Note 6. Income Taxes

3 Months Ended

Jan. 31, 2012

Notes

Note 6. Income Taxes

6. Income Taxes

The benefit for income taxes for the three months ended January 31, 2012 and 2011 is estimated using the estimated annual effective tax rate for the fiscal years ending October 31, 2012 and 2011.  The effective income tax rate for the first three months of Fiscal 2012 and Fiscal 2011 was estimated at 34%.

The Companies’ practice is to recognize interest and/or penalties related to income tax matters as income tax expense in its combined financial statements. As of and for the three months ended January 31, 2012, no interest and penalties have been accrued in the combined balance sheet and no expense is reflected in the combined statement of operations.    At January 31, 2012, federal and state tax returns for years ending October 31, 2008 and later are subject to future examination by the respective tax authorities.