Income Taxes (Tables)

12 Months Ended

Oct. 31, 2013

The provision for income taxes consists of the following (Dollars in millions):


For the years ended October 31,	2013			2012		2011
Current
Federal	$	54.2		$	19.7	$	25.6
State and local		8.8			5.4		4.4
Non-U.S.		32.6			13.5		27.5

		95.6			38.6		57.5
Deferred
Federal		(6.3	)		10.3		11.0
State and local		(0.2	)		2.7		5.0
Non-U.S.		8.5			7.2		(6.2	)

		2.0			20.2		9.8

	$	97.6		$	58.8	$	67.3

Reconciliation of Effective Income Tax Rate

The following is a reconciliation of the provision for income taxes based on the federal statutory rate to the Company’s effective income tax rate:


For the years ended October 31,	2013			2012			2011
United States federal tax rate		35.00	%		35.00	%		35.00	%
Non-U.S. tax rates		2.20	%		-1.10	%		-10.00	%
State and local taxes, net of federal tax benefit		2.50	%		2.30	%		1.90	%
United States tax credits		-2.10	%		-0.70	%		-0.80	%
Unrecognized tax benefits		-0.20	%		-5.50	%		12.60	%
Change in judgment regarding valuation allowance		0.50	%		1.50	%		-14.50	%
Withholding tax		2.90	%		2.60	%		1.90	%
Foreign partnerships		-3.60	%		-4.30	%		-1.00	%
Foreign Income Inclusion		1.70	%		1.60	%		0.10	%
Other items		1.10	%		0.30	%		2.80	%

		40.00	%		31.70	%		28.00	%

Significant Components of Company's Deferred Tax Assets and Liabilities

The components of the Company’s deferred tax assets and liabilities as of October 31 for the years indicated were as follows (Dollars in millions):


	2013			2012
Deferred Tax Assets
Net operating loss carryforwards	$	102.4		$	90.7
Minimum pension liabilities		41.5			61.6
Insurance operations		6.4			9.1
Incentives		5.5			4.1
Environmental reserves		7.3			7.4
Inventories		6.1			2.7
State income tax		9.6			9.2
Postretirement		5.6			7.4
Other		5.6			6.3
Derivatives instruments		0.4			0.5
Interest		5.2			5.3
Allowance for doubtful accounts		3.0			4.5
Restructuring reserves		0.4			1.1
Deferred compensation		2.8			2.5
Foreign tax credits		2.5			1.8
Vacation accruals		1.5			1.4
Stock options		1.0			1.4
Severance		0.2			0.2
Workers compensation accruals		3.9			2.5

Total Deferred Tax Assets		210.9			219.7
Valuation allowance		(78.6	)		(57.0	)

Net Deferred Tax Assets		132.3			162.7

Deferred Tax Liabilities
Properties, plants and equipment		114.8			121.9
Goodwill and other intangible assets		97.5			93.4
Foreign Income Inclusion		0.8			—
Foreign exchange		7.6			7.8
Timberland transactions		102.1			95.7
Pension		8.9			16.5

Total Deferred Tax Liabilities		331.7			335.3

Net Deferred Tax Liability	$	(199.4	)	$	(172.6	)

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ended amount of unrecognized tax benefits is as follows:


	2013			2012			2011
Balance at November 1	$	43.6		$	73.9		$	35.4
Increases in tax positions for prior years		1.3			7.3			44.0
Decreases in tax positions for prior years		(2.5	)		(2.1	)		(1.6	)
Increases in tax positions for current years		1.3			3.9			—
Settlements with taxing authorities		(30.3	)		(32.5	)		(4.5	)
Lapse in statute of limitations		—			(0.3	)		—
Currency translation		2.6			(6.6	)		0.6

Balance at October 31	$	16.0		$	43.6		$	73.9

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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