Table:
|  |  | Fiscal |  |
| --- | --- | --- | --- |
|  | 2019 | 2018 | 2017 |
|  |  | (in millions) |  |
| Notional U.S. federal income tax expense at the statutory rate (1) | $ 406 | $ 551 | $ 602 |
| Adjustments to reconcile to the income tax expense (benefit): |  |  |  |
| U.S. state income tax benefit, net | (5) | (7) | (4) |
| Tax law changes | 15 | 638 | 7 |
| Tax credits | (22) | (8) | (8) |
| Non-U.S. net earnings(2) | (166) | (213) | (355) |
| Change in accrued income tax liabilities | (61) | 13 | 24 |
| Valuation allowance | (163) | 33 | (1) |
| Legal entity restructuring and intercompany transactions | 3 | (1,329) | (40) |
| Excess tax benefits from share-based payments | (8) | (24) | (40) |
| Other | (14) | 2 | (5) |
| Income tax expense (benefit) | $ (15) | $ (344) | $ 180 |
Paragraphs:
The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense (benefit) was as follows:
(1) The U.S. federal statutory rate was 21% for fiscal 2019, 24.58% for fiscal 2018, and 35%
for fiscal 2017.
(2) Excludes items which are separately presented.
The income tax benefit for fiscal 2019 included a $216 million income tax benefit related to the tax impacts of certain measures of the Switzerland Federal Act on Tax Reform and AHV Financing (“Swiss Tax Reform”), a $90 million income tax benefit related to the effective settlement of a tax audit in a non-U.S. jurisdiction, and $15 million of income tax expense associated with the tax impacts of certain legal entity restructurings and intercompany transactions. See “Swiss Tax Reform” below for additional information regarding Swiss Tax Reform.
The income tax benefit for fiscal 2018 included a $1,222 million net income tax benefit associated with the tax impacts of certain legal entity restructurings and intercompany transactions that occurred in the quarter ended September 28, 2018. The net income tax benefit of $1,222 million related primarily to the recognition of certain non-U.S. loss carryforwards and basis differences in subsidiaries expected to be utilized against future taxable income, partially offset by a $46 million increase in the valuation allowance for certain U.S. federal tax credit carryforwards. The income tax benefit for fiscal 2018 also included $567 million of income tax expense related to the tax impacts of the Tax Cuts and Jobs Act (the “Act”) and a $61 million net income tax benefit related to the tax impacts of certain legal entity restructurings that occurred in the quarter ended December 29, 2017. See “Tax Cuts and Jobs Act” below for additional information regarding the Act.
The income tax expense for fiscal 2017 included a $52 million income tax benefit associated with the tax impacts of certain intercompany transactions and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards, a $40 million income tax benefit related to share-based payments and the adoption of ASU No. 2016-09, and a $14 million income tax benefit associated with pre-separation tax matters.
Question:
What do the Non-U.S. net earnings exclude?
Answer: items which are separately presented.