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FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended
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Jul. 31, 2014
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, 2014 |  | October 31, 2013 |  | July 31, 2013 |
|  | Carrying Value |  | Fair Value * |  | Carrying Value |  | Fair Value * |  | Carrying Value |  | Fair Value * |
Financing receivables - net |  | $ | 27,080 |  | $ | 26,952 |  | $ | 25,633 |  | $ | 25,572 |  | $ | 24,183 |  | $ | 24,143 |
Financing receivables securitized - net |  | 4,264 |  | 4,222 |  | 4,153 |  | 4,124 |  | 3,891 |  | 3,868 |
Short-term securitization borrowings |  | 4,143 |  | 4,145 |  | 4,109 |  | 4,113 |  | 3,780 |  | 3,778 |
Long-term borrowings due within one year: |  |  |  |  |  |  |  |  |  |  |  |  |
Equipment operations |  | $ | 245 |  | $ | 238 |  | $ | 821 |  | $ | 837 |  | $ | 787 |  | $ | 814 |
Financial services |  | 4,915 |  | 4,927 |  | 4,408 |  | 4,441 |  | 4,320 |  | 4,370 |
Total |  | $ | 5,160 |  | $ | 5,165 |  | $ | 5,229 |  | $ | 5,278 |  | $ | 5,107 |  | $ | 5,184 |
Long-term borrowings: |  |  |  |  |  |  |  |  |  |  |  |  |
Equipment operations |  | $ | 4,678 |  | $ | 5,120 |  | $ | 4,871 |  | $ | 5,141 |  | $ | 4,892 |  | $ | 5,162 |
Financial services |  | 19,357 |  | 19,569 |  | 16,707 |  | 16,887 |  | 16,807 |  | 16,980 |
Total |  | $ | 24,035 |  | $ | 24,689 |  | $ | 21,578 |  | $ | 22,028 |  | $ | 21,699 |  | $ | 22,142 |
* 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 |
|  | 2014* |  | 2013* |  | 2013* |
Marketable securities |  |  |  |  |  |  |
Equity fund |  | $ | 32 |  | $ | 20 |  | $ | 13 |
Fixed income fund |  | 10 |  |  |  |  |
U.S. government debt securities |  | 1,108 |  | 1,312 |  | 1,408 |
Municipal debt securities |  | 34 |  | 36 |  | 35 |
Corporate debt securities |  | 169 |  | 138 |  | 130 |
Mortgage-backed securities ** |  | 136 |  | 119 |  | 120 |
Total marketable securities |  | 1,489 |  | 1,625 |  | 1,706 |
Other assets |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |
Interest rate contracts |  | 321 |  | 347 |  | 365 |
Foreign exchange contracts |  | 14 |  | 32 |  | 36 |
Cross-currency interest rate contracts |  | 13 |  | 15 |  | 12 |
Total assets *** |  | $ | 1,837 |  | $ | 2,019 |  | $ | 2,119 |
Accounts payable and accrued expenses |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |
Interest rate contracts |  | $ | 101 |  | $ | 120 |  | $ | 155 |
Foreign exchange contracts |  | 32 |  | 42 |  | 36 |
Cross-currency interest rate contracts |  | 1 |  | 17 |  | 40 |
Total liabilities |  | $ | 134 |  | $ | 179 |  | $ | 231 |
* All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $1,041 million, $1,247 million and $1,347 million at July 31, 2014, October 31, 2013 and July 31, 2013, respectively, the equity fund of $32 million, $20 million and $13 million at July 31, 2014, October 31, 2013 and July 31, 2013, respectively, and the fixed income fund of $10 million at July 31, 2014. There were no transfers between Level 1 and Level 2 during the first nine months of 2014 or 2013. ** 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, 2014 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 |  | $ | 1,021 |  | $ | 1,021 |
Due after one through five years |  | 86 |  | 90 |
Due after five through 10 years |  | 141 |  | 145 |
Due after 10 years |  | 53 |  | 55 |
Mortgage-backed securities |  | 137 |  | 136 |
Debt securities |  | $ | 1,438 |  | $ | 1,447 |
Fair Value, Nonrecurring, Level 3 Measurements | Fair value, nonrecurring, Level 3 measurements from impairments in millions of dollars follow:
|  | Fair Value * |  | Losses |
|  |  |  |  |  |  |  | Three Months Ended |  | Nine Months Ended |
|  | July 31 |  | October 31 |  | July 31 |  | July 31 |  | July 31 |
|  | 2014 |  | 2013 |  | 2013 |  | 2014 |  | 2013 |  | 2014 |  | 2013 |
Property and equipment – net |  |  |  | $ | 36 |  | $ | 39 |  |  |  |  |  | $ | 26 |  | $ | 43 |
Other intangible assets – net |  |  |  |  |  | $ | 2 |  |  |  |  |  |  |  | $ | 7 |
Assets held for sale – Water operations ** |  |  |  |  |  |  |  |  |  |  |  | $ | 36 |  |  |
* See financing receivables with specific allowances in Note 10. Losses were not significant. ** See Note 19.

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- 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). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19296-110258 + Details
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