Income Taxes (Tables)

12 Months Ended

Oct. 31, 2012

Income Taxes

Provision for Income Taxes by Taxing Jurisdiction and by Significant Component

The provision for income taxes by taxing jurisdiction and by significant component consisted of the following (in millions of dollars):

	2012			2011		2010
Current:
U.S.:
Federal	$	173.6		$	66.5	$	50.3
State	10.1			14.4		1.0
Foreign	34.0			25.0		21.2
Total current	217.7			105.9		72.5
Deferred:
U.S.:
Federal	4.4			98.1		88.6
State	1.6			2.8		(1.4		)
Foreign	(5.9		)	2.4		(.3		)
Total deferred	.1			103.3		86.9
Provision for income taxes	$	217.8		$	209.2	$	159.4

Comparison of Statutory and Effective Income Tax Provision

A comparison of the statutory and effective income tax provision and reasons for related differences follows (in millions of dollars):

	2012			2011			2010
U.S. federal income tax provision at a statutory rate of 35 percent	$	209.7		$	200.1		$	167.3
Increase (decrease) resulting from:
Municipal lease income not taxable	(1.5		)	(1.6		)	(1.6		)
Tax rates on foreign earnings	(6.3		)	(5.5		)	(3.8		)
State and local income taxes, net of federal income tax benefit	7.6			11.2			(.3		)
Other — net	8.3			5.0			(2.2		)
Provision for income taxes	$	217.8		$	209.2		$	159.4

Analysis of Deferred Income Tax Assets and Liabilities

Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of deferred income tax assets and liabilities at October 31 was as follows (in millions of dollars):

	2012					2011
	Deferred Tax Assets			Deferred Tax Liabilities		Deferred Tax Assets		Deferred Tax Liabilities
Lease transactions				$	345.6			$	340.1
Tax over book depreciation				2.0				7.6
Deferred retail note finance income				3.0				3.0
Allowance for credit losses	$	45.9				$	53.2
Unrealized gain/loss on derivatives	6.1					4.3
Accrual for retirement and other benefits	8.0					9.4
Federal taxes on deferred state tax deductions	12.2					8.8
Tax loss and tax credit carryforwards	3.9					4.4
Miscellaneous accruals and other	.2							5.8
Less valuation allowances	(.4		)
Deferred income tax assets and liabilities	$	75.9		$	350.6	$	80.1	$	356.5

Reconciliation of Total Amounts of Unrecognized Tax Benefits

A reconciliation of the total amounts of unrecognized tax benefits at October 31 was as follows (in millions of dollars):

	2012			2011			2010
Beginning of year balance	$	30.0		$	30.3		$	38.5
Increases to tax positions taken during the current year	12.0			10.6			8.9
Increases to tax positions taken during prior years	.8			5.9			.4
Decreases to tax positions taken during prior years	(6.6		)	(14.7		)	(14.4		)
Decreases due to lapse of statute of limitations	(3.6		)	(2.1		)	(1.4		)
Settlements				(.1		)	(1.5		)
Foreign exchange	(.1		)	.1			(.2		)
End of year balance	$	32.5		$	30.0		$	30.3