Fair Value Measurements (Tables)

3 Months Ended

Jan. 31, 2012

Financial instruments measured at fair value, recurring basis

The following table presents the financial instruments measured at fair value on a recurring basis:



	January 31, 2012
	Level 1		Level 2		Level 3		Total
(in millions)
Assets
Marketable securities
U.S. Treasury bills	$	199	$	—	$	—	$	199
Other U.S. and non-U.S. government bonds	220		—		—		220
Other	20		—		—		20
Derivative financial instruments
Foreign currency contracts	—		—		—		—
Commodity contracts	—		1		—		1
Total assets	$	439	$	1	$	—	$	440
Liabilities
Derivative financial instruments
Foreign currency contracts	$	—	$	1	$	—	$	1
Commodity contracts	—		4		—		4
Guarantees	—		—		7		7
Total liabilities	$	—	$	5	$	7	$	12



	As of October 31, 2011
	Level 1		Level 2		Level 3		Total
(in millions)
Assets
Marketable securities
U.S. Treasury bills	$	283	$	—	$	—	$	283
Other U.S and non-U.S. government bonds	415		—		—		415
Other	20		—		—		20
Derivative financial instruments
Commodity contracts	—		—		1		1
Foreign currency contracts	—		3		—		3
Total assets	$	718	$	3	$	1	$	722
Liabilities
Derivative financial instruments
Commodity contracts	$	—	$	3	$	3	$	6
Cross currency swaps	—		4		—		4
Guarantees	—		—		6		6
Total liabilities	$	—	$	7	$	9	$	16

Financial instruments classified within Level 3

The table below presents the changes for those financial instruments classified within Level 3 of the valuation hierarchy:



	Three Months Ended January 31,
	2012							2011
	Guarantees		Retained interests		Commodity contracts			Guarantees		Retained interests			Commodity contracts
(in millions)
Balance at November 1	$	6	$	—	$	(2	)	$	—	$	53		$	2
Total gains (losses) (realized/unrealized) included in earnings^(A)	—		—		(1		)	—		1			4
Transfers into Level 3	—		—		—			—		—			—
Transfers out of Level 3	—		—		2			—		—			—
Purchases	—		—		—			—		—			—
Sales	—		—		—			—		—			—
Issuances	1		—		—			—		—			—
Settlements	—		—		1			—		(54		)	(1		)
Balance at January 31	$	7	$	—	$	—		$	—	$	—		$	5
Change in unrealized gains on assets and liabilities still held	$	—	$	—	$	—		$	—	$	—		$	3

_____________


(A)	For commodity contracts, gains (losses) are included in Costs of products sold. For retained interests, gains recognized are included in Finance revenues.

Financial instruments measured at fair value, nonrecurring basis

The following table presents the financial instruments measured at fair value on a nonrecurring basis:



	Level 2
	January 31, 2012		October 31, 2011
(in millions)
Finance receivables^(A)	$	7	$	5

_____________

(A)

Certain impaired finance receivables are measured at fair value on a nonrecurring basis. An impairment charge is recorded for the amount by which the carrying value of the receivables exceeds the fair value of the underlying collateral, net of remarketing costs. As of January 31, 2012, impaired receivables with a carrying amount of $17 million had specific loss reserves of $10 million and a fair value of $7 million. As of October 31, 2011, impaired receivables with a carrying amount of $15 million had specific loss reserves of $10 million and a fair value of $5 million. Fair values of the underlying collateral are determined by reference to dealer vehicle value publications adjusted for certain market factors.

Carrying values and estimated fair values of financial instruments

The carrying values and estimated fair values of financial instruments are summarized in the table below:



	January 31, 2012				October 31, 2011
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
(in millions)
Assets
Retail notes	$	856	$	805	$	958	$	902
Notes receivable	43		42		47		47
Liabilities
Debt:
Manufacturing operations
8.25% Senior Notes, due 2021	871		995		967		1,131
3.0% Senior Subordinated Convertible Notes, due 2014^(A)	502		665		497		633
Debt of majority-owned dealerships	92		88		94		88
Financing arrangements	137		125		114		112
Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040	225		246		225		234
Promissory Note	38		38		40		39
Asset-Based Credit Facility	100		100		—		—
Other	42		39		39		26
Financial services operations
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2018	1,371		1,395		1,664		1,695
Bank revolvers, at fixed and variable rates, due dates from 2013 through 2017	997		985		1,072		1,091
Commercial paper, at variable rates, due serially through 2012	63		63		70		70
Borrowings secured by operating and finance leases, at various rates, due serially through 2017	72		71		70		70

___________________


(A)	The carrying value represents the financial statement amount of the debt after allocation of the conversion feature to equity, while the fair value is based on quoted market prices for the convertible note which includes the equity feature.

- Definition

Tabular disclosure of assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Publisher FASB

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Name Statement of Financial Accounting Standard (FAS)

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