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Income Taxes | 12 Months Ended
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Sep. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Pretax earnings from continuing operations consist of the following:
| 2017 |  |  | 2018 |  |  | 2019 |
United States | $ | 1,350 |  |  | 1,652 |  |  | 1,771 |
Non-U.S. | 985 |  |  | 1,015 |  |  | 1,088 |
Total pretax earnings | $ | 2,335 |  |  | 2,667 |  |  | 2,859 |
The principal components of income tax expense follow:
| 2017 |  |  | 2018 |  |  | 2019 |
Current: |  |  |  |  |
U.S. federal | $ | 351 |  |  | 341 |  |  | 247 |
State and local | 40 |  |  | 52 |  |  | 24 |
Non-U.S. | 311 |  |  | 300 |  |  | 308 |
Deferred: |  |  |  |  |
U.S. federal | 7 |  |  | (224 | ) |  | (2 | )
State and local | 4 |  |  | (11 | ) |  | 12 |
Non-U.S. | (53 | ) |  | (15 | ) |  | (58 | )
Income tax expense | $ | 660 |  |  | 443 |  |  | 531 |
Reconciliations of the U.S. federal statutory income tax rate to the Company's effective tax rate follow. For fiscal 2018, the U.S. federal statutory rate was 35 percent for one quarter and 21 percent for three quarters.
| 2017 |  |  | 2018 |  |  | 2019 |
U.S. federal statutory rate | 35.0 | % |  | 24.5 | % |  | 21.0 | %
State and local taxes, net of U.S. federal tax benefit | 1.2 |  |  | 1.2 |  |  | 1.0 |
Non-U.S. rate differential | (3.6 | ) |  | 0.8 |  |  | 1.8 |
Non-U.S. tax holidays | (1.0 | ) |  | (0.8 | ) |  | (1.1 | )
U.S. manufacturing deduction | (1.7 | ) |  | (1.1 | ) |  | — |
Foreign derived intangible income | — |  |  | — |  |  | (1.1 | )
Gain on divestiture | — |  |  | 1.0 |  |  | — |
Subsidiary restructuring | (1.8 | ) |  | (2.0 | ) |  | (2.6 | )
Transition impact of Tax Act | — |  |  | (7.1 | ) |  | — |
Other | 0.2 |  |  | 0.1 |  |  | (0.4 | )
Effective income tax rate | 28.3 | % |  | 16.6 | % |  | 18.6 | %
On December 22, 2017, the U.S. government enacted tax reform, the Tax Cuts and Jobs Act (the “Act”), which made comprehensive changes to U.S. federal income tax laws by moving from a global to a modified territorial tax regime. The Act includes a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent in calendar year 2018 along with the elimination of certain deductions and credits, and a one-time “deemed repatriation” of accumulated non-U.S. earnings. During 2018, the Company recognized a net tax benefit of $189 ($0.30 per share) due to impacts of the Act, consisting of a $94 benefit on revaluation of net deferred income tax liabilities to the lower tax rate, $35 of expense for the tax on deemed repatriation of accumulated non-U.S. earnings and withholding taxes, and the reversal of $130 accrued in previous periods for the planned repatriation of non-U.S. cash. The Company completed its accounting for the Act in the first quarter of fiscal 2019. Effective in fiscal 2019, the Act also subjects the Company to U.S. tax on global intangible low-taxed income earned by certain of its non-U.S. subsidiaries. The Company has elected to recognize this tax as a period expense when it is incurred. Non-U.S. tax holidays reduce tax rates in certain jurisdictions and are expected to expire over the next three years. Following are changes in unrecognized tax benefits before considering recoverability of any cross-jurisdictional tax credits (U.S. federal, state and non-U.S.) and temporary differences. The amount of unrecognized tax benefits is not expected to change significantly within the next 12 months.
| 2018 |  |  | 2019 |
Unrecognized tax benefits, beginning | $ | 132 |  |  | 158 |
Additions for current year tax positions | 13 |  |  | 15 |
Additions for prior year tax positions | 8 |  |  | 18 |
Reductions for prior year tax positions | (8 | ) |  | (22 | )
Acquisitions and divestitures | 21 |  |  | 4 |
Reductions for settlements with tax authorities | (3 | ) |  | (5 | )
Reductions for expiration of statutes of limitations | (5 | ) |  | (9 | )
Unrecognized tax benefits, ending | $ | 158 |  |  | 159 |
If none of the unrecognized tax benefits shown is ultimately paid, the tax provision and the calculation of the effective tax rate would be favorably impacted by $124, which is net of cross-jurisdictional tax credits and temporary differences. The Company accrues interest and penalties related to income taxes in income tax expense. Total interest and penalties recognized were $4, $2 and $(1) in 2019, 2018 and 2017, respectively. As of September 30, 2019 and 2018, total accrued interest and penalties were $27 and $23, respectively. The U.S. is the major jurisdiction for which the Company files income tax returns. U.S. federal tax returns are closed through 2013. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates. The principal items that gave rise to deferred income tax assets and liabilities follow:
| 2018 |  |  | 2019 |
Deferred tax assets: |  |  |
Net operating losses and tax credits | $ | 396 |  |  | 407 |
Accrued liabilities | 238 |  |  | 228 |
Postretirement and postemployment benefits | 37 |  |  | 36 |
Employee compensation and benefits | 119 |  |  | 110 |
Pensions | — |  |  | 95 |
Other | 151 |  |  | 121 |
Total | $ | 941 |  |  | 997 |
Valuation allowances | $ | (341 | ) |  | (307 | )
Deferred tax liabilities: |  |  |
Intangibles | $ | (693 | ) |  | (637 | )
Pensions | (43 | ) |  | — |
Property, plant and equipment | (187 | ) |  | (195 | )
Undistributed non-U.S. earnings | (52 | ) |  | (49 | )
Other | (35 | ) |  | (39 | )
Total | $ | (1,010 | ) |  | (920 | )
Net deferred income tax liability | $ | (410 | ) |  | (230 | )
Total income taxes paid were approximately $650, $680 and $1,420 in 2019, 2018 and 2017, respectively. Approximately half of the $407 of net operating losses and tax credits expire over the next 5 years, while most of the remainder can be carried forward indefinitely.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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