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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Nov. 01, 2020

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values at November 1, 2020 and November 3, 2019 in millions of dollars follow:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2020

​

2019

​

​

​

Carrying

​

Fair

​

Carrying

​

Fair

​

​

Value

Value*

Value

Value*

Financing receivables – net:

​

​

​

​

​

​

​

​

​

Equipment operations

​

$

105

​

$

103

​

$

65

​

$

61

​

Financial services

​

​

29,645

​

​

29,838

​

​

29,130

​

​

29,106

​

Total

​

$

29,750

​

$

29,941

​

$

29,195

​

$

29,167

​

Financing receivables securitized – net:

​

​

​

​

​

​

​

​

​

Equipment operations

​

$

26

​

$

26

​

$

44

​

$

43

​

Financial services

​

​

4,677

​

​

4,773

​

​

4,339

​

​

4,362

​

Total

​

$

4,703

​

$

4,799

​

$

4,383

​

$

4,405

​

Short-term securitization borrowings:

​

​

​

​

​

​

​

​

​

Equipment operations

​

$

26

​

$

26

​

$

44

​

$

45

​

Financial services

​

​

4,656

​

​

4,698

​

​

4,277

​

​

4,302

​

Total

​

$

4,682

​

$

4,724

​

$

4,321

​

$

4,347

​

Long-term borrowings due within one year:**

​

​

​

​

​

​

​

​

​

​

​

​

​

Equipment operations

$

79

$

78

$

642

$

645

​

Financial services

​

6,870

​

6,936

​

6,786

​

6,788

​

Total

$

6,949

$

7,014

$

7,428

$

7,433

​

Long-term borrowings:**

​

​

​

​

​

​

​

​

​

​

​

​

​

Equipment operations

$

10,085

$

11,837

$

5,415

$

6,138

​

Financial services

​

22,610

​

23,170

​

24,814

​

25,122

​

Total

$

32,695

$

35,007

$

30,229

$

31,260

​

*    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.

** Values exclude finance lease liabilities that are presented as borrowings beginning in 2020 (see Note 25).

​

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at November 1, 2020 and November 3, 2019 at fair value on a recurring basis in millions of dollars follow*:

​

​	​	​	​	​	​	​	​
​		2020			2019
Level 1:	​	​	​	​	​	​	​
Marketable securities	​	​	​	​	​	​	​
U.S. equity fund		$	62		$	59	​
International equity securities	​	​	2	​	​	​	​
U.S. government debt securities	​		55	​		50	​
Total Level 1 marketable securities	​	​	119	​	​	109	​
​	​	​	​	​	​	​	​
Level 2:	​	​	​	​	​	​	​
Marketable securities	​	​	​	​	​	​	​
U.S. government debt securities	​	​	113	​	​	81	​
Municipal debt securities	​		68	​		60	​
Corporate debt securities	​		188	​		165	​
International debt securities	​	​	2	​	​	5	​
Mortgage-backed securities**	​		147	​		160	​
Total Level 2 marketable securities	​		518	​		471	​
Other assets	​	​	​	​	​	​	​
Derivatives:	​	​	​	​	​	​	​
Interest rate contracts	​		669	​		363	​
Foreign exchange contracts	​		48	​		20	​
Cross-currency interest rate contracts	​		8	​		1	​
Total Level 2 other assets	​	​	725	​	​	384	​
Accounts payable and accrued expenses	​	​	​	​	​	​	​
Derivatives:	​	​	​	​	​	​	​
Interest rate contracts		​	88		​	65	​
Foreign exchange contracts	​		26	​		71	​
Cross-currency interest rate contracts	​	​	1	​		3	​
Total Level 2 accounts payable and accrued expenses	​	​	115	​	​	139	​
​	​	​	​	​	​	​	​
Level 3:	​	​	​	​	​	​	​
Marketable securities	​	​	​	​	​	​	​
International debt securities		​	4		​	1	​

*      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.

​

Fair Value, Recurring, Level 3 Measurements

Fair value, recurring Level 3 measurements from available-for-sale marketable securities at November 1, 2020, November 3, 2019, and October 28, 2018 in millions of dollars follow:

​

​	​	​	​	​	​	​	​	​	​	​	​
​		2020			2019			2018		​	​
Beginning of year balance	​	$	1	​	$	8		$	17	​	​
Purchases	​	​	9	​	​	​	​	​	​	​	​
Principal payments	​	​	(1)	​	​	(8)	​	​	(9)	​	​
Change in unrealized gain	​	​	​	​	​	​	​	​	1	​	​
Other	​	​	(5)	​	​	1	​	​	(1)	​	​
End of year balance	​	$	4	​	$	1	​	$	8	​	​

​

Fair Value, Nonrecurring Level 3 Measurements from Impairments

Fair value, nonrecurring Level 3 measurements from impairments at November 1, 2020 and November 3, 2019 in millions of dollars follow:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value

​

Losses

​

​

2020

2019

2020

2019

2018

​

Other receivables 1

​

$

1

​

​

$

2

​

​

​

​

​

​

Equipment on operating leases – net 2

$

371

$

855

$

22

$

59

​

​

​

​

Property and equipment – net 3

$

135

​

​

$

102

​

​

​

​

​

​

Investments in unconsolidated affiliates 4

​

$

19

​

​

​

​

$

50

​

​

​

​

​

​

Other intangible assets – net

​

​

​

​

​

​

​

$

2

​

​

​

​

​

​

Other assets 2

$

59

​

$

142

$

16

​

$

18

​

​

​

​

¹ Fair value as of August 2, 2020.

² Fair value as of May 3, 2020.

³ Fair value of $70 million at May 3, 2020, $8 million at August 2, 2020, and $57 million at November 1, 2020.

⁴ Fair value as of November 1, 2020.

​

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