreign taxes2.1 31.3 0.1 
State income taxes, net of federal tax benefit2.4 21.4 2.7 
Other impact of foreign operations0.2 3.2 0.5 
Non-deductible meals and entertainment0.6 1.0 (0.1)
Equity compensation(0.1)9.5 (0.8)
Excess officer's compensation0.4 3.7 — 
Foreign derived intangible income— (13.7)— 
Other0.2 0.4 0.7 
Effective income tax rate26.8 %77.8 %24.1 %
Deferred Taxes
Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Recoverability of any tax assets are evaluated and necessary valuation allowances are provided. The carrying value of the net deferred tax assets is based on management’s judgments using certain estimates and assumptions that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize the benefits of such assets. If these estimates and related assumptions change in the future, additional valuation allowances may be recorded against the deferred tax assets resulting in additional income tax expense in the future.
The components of our net deferred tax liabilities are as follows:
September 30,
(in thousands)20232022
Deferred tax liabilities:
Property, plant and equipment$532,827 $558,293 
Marketable securities14,626 9,766 
Other27,980 24,460 
Total deferred tax liabilities575,433 592,519 
Deferred tax assets:
Pension reserves3,083 4,811 
Self-insurance reserves6,235 7,333 
Net operating loss, foreign tax credit, and other federal tax credit carryforwards6,770 8,673 
Financial accruals29,449 31,022 
Other21,647 13,678 
Total deferred tax assets67,184 65,517 
Valuation allowance(9,560)(10,710)
Net deferred tax assets57,624 54,807 
Net deferred tax liabilities$517,809 $537,712 
The change in our net deferred tax assets and liabilities is impacted by foreign currency remeasurement.
As of September 30, 2023, we had federal, state and foreign tax net operating loss carryforwards of approximately $2.6 million, $14.8 million and $14.8 million, respectively, and federal and foreign research and development tax credits of approximately $0.4 million and $1.0 million, respectively, which will expire in fiscal 2024 through 2043 and some of which can be carried forward indefinitely. Certain of these carryforwards are subject to various rules which impose limitations on their utilization. The valuation allowance is primarily attributable to foreign net operating loss carryforwards of $2.6 million and equity compensation of $6.9 million which more likely than not will not be utilized.
Unrecognized Tax Benefits
We recognize accrued interest related to unrecognized tax benefits in interest expense, and penalties in other expense in the Consolidated Statements of Operations. As of September 30, 2023, 2022 and 2021, we had accrued interest and penalties of $2.9 million, $3.0 million and $2.9 million, respectively. A reconciliation of the change in our gross unrecognized tax benefits are as follows:
(in thousands)202320222021
Unrecognized tax benefits at October 1,$960 $1,678 $13,440 
Gross decreases - current period effect of tax positions(534)(718)(11,648)
Gross increases - current period effect of tax positions6 — — 
Expiration of statute of limitations for assessments(185)— (114)
Unrecognized tax benefits at September 30, $247 $960 $1,678 
As of September 30, 2023, we have recorded approximately $3.1 million of unrecognized tax benefits, interest, and penalties. We believe it is reasonably possible up to $2.6 million of the unrecognized tax benefits, interest, and penalties will be recognized as of June 30, 2024 as a result of a lapse of the statute of limitations. We cannot predict with certainty if we will achieve ultimate resolution of any additional uncertain tax positions associated with our U.S. and international operations resulting in any additional material increases or decreases of our unrecognized tax benefits for the next twelve months.
Tax Returns
We file a consolidated U.S. federal income tax return, as well as income tax returns in various states and foreign jurisdictions. The tax years that remain open to examination by U.S. federal and state jurisdictions include fiscal years 2019 through 2022, with exception of certain state jurisdictions currently under audit. The tax years remaining open to examination by foreign jurisdictions include 2003 through 2022.