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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 29, 2017

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:

		January 29, 2017						October 30, 2016						January 31, 2016
		Carrying Value			Fair Value *			Carrying Value			Fair Value *			Carrying Value			Fair Value *
Financing receivables – net		$	23,031		$	22,842		$	23,702		$	23,564		$	23,630		$	23,519
Financing receivables securitized – net			4,250			4,218			5,127			5,114			4,003			3,986
Short-term securitization borrowings			4,220			4,220			4,998			5,005			3,875			3,882
Long-term borrowings due within one year:
Equipment operations		$	122		$	115		$	85		$	80		$	96		$	89
Financial services			6,038			6,037			5,258			5,259			4,976			4,981
Total		$	6,160		$	6,152		$	5,343		$	5,339		$	5,072		$	5,070
Long-term borrowings:
Equipment operations		$	4,534		$	5,004		$	4,565		$	5,184		$	4,496		$	4,889
Financial services			18,383			18,513			19,138			19,273			19,978			19,979
Total		$	22,917		$	23,517		$	23,703		$	24,457		$	24,474		$	24,868

* 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:

		January 29			October 30			January 31
		2017*			2016*			2016*
Marketable securities
Equity fund		$	45		$	45		$	44
Fixed income fund			14			15
U.S. government debt securities			82			88			87
Municipal debt securities			38			43			33
Corporate debt securities			124			118			119
International debt securities			29			34			76
Mortgage-backed securities **			113			111			117
Total marketable securities			445			454			476
Other assets
Derivatives:
Interest rate contracts			144			294			437
Foreign exchange contracts			21			60			92
Cross-currency interest rate contracts			24			21			29
Total assets ***		$	634		$	829		$	1,034
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		$	102		$	29		$	62
Foreign exchange contracts			68			43			24
Total liabilities		$	170		$	72		$	86

* Measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $45 million, $45 million, and $44 million at January 29, 2017, October 30, 2016, and January 31, 2016, respectively; the fixed income fund of $14 million and $15 million at January 29, 2017 and October 30, 2016, respectively; and U.S. government debt securities of $49 million, $53 million, and $43 million at January 29, 2017, October 30, 2016, and January 31, 2016, respectively. In addition, $23 million, $28 million, and $44 million of the international debt securities were Level 3 measurements at January 29, 2017, October 30, 2016, and January 31, 2016, respectively. There were no transfers between Level 1 and Level 2 during the first three months of 2017 or 2016.

** 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 January 29, 2017 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			Fair
		Cost			Value
Due in one year or less		$	27		$	27
Due after one through five years			109			107
Due after five through 10 years			87			88
Due after 10 years			52			51
Mortgage-backed securities			114			113
Debt securities		$	389		$	386

Fair Value, Recurring Level 3 Measurements from Available for Sale Marketable Securities

Fair value, recurring Level 3 measurements from available for sale marketable securities in millions of dollars follow:

		Three Months Ended
		January 29			January 31
		2017			2016
Beginning of period balance		$	28		$	29
Purchases						25
Principal payments			(6)			(2)
Change in unrealized gain (loss)			1			(8)
End of period balance		$	23		$	44

Fair Value, Nonrecurring Level 3 Measurements from Impairments

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

		Fair Value *									Losses
											Three Months Ended
		January 29			October 30			January 31			January 29			January 31
		2017			2016			2016			2017			2016
Equipment on operating leases – net					$	654		$	469					$	4
Property and equipment – net					$	31
Investments in unconsolidated affiliates					$	1
Other assets					$	184		$	126					$	9

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

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