INCOME TAXES (Tables)

12 Months Ended

Oct. 31, 2013

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:

	2013		2012		2011
Current:
U.S.:
Federal	$	1,405	$	1,277	$	928
State	145		119		144
Foreign	569		355		520
Total current	2,119		1,751		1,592
Deferred:
U.S.:
Federal	(117)		(76)		(135)
State	(11)		(7)		(28)
Foreign	(45)		(9)		(5)
Total deferred	(173)		(92)		(168)
Provision for income taxes	$	1,946	$	1,659	$	1,424

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:

	2013		2012		2011
U.S. federal income tax provision at a statutory rate of 35 percent	$	1,919	$	1,657	$	1,478
Increase (decrease) resulting from:
State and local income taxes, net of federal income tax benefit	87		73		75
German branch deferred tax write-off	56
Nontaxable foreign partnership (earnings) losses	43		(172)
Nondeductible impairment charges	29		6
Research and development tax credits	(56)		(10)		(38)

	2013		2012		2011
Tax rates on foreign earnings	(34)		(69)		(70)
Valuation allowance on foreign deferred taxes	(14)		200		18
Other-net	(84)		(26)		(39)
Provision for income taxes	$	1,946	$	1,659	$	1,424

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:

	2013				2012
	Deferred Tax Assets		Deferred Tax Liabilities		Deferred Tax Assets		Deferred Tax Liabilities
Other postretirement benefit liabilities	$	1,777			$	2,136
Tax over book depreciation			$	582			$	606
Accrual for sales allowances	602				546
Pension liabilities - net					457
Lease transactions			424				317
Pension asset - net			137
Tax loss and tax credit carryforwards	371				249
Accrual for employee benefits	234				249
Share-based compensation	142				133
Inventory	161				131
Goodwill and other intangible assets			100				110
Allowance for credit losses	69				92
Deferred gains on distributed foreign earnings	26				84
Deferred compensation	44				40
Undistributed foreign earnings			26				11
Other items	419		157		443		115
Less valuation allowances	(254)				(285)
Deferred income tax assets and liabilities	$	3,591	$	1,426	$	4,275	$	1,159

Reconciliation of Unrecognized Tax Benefits

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

	2013		2012		2011
Beginning of year balance	$	265	$	199	$	218
Increases to tax positions taken during the current year	30		46		23
Increases to tax positions taken during prior years	24		54		13
Decreases to tax positions taken during prior years	(51)		(14)		(42)
Decreases due to lapse of statute of limitations	(5)		(9)		(13)
Settlements					(1)
Foreign exchange	9		(11)		1
End of year balance	$	272	$	265	$	199