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FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended
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Aug. 01, 2021
FAIR VALUE MEASUREMENTS |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities (see Note 17).
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | August 1, 2021 | ​ | November 1, 2020 | ​ | August 2, 2020 |
​ | ​ | Carrying Value | ​ | Fair Value | ​ | Carrying Value | ​ | Fair Value | ​ | Carrying Value | ​ | Fair Value |
Financing receivables – net: |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equipment operations | ​ | $ | 89 | ​ | $ | 85 | ​ | $ | 105 | ​ | $ | 103 | ​ | $ | 111 | ​ | $ | 102 | ​
Financial services | ​ | ​ | 31,360 | ​ | ​ | 31,430 | ​ | ​ | 29,645 | ​ | ​ | 29,838 |  | ​ | 27,703 | ​ | ​ | 27,929 | ​
Total | ​ | $ | 31,449 | ​ | $ | 31,515 | ​ | $ | 29,750 | ​ | $ | 29,941 | ​ | $ | 27,814 | ​ | $ | 28,031 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financing receivables securitized – net: | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equipment operations | ​ | $ | 13 | ​ | $ | 13 | ​ | $ | 26 | ​ | $ | 26 | ​ | $ | 37 | ​ | $ | 34 | ​
Financial services | ​ | ​ | 5,388 | ​ | ​ | 5,454 | ​ | ​ | 4,677 | ​ | ​ | 4,773 | ​ | ​ | 5,432 | ​ | ​ | 5,544 | ​
Total | ​ | $ | 5,401 | ​ | $ | 5,467 | ​ | $ | 4,703 | ​ | $ | 4,799 | ​ | $ | 5,469 | ​ | $ | 5,578 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Short-term securitization borrowings: | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equipment operations | ​ | $ | 12 | ​ | $ | 13 | ​ | $ | 26 | ​ | $ | 26 | ​ | $ | 37 | ​ | $ | 37 | ​
Financial services | ​ | ​ | 5,265 | ​ | ​ | 5,289 | ​ | ​ | 4,656 | ​ | ​ | 4,698 | ​ | ​ | 5,324 | ​ | ​ | 5,381 | ​
Total | ​ | $ | 5,277 | ​ | $ | 5,302 | ​ | $ | 4,682 | ​ | $ | 4,724 | ​ | $ | 5,361 | ​ | $ | 5,418 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Long-term borrowings due within one year: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equipment operations | ​ | $ | 1,239 | ​ | $ | 1,257 | ​ | $ | 79 |  | $ | 78 | ​ | $ | 507 | ​ | $ | 504 | ​
Financial services | ​ | ​ | 7,127 | ​ | ​ | 7,183 | ​ |  | 6,870 | ​ |  | 6,936 | ​ |  | 6,114 | ​ | ​ | 6,168 | ​
Total | ​ | $ | 8,366 | ​ | $ | 8,440 | ​ | $ | 6,949 | ​ | $ | 7,014 | ​ | $ | 6,621 | ​ | $ | 6,672 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Long-term borrowings: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equipment operations | ​ | $ | 8,940 | ​ | $ | 10,586 | ​ | $ | 10,085 |  | $ | 11,837 | ​ | $ | 10,184 | ​ | $ | 12,163 | ​
Financial services | ​ | ​ | 23,298 | ​ | ​ | 23,759 | ​ |  | 22,610 | ​ |  | 23,170 | ​ |  | 23,820 | ​ | ​ | 24,464 | ​
Total | ​ | $ | 32,238 | ​ | $ | 34,345 | ​ | $ | 32,695 | ​ | $ | 35,007 | ​ | $ | 34,004 | ​ | $ | 36,627 | ​
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, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021.
