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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Oct. 28, 2018

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values at October 28, 2018 and October 29, 2017 in millions of dollars follow:

		2018						2017
		Carrying			Fair			Carrying			Fair
		Value			Value*			Value			Value*
Financing receivables – net:
Equipment operations **		$	93		$	91
Financial services			26,961			26,722		$	25,104		$	24,946
Total		$	27,054		$	26,813		$	25,104		$	24,946
Financing receivables securitized – net:
Equipment operations **		$	76		$	73
Financial services			3,946			3,895		$	4,159		$	4,130
Total		$	4,022		$	3,968		$	4,159		$	4,130
Short-term securitization borrowings:
Equipment operations **		$	75		$	75
Financial services			3,882			3,870		$	4,119		$	4,118
Total		$	3,957		$	3,945		$	4,119		$	4,118
Long-term borrowings due within one year:
Equipment operations **		$	970		$	979		$	154		$	154
Financial services			5,427			5,411			6,064			6,079
Total		$	6,397		$	6,390		$	6,218		$	6,233
Long-term borrowings:
Equipment operations **		$	4,714		$	4,948		$	5,491		$	6,026
Financial services			22,523			22,590			20,400			20,606
Total		$	27,237		$	27,538		$	25,891		$	26,632

*    Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

**   See Note 4.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at October 28, 2018 and October 29, 2017 at fair value on a recurring basis in millions of dollars follow:

		2018*			2017*
Marketable securities
Equity fund		$	46		$	48
Fixed income fund						15
U.S. government debt securities			111			77
Municipal debt securities			46			39
Corporate debt securities			140			135
International debt securities			10			20
Mortgage-backed securities**			137			118
Total marketable securities			490			452
Other assets
Derivatives:
Interest rate contracts			80			116
Foreign exchange contracts			83			108
Cross-currency interest rate contracts			5			11
Total assets***		$	658		$	687
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		$	350		$	131
Foreign exchange contracts			49			26
Cross-currency interest rate contracts						1
Total liabilities		$	399		$	158

*      All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $46 million and $48 million at October 28, 2018 and October 29, 2017, respectively, the fixed income fund of $15 million at October 29, 2017, and U.S. government debt securities of $44 million and $44 million at October 28, 2018 and October 29, 2017, respectively. In addition, $8 million and $17 million of the international debt securities were Level 3 measurements at October 28, 2018 and October 29, 2017, respectively. There were no transfers between Level 1 and Level 2 during 2018 and 2017.

**    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 and time deposits.

Fair Value, Recurring, Level 3 Measurements

Fair value, recurring Level 3 measurements from available-for-sale marketable securities at October 28, 2018, October 29, 2017, and October 30, 2016 in millions of dollars follow:

		2018			2017			2016
Beginning of year balance		$	17		$	28		$	29
Purchases									25
Principal payments			(9)			(13)			(22)
Change in unrealized gain (loss)			1			2			(4)
Other			(1)
End of year balance		$	8		$	17		$	28

Fair Value, Nonrecurring Measurements From Impairments

Fair value, nonrecurring measurements from impairments at October 28, 2018 and October 29, 2017 in millions of dollars follow:

		Fair Value*						Losses*
		2018			2017			2018			2017			2016
Equipment on operating leases – net														$	31
Property and equipment – net														$	13
Investments in unconsolidated affiliates					$	28					$	40		$	12
Other assets														$	29

*    Fair value at October 29, 2017 was a Level 1 measurement. See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments.

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