Income Taxes (Tables)

12 Months Ended

Oct. 31, 2011

Income Tax Disclosure [Abstract]

Domestic and foreign components of Income before income tax and extraordinary gain

The domestic and foreign components of Income before income tax benefit (expense) and extraordinary gain consist of the following for the years ended October 31:

	2011		2010		2009
(in millions)
Domestic	$	247	$	166	$	441
Foreign	73		124		(82		)
Income before income tax benefit (expense) and extraordinary gain	$	320	$	290	$	359

Components of Income tax expense

The components of Income tax benefit (expense) consist of the following for the years ended October 31:

	2011			2010			2009
(in millions)
Current:
Federal	$	(3	)	$	30		$	(3	)
State and local	1			(4		)	(6		)
Foreign	(47		)	(33		)	(14		)
Total current expense	(49		)	(7		)	(23		)
Deferred:
Federal	1,423			—			—
State and local	106			—			—
Foreign	(22		)	(16		)	(14		)
Total deferred benefit (expense)	1,507			(16		)	(14		)
Total income tax benefit (expense)	$	1,458		$	(23	)	$	(37	)

Reconciliation of statutory federal income tax expense to recorded income tax expense

A reconciliation of statutory federal income tax expense to recorded income tax benefit (expense) is as follows for the years ended October 31:

	2011			2010			2009
(in millions)
Statutory federal income tax expense	$	(112	)	$	(101	)	$	(126	)
State income taxes, net of federal benefit	(6		)	(3		)	(4		)
Alternative minimum taxes	—			29			(10		)
Credits and incentives	27			2			8
Adjustments to valuation allowances	1,499			56			105
Medicare subsidies	—			6			11
Foreign operations	(19		)	(11		)	(13		)
Adjustments to uncertain tax positions	42			5			(1		)
Subpart F income	(1		)	(17		)	(1		)
Non-controlling interest adjustment	19			16			9
Other	9			(5		)	(15		)
Recorded income tax benefit (expense)	$	1,458		$	(23	)	$	(37	)

Components of the deferred tax asset (liability)

The components of the deferred tax asset (liability) at October 31 are as follows:

	2011			2010
(in millions)
Deferred tax assets attributable to:
Employee benefits liabilities	$	1,369		$	840
Net operating loss (“NOL”) carry forwards	273			306
Product liability and warranty accruals	262			232
Research and development	74			98
Tax credit carry forwards	208			115
Other	294			335
Gross deferred tax assets	2,480			1,926
Less: Valuation allowances	(344		)	(1,777		)
Net deferred tax assets	$	2,136		$	149
Deferred tax liabilities attributable to:
Goodwill and intangibles assets	$	(107	)	$	(104	)
Other	(39		)	(59		)
Total deferred tax liabilities	$	(146	)	$	(163	)

Summary of changes in the liability for uncertain tax positions

Changes in the liability for uncertain tax positions during the year ended October 31, 2011 are summarized as follows:

(in millions)
Liability for uncertain tax positions at October 31, 2010	$	91
Increase as a result of positions taken in prior periods	79
Decrease as a result of positions taken in prior periods	(150		)
Increase as a result of positions taken in the current period	1
Settlements	(2		)
Liability for uncertain tax positions at October 31, 2011	$	19