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	$	51	$	377	$	1,217
State		26		32		126
Foreign		340		449		564
Total current		417		858		1,907
Deferred:
U.S.:
Federal		297		21		(189)
State		11		4		(11)
Foreign		(25)		(43)		(80)
Total deferred		283		(18)		(280)
Provision for income taxes	$	700	$	840	$	1,627

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:

	2016		2015		2014
U.S. federal income tax provisionat a statutory rate of 35 percent	$	778	$	973	$	1,679
Increase (decrease) resulting from:
State and local income taxes, net of federal income tax benefit		26		23		75
Differences in taxability of foreign (earnings) losses		(107)		(449)		(305)
Nondeductible impairment charges		4				32
Research and business tax credits		(57)		(76)		(99)
Tax rates on foreign earnings		(27)		(36)		(71)
Valuation allowance on deferred taxes		79		384		454
Other-net		4		21		(138)
Provision for income taxes	$	700	$	840	$	1,627

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:

	2016				2015
	Deferred		Deferred		Deferred		Deferred
	Tax		Tax		Tax		Tax
	Assets		Liabilities		Assets		Liabilities
Other postretirement benefit liabilities	$	2,191			$	1,972
Tax over book depreciation			$	578			$	574
Accrual for sales allowances		592				618
Lease transactions				817				528
Tax loss and tax credit carryforwards		661				604
Foreign unrealized losses		472				458
Pension liability - net		706				315
Accrual for employee benefits		133				172
Share-based compensation		152				141
Goodwill and other intangible assets				89				80
Allowance for credit losses		88				72
Deferred gains on distributed foreign earnings		32				33
Deferred compensation		50				51
Undistributed foreign earnings				30				25
Other items		439		175		436		119
Less valuation allowances		(1,029)				(940)
Deferred income taxassets and liabilities	$	4,487	$	1,689	$	3,932	$	1,326

Reconciliation of Unrecognized Tax Benefits

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

	2016		2015		2014
Beginning of year balance	$	229	$	213	$	272
Increases to tax positions taken during the current year		14		32		28
Increases to tax positions taken during prior years		11		29		20
Decreases to tax positions taken during prior years		(36)		(15)		(84)
Decreases due to lapse of statute of limitations		(7)		(11)		(4)
Settlements		(5)		(6)
Foreign exchange		(8)		(13)		(19)
End of year balance	$	198	$	229	$	213