Fair Value Measurements (Tables)

3 Months Ended

Jan. 31, 2013

Financial instruments measured at fair value, recurring basis

The following tables present the financial instruments measured at fair value on a recurring basis:



	January 31, 2013
(in millions)	Level 1		Level 2		Level 3		Total
Assets
Marketable securities:
U.S. Treasury bills	$	719	$	—	$	—	$	719
Other	52		—		—		52
Derivative financial instruments:
Foreign currency contracts	—		2		—		2
Total assets	$	771	$	2	$	—	$	773
Liabilities
Derivative financial instruments:
Commodity contracts	$	—	$	3	$	—	$	3
Foreign currency contracts	—		1		—		1
Guarantees	—		—		7		7
Total liabilities	$	—	$	4	$	7	$	11



	October 31, 2012
(in millions)	Level 1		Level 2		Level 3		Total
Assets
Marketable securities:
U.S. Treasury bills	$	420	$	—	$	—	$	420
Other	46		—		—		46
Total assets	$	466	$	—	$	—	$	466
Liabilities
Derivative financial instruments:
Commodity contracts	$	—	$	4	$	—	$	4
Guarantees	—		—		7		7
Total liabilities	$	—	$	4	$	7	$	11

Financial instruments classified within Level 3

The following tables present the changes for those financial instruments classified within Level 3 of the valuation hierarchy:



	Three Months Ended January 31,
	2013					2012
(in millions)	Guarantees			Commodity contracts		Guarantees			Commodity contracts
Balance at November 1	$	(7	)	$	—	$	(6	)	$	(2	)
Total losses (realized/unrealized) included in earnings^(A)	—			—		—			(1		)
Transfers out of Level 3	—			—		—			2
Issuances	—			—		(1		)	—
Settlements	—			—		—			1
Balance at January 31	$	(7	)	$	—	$	(7	)	$	—
Total losses (realized/unrealized) included in earnings	$	—		$	—	$	—		$	—

_____________


(A)	For commodity contracts, losses are included in Cost of products sold.

Financial instruments measured at fair value, nonrecurring basis

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



	Level 2
(in millions)	January 31, 2013		October 31, 2012
Finance receivables^(A)	$	5	$	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, 2013, impaired receivables with a carrying amount of $13 million had specific loss reserves of $8 million and a fair value of $5 million. As of October 31, 2012, impaired receivables with a carrying amount of $14 million had specific loss reserves of $9 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 tables below:



	January 31, 2013
	Estimated Fair Value								Carrying Value
(in millions)	Level 1		Level 2		Level 3		Total
Assets
Retail notes	$	—	$	—	$	526	$	526	$	534
Notes receivable	—		—		21		21		22
Liabilities
Debt:
Manufacturing operations
Senior Secured Term Loan Credit Facility, due 2014	—		—		1,074		1,074		990
8.25% Senior Notes, due 2021	897		—		—		897		873
3.0% Senior Subordinated Convertible Notes, due 2014^(A)	560		—		—		560		526
Debt of majority-owned dealerships	—		—		51		51		51
Financing arrangements	—		—		57		57		89
Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040	—		249		—		249		225
Promissory Note	—		—		27		27		28
Other	—		—		67		67		68
Financial Services operations
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2019	—		—		816		816		811
Bank revolvers, at fixed and variable rates, due dates from 2013 through 2019	—		—		705		705		726
Borrowings secured by operating and finance leases, at various rates, due serially through 2017	—		—		71		71		71



	October 31, 2012
	Estimated Fair Value								Carrying Value
(in millions)	Level 1		Level 2		Level 3		Total
Assets
Retail notes	$	—	$	—	$	613	$	613	$	618
Notes receivable	—		—		27		27		27
Liabilities
Debt:
Manufacturing operations
Senior Secured Term Loan Credit Facility, due 2014	—		—		1,047		1,047		991
8.25% Senior Notes, due 2021	899		—		—		899		872
3.0% Senior Subordinated Convertible Notes, due 2014^(A)	514		—		—		514		520
Debt of majority-owned dealerships	—		—		60		60		60
Financing arrangements	—		—		102		102		136
Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040	—		234		—		234		225
Promissory Note	—		—		29		29		30
Other	—		—		67		67		67
Financial Services operations
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2019	—		—		994		994		994
Bank revolvers, at fixed and variable rates, due dates from 2013 through 2019	—		—		734		734		763
Commercial paper, at variable rates, matured in 2013	31		—		—		31		31
Borrowings secured by operating and finance leases, at various rates, due serially through 2017	—		—		79		79		78

_________________________


(A)	The carrying value represents the consolidated financial statement amount of the debt which excludes the 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 shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of 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.

Reference 10: http://www.xbrl.org/2003/role/presentationRef

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