INCOME TAXES (Tables)

12 Months Ended

Oct. 31, 2015

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:

	2015		2014		2013
Current:
U.S.:
Federal	$	377	$	1,217	$	1,405
State		32		126		145
Foreign		449		564		569
Total current		858		1,907		2,119
Deferred:
U.S.:
Federal		21		(189)		(117)
State		4		(11)		(11)
Foreign		(43)		(80)		(45)
Total deferred		(18)		(280)		(173)
Provision for income taxes	$	840	$	1,627	$	1,946

Comparison of Statutory and Effective Income Tax Provision

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

	2015		2014		2013
U.S. federal income tax provision at a statutory rate of 35 percent	$	973	$	1,679	$	1,919
Increase (decrease) resulting from:
State and local income taxes, net of federal income tax benefit		23		75		87
German branch deferred tax write-off						56
Differences in taxability of foreign (earnings) losses		(449)		(305)		43
Nondeductible impairment charges				32		29
Research and business tax credits		(76)		(99)		(56)
Tax rates on foreign earnings		(36)		(71)		(34)
Valuation allowance on deferred taxes		384		454		(14)
Other-net		21		(138)		(84)
Provision for income taxes	$	840	$	1,627	$	1,946

Analysis of the Deferred Income Tax Assets and Liabilities

An analysis of the deferred income tax assets and liabilities at October 31 in millions of dollars follows:

	2015				2014
	Deferred		Deferred		Deferred		Deferred
	Tax		Tax		Tax		Tax
	Assets		Liabilities		Assets		Liabilities
Other postretirement benefit liabilities	$	1,972			$	1,968
Tax over book depreciation			$	574			$	542
Accrual for sales allowances		618				654
Lease transactions				528				404
Tax loss and tax credit carryforwards		604				514
Foreign unrealized losses		458				146
Pension liability - net		315				160
Accrual for employee benefits		172				229
Share-based compensation		141				145
Inventory						22
Goodwill and other intangible assets				80				89
Allowance for credit losses		72				73
Deferred gains on distributed foreign earnings		33				32
Deferred compensation		51				47
Undistributed foreign earnings				25				26
Other items		436		119		440		116
Less valuation allowances		(940)				(637)
Deferred income tax assets and liabilities	$	3,932	$	1,326	$	3,793	$	1,177

Reconciliation of Unrecognized Tax Benefits

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

	2015		2014		2013
Beginning of year balance	$	213	$	272	$	265
Increases to tax positions taken during the current year		32		28		30
Increases to tax positions taken during prior years		29		20		24
Decreases to tax positions taken during prior years		(15)		(84)		(51)
Decreases due to lapse of statute of limitations		(11)		(4)		(5)
Settlements		(6)
Foreign exchange		(13)		(19)		9
End of year balance	$	229	$	213	$	272