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FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended
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Oct. 31, 2015
FAIR VALUE MEASUREMENTS |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at October 31 in millions of dollars follow:
|  | 2015 |  | 2014 |
|  | Carrying |  | Fair |  | Carrying |  | Fair |
|  | Value |  | Value* |  | Value |  | Value* |
Financing receivables – net |  | $ | 24,809 |  | $ | 24,719 |  | $ | 27,422 |  | $ | 27,337 |
Financing receivables securitized – net |  | $ | 4,835 |  | $ | 4,820 |  | $ | 4,602 |  | $ | 4,573 |
Short-term securitization borrowings |  | $ | 4,590 |  | $ | 4,590 |  | $ | 4,559 |  | $ | 4,562 |
Long-term borrowings due within one year: |  |  |  |  |  |  |  |  |  |  |  |  |
Equipment operations |  | $ | 86 |  | $ | 78 |  | $ | 243 |  | $ | 233 |
Financial services |  |  | 5,167 |  |  | 5,167 |  |  | 4,730 |  |  | 4,743 |
Total |  | $ | 5,253 |  | $ | 5,245 |  | $ | 4,973 |  | $ | 4,976 |
Long-term borrowings: |  |  |  |  |  |  |  |  |  |  |  |  |
Equipment operations |  | $ | 4,461 |  | $ | 4,835 |  | $ | 4,643 |  | $ | 5,095 |
Financial services |  |  | 19,372 |  |  | 19,348 |  |  | 19,738 |  |  | 19,886 |
Total |  | $ | 23,833 |  | $ | 24,183 |  | $ | 24,381 |  | $ | 24,981 |
*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 October 31 at fair value on a recurring basis in millions of dollars follow:
|  | 2015* |  | 2014* |
Marketable securities |  |  |  |  |  |  |
Equity fund |  | $ | 43 |  | $ | 45 |
Fixed income fund |  |  |  |  |  | 10 |
U.S. government debt securities |  |  | 82 |  |  | 808 |
Municipal debt securities |  |  | 31 |  |  | 34 |
Corporate debt securities |  |  | 124 |  |  | 172 |
International debt securities |  |  | 47 |  |  |  |
Mortgage-backed securities** |  |  | 110 |  |  | 146 |
Total marketable securities |  |  | 437 |  |  | 1,215 |
Other assets |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |
Interest rate contracts |  |  | 353 |  |  | 319 |
Foreign exchange contracts |  |  | 50 |  |  | 18 |
Cross-currency interest rate contracts |  |  | 25 |  |  | 16 |
Total assets*** |  | $ | 865 |  | $ | 1,568 |
Accounts payable and accrued expenses |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |
Interest rate contracts |  | $ | 60 |  | $ | 81 |
Foreign exchange contracts |  |  | 18 |  |  | 29 |
Total liabilities |  | $ | 78 |  | $ | 110 |
* All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $37 million and $741 million at October 31, 2015 and 2014, respectively, and the equity fund of $43 million and $45 million at October 31, 2015 and 2014, respectively, and the fixed income fund of $10 million at October 31, 2014. In addition, $29 million of the international debt securities were Level 3 measurements at October 31, 2015. There were no transfers between Level 1 and Level 2 during 2015 and 2014. ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were 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.
Fair Value, Recurring, Level 3 Measurements | Fair value, recurring, Level 3 measurements from available for sale marketable securities at October 31 in millions of dollars follow:
|  | 2015 |  |
Beginning of period balance |  |  |  |  |
Purchases |  | $ | 30 |  |
Change in unrealized gain (loss) |  |  | (1) |  |
End of period balance |  | $ | 29 |  |
Fair Value, Nonrecurring, Level 3 Measurements | Fair value, nonrecurring, Level 3 measurements from impairments at October 31 in millions of dollars follow:
|  | Fair Value* |  | Losses* |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |  | 2013 |
Equipment on operating leases – net |  | $ | 479 |  |  |  |  | $ | 10 |  |  |  |  |  |  |
Property and equipment – net |  | $ | 33 |  | $ | 53 |  | $ | 10 |  | $ | 44 |  | $ | 48 |
Other intangible assets – net |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9 |
Other assets |  | $ | 112 |  | $ | 15 |  | $ | 15 |  | $ | 16 |  |  |  |
Assets held for sale – Water operations |  |  |  |  |  |  |  |  |  |  | $ | 36 |  |  |  |
*See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments.

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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=36462937&loc=d3e19296-110258 + Details
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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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19279-110258 + Details
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