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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

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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.

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