FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jul. 31, 2015

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


	July 31, 2015				October 31, 2014				July 31, 2014
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables - net	$	24,973	$	24,831	$	27,422	$	27,337	$	27,080	$	26,952
Financing receivables securitized - net		4,738		4,709		4,602		4,573		4,264		4,222
Short-term securitization borrowings		4,595		4,596		4,559		4,562		4,143		4,145

Long-term borrowings due within one year:
Equipment operations	$	167	$	157	$	243	$	233	$	245	$	238
Financial services		4,683		4,674		4,730		4,743		4,915		4,927
Total	$	4,850	$	4,831	$	4,973	$	4,976	$	5,160	$	5,165

Long-term borrowings:
Equipment operations	$	4,475	$	4,878	$	4,643	$	5,095	$	4,678	$	5,120
Financial services		18,726		18,772		19,738		19,886		19,357		19,569
Total	$	23,201	$	23,650	$	24,381	$	24,981	$	24,035	$	24,689

* 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:


	July 31		October 31		July 31
	2015*		2014*		2014*
Marketable securities
International equity securities	$	8
Equity fund		35	$	45	$	32
Fixed income fund				10		10
U.S. government debt securities		82		808		1,108
Municipal debt securities		30		34		34
Corporate debt securities		104		172		169
International debt securities		47
Mortgage-backed securities **		115		146		136
Total marketable securities		421		1,215		1,489
Other assets
Derivatives:
Interest rate contracts		341		319		321
Foreign exchange contracts		57		18		14
Cross-currency interest rate contracts		27		16		13
Total assets ***	$	846	$	1,568	$	1,837
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	83	$	81	$	101
Foreign exchange contracts		26		29		32
Cross-currency interest rate contracts						1
Total liabilities	$	109	$	110	$	134

* Measurements above were Level 2 measurements except for Level 1 measurements of the international equity securities of $8 million at July 31, 2015; the equity fund of $35 million, $45 million and $32 million at July 31, 2015, October 31, 2014 and July 31, 2014; the fixed income fund of $10 million at both October 31, 2014 and July 31, 2014; and the U.S. government debt securities of $37 million, $741 million and $1,041 million at July 31, 2015, October 31, 2014 and July 31, 2014, respectively. In addition, $31 million of the international debt securities were Level 3 measurements at July 31, 2015. There were no transfers between Level 1 and Level 2 during the first nine months of 2015 or 2014.

** 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 July 31, 2015 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	$	39	$	40
Due after one through five years		85		88
Due after five through 10 years		92		95
Due after 10 years		38		40
Mortgage-backed securities		113		115
Debt securities	$	367	$	378

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		Nine Months Ended
	July 31		July 31
	2015		2015
Beginning of period balance
Purchases	$	30	$	30
Change in unrealized gain (loss)		1		1
End of period balance	$	31	$	31

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		Nine Months Ended
	July 31	October 31		July 31	July 31		July 31
	2015	2014		2014	2015	2014	2015	2014

Property and equipment – net		$	53					$	26

Assets held for sale – Water operations **								$	36

Other assets		$	15

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

** Does not include costs to sell (see Note 18).