Income Taxes (Tables)

12 Months Ended

Oct. 31, 2016

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):

	2016		2015		2014
Current:
U.S.:
Federal	$	(119.0)	$	119.1	$	274.4
State		4.4		5.4		7.9
Foreign		17.1		20.1		21.2
Total current		(97.5)		144.6		303.5
Deferred:
U.S.:
Federal		273.4		121.2		(33.7)
State		(.7)		1.7		.6
Foreign		5.1		2.4		(9.8)
Total deferred		277.8		125.3		(42.9)
Provision for income taxes	$	180.3	$	269.9	$	260.6

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):

	2016		2015		2014
U.S. federal income tax provision at a statutory rate of 35 percent	$	182.0	$	268.4	$	281.0
Increase (decrease) resulting from:
Municipal lease income not taxable		(1.4)		(1.4)		(1.4)
Tax rates on foreign earnings		(5.9)		(6.0)		(8.0)
Foreign tax benefit						(23.1)
State and local income taxes, net of federal income tax benefit		2.4		4.6		5.5
Other – net		3.2		4.3		6.6
Provision for income taxes	$	180.3	$	269.9	$	260.6

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):

	2016				2015
	Deferred		Deferred		Deferred		Deferred
	Tax		Tax		Tax		Tax
	Assets		Liabilities		Assets		Liabilities
Lease transactions			$	789.9			$	505.4
Tax over book depreciation				12.0				9.7
Deferred retail note finance income				5.4				6.2
Allowance for credit losses	$	53.6			$	45.3
Accrual for retirement and other benefits		26.3				27.4
Federal taxes on deferred state tax deductions		14.6				14.1
Tax loss and tax credit carryforwards		20.8				11.8
Miscellaneous accruals and other		8.3		.2		17.6
Less valuation allowances		(1.8)				(1.1)
Deferred income tax assets and liabilities	$	121.8	$	807.5	$	115.1	$	521.3

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):

	2016		2015		2014
Beginning of year balance	$	36.0	$	36.2	$	33.6
Increases to tax positions taken during the current year		9.7		11.1		12.1
Increases to tax positions taken during prior years		1.1		1.6		.7
Decreases to tax positions taken during prior years		(7.3)		(7.8)		(7.0)
Decreases due to lapse of statute of limitations		(3.0)		(3.9)		(3.2)
Settlements				(1.1)
Foreign exchange				(.1)
End of year balance	$	36.5	$	36.0	$	36.2