(15) The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	April 30, 2014				October 31, 2013				April 30, 2013
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *

Financing receivables - net	$	25,496	$	25,383	$	25,633	$	25,572	$	22,745	$	22,796
Financing receivables securitized - net	4,345		4,308		4,153		4,124		3,788		3,785
Short-term securitization borrowings	4,330		4,333		4,109		4,113		3,788		3,794

Long-term borrowings due within one year:
Equipment operations	$	130	$	128	$	821	$	837	$	911	$	939
Financial services	4,391		4,405		4,408		4,441		5,008		5,065
Total	$	4,521	$	4,533	$	5,229	$	5,278	$	5,919	$	6,004

Long-term borrowings:
Equipment operations	$	4,817	$	5,181	$	4,871	$	5,141	$	4,925	$	5,626
Financial services	18,350		18,548		16,707		16,887		16,828		17,029
Total	$	23,167	$	23,729	$	21,578	$	22,028	$	21,753	$	22,655

* Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings.

Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts.

Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges.

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow:

	April 30		October 31		April 30
	2014*		2013*		2013*
Marketable securities
Equity fund	$	30	$	20	$	3
Fixed income fund	10
U.S. government debt securities	1,213		1,312		1,102
Municipal debt securities	35		36		38
Corporate debt securities	155		138		130
Mortgage-backed securities **	129		119		126
Total marketable securities	1,572		1,625		1,399
Other assets
Derivatives:
Interest rate contracts	296		347		589
Foreign exchange contracts	20		32		25
Cross-currency interest rate contracts	16		15		5
Total assets ***	$	1,904	$	2,019	$	2,018
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	136	$	120	$	66
Foreign exchange contracts	33		42		36
Cross-currency interest rate contracts			17		54
Total liabilities	$	169	$	179	$	156

* All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $1,144 million, $1,247 million and $1,041 million at April 30, 2014, October 31, 2013 and April 30, 2013, respectively, the equity fund of $30 million, $20 million and $3 million at April 30, 2014, October 31, 2013 and April 30, 2013, respectively, and the fixed income fund of $10 million at April 30, 2014. There were no transfers between Level 1 and Level 2 during the first six months of 2014 or 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.

The contractual maturities of debt securities at April 30, 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	$ 1,123	$ 1,123
Due after one through five years	83	87
Due after five through 10 years	134	136
Due after 10 years	55	57
Mortgage-backed securities	131	129
Debt securities	$ 1,526	$ 1,532

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

	Fair Value *			Losses
				Three Months Ended		Six Months Ended
	April 30	October 31	April 30	April 30		April 30
	2014	2013	2013	2014	2013	2014	2013

Property and equipment – net		$ 36				$ 26

Assets held for sale – Water operations **	$ 91			$ 36		$ 36

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

** Does not include cost to sell. See Note 19.

The property and equipment fair value measurement and impairment loss shown above were the result of changes in circumstances that indicate it was probable the future cash flows would not cover the carrying amounts of certain long-lived assets. The non-cash charge of $26 million pretax and after-tax was recognized in the first quarter of 2014 in cost of sales. The impairment was associated with the Company’s John Deere Water operations, which were included in the agriculture and turf operating segment. The first quarter loss was due to a review of strategic options for the business.

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value:

Marketable Securities – The portfolio of investments is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities.

Derivatives – The Company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency forwards and swaps and cross-currency interest rate swaps. The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.

Financing Receivables – Specific reserve impairments are based on the fair value of collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values.

Property and Equipment – Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on an income approach using probability weighted cash flows of potential outcomes of the ongoing strategic option review. The inputs include estimates of the cash flow related to each of the alternatives being considered and management’s estimate of the likelihood of each alternative.

Assets Held for Sale – Water Operations – The impairment of the disposal group is measured at the lower of the carrying amount, or fair value less cost to sell. Fair value is based on the probable sale price. The inputs include estimates of the final sale price.