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FAIR VALUE MEASUREMENTS (Tables)
 6 Months Ended
Apr. 30, 2015
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:

 

 

 

April 30, 2015

 

October 31, 2014

 

April 30, 2014

 

 

 

Carrying
Value

 

Fair
Value *

 

Carrying
Value

 

Fair
Value *

 

Carrying
Value

 

Fair
Value *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing receivables - net

 

 $

24,746

 

 $

24,632

 

 $

27,422

 

 $

27,337

 

 $

25,496

 

 $

25,383

 

Financing receivables securitized - net

 

4,741

 

4,716

 

4,602

 

4,573

 

4,345

 

4,308

 

Short-term securitization borrowings

 

4,703

 

4,707

 

4,559

 

4,562

 

4,330

 

4,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term borrowings due within one year:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equipment operations

 

 $

280

 

 $

264

 

 $

243

 

 $

233

 

 $

130

 

 $

128

 

Financial services

 

4,884

 

4,871

 

4,730

 

4,743

 

4,391

 

4,405

 

Total

 

 $

5,164

 

 $

5,135

 

 $

4,973

 

 $

4,976

 

 $

4,521

 

 $

4,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equipment operations

 

 $

4,489

 

 $

4,994

 

 $

4,643

 

 $

5,095

 

 $

4,817

 

 $

5,181

 

Financial services

 

19,134

 

19,265

 

19,738

 

19,886

 

18,350

 

18,548

 

Total

 

 $

23,623

 

 $

24,259

 

 $

24,381

 

 $

24,981

 

 $

23,167

 

 $

23,729

 

 

*            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:

 

 

 

April 30

 

October 31

 

April 30

 

 

 

2015*

 

2014*

 

2014*

 

Marketable securities

 

 

 

 

 

 

 

Equity fund

 

 $

47

 

 $

45

 

 $

30

 

Fixed income fund

 

 

 

10

 

10

 

U.S. government debt securities

 

75

 

808

 

1,213

 

Municipal debt securities

 

28

 

34

 

35

 

Corporate debt securities

 

128

 

172

 

155

 

Mortgage-backed securities **

 

115

 

146

 

129

 

Total marketable securities

 

393

 

1,215

 

1,572

 

Other assets

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

Interest rate contracts

 

340

 

319

 

296

 

Foreign exchange contracts

 

38

 

18

 

20

 

Cross-currency interest rate contracts

 

26

 

16

 

16

 

Total assets ***

 

 $

797

 

 $

1,568

 

 $

1,904

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

Interest rate contracts

 

 $

72

 

 $

81

 

 $

136

 

Foreign exchange contracts

 

81

 

29

 

33

 

Total liabilities

 

 $

153

 

 $

110

 

 $

169

 

 

*                               All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $47 million, $45 million and $30 million at April 30, 2015, October 31, 2014 and April 30, 2014, respectively, the fixed income fund of $10 million at October 31, 2014 and April 30, 2014 and U.S. government debt securities of $28 million, $741 million and $1,144 million at April 30, 2015, October 31, 2014 and April 30, 2014, respectively.  There were no transfers between Level 1 and Level 2 during the first six months of 2015 or 2014.

 

**                        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 April 30, 2015 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

 

$

9

 

$

10

 

Due after one through five years

 

73

 

76

 

Due after five through 10 years

 

101

 

105

 

Due after 10 years

 

37

 

40

 

Mortgage-backed securities

 

113

 

115

 

Debt securities

 

$

333

 

$

346

 

 
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

 

Six Months Ended

 

 

 

April 30

 

October 31

 

April 30

 

April 30

 

April 30

 

 

 

2015

 

2014

 

2014

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment – net

 

 

 

 $

53

 

 

 

 

 

 

 

 

 

 $

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale – Water operations **

 

 

 

 

 

 $

91

 

 

 

 $

36

 

 

 

 $

36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

 

 $

15

 

 

 

 

 

 

 

 

 

 

 

 

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

**     Does not include costs to sell (see Note 18).