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INCOME TAXES (Notes) | 9 Months Ended
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Jul. 31, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | 4. INCOME TAXES The company's income tax expense was $18 million and $70 million for the three and nine months ended July 31, 2017 with an effective tax rate of 9.3 percent and 12.1 percent, respectively. The income tax expense was $10 million and $57 million for the three and nine months ended July 31, 2016 with an effective tax rate of 7.5 percent and 14.5 percent, respectively. The income tax provision for the three and nine months ended July 31, 2017 included net discrete tax benefits of $60 million and $63 million, respectively. The significant component of the net discrete tax benefit for the nine months ended July 31, 2017 included a $51 million tax benefit due to the settlement of an audit in Germany for the fiscal years 2005 to 2008. The U.S. statute of limitations for audit of tax returns for the fiscal years 2012 and 2013 expired in July 2017. The statute expiration resulted in the recognition of previously unrecognized tax benefits of $40 million. This discrete tax benefit was offset by a deferred tax liability required for the tax expected upon repatriation of related unremitted foreign earnings that were not asserted as indefinitely invested outside the U.S. During the current quarter, the company assessed its overall cash needs and funding sources for fiscal year 2017, which included evaluating its intent and ability regarding the indefinite reinvestment of foreign earnings from certain foreign subsidiaries and the use of cash tax attributes in anticipation of U.S. tax reform. Accordingly, the company determined that a portion of current year foreign earnings from its low tax jurisdictions would be repatriated in the near term. As such, a deferred tax liability for the expected repatriation of foreign earnings was accrued in the current quarter, which increased the annual estimated effective tax rate and the year to date tax expense of the company. The income tax provision for the three and nine months ended July 31, 2016 included net discrete tax benefits of $6 million and $9 million, respectively. The significant component of the net discrete tax benefit for the nine months ended July 31, 2016 included an out of period correcting tax benefit of $11 million associated with a true-up of deferred tax liability for unremitted foreign earnings that should have been recorded in the third quarter of fiscal year 2015. The out-of-period correction was determined to be immaterial to the previously issued financial statements. In the U.S., tax years remain open back to the year 2014 for federal income tax purposes and the year 2000 for significant states. Other than as mentioned above, there were no substantial changes from our 2016 Annual Report on Form 10-K to the status of these open tax years in the first nine months of fiscal year 2017. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year 2001. During the first quarter of fiscal year 2017, the company settled its ongoing tax audit in Italy for the years 2011 to 2013 resulting in a net tax expense of $7 million. The settlement resulted in the recognition of previously unrecognized tax benefits of approximately $14 million. During the three months ended July 31, 2017, the company settled its ongoing tax audit in Germany for the years 2005 to 2008, which resulted in the recognition of previously unrecognized tax benefits of approximately $51 million. With these jurisdictions and the U.S., it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitation or a tax audit settlement which could partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, management is unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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