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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Apr. 28, 2019

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 28, 2019						October 28, 2018						April 29, 2018
		Carrying Value			Fair Value *			Carrying Value			Fair Value *			Carrying Value			Fair Value *
Financing receivables – net:
Equipment operations		$	102		$	95		$	93		$	91		$	76		$	74
Financial services			25,768			25,697			26,961			26,722			24,200			23,997
Total		$	25,870		$	25,792		$	27,054		$	26,813		$	24,276		$	24,071
Financing receivables securitized – net:
Equipment operations		$	59		$	57		$	76		$	73		$	113		$	110
Financial services			4,755			4,726			3,946			3,895			4,323			4,273
Total		$	4,814		$	4,783		$	4,022		$	3,968		$	4,436		$	4,383
Short-term securitization borrowings:
Equipment operations		$	58		$	58		$	75		$	75		$	113		$	113
Financial services			4,644			4,653			3,882			3,870			4,288			4,274
Total		$	4,702		$	4,711		$	3,957		$	3,945		$	4,401		$	4,387
Long-term borrowings due within one year:
Equipment operations		$	982		$	987		$	970		$	979		$	274		$	273
Financial services			5,321			5,305			5,427			5,411			6,566			6,559
Total		$	6,303		$	6,292		$	6,397		$	6,390		$	6,840		$	6,832
Long-term borrowings:
Equipment operations		$	4,679		$	5,110		$	4,714		$	4,948		$	5,537		$	5,850
Financial services			23,576			23,805			22,523			22,590			20,742			20,769
Total		$	28,255		$	28,915		$	27,237		$	27,538		$	26,279		$	26,619

* 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*:

		April 28			October 28			April 29
		2019			2018			2018
Level 1:
Marketable securities
Equity fund		$	58		$	46		$	46
Fixed income fund									14
U.S. government debt securities			44			44			42
Total Level 1 marketable securities			102			90			102
Level 2:
Marketable securities
U.S. government debt securities			73			67			44
Municipal debt securities			55			46			46
Corporate debt securities			148			140			137
International debt securities			9			2			3
Mortgage-backed securities **			154			137			133
Total Level 2 marketable securities			439			392			363
Other assets
Derivatives:
Interest rate contracts			139			80			87
Foreign exchange contracts			99			83			101
Cross-currency interest rate contracts			2			5			6
Total Level 2 other assets			240			168			194
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts			165			350			341
Foreign exchange contracts			48			49			28
Cross-currency interest rate contracts			2						2
Total Level 2 accounts payable and accrued expenses			215			399			371
Level 3:
Marketable securities
International debt securities			4			8			14

* 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 and time deposits.

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

Contractual Maturities of Debt Securities

The contractual maturities of debt securities at April 28, 2019 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		$	28		$	28
Due after one through five years			111			111
Due after five through 10 years			96			97
Due after 10 years			95			97
Mortgage-backed securities			155			154
Debt securities		$	485		$	487

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						Six Months Ended
		April 28			April 29			April 28			April 29
		2019			2018			2019			2018
Beginning of period balance		$	6		$	15		$	8		$	17
Principal payments			(2)			(1)			(5)			(3)
Other									1
End of period balance		$	4		$	14		$	4		$	14

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