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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

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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