INCOME TAXES (Tables)

12 Months Ended

Oct. 31, 2013

Income before income taxes domestic and foreign

The domestic and foreign components of income before taxes are:



	Years Ended October 31,
	2013		2012		2011
	(in millions)
U.S. operations	$	39	$	45	$	88
Non-U.S. operations	820		998		944
Total income before taxes	$	859	$	1,043	$	1,032

Provision for income taxes from operations

The provision (benefit) for income taxes is comprised of:



	Years Ended October 31,
	2013			2012			2011
	(in millions)
U.S. federal taxes:
Current	$	24		$	6		$	(1	)
Deferred	48			(144		)	—
Non-U.S. taxes:
Current	77			41			(6		)
Deferred	(24		)	(22		)	28
State taxes, net of federal benefit:
Current	3			1			(11		)
Deferred	7			8			10
Total provision	$	135		$	(110	)	$	20

Significant components of deferred tax assets and deferred tax liabilities

The significant components of deferred tax assets and deferred tax liabilities included on the consolidated balance sheet are:



	October 31,
	2013					2012
	Deferred Tax Assets			Deferred Tax Liabilities		Deferred Tax Assets			Deferred Tax Liabilities
	(in millions)
Inventory	$	32		$	—	$	24		$	—
Intangibles	—			214		—			239
Property, plant and equipment	18			—		11			—
Warranty reserves	25			—		21			—
Retiree medical benefits	—			—		5			—
Pension benefits	42			—		136			—
Employee benefits, other than retirement	57			—		60			—
Net operating loss, capital loss, and credit carryforwards	263			—		293			—
Unrealized gains/losses on investments	24			—		26			—
Unremitted earnings of foreign subsidiaries	—			114		—			88
Share-based compensation	54			—		57			—
Deferred revenue	27			—		27			—
Other	36			3		51			1
Subtotal	578			331		711			328
Tax valuation allowance	(85		)	—		(93		)	—
Total deferred tax assets or deferred tax liabilities	$	493		$	331	$	618		$	328

Current and Long Term Tax Assets and Liabilities [Table Text Block]

The breakdown between current and long-term income tax assets and liabilities, excluding deferred tax assets and liabilities, was as follows for the years 2013 and 2012:



	October 31,
	2013			2012
	(in millions)
Current income tax assets (included within other current assets)	$	42		$	65
Long-term income tax assets (included within other assets)	34			49
Current income tax liabilities (included within other accrued liabilities)	(48		)	(115		)
Long-term income tax liabilities (included within other long-term liabilities)	(341		)	(320		)
Total	$	(313	)	$	(321	)

Tax rate reconciliation, U.S. federal statutory rate to effective tax rate from operations



	Years Ended October 31,
	2013			2012			2011
	(in millions)
Profit before tax times statutory rate	$	301		$	365		$	361
State income taxes, net of federal benefit	7			8			(1		)
Non-U.S. income taxed at different rates	(162		)	(144		)	(153		)
Change in unrecognized non-U.S. tax benefits	—			(68		)	(97		)
Valuation allowances	(8		)	(280		)	(84		)
Other, net	(3		)	9			(6		)
Provision for income taxes	$	135		$	(110	)	$	20
Effective tax rate	16		%	(11		)%	2		%

Current and long-term deferred tax assets and deferred tax liabilities

The breakdown between current and long-term deferred tax assets and deferred tax liabilities was as follows for the years 2013 and 2012:



	October 31,
	2013			2012
	(in millions)
Current deferred tax assets (included within other current assets)	$	115		$	95
Long-term deferred tax assets (included within other assets)	264			400
Current deferred tax liabilities (included within other accrued liabilities)	(4		)	(2		)
Long-term deferred tax liabilities (included within other long-term liabilities)	(213		)	(203		)
Total	$	162		$	290

Income tax contingencies rollforward

tax benefits including all federal, state and foreign tax jurisdictions are as follows:



	2013			2012			2011
	(in millions)
Balance, beginning of year	$	464		$	469		$	656
Additions for acquisitions	—			—			—
Additions for tax positions related to the current year	53			56			41
Additions for tax positions from prior years	11			40			18
Reductions for tax positions from prior years	(6		)	(90		)	(170		)
Settlements with taxing authorities	(3		)	(2		)	(67		)
Statute of limitations expirations	(3		)	(9		)	(9		)
Balance, end of year	$	516		$	464		$	469

- 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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