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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 28, 2018

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 28, 2018						October 29, 2017						January 29, 2017
		Carrying Value			Fair Value *			Carrying Value			Fair Value *			Carrying Value			Fair Value *
Financing receivables – net:
Equipment operations		$	52		$	51								$	1		$	1
Financial services			23,803			23,597		$	25,104		$	24,946			23,030			22,841
Total		$	23,855		$	23,648		$	25,104		$	24,946		$	23,031		$	22,842
Financing receivables securitized – net:
Equipment operations		$	125		$	125
Financial services			4,349			4,303		$	4,159		$	4,130		$	4,250		$	4,218
Total		$	4,474		$	4,428		$	4,159		$	4,130		$	4,250		$	4,218
Short-term securitization borrowings:
Equipment operations		$	126		$	126
Financial services			4,302			4,293		$	4,119		$	4,118		$	4,220		$	4,220
Total		$	4,428		$	4,419		$	4,119		$	4,118		$	4,220		$	4,220
Long-term borrowings due within one year:
Equipment operations		$	289		$	289		$	154		$	154		$	122		$	115
Financial services			6,124			6,127			6,064			6,079			6,038			6,037
Total		$	6,413		$	6,416		$	6,218		$	6,233		$	6,160		$	6,152
Long-term borrowings:
Equipment operations		$	5,573		$	6,076		$	5,491		$	6,026		$	4,534		$	5,004
Financial services			20,849			21,023			20,400			20,606			18,383			18,513
Total		$	26,422		$	27,099		$	25,891		$	26,632		$	22,917		$	23,517

* 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.

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 28			October 29			January 29
		2018*			2017*			2017*
Marketable securities
Equity fund		$	52		$	48		$	45
Fixed income fund			14			15			14
U.S. government debt securities			75			77			82
Municipal debt securities			41			39			38
Corporate debt securities			137			135			124
International debt securities			18			20			29
Mortgage-backed securities **			125			118			113
Total marketable securities			462			452			445
Other assets
Derivatives:
Interest rate contracts			94			116			144
Foreign exchange contracts			31			108			21
Cross-currency interest rate contracts			8			11			24
Total assets ***		$	595		$	687		$	634
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		$	248		$	131		$	102
Foreign exchange contracts			124			26			68
Cross-currency interest rate contracts			2			1
Total liabilities		$	374		$	158		$	170

* All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $52 million, $48 million, and $45 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively; the fixed income fund of $14 million, $15 million, and $14 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively; and U.S. government debt securities of $43 million, $44 million, and $49 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. In addition, $15 million, $17 million, and $23 million of the international debt securities were Level 3 measurements at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. There were no transfers between Level 1 and Level 2 during the first three months of 2018 or 2017.

** Primarily issued by U.S. government sponsored enterprises.

*** Excluded from this table were 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 28, 2018 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		$	23		$	22
Due after one through five years			114			113
Due after five through 10 years			85			85
Due after 10 years			50			51
Mortgage-backed securities			129			125
Debt securities		$	401		$	396

Fair Value, Recurring, Level 3 Measurements

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

		Three Months Ended
		January 28			January 29
		2018			2017
Beginning of period balance		$	17		$	28
Principal payments			(2)			(6)
Change in unrealized gain (loss)						1
End of period balance		$	15		$	23

Fair Value, Nonrecurring, Level 1 Measurements

Fair value,  nonrecurring Level 1 measurements from impairments in millions of dollars follow:

		Fair Value *									Losses
											Three Months Ended
		January 28			October 29			January 29			January 28			January 29
		2018			2017			2017			2018			2017
Investments in unconsolidated affiliates					$	28

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

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