Eme r s on 2013 Ann u al R e por t 49 If none of the unrecognized tax benefts shown is ultimately paid the tax provision and the calculation of the effective tax rate would be favorably impacted by 90 The Company accrues interest and penalties related to income taxes in income tax expense Total interest and penalties recognized were 6 1 and 3 in 2013 2012 and 2011 respectively As of September 30 2013 and 2012 total accrued interest and penalties were 27 and 35 respectively The United States is the major jurisdiction for which the Company fles income tax returns Examinations by the US Internal Revenue Service are substantially complete through 2009 The status of state and nonUS tax examinations varies by 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 2012 2013 Deferred tax assets Net operating losses and tax credits 237 231 Accrued liabilities 247 262 Postretirement and postemployment benefits 135 102 Employee compensation and benefits 194 256 Pensions 224 Other 138 124 Total 1175 975 Valuation allowances 113 131 Deferred tax liabilities Intangibles 780 780 Pensions 38 Property plant and equipment 282 255 Other 110 158 Total 1172 1231 Net deferred income tax liability 110 387 At September 30 2013 and 2012 respectively current deferred tax assets net were 354 and 377 and noncurrent deferred tax liabilities net were 741 and 487 Total income taxes paid were approximately 1270 1300 and 1030 in 2013 2012 and 2011 respectively Approximately half of the 231 of net operating losses and tax credits can be carried forward indefnitely while the remainder expire over varying periods 14 s tock b ased c ompensation The Companys stockbased compensation plans include stock options performance shares restricted stock and restricted stock units Although the Company has discretion shares distributed under these plans are issued from treasury stock s tock oP tions The Companys stock option plans permit key offcers and employees to purchase common stock at specifed prices Awards are granted at 100 percent of the closing market price of the Companys common stock on the date of grant Awards made prior to 2011 were granted at 100 percent of the average of the high and low market prices on the date of grant Options generally vest onethird in each of the three years subsequent to grant and expire 10 years from the date of grant Compensation expense is recognized ratably over the vesting period based on the number of options expected to vest As of September 30 2013 191 million options were available for grant under the plans