FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Apr. 30, 2016

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


	April 30, 2016				October 31, 2015				April 30, 2015
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables - net	$	23,415	$	23,300	$	24,809	$	24,719	$	24,746	$	24,632
Financing receivables securitized - net		4,735		4,723		4,835		4,820		4,741		4,716
Short-term securitization borrowings		4,642		4,642		4,590		4,590		4,703		4,707

Long-term borrowings due within one year:
Equipment operations	$	41	$	38	$	86	$	78	$	280	$	264
Financial services		5,309		5,321		5,167		5,167		4,884		4,871
Total	$	5,350	$	5,359	$	5,253	$	5,245	$	5,164	$	5,135

Long-term borrowings:
Equipment operations	$	4,584	$	5,148	$	4,461	$	4,835	$	4,489	$	4,994
Financial services		20,064		20,182		19,372		19,348		19,134		19,265
Total	$	24,648	$	25,330	$	23,833	$	24,183	$	23,623	$	24,259

* 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:


	April 30		October 31		April 30
	2016*		2015*		2015*
Marketable securities
Equity fund	$	44	$	43	$	47
Fixed income fund		3
U.S. government debt securities		79		82		75
Municipal debt securities		41		31		28
Corporate debt securities		113		124		128
International debt securities		71		47
Mortgage-backed securities **		124		110		115
Total marketable securities		475		437		393
Other assets
Derivatives:
Interest rate contracts		419		353		340
Foreign exchange contracts		38		50		38
Cross-currency interest rate contracts		22		25		26
Total assets ***	$	954	$	865	$	797
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	48	$	60	$	72
Foreign exchange contracts		96		18		81
Cross-currency interest rate contracts		1
Total liabilities	$	145	$	78	$	153

* Measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $44 million, $43 million and $47 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively; the fixed income fund of $3 million at April 30, 2016; and the U.S. government debt securities of $38 million, $37 million and $28 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. In addition, $40 million and $29 million of the international debt securities were Level 3 measurements at April 30, 2016 and October 31, 2015. There were no transfers between Level 1 and Level 2 during the first six 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 April 30, 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	$	61	$	61
Due after one through five years		107		103
Due after five through 10 years		90		94
Due after 10 years		43		46
Mortgage-backed securities		120		124
Debt securities	$	421	$	428

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		Six Months Ended
	April 30		April 30
	2016		2016
Beginning of period balance	$	44	$	29
Purchases				25
Principal payments		(6)		(8)
Change in unrealized gain (loss)		2		(6)
End of period balance	$	40	$	40

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			Six Months Ended
	April 30		October 31		April 30	April 30			April 30
	2016		2015		2015	2016		2015	2016		2015
Equipment on operating leases – net	$	725	$	479		$	26		$	30
Property and equipment – net			$	33
Other assets	$	166	$	112		$	11		$	20

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