Summary of Significant Accounting Policies (Tables)

12 Months Ended

Oct. 31, 2013

The ranges of estimated useful lives are as follows:



	Years
Buildings	20 - 50
Leasehold improvements	3 - 20
Machinery and equipment	3 - 12
Furniture, fixtures, and equipment	3 - 15
Equipment leased to others	1 - 10

Schedule of Intangible Asset Amortization Periods

The ranges for the amortization periods are generally as follows:



	Years
Customer base and relationships	3 - 15
Trademarks	20
Other	3 - 18

Schedule of Accrued Product Warranty and Deferred Warranty Revenue

The following table presents accrued product warranty and deferred warranty revenue activity:



(in millions)	2013			2012			2011
Balance at November 1	$	1,118		$	598		$	506
Costs accrued and revenues deferred^(A)	469			575			407
Acquisitions	—			—			5
Divestitures	(3		)	—			—
Currency translation adjustment	(2		)	(4		)	—
Adjustments to pre-existing warranties^(B)(C)	404			404			79
Payments and revenues recognized	(637		)	(455		)	(399		)
Balance at October 31	1,349			1,118			598
Less: Current portion	601			551			263
Noncurrent accrued product warranty and deferred warranty revenue	$	748		$	567		$	335

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(A)

The warranty estimation for engines sold in 2012 includes a factor for improvements to the design and manufacturing process that was based on historical experience. In the fourth quarter of 2012 we identified a deviation from historic experience and we recorded an adjustment for a change in estimate to increase the costs accrued for warranty of $28 million, or $0.41 per diluted share for products sold in the first three quarters of 2012.

(B)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.

In the first quarter of 2013, we recorded adjustments for changes in estimates of $40 million, or $0.50 per diluted share. In the second quarter of 2013, we recorded adjustments for changes in estimates of $164 million, or $2.04 per diluted share. In the third quarter of 2013, we recorded adjustments for changes in estimates of $48 million, or $0.60 per diluted share. In the fourth quarter of 2013, we recorded adjustments for changes in estimates of $152 million, or $1.89 per diluted share. The impact of income taxes on the 2013 adjustments are not material due to our deferred tax valuation allowances on our U.S. deferred tax assets

In the first quarter of 2012, we recorded adjustments for changes in estimates of $123 million, or $1.76 per diluted share. In the second quarter of 2012, we recorded adjustments for changes in estimates of $104 million, or $1.51 per diluted share. In the fourth quarter of 2012, we recorded adjustments for changes in estimates of $149 million, or $2.16 per diluted share.

In the second quarter of 2011, we recorded adjustments for changes in estimates of $27 million, or $0.34 per diluted share. In the third quarter of 2011, we recorded adjustments for changes in estimates of $30 million, or $0.39 per diluted share.

(C)

In the first quarter of 2013, we recognized $13 million of charges for adjustments to pre-existing warranties for a specific warranty issue related to component parts from a supplier. Also during the first quarter of 2013, we reached agreement for reimbursement from this supplier for this amount and other costs previously accrued. As a result of this agreement, we recognized a recovery of $27 million within Costs of products sold and recorded a receivable within Other current assets. In the second quarter of 2013, we recognized a warranty recovery of $13 million within Loss from discontinued operations, net of tax and recorded a receivable within Other current assets.

In the third quarter of 2012, we recognized $10 million of adjustments to pre-existing warranties for a specific warranty issue related to component parts from a supplier. Also during the quarter, we reached agreement for reimbursement from such supplier and recognized a recovery for that amount and recorded a receivable within Other current assets.