|3 Months Ended|
Dec. 31, 2020
|Income Tax Disclosure [Abstract]|
|Income Taxes||Income Taxes
The effective tax rates for the three months ended December 31, 2020 and 2019 were 28.7% and 93.9%, respectively. The difference in the effective tax rate in the current quarter relative to the federal statutory tax rate was primarily attributable to an unfavorable geographic mix of pretax income, the impact that tax loss carryforwards and the tax loss on the sale of Red Valve had on foreign tax credit determinations related to foreign income inclusions, as well as deferred taxes recognized on accumulated earnings of foreign subsidiaries. The decrease in the effective tax rate from the prior year is primarily due to the prior year net loss position and the tax benefit recognized from the revaluation of current and deferred tax balances in connection with enacted statutory tax rate reductions in certain foreign jurisdictions, which significantly increased the tax rate in the prior year, partially offset by the impact of nondeductible expenses associated with the Milacron acquisition.The acquisition of Milacron was completed during the quarter ended December 31, 2019, through the merger of a Hillenbrand wholly-owned subsidiary with and into Milacron, resulting in 100% ownership of Milacron common stock that was issued and outstanding after the acquisition. In connection with the acquisition, the Company recorded a deferred tax asset of $5.9 and a deferred tax liability of $139.0 associated with the difference between the financial accounting basis and the tax basis in the acquired assets and liabilities assumed. Included in the acquired deferred taxes were deferred tax assets for the carryforward of Milacron’s tax net operating losses from federal, state, and foreign tax jurisdictions of $65.5, which were partially offset by the recognition of preliminary valuation allowances of $22.0 related to the estimated realizability of these items. The utilization of the acquired U.S. federal and state net operating losses to reduce Hillenbrand’s taxable income will be limited annually under Section 382 of the Internal Revenue Code. The annual Section 382 limitation is $39.6 until the net operating losses are utilized.
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.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef