INCOME TAXES (Tables)
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12 Months Ended |
Oct. 31, 2017 |
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| Income Tax Disclosure [Abstract] |
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| Income before income taxes domestic and foreign |
The domestic and foreign components of income from continuing operations before taxes are:
| | | | | | | | | | | | | | Years Ended October 31, | | 2017 | | 2016 | | 2015 | | (in millions) | U.S. operations | $ | 116 |
| | $ | 27 |
| | $ | 77 |
| Non-U.S. operations | 687 |
| | 517 |
| | 403 |
| Total income from continuing operations before taxes | $ | 803 |
| | $ | 544 |
| | $ | 480 |
|
|
| Provision for income taxes from operations |
The provision for income taxes is comprised of:
| | | | | | | | | | | | | | Years Ended October 31, | | 2017 | | 2016 | | 2015 | | (in millions) | U.S. federal taxes: | | | | | | Current | $ | 15 |
| | $ | (1 | ) | | $ | (91 | ) | Deferred | 110 |
| | 19 |
| | 97 |
| Non-U.S. taxes: | | | | | | Current | 1 |
| | 77 |
| | 62 |
| Deferred | (7 | ) | | (14 | ) | | (27 | ) | State taxes, net of federal benefit: | | | | | | Current | 1 |
| | 3 |
| | 1 |
| Deferred | (1 | ) | | (2 | ) | | — |
| Total provision | $ | 119 |
| | $ | 82 |
| | $ | 42 |
|
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| 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, | | 2017 | | 2016 | | Deferred Tax Assets | | Deferred Tax Liabilities | | Deferred Tax Assets | | Deferred Tax Liabilities | | (in millions) | Inventory | $ | 16 |
| | $ | — |
| | $ | 13 |
| | $ | — |
| Intangibles | — |
| | 93 |
| | — |
| | 92 |
| Property, plant and equipment | 12 |
| | — |
| | 16 |
| | — |
| Warranty reserves | 12 |
| | — |
| | 14 |
| | — |
| Pension benefits and retiree medical benefits | 70 |
| | — |
| | 136 |
| | — |
| Employee benefits, other than retirement | 28 |
| | — |
| | 28 |
| | — |
| Net operating loss, capital loss, and credit carryforwards | 328 |
| | — |
| | 293 |
| | — |
| Unremitted earnings of foreign subsidiaries | — |
| | 163 |
| | — |
| | 53 |
| Share-based compensation | 45 |
| | — |
| | 41 |
| | — |
| Deferred revenue | 45 |
| | — |
| | 42 |
| | — |
| Other | 1 |
| | — |
| | 12 |
| | — |
| Subtotal | 557 |
| | 256 |
| | 595 |
| | 145 |
| Tax valuation allowance | (138 | ) | | — |
| | (129 | ) | | — |
| Total deferred tax assets or deferred tax liabilities | $ | 419 |
| | $ | 256 |
| | $ | 466 |
| | $ | 145 |
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| Current and long-term deferred tax assets and deferred tax liabilities |
The breakdown between long-term deferred tax assets and deferred tax liabilities was as follows for the years 2017 and 2016:
| | | | | | | | | | October 31, | | 2017 | | 2016 | | (in millions) | Long-term deferred tax assets (included within other assets) | $ | 240 |
| | $ | 386 |
| Long-term deferred tax liabilities (included within other long-term liabilities) | (77 | ) | | (65 | ) | Total | $ | 163 |
| | $ | 321 |
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|
| Tax rate reconciliation, U.S. federal statutory rate to effective tax rate from operations |
The differences between the U.S. federal statutory income tax rate and our effective tax rate are:
| | | | | | | | | | | | | | Years Ended October 31, | | 2017 | | 2016 | | 2015 | | (in millions) | Profit before tax times statutory rate | $ | 281 |
| | $ | 190 |
| | $ | 167 |
| State income taxes, net of federal benefit | 2 |
| | 2 |
| | (8 | ) | Non-U.S. income taxed at different rates | (43 | ) | | (68 | ) | | (72 | ) | Change in unrecognized tax benefits | (110 | ) | | (27 | ) | | (116 | ) | Repatriation of foreign earnings | — |
| | — |
| | 68 |
| Valuation allowances | 1 |
| | 18 |
| | (2 | ) | Adjustments to earnings of foreign subsidiaries | — |
| | (11 | ) | | — |
| Other, net | (12 | ) | | (22 | ) | | 5 |
| Provision for income taxes | $ | 119 |
| | $ | 82 |
| | $ | 42 |
| Effective tax rate | 14.8 | % | | 15.1 | % | | 8.7 | % |
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| 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 2017 and 2016: | | | | | | | | | | October 31, | | 2017 | | 2016 | | (in millions) | Current income tax assets (included within other current assets) | $ | 77 |
| | $ | 83 |
| Long-term income tax assets (included within other assets) | 18 |
| | 19 |
| Current income tax liabilities (included within other accrued liabilities) | (55 | ) | | (49 | ) | Long-term income tax liabilities (included within other long-term liabilities) | (131 | ) | | (190 | ) | Total | $ | (91 | ) | | $ | (137 | ) |
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| Income tax contingencies rollforward |
The aggregate changes in the balances of our unrecognized tax benefits including all federal, state and foreign tax jurisdictions are as follows:
| | | | | | | | | | | | | | 2017 | | 2016 | | 2015 | | (in millions) | Balance, beginning of year | $ | 293 |
| | $ | 289 |
| | $ | 417 |
| Additions for tax positions related to the current year | 32 |
| | 31 |
| | 33 |
| Additions for tax positions from prior years | 1 |
| | 1 |
| | 3 |
| Reductions for tax positions from prior years | (3 | ) | | (27 | ) | | (156 | ) | Settlements with taxing authorities | (52 | ) | | — |
| | (4 | ) | Statute of limitations expirations | (47 | ) | | (1 | ) | | (4 | ) | Balance, end of year | $ | 224 |
| | $ | 293 |
| | $ | 289 |
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