PROPERTY AND DEPRECIATION

12 Months Ended

Oct. 31, 2011

PROPERTY AND DEPRECIATION

PROPERTY AND DEPRECIATION

16. PROPERTY AND DEPRECIATION

A summary of property and equipment at October 31 in millions of dollars follows:

	Useful Lives*
	(Years)	2011		2010
Equipment Operations
Land		$	117	$	113
Buildings and building equipment	24	2,430		2,226
Machinery and equipment	11	4,254		3,972
Dies, patterns, tools, etc	7	1,213		1,105
All other	5	731		685
Construction in progress		649		478
Total at cost		9,394		8,579
Less accumulated depreciation		5,107		4,856
Total		4,287		3,723
Financial Services
Land		4		4
Buildings and building equipment	27	71		70
All other	6	39		38
Total at cost		114		112
Less accumulated depreciation		49		44
Total		65		68
Property and equipment-net		$	4,352	$	3,791

* Weighted-averages

In 2010, the company signed an agreement to sell its wind energy business and reclassified the related net property and equipment of $908 million to assets held for sale. The property and equipment included in financial services that was reclassified consisted of costs of machinery and equipment of $1,058 million, construction in progress of $5 million and all other of $1 million, less accumulated depreciation of $156 million (see Note 4).

Total property and equipment additions in 2011, 2010 and 2009 were $1,059 million, $802 million and $798 million and depreciation was $516 million, $540 million and $513 million, respectively. Capitalized interest was $8 million, $6 million and $15 million in the same periods, respectively. The cost of leased property and equipment under capital leases of $41 million and $43 million and accumulated depreciation of $23 million and $23 million at October 31, 2011 and 2010, respectively, is included in property and equipment.

Financial services’ property and equipment additions included above were $2 million, none and $1 million in 2011, 2010 and 2009 and depreciation was $6 million, $64 million and $62 million, respectively. Financial services had additions to cost of property and equipment of $23 million in 2010 and $71 million in 2009, which were offset by cost reductions of $23 million in 2010 and $70 million in 2009 due to becoming eligible for government grants for certain wind energy investments.

Capitalized software has an estimated useful life of three years. The amounts of total capitalized software costs, including purchased and internally developed software, classified as “Other Assets” at October 31, 2011 and 2010 were $592 million and $526 million, less accumulated amortization of $451 million and $394 million, respectively. Amortization of these software costs was $73 million in 2011, $68 million in 2010 and $54 million in 2009. The cost of leased software assets under capital leases amounting to $40 million and $35 million at October 31, 2011 and 2010, respectively, is included in other assets.

The cost of compliance with foreseeable environmental requirements has been accrued and did not have a material effect on the company’s consolidated financial statements.