INCOME TAXES (Tables)

12 Months Ended

Oct. 31, 2011

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:

	2011			2010		2009
Current:
U.S.:
Federal	$	928		$	574	$	3
State	144			50		12
Foreign	520			363		273
Total current	1,592			987		288
Deferred:
U.S.:
Federal	(135		)	156		246
State	(28		)	11		10
Foreign	(5		)	8		(84		)
Total deferred	(168		)	175		172
Provision for income taxes	$	1,424		$	1,162	$	460

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:

	2011			2010			2009
U.S. federal income tax provision at a statutory rate of 35 percent	$	1,478		$	1,059		$	469
Increase (decrease) resulting from:
Nondeductible health care claims*				123
Nondeductible goodwill impairment charge				7			86
State and local income taxes, net of federal income tax benefit	75			40			14
Wind energy production tax credits				(30		)	(26		)
Research and development tax credits	(38		)	(5		)	(25		)
Tax rates on foreign activities	(70		)	(59		)	(27		)
Other-net	(21		)	27			(31		)
Provision for income taxes	$	1,424		$	1,162		$	460

* Cumulative adjustment from change in law. Effect included in state taxes was $7 million.

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:

	2011					2010
	Deferred			Deferred		Deferred			Deferred
	Tax			Tax		Tax			Tax
	Assets			Liabilities		Assets			Liabilities
Other postretirement benefit liabilities	$	1,944				$	1,762
Accrual for sales allowances	438					361
Pension liabilities - net	279					199
Accrual for employee benefits	189					175
Inventory	152					89
Tax over book depreciation				$	492				$	521
Tax loss and tax credit carryforwards	121					141
Lease transactions				309					225
Allowance for credit losses	115					137
Goodwill and other intangible assets				123					117
Share-based compensation	113					101
Deferred gains on distributed foreign earnings	83					78
Deferred compensation	37					35
Undistributed foreign earnings				19					18
Other items	348			112		328			128
Less valuation allowances	(74		)			(64		)
Deferred income tax assets and liabilities	$	3,745		$	1,055	$	3,342		$	1,009

Reconciliation of Unrecognized Tax Benefits

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

	2011			2010			2009
Beginning of year balance	$	218		$	260		$	236
Increases to tax positions taken during the current year	23			36			29
Increases to tax positions taken during prior years	13			83			12
Decreases to tax positions taken during prior years	(42		)	(133		)	(28		)
Decreases due to lapse of statute of limitations	(13		)	(2		)	(3		)
Settlements	(1		)	(19		)	(5		)
Foreign exchange	1			(7		)	19
End of year balance	$	199		$	218		$	260