FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 31, 2016

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


	January 31, 2016				October 31, 2015				January 31, 2015
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables - net	$	23,630	$	23,519	$	24,809	$	24,719	$	25,806	$	25,733
Financing receivables securitized - net		4,003		3,986		4,835		4,820		3,893		3,868
Short-term securitization borrowings		3,879		3,882		4,590		4,590		3,888		3,891

Long-term borrowings due within one year:
Equipment operations	$	96	$	89	$	86	$	78	$	216	$	207
Financial services		4,977		4,981		5,167		5,167		4,660		4,669
Total	$	5,073	$	5,070	$	5,253	$	5,245	$	4,876	$	4,876

Long-term borrowings:
Equipment operations	$	4,519	$	4,889	$	4,461	$	4,835	$	4,622	$	5,344
Financial services		20,014		19,979		19,372		19,348		19,485		19,687
Total	$	24,533	$	24,868	$	23,833	$	24,183	$	24,107	$	25,031

* 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		October 31		January 31
	2016*		2015*		2015*
Marketable securities
Equity fund	$	44	$	43	$	45
U.S. government debt securities		87		82		179
Municipal debt securities		33		31		29
Corporate debt securities		119		124		134
International debt securities		76		47
Mortgage-backed securities **		117		110		107
Total marketable securities		476		437		494
Other assets
Derivatives:
Interest rate contracts		437		353		478
Foreign exchange contracts		92		50		125
Cross-currency interest rate contracts		29		25		22
Total assets ***	$	1,034	$	865	$	1,119
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	62	$	60	$	80
Foreign exchange contracts		24		18		49
Total liabilities	$	86	$	78	$	129

* Measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $44 million, $43 million and $45 million at January 31, 2016, October 31, 2015 and January 31, 2015, respectively; and the U.S. government debt securities of $43 million, $37 million and $129 million at January 31, 2016, October 31, 2015 and January 31, 2015, respectively. In addition, $44 million and $29 million of the international debt securities were Level 3 measurements at January 31, 2016 and October 31, 2015. There were no transfers between Level 1 and Level 2 during the first three months of 2016 or 2015.

** 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, 2016 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	$	50	$	48
Due after one through five years		127		121
Due after five through 10 years		100		103
Due after 10 years		40		43
Mortgage-backed securities		114		117
Debt securities	$	431	$	432

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
	January 31
	2016
Beginning of period balance	$	29
Purchases		25
Principal Payments		(2)
Change in unrealized gain (loss)		(8)
End of period balance	$	44

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
	2016		2015		2015	2016		2015
Equipment on operating leases – net	$	469	$	479		$	4
Property and equipment – net			$	33
Other assets	$	126	$	112		$	9

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