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | August 1 |  | November 1 |  | August 2 |
​ | ​ | 2021 | ​ | 2020 | ​ | 2020 |
Level 1: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Marketable securities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
International equity securities | ​ | $ | 3 | ​ | $ | 2 | ​ | $ | 2 | ​
U.S. equity fund | ​ | ​ | 74 | ​ | ​ | 62 | ​ | ​ | 68 | ​
U.S. government debt securities | ​ | ​ | 60 | ​ |  | 55 | ​ |  | 50 | ​
Total Level 1 marketable securities | ​ | ​ | 137 | ​ | ​ | 119 | ​ | ​ | 120 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Level 2: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Marketable securities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. government debt securities | ​ | ​ | 124 | ​ | ​ | 113 | ​ | ​ | 105 | ​
Municipal debt securities | ​ | ​ | 71 | ​ |  | 68 | ​ |  | 64 | ​
Corporate debt securities | ​ | ​ | 217 | ​ |  | 188 | ​ |  | 185 | ​
International debt securities | ​ | ​ | 3 | ​ | ​ | 2 | ​ | ​ | 2 | ​
Mortgage-backed securities | ​ | ​ | 136 | ​ |  | 147 | ​ |  | 159 | ​
Total Level 2 marketable securities | ​ | ​ | 551 | ​ |  | 518 | ​ |  | 515 | ​
Other assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Derivatives: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest rate contracts | ​ | ​ | 389 | ​ |  | 669 | ​ |  | 895 | ​
Foreign exchange contracts | ​ | ​ | 41 | ​ |  | 48 | ​ |  | 57 | ​
Cross-currency interest rate contracts | ​ | ​ | 2 | ​ |  | 8 | ​ |  | 9 | ​
Total Level 2 other assets |  | ​ | 432 | ​ | ​ | 725 | ​ | ​ | 961 | ​
Accounts payable and accrued expenses | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Derivatives: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest rate contracts |  | ​ | 83 | ​ | ​ | 88 | ​ | ​ | 115 | ​
Foreign exchange contracts | ​ | ​ | 67 | ​ |  | 26 | ​ |  | 55 | ​
Cross-currency interest rate contracts | ​ | ​ | 2 | ​ | ​ | 1 | ​ | ​ | ​ | ​
Total Level 2 accounts payable and accrued expenses |  | ​ | 152 | ​ | ​ | 115 | ​ | ​ | 170 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Level 3: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Marketable securities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
International debt securities |  | ​ | ​ | ​ | ​ | 4 | ​ | ​ | 5 | ​
​
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at August 1, 2021 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. Mortgage-backed securities were primarily issued by U.S. government sponsored enterprises.
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized | ​ | Fair | ​
​ | ​ | Cost | ​ | Value | ​
Due in one year or less |  | $ | 21 | ​ | $ | 21 | ​
Due after one through five years | ​ | ​ | 82 | ​ | ​ | 86 | ​
Due after five through 10 years | ​ | ​ | 136 | ​ | ​ | 142 | ​
Due after 10 years | ​ | ​ | 213 | ​ | ​ | 226 | ​
Mortgage-backed securities | ​ | ​ | 132 | ​ | ​ | 136 | ​
Debt securities |  | $ | 584 |  | $ | 611 | ​
​
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. The fair value measurement losses for the investment in unconsolidated affiliates during the nine months ended August 2, 2020 were Level 1. The other fair value measurements were Level 3. Equipment on operating leases – net and Other assets fair values for November 1, 2020 represents the fair value assessment at May 3, 2020.
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value | ​ | Losses | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Three Months Ended | ​ | Nine Months Ended | ​
​ | ​ | August 1 | ​ | November 1 | ​ | August 2 | ​ | August 1 | ​ | August 2 | ​ | August 1 | ​ | August 2 | ​
​ |  | 2021 |  | 2020 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020 |
Other receivables | ​ | ​ | ​ | ​ | $ | 1 | ​ | $ | 1 | ​ | ​ | ​ | ​ | $ | 2 | ​ | ​ | ​ | ​ | $ | 2 | ​
Equipment on operating leases – net | ​ | ​ | ​ | ​ | $ | 371 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 22 | ​
Property and equipment – net | ​ | ​ | ​ | ​ | $ | 135 | ​ | $ | 8 | ​ | ​ | ​ | ​ | $ | 5 | ​ | $ | 44 | ​ | $ | 67 | ​
Investments in unconsolidated affiliates | ​ | ​ | ​ | ​ | $ | 19 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 20 | ​
Other intangible assets – net | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 2 | ​ | ​ | ​ | ​ | $ | 2 | ​
Other assets | ​ | ​ | ​ | ​ | $ | 59 | ​ | $ | 19 | ​ | ​ | ​ | ​ | $ | 24 | ​ | $ | 6 | ​ | $ | 34 | ​

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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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