FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

May 02, 2021

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities (see Note 17).

	May 2, 2021				November 1, 2020				May 3, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financing receivables – net:
Equipment operations	$	99	$	94	$	105	$	103	$	118	$	111
Financial services		30,895		31,071		29,645		29,838		27,138		27,317
Total	$	30,994	$	31,165	$	29,750	$	29,941	$	27,256	$	27,428
Financing receivables securitized – net:
Equipment operations	$	15	$	15	$	26	$	26	$	37	$	35
Financial services		4,092		4,173		4,677		4,773		4,648		4,722
Total	$	4,107	$	4,188	$	4,703	$	4,799	$	4,685	$	4,757
Short-term securitization borrowings:
Equipment operations	$	14	$	15	$	26	$	26	$	37	$	37
Financial services		4,092		4,117		4,656		4,698		4,603		4,632
Total	$	4,106	$	4,132	$	4,682	$	4,724	$	4,640	$	4,669
Long-term borrowings due within one year:
Equipment operations	$	206	$	211	$	79	$	78	$	480	$	477
Financial services		7,211		7,293		6,870		6,936		6,587		6,609
Total	$	7,417	$	7,504	$	6,949	$	7,014	$	7,067	$	7,086
Long-term borrowings:
Equipment operations	$	10,079	$	11,391	$	10,085	$	11,837	$	9,921	$	11,192
Financial services		23,222		23,701		22,610		23,170		24,377		24,537
Total	$	33,301	$	35,092	$	32,695	$	35,007	$	34,298	$	35,729

Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other 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, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021.

	May 2		November 1		May 3
	2021		2020		2020
Level 1:
Marketable securities
International equity securities	$	2	$	2	$	2
U.S. equity fund		71		62		62
U.S. government debt securities		59		55		50
Total Level 1 marketable securities		132		119		114
Level 2:
Marketable securities
U.S. government debt securities		121		113		104
Municipal debt securities		69		68		63
Corporate debt securities		202		188		177
International debt securities		4		2		2
Mortgage-backed securities		140		147		165
Total Level 2 marketable securities		536		518		511
Other assets
Derivatives:
Interest rate contracts		368		669		842
Foreign exchange contracts		30		48		92
Cross-currency interest rate contracts		4		8		17
Total Level 2 other assets		402		725		951
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		132		88		131
Foreign exchange contracts		89		26		68
Cross-currency interest rate contracts		2		1
Total Level 2 accounts payable and accrued expenses		223		115		199
Level 3:
Marketable securities
International debt securities				4		1

Contractual Maturities of Debt Securities

The contractual maturities of debt securities at May 2, 2021 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. Mortgage-backed securities were primarily issued by U.S. government sponsored enterprises.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	20	$	21
Due after one through five years		90		94
Due after five through 10 years		124		127
Due after 10 years		207		213
Mortgage-backed securities		136		140
Debt securities	$	577	$	595

Fair Value, Nonrecurring Level 3 Measurements from Impairments

Fair value, nonrecurring measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. Equipment on operating leases – net and Other assets fair value for November 1, 2020 represents the fair value assessment at May 3, 2020.

	Fair Value					Losses
						Three Months Ended			Six Months Ended
	May 2	November 1		May 3		May 2	May 3		May 2		May 3
	2021	2020		2020		2021	2020		2021		2020
Other receivables		$	1
Equipment on operating leases – net		$	371	$	371		$	22			$	22
Property and equipment – net		$	135	$	70		$	62	$	44	$	62
Investments in unconsolidated affiliates		$	19	$	10		$	20			$	20
Other assets		$	59	$	59		$	10	$	6	$	10