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Income Taxes | 12 Months Ended
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Sep. 30, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Inflation Reduction Act In August 2022, the Inflation Reduction Act of 2022 (“Act”) was signed into U.S. law. Under the Act, there is a new 15% corporate minimum tax and a new 1% excise tax on stock repurchases that are effective after December 31, 2022. Further, the Act includes provisions related to climate change, energy, and health care. These provisions should not have a material impact on the Company’s consolidated financial statements. Income tax expense/(benefit) for the years ended September 30, 2023, 2022, and 2021 was allocated as follows:
| Year Ended September 30,
(in millions) | 2023 |  | 2022 |  | 2021
Income tax expense attributable to income from operations | $ | 84.5 |  |  | $ | 70.1 |  |  | $ | 37.8 |
Taxes allocated to stockholders’ equity, related to pension liabilities | 0.2 |  |  | (0.1) |  |  | 0.5 |
Taxes allocated to stockholders’ equity, related to hedge accounting | 11.1 |  |  | (17.0) |  |  | — |
Total income tax expense | $ | 95.8 |  |  | $ | 53.0 |  |  | $ | 38.3 |
The components of income tax expense/(benefit) attributable to income from operations were as follows:
| Year Ended September 30,
(in millions) | 2023 |  | 2022 |  | 2021
Current taxes: |  |  |  |  |
U.S. federal | $ | 15.8 |  |  | $ | 8.2 |  |  | $ | 6.7 |
U.S. state and local | 3.9 |  |  | 3.6 |  |  | (0.1) |
Australia | 2.2 |  |  | 2.8 |  |  | 1.8 |
Brazil | 16.0 |  |  | 12.6 |  |  | 8.0 |
Germany | 4.5 |  |  | 8.9 |  |  | 6.0 |
Singapore | 4.9 |  |  | 2.0 |  |  | 1.9 |
Switzerland | 2.6 |  |  | — |  |  | — |
United Kingdom | 30.9 |  |  | 29.2 |  |  | 6.6 |
Other international | 6.1 |  |  | 3.1 |  |  | 3.7 |
Total current taxes | 86.9 |  |  | 70.4 |  |  | 34.6 |
Deferred taxes: |  |  |  |  |
U.S. federal | (1.1) |  |  | 3.4 |  |  | 1.4 |
U.S. state and local | — |  |  | (0.1) |  |  | 2.7 |
Australia | 0.1 |  |  | (0.2) |  |  | 0.3 |
Brazil | — |  |  | (0.8) |  |  | (1.3) |
Singapore | — |  |  | — |  |  | 0.4 |
Switzerland | 0.4 |  |  | — |  |  | — |
United Kingdom | (1.4) |  |  | (2.7) |  |  | 0.1 |
Other international | (0.4) |  |  | 0.1 |  |  | (0.4) |
Total deferred taxes | (2.4) |  |  | (0.3) |  |  | 3.2 |
Income tax expense | $ | 84.5 |  |  | $ | 70.1 |  |  | $ | 37.8 |
U.S. and international components of income from operations, before tax, were as follows:
| Year Ended September 30,
(in millions) | 2023 |  | 2022 |  | 2021
U.S. | $ | 135.1 |  |  | $ | 50.0 |  |  | $ | 37.3 |
Australia | 7.4 |  |  | 8.7 |  |  | 7.8 |
Brazil | 35.3 |  |  | 25.3 |  |  | 13.7 |
Germany | 13.3 |  |  | 27.8 |  |  | 17.2 |
Singapore | 38.1 |  |  | 19.4 |  |  | 16.0 |
Switzerland | 22.5 |  |  | — |  |  | — |
United Kingdom | 77.7 |  |  | 104.8 |  |  | 41.4 |
Other international | (6.4) |  |  | 41.2 |  |  | 20.7 |
Income from operations, before tax | $ | 323.0 |  |  | $ | 277.2 |  |  | $ | 154.1 |
Items accounting for the difference between income taxes computed at the federal statutory rate and income tax expense were as follows:
| Year Ended September 30,
| 2023 |  | 2022 |  | 2021
Federal statutory rate effect of: | 21.0 | % |  | 21.0 | % |  | 21.0 | %
U.S. State and local income taxes | 1.0 | % |  | 1.0 | % |  | 1.8 | %
Foreign earnings and losses taxed at different rates | 1.1 | % |  | 1.1 | % |  | 1.0 | %
Change in valuation allowance | (0.4) | % |  | 0.9 | % |  | 1.9 | %
U.K. bank tax | 0.3 | % |  | 2.6 | % |  | 0.4 | %
U.S. permanent items | 0.2 | % |  | 0.2 | % |  | (1.2) | %
Non-deductible compensation | 2.0 | % |  | 0.7 | % |  | 1.9 | %
Foreign permanent items | 0.4 | % |  | (2.8) | % |  | (2.3) | %
U.S. bargain purchase gain | (1.4) | % |  | — | % |  | (0.5) | %
GILTI | 2.0 | % |  | 0.6 | % |  | 0.6 | %
Effective rate | 26.2 | % |  | 25.3 | % |  | 24.6 | %
The components of deferred income tax assets and liabilities were as follows:
(in millions) | September 30, 2023 |  | September 30, 2022
Deferred tax assets: |  |  |
Share-based compensation | $ | 7.4 |  |  | $ | 4.8 |
Deferred compensation | 5.4 |  |  | 5.1 |
Net operating loss carryforwards | 17.2 |  |  | 18.7 |
Intangible assets | 3.8 |  |  | 6.4 |
Bad debt reserve | 9.6 |  |  | 7.8 |
Hedging | 5.9 |  |  | 17.0 |
Foreign tax credit carryforwards | 0.6 |  |  | 1.6 |
Other compensation | 7.8 |  |  | 8.0 |
Pension | 3.6 |  |  | 2.1 |
