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Income Taxes (Tables)

12 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Provision for Income Taxes from Continuing Operations

The provision (benefit) for income taxes for the years ended September 30 consisted of:

(Millions of dollars)			2024						2023						2022
Current:
Federal			$	132					$	364					$	17
State and local, including Puerto Rico			17						87						32
Foreign			362						303						228
			$	511					$	754					$	277
Deferred:
Domestic			$	(169)					$	(644)					$	(96)
Foreign			(42)						22						(33)
			(211)						(622)						(129)
Income tax provision			$	300					$	132					$	148

The following were included for the years ended September 30 as a component of Income tax provision on the consolidated statements of income.

(Millions of dollars)			2024						2023						2022
Interest and penalties associated with unrecognized tax benefits			$	42					$	20					$	(6)

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)			2024						2023						2022
Domestic, including Puerto Rico			$	336					$	358					$	496
Foreign			1,669						1,304						1,287
Income from Continuing Operations Before Income Taxes			$	2,005					$	1,662					$	1,783

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 during the next twelve months due to one or more of the following events: 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. However, the Company does not expect changes to have a significant effect on its results of operations, financial condition, or cash flows.

(Millions of dollars)			2024						2023						2022
Balance at October 1			$	269					$	267					$	354
Increase due to acquisitions			—						—						2
Increase due to current year tax positions			22						22						40
Increase due to prior year tax positions			—						33						60
Decreases due to prior year tax positions			—						(29)						—
Decrease due to settlements with tax authorities			(64)						(6)						(77)
Decrease due to lapse of statute of limitations			(6)						(18)						(112)
Balance at September 30			$	221					$	269					$	267
Unrecognized tax benefits that would affect the effective tax rate if recognized			$	257					$	366					$	348

Deferred Income Taxes

Deferred income taxes at September 30 consisted of:

			2024												2023
(Millions of dollars)			Assets						Liabilities						Assets						Liabilities
Compensation and benefits			$	405					$	—					$	426					$	—
Property and equipment			—						391						—						405
Intangibles			—						1,612						—						1,858
Loss and credit carryforwards			2,946						—						2,352						—
Product recall and liability reserves			261						—						362						—
Capitalized research and development expenses (a)			364						—						243						—
Other			512						64						431						88
			4,489						2,067						3,814						2,351
Valuation allowance			(2,990)						—						(2,272)						—
Net (b)			$	1,498					$	2,067					$	1,542					$	2,351

(a)As required by the 2017 Tax Cuts and Jobs Act, the Company’s research and development expenditures were capitalized and amortized in fiscal year 2024 for income tax purposes. This resulted in an increase in cash tax paid in fiscal year 2024 with a corresponding deferred tax benefit.

(b)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:

			2024						2023						2022
Federal statutory tax rate			21.0		%				21.0		%				21.0		%
State and local income taxes, net of federal tax benefit			(0.7)						(1.0)						(1.1)
Foreign income tax at rates other than 21%			(9.1)						(8.2)						(7.3)
Effect of foreign operations			4.3						(3.9)						5.6
Effect of Research Credits, FDII and Other Credits (a)			(22.1)						(3.2)						(2.2)
Effect of share-based compensation			(0.3)						(0.4)						(1.7)
Effect of gain on divestitures			—						3.2						—
Effect of valuation allowance			19.3						—						(5.5)
Effect of nondeductible costs (b)			2.2						—						—
Other, net			0.4						0.4						(0.5)
Effective income tax rate			15.0		%				7.9		%				8.3		%

(a)    During fiscal year 2024, the Company was granted non-U.S. tax credits, for which a full valuation allowance was established.

(b)    Primarily related to the estimated liability recorded as a result of the SEC investigation, as further discussed in Note 6.

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 2039. The Company’s income tax payments, net of refunds are also provided below.

(Millions of dollars, except per share amounts)			2024						2023						2022
Tax impact related to tax holidays			$	414					$	363					$	284
Impact of tax holiday on diluted earnings per share			1.42						1.26						0.99
Income tax payments, net of refunds			653						629						532

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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.

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