FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jul. 31, 2013

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	July 31, 2013				October 31, 2012				July 31, 2012
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables - net	$	24,183	$	24,143	$	22,159	$	22,244	$	20,685	$	20,707
Financing receivables securitized - net	3,891		3,868		3,618		3,615		3,164		3,165
Short-term securitization borrowings	3,780		3,778		3,575		3,584		3,028		3,038
Long-term borrowings due within one year:
Equipment operations	$	787	$	814	$	195	$	194	$	322	$	317
Financial services	4,320		4,370		4,790		4,871		4,491		4,552
Total	$	5,107	$	5,184	$	4,985	$	5,065	$	4,813	$	4,869
Long-term borrowings:
Equipment operations	$	4,892	$	5,162	$	5,445	$	6,237	$	5,357	$	6,288
Financial services	16,807		16,980		17,008		17,438		15,800		16,110
Total	$	21,699	$	22,142	$	22,453	$	23,675	$	21,157	$	22,398

* Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow:

	July 31		October 31		July 31
	2013*		2012*		2012*
Marketable securities
Equity fund	$	13
U.S. government debt securities	1,408		$	1,200	$	1,288
Municipal debt securities	35		38		37
Corporate debt securities	130		110		105
Mortgage-backed securities **	120		122		116
Total marketable securities	1,706		1,470		1,546
Other assets
Derivatives:
Interest rate contracts	365		609		653
Foreign exchange contracts	36		17		10
Cross-currency interest rate contracts	12		11		23
Total assets ***	$	2,119	$	2,107	$	2,232
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	155	$	72	$	70
Foreign exchange contracts	36		18		52
Cross-currency interest rate contracts	40		59		87
Total liabilities	$	231	$	149	$	209

* All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $1,347 million, $1,139 million and $1,241 million at July 31, 2013, October 31, 2012 and July 31, 2012, respectively, and the equity fund of $13 million at July 31, 2013.  There were no transfers between Level 1 and Level 2 during the first nine months of 2013 or 2012.

** Primarily issued by U.S. government sponsored enterprises.

*** Excluded from this table are the Company’s cash equivalents, which were carried at cost that approximates fair value.  The cash equivalents consist primarily of money market funds that were Level 1 measurements.

Contractual Maturities of Debt Securities

The contractual maturities of debt securities at July 31, 2013 in millions of dollars are shown below.  Actual maturities may differ from those scheduled as a result of prepayments by the issuers.  Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized Cost		Fair Value
Due in one year or less	$	811	$	811
Due after one through five years	577		582
Due after five through 10 years	114		114
Due after 10 years	65		66
Mortgage-backed securities	121		120
Debt securities	$	1,688	$	1,693

Fair value, nonrecurring, Level 3 measurements

Fair value, nonrecurring, Level 3 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Nine Months Ended
	July 31		October 31	July 31	July 31
	2013		2012	2012	2013		2012
Property and equipment - net	$	39			$	43
Other intangible assets - net	$	2			$	7

* See financing receivables with specific allowances in Note 10.  Losses were not significant.