Right of use assets | 20.1 |  |  | 23.8 |
Other | 1.1 |  |  | 2.0 |
Total gross deferred tax assets | 82.5 |  |  | 97.3 |
Less valuation allowance | (12.4) |  |  | (15.8) |
Deferred tax assets | 70.1 |  |  | 81.5 |
Deferred income tax liabilities: |  |  |
Unrealized gain on securities | 2.8 |  |  | 2.5 |
Prepaid expenses | 5.0 |  |  | 3.8 |
Property and equipment | 1.6 |  |  | 2.0 |
Right of use liabilities | 17.2 |  |  | 20.8 |
Mark to market on inventory | 4.8 |  |  | — |
Other deferred liabilities | 1.4 |  |  | 0.4 |
Deferred income tax liabilities | 32.8 |  |  | 29.5 |
Deferred income taxes, net | $ | 37.3 |  |  | $ | 52.0 |
Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. As of September 30, 2023 and 2022, the Company has net operating loss carryforwards for U.S. federal, state, local, and foreign income tax purposes o f $5.4 million and $5.2 million, net of valuation allowances, respectively, which are available to offset future taxable income in these jurisdictions. The state and local net operating loss carryforwards of $4.4 million, net of valuation allowance, begin to expire after September 2023. The Company also has $0.7 million, net of valuation allowances, of federal net operating loss carryforwards, which consist of a portion that will expire in tax years ending 2031 through 2036. The remaining portion of the federal net operating loss carryforwards do not expire, but cannot be utilized until after 2037 and are limited by Internal Revenue Code (“IRC”) Section 382. As of September 30, 2023, the Company has $0.4 million, net of valuation allowance, of foreign net operating loss carryforwards primarily in Columbia and Ireland, which have various carryforward periods. The valuation allowance for deferred tax assets as of September 30, 2023 was $12.4 million. The net change in the total valuation allowance for the year ended September 30, 2023 was a decrease of $3.4 million. The decrease was related to the decrease in foreign net operating loss carryforwards and decreases related to foreign tax credits. The valuation allowances as of September 30, 2023 and 2022 were primarily related to U.S. state and local and foreign net operating loss carryforwards that, in the judgment of management, are not more likely than not to be realized. T he Company does not intend to distribute earnings of its foreign subsidiaries in a taxable manner, and therefore intends to limit distributions to earnings previously taxed in the U.S., or earnings that would qualify for the 100 percent dividends received deduction, and earnings that would not result in any significant foreign taxes. The Company repatriated $35.5 million and $29.7 million during the years ended September 30, 2023 and 2022, respectively, of earnings previously taxed in the U.S. resulting in no significant incremental taxes. Therefore, the Company has not recognized a deferred tax liability on its investment in foreign subsidiaries. The Company had a de minimis balance of unrecognized tax benefits as of September 30, 2023, 2022, and 2021 that, if recognized, would affect the effective tax rate. Accrued interest and penalties are included in the related tax liability line in the Consolidated Balance Sheets. The Company had no accrued interest and penalties included in the Consolidated Balance Sheets as of September 30, 2023 and 2022. The Company recognizes accrued interest and penalties related to income taxes as a component of income tax expense. The Company had a de minimis amount of interest, net of federal benefit, and penalties recognized as a component of income tax expense during the years ended September 30, 2023, 2022, and 2021. The Company and its subsidiaries file income tax returns with the U.S. federal jurisdiction and various U.S. state and local and foreign jurisdictions. The Company has open tax years ranging from September 30, 2017 through September 30, 2023 with U.S. federal and state and local taxing authorities. In the U.K., the Company has open tax years ending September 30, 2020 to September 30, 2023. In Brazil, the Company has open tax years ranging from December 31, 2018 through December 31, 2022. In Argentina, the Company has open tax years ranging from September 30, 2016 to September 30, 2023. In Singapore, the Company has open tax years ranging from September 30, 2018 to September 30, 2023.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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