XML 54 R39.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Income Taxes (Tables) | 12 Months Ended
--- | ---
Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Provision for Income Taxes from Continuing Operations | The provision (benefit) for income taxes the years ended September 30 consisted of:
(Millions of dollars) | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 17 |  |  | $ | 72 |  |  | $ | (68) |
State and local, including Puerto Rico | 32 |  |  | 42 |  |  | 43 |
Foreign | 228 |  |  | 254 |  |  | 372 |
| $ | 277 |  |  | $ | 368 |  |  | $ | 347 |
Deferred: |  |  |  |  |
Domestic | $ | (96) |  |  | $ | (284) |  |  | $ | (182) |
Foreign | (33) |  |  | 4 |  |  | (103) |
| (129) |  |  | (280) |  |  | (285) |
Income tax provision | $ | 148 |  |  | $ | 88 |  |  | $ | 62 |
The following were included for the years ended September 30 as a component of Income tax provision (benefit) on the consolidated statements of income.
(Millions of dollars) | 2022 |  | 2021 |  | 2020
Interest and penalties associated with unrecognized tax benefits | $ | (6) |  |  | $ | 5 |  |  | $ | 1 |
Components of Income from Continuing Operations Before Income Taxes | The components of Income from Continuing Operations Before Income Taxes for the years ended September 30 consisted of:
(Millions of dollars) | 2022 |  | 2021 |  | 2020
Domestic, including Puerto Rico | $ | 496 |  |  | $ | 70 |  |  | $ | (579) |
Foreign | 1,287 |  |  | 1,623 |  |  | 993 |
Income from Continuing Operations Before Income Taxes | $ | 1,783 |  |  | $ | 1,692 |  |  | $ | 414 |
Summary of Gross Amounts of Unrecognized Tax Benefits | The table below summarizes the gross amounts of unrecognized tax benefits without regard to reduction in tax liabilities or additions to deferred tax assets and liabilities if such unrecognized tax benefits were settled. The Company believes it is reasonably possible that the amount of unrecognized benefits will change due to one or more of the following events in the next twelve months: expiring statutes, audit activity, tax payments, other activity, or final decisions in matters that are the subject of controversy in various taxing jurisdictions in which we operate.
(Millions of dollars) | 2022 |  | 2021 |  | 2020
Balance at October 1 | $ | 354 |  |  | $ | 611 |  |  | $ | 568 |
Increase due to acquisitions | 2 |  |  | 2 |  |  | 1 |
Increase due to current year tax positions | 40 |  |  | 23 |  |  | 35 |
Increase due to prior year tax positions | 60 |  |  | 5 |  |  | 76 |
Decreases due to prior year tax positions | — |  |  | (4) |  |  | (49) |
Decrease due to settlements with tax authorities | (77) |  |  | (183) |  |  | (4) |
Decrease due to lapse of statute of limitations | (112) |  |  | (100) |  |  | (16) |
Balance at September 30 | $ | 267 |  |  | $ | 354 |  |  | $ | 611 |
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ | 348 |  |  | $ | 447 |  |  | $ | 719 |
Deferred Income Taxes | Deferred income taxes at September 30 consisted of:
| 2022 |  | 2021
(Millions of dollars) | Assets |  | Liabilities |  | Assets |  | Liabilities
Compensation and benefits | $ | 430 |  |  | $ | — |  |  | $ | 524 |  |  | $ | — |
Property and equipment | — |  |  | 412 |  |  | — |  |  | 400 |
Intangibles | — |  |  | 2,002 |  |  | — |  |  | 2,161 |
Loss and credit carryforwards | 2,185 |  |  | — |  |  | 2,107 |  |  | — |
Product recall and liability reserves | 133 |  |  | — |  |  | 191 |  |  | — |
Other | 524 |  |  | 260 |  |  | 549 |  |  | 123 |
| 3,271 |  |  | 2,674 |  |  | 3,370 |  |  | 2,684 |
Valuation allowance | (2,093) |  |  | — |  |  | (2,036) |  |  | — |
Net (a) | $ | 1,178 |  |  | $ | 2,674 |  |  | $ | 1,334 |  |  | $ | 2,684 |
(a)Net deferred tax assets are included in Other Assets and net deferred tax liabilities are included in Deferred Income Taxes and Other Liabilities on the consolidated balance sheets.
Reconciliation of Federal Statutory Tax Rate to Company's Effective Tax Rate | A reconciliation of the federal statutory tax rate to the Company’s effective income tax rate for continuing operations was as follows:
| 2022 |  | 2021 |  | 2020
Federal statutory tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local income taxes, net of federal tax benefit | (1.1) |  |  | (2.7) |  |  | (5.3) |
Foreign income tax at rates other than 21% | (7.3) |  |  | (6.4) |  |  | (17.6) |
Effect of foreign operations | 5.6 |  |  | (1.0) |  |  | 44.5 |
Effect of Research Credits and FDII/Domestic Production Activities | (2.2) |  |  | (2.0) |  |  | (11.1) |
Effect of share-based compensation | (1.7) |  |  | 0.1 |  |  | (10.7) |
Effect of gain on divestitures | — |  |  | — |  |  | (10.6) |
Effect of valuation allowance release | (5.5) |  |  | (2.2) |  |  | 2.2 |
Other, net | (0.5) |  |  | (1.6) |  |  | 2.5 |
Effective income tax rate | 8.3 | % |  | 5.2 | % |  | 14.9 | %
Summary of Income Tax Holiday | The approximate tax impacts related to tax holidays in various countries in which the Company does business are provided below. The tax holidays expire at various dates through 2028. The Company’s income tax payments, net of refunds are also provided below.
(Millions of dollars, except per share amounts) | 2022 |  | 2021 |  | 2020
Tax impact related to tax holidays | $ | 284 |  |  | $ | 243 |  |  | $ | 132 |
Impact of tax holiday on diluted earnings per share | 0.99 |  |  | 0.83 |  |  | 0.47 |
Income tax payments, net of refunds | 532 |  |  | 671 |  |  | 523 |

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(1)(Note 1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the change in unrecognized tax benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI https://asc.fasb.org/extlink&oid=126976462&loc=d3e36027-109320 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 + Details
Name: | us-gaap_ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the income tax exemptions and reductions which have been granted by taxing authorities for a specified period, applicable term of the exemptions and reductions, estimated dollar value of tax benefits, and per share benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 + Details
Name: | us-gaap_SummaryOfIncomeTaxHolidayTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration