Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

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)	2020		2019		2018
Current:
Federal	$	(50)	$	235	$	665
State and local, including Puerto Rico	47		41		73
Foreign	400		300		387
	$	397	$	576	$	1,124
Deferred:
Domestic	$	(184)	$	(577)	$	(201)
Foreign	(101)		(56)		(61)
	(286)		(633)		(262)
Income tax provision (benefit)	$	111	$	(57)	$	862

Components of Income from Continuing Operations Before Income Taxes

The components of Income Before Income Taxes for the years ended September 30 consisted of:

(Millions of dollars)	2020		2019		2018
Domestic, including Puerto Rico	$	(489)	$	799	$	(135)
Foreign	1,474		377		1,308
Income Before Income Taxes	$	985	$	1,176	$	1,173

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)	2020		2019		2018
Balance at October 1	$	577	$	601	$	407
Increase due to acquisitions	1		3		140
Increase due to current year tax positions	35		11		43
Increase due to prior year tax positions	76		6		43
Decreases due to prior year tax positions	(49)		(39)		—
Decrease due to settlements with tax authorities	(4)		—		(29)
Decrease due to lapse of statute of limitations	(16)		(5)		(3)
Balance at September 30	$	620	$	577	$	601

Deferred Income Taxes

Deferred income taxes at September 30 consisted of:

	2020				2019
(Millions of dollars)	Assets		Liabilities		Assets		Liabilities
Compensation and benefits	$	554	$	—	$	513	$	—
Property and equipment	—		361		—		312
Intangibles	—		2,408		—		2,624
Loss and credit carryforwards	1,900		—		1,327		—
Product recall and liability reserves	241		—		182		—
Other	501		137		396		74
	3,196		2,906		2,417		3,011
Valuation allowance	(1,820)		—		(1,240)		—
Net (a)	$	1,376	$	2,906	$	1,177	$	3,011

(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 was as follows:

	2020		2019		2018
Federal statutory tax rate	21.0	%	21.0	%	24.5	%
New U.S. tax legislation (see discussion above)	—		(4.3)		54.6
State and local income taxes, net of federal tax benefit	(1.9)		0.1		0.8
Foreign income tax at rates other than 21%	(14.8)		(6.6)		(11.7)
Effect of foreign operations	19.1		(5.5)		19.0
Effect of Research Credits and FDII/Domestic Production Activities	(5.0)		(3.3)		(2.8)
Effect of tax benefit relating to share-based compensation	(4.5)		(3.9)		(6.1)
Effect of gain on divestitures	(4.5)		(2.0)		1.3
Effect of uncertain tax position	—		—		3.3
Effect of valuation allowance release	—		—		(4.8)
Effect of application for change in accounting method	—		—		(4.5)
Effect of nondeductible compensation	—		—		1.6
Other, net	1.9		(0.3)		(1.7)
Effective income tax rate	11.3	%	(4.8)	%	73.5	%