FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Oct. 29, 2017

The fair values of financial instruments that do not approximate the carrying values at October 29, 2017 and October 30, 2016 in millions of dollars follow:


	2017				2016
	Carrying		Fair		Carrying		Fair
	Value		Value*		Value		Value*
Financing receivables – net	$	25,104	$	24,946	$	23,702	$	23,564

Financing receivables securitized – net	$	4,159	$	4,130	$	5,127	$	5,114

Short-term securitization borrowings	$	4,119	$	4,118	$	4,998	$	5,005

Long-term borrowings due within one year:
Equipment operations	$	154	$	154	$	85	$	80
Financial services		6,064		6,079		5,258		5,259
Total	$	6,218	$	6,233	$	5,343	$	5,339
Long-term borrowings:
Equipment operations	$	5,491	$	6,026	$	4,565	$	5,184
Financial services		20,400		20,606		19,138		19,273
Total	$	25,891	$	26,632	$	23,703	$	24,457

* 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 October 29, 2017 and October 30, 2016 at fair value on a recurring basis in millions of dollars follow:


	2017*		2016*
Marketable securities
Equity fund	$	48	$	45
Fixed income fund		15		15
U.S. government debt securities		77		88
Municipal debt securities		39		43
Corporate debt securities		135		118
International debt securities		20		34
Mortgage-backed securities**		118		111
Total marketable securities		452		454
Other assets
Derivatives:
Interest rate contracts		116		294
Foreign exchange contracts		108		60
Cross-currency interest rate contracts		11		21
Total assets***	$	687	$	829
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	131	$	29
Foreign exchange contracts		26		43
Cross-currency interest rate contracts		1
Total liabilities	$	158	$	72

* All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $48 million and $45 million at October 29, 2017 and October 30, 2016, respectively, the fixed income fund of $15 million and $15 million at October 29, 2017 and October 30, 2016, respectively, and U.S. government debt securities of $44 million and $53 million at October 29, 2017 and October 30, 2016, respectively. In addition, $17 million and $28 million of the international debt securities were Level 3 measurements at October 29, 2017 and October 30, 2016, respectively. There were no transfers between Level 1 and Level 2 during 2017 and 2016.

** Primarily issued by U.S. government sponsored enterprises.

*** Excluded from this table were 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.

Fair Value, Recurring, Level 3 Measurements

Fair value, recurring Level 3 measurements from available-for-sale marketable securities at October 29, 2017 and October 30, 2016 in millions of dollars follow:


	2017		2016
Beginning of period balance	$	28	$	29
Purchases				25
Principal payments		(13)		(22)
Change in unrealized gain (loss)		2		(4)
End of period balance	$	17	$	28

Fair Value, Nonrecurring, Level 3 Measurements

Fair value, nonrecurring measurements from impairments at October 29, 2017 and October 30, 2016 in millions of dollars follow:


	Fair Value*				Losses*
	2017		2016		2017		2016		2015
Equipment on operating leases – net			$	654			$	31	$	10
Property and equipment – net			$	31			$	13	$	10
Investments in unconsolidated affiliates	$	28	$	1	$	40	$	12
Other assets			$	184			$	29	$	15

* Fair value at October 29, 2017 was a Level 1 measurement, while fair values at October 30, 2016 were Level 3 measurements. See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments.