FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 31, 2014

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 31, 2014				October 31, 2013				January 31, 2013
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables - net	$	25,242	$	25,129	$	25,633	$	25,572	$	22,071	$	22,144
Financing receivables securitized - net	3,491		3,463		4,153		4,124		3,033		3,032
Short-term securitization borrowings	3,491		3,492		4,109		4,113		3,044		3,050
Long-term borrowings due within one year:
Equipment operations	$	815	$	821	$	821	$	837	$	197	$	197
Financial services	4,501		4,511		4,408		4,441		4,505		4,592
Total	$	5,316	$	5,332	$	5,229	$	5,278	$	4,702	$	4,789
Long-term borrowings:
Equipment operations	$	4,828	$	5,102	$	4,871	$	5,141	$	5,465	$	6,097
Financial services	17,437		17,619		16,707		16,887		16,705		16,860
Total	$	22,265	$	22,721	$	21,578	$	22,028	$	22,170	$	22,957

*    Fair value measurements above were Level 3 for all financing receivables and Level 2 for all 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 31 2014 *		October 31 2013 *		January 31 2013 *
Marketable securities
Equity fund	$	20	$	20
U.S. government debt securities	1,113		1,312		$	1,096
Municipal debt securities	36		36		38
Corporate debt securities	147		138		120
Mortgage-backed securities **	122		119		122
Total marketable securities	1,438		1,625		1,376
Other assets
Derivatives:
Interest rate contracts	329		347		557
Foreign exchange contracts	70		32		35
Cross-currency interest rate contracts	19		15		8
Total assets ***	$	1,856	$	2,019	$	1,976
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	144	$	120	$	75
Foreign exchange contracts	24		42		35
Cross-currency interest rate contracts			17		33
Total liabilities	$	168	$	179	$	143

*              All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $1,046 million, $1,247 million and $1,038 million at January 31, 2014, October 31, 2013 and January 31, 2013, respectively, and the equity fund of $20 million and $20 million at January 31, 2014 and October 31, 2013, respectively.  There were no transfers between Level 1 and Level 2 during the first three months of 2014 and 2013.

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

***          Excluded from this table are 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 31, 2014 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 Cost		Fair Value
Due in one year or less	$	923	$	924
Due after one through five years	172		176
Due after five through 10 years	136		137
Due after 10 years	59		59
Mortgage-backed securities	125		122
Debt securities	$	1,415	$	1,418

Fair Value, Nonrecurring, Level 3 Measurements

Fair value, nonrecurring, Level 3 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended
	January 31	October 31		January 31	January 31
	2014	2013		2013	2014		2013
Property and equipment - net		$	36		$	26

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