| Fair Value of Financial Instruments |
The fair values of financial instruments that do not approximate the carrying values at November 3, 2019 and October 28, 2018 in millions of dollars follow: | | | | | | | | | | | | | | | | 2019 | | 2018 | | | | Carrying | | Fair | | Carrying | | Fair | | | | Value | | Value* | | Value | | Value* | | Financing receivables – net: | | | | | | | | | | | | | | Equipment operations | | $ | 65 | | $ | 61 | | $ | 93 | | $ | 91 | | Financial services | | | 29,130 | | | 29,106 | | | 26,961 | | | 26,722 | | Total | | $ | 29,195 | | $ | 29,167 | | $ | 27,054 | | $ | 26,813 | | Financing receivables securitized – net: | | | | | | | | | | | | | | Equipment operations | | $ | 44 | | $ | 43 | | $ | 76 | | $ | 73 | | Financial services | | | 4,339 | | | 4,362 | | | 3,946 | | | 3,895 | | Total | | $ | 4,383 | | $ | 4,405 | | $ | 4,022 | | $ | 3,968 | | Short-term securitization borrowings: | | | | | | | | | | | | | | Equipment operations | | $ | 44 | | $ | 45 | | $ | 75 | | $ | 75 | | Financial services | | | 4,277 | | | 4,302 | | | 3,882 | | | 3,870 | | Total | | $ | 4,321 | | $ | 4,347 | | $ | 3,957 | | $ | 3,945 | | Long-term borrowings due within one year: | | | | | | | | | | | | | | Equipment operations | | $ | 642 | | $ | 645 | | $ | 970 | | $ | 979 | | Financial services | | | 6,786 | | | 6,788 | | | 5,427 | | | 5,411 | | Total | | $ | 7,428 | | $ | 7,433 | | $ | 6,397 | | $ | 6,390 | | Long-term borrowings: | | | | | | | | | | | | | | Equipment operations | | $ | 5,415 | | $ | 6,138 | | $ | 4,714 | | $ | 4,948 | | Financial services | | | 24,814 | | | 25,122 | | | 22,523 | | | 22,590 | | Total | | $ | 30,229 | | $ | 31,260 | | $ | 27,237 | | $ | 27,538 | |
* 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.
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| Assets and Liabilities Measured at Fair Value on a Recurring Basis |
Assets and liabilities measured at November 3, 2019 and October 28, 2018 at fair value on a recurring basis in millions of dollars follow*: | | | | | | | | | | 2019 | | 2018 | | Level 1: | | | | | | | | Marketable securities | | | | | | | | Equity fund | | $ | 59 | | $ | 46 | | U.S. government debt securities | | | 50 | | | 44 | | Total Level 1 marketable securities | | | 109 | | | 90 | | | | | | | | | | Level 2: | | | | | | | | Marketable securities | | | | | | | | U.S. government debt securities | | | 81 | | | 67 | | Municipal debt securities | | | 60 | | | 46 | | Corporate debt securities | | | 165 | | | 140 | | International debt securities | | | 5 | | | 2 | | Mortgage-backed securities** | | | 160 | | | 137 | | Total Level 2 marketable securities | | | 471 | | | 392 | | Other assets | | | | | | | | Derivatives: | | | | | | | | Interest rate contracts | | | 363 | | | 80 | | Foreign exchange contracts | | | 20 | | | 83 | | Cross-currency interest rate contracts | | | 1 | | | 5 | | Total Level 2 other assets | | | 384 | | | 168 | | Accounts payable and accrued expenses | | | | | | | | Derivatives: | | | | | | | | Interest rate contracts | | | 65 | | | 350 | | Foreign exchange contracts | | | 71 | | | 49 | | Cross-currency interest rate contracts | | | 3 | | | | | Total Level 2 accounts payable and accrued expenses | | | 139 | | | 399 | | | | | | | | | | Level 3: | | | | | | | | Marketable securities | | | | | | | | International debt securities | | | 1 | | | 8 | |
* Excluded from this table were the company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds and time deposits. ** Primarily issued by U.S. government sponsored enterprises.
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| Fair Value, Recurring, Level 3 Measurements |
Fair value, recurring Level 3 measurements from available-for-sale marketable securities at November 3, 2019, October 28, 2018, and October 29, 2017 in millions of dollars follow: | | | | | | | | | | | | | | 2019 | | 2018 | | 2017 | | | Beginning of year balance | | $ | 8 | | $ | 17 | | $ | 28 | | | Principal payments | | | (8) | | | (9) | | | (13) | | | Change in unrealized gain | | | | | | 1 | | | 2 | | | Other | | | 1 | | | (1) | | | | | | End of year balance | | $ | 1 | | $ | 8 | | $ | 17 | | |
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| Fair Value, Nonrecurring Measurements From Impairments |
Fair value, nonrecurring measurements from impairments at November 3, 2019 and October 28, 2018 in millions of dollars follow: | | | | | | | | | | | | | | | | | | | Fair Value* | | Losses* | | | | 2019 | | 2018 | | 2019 | | 2018 | | 2017 | | Equipment on operating leases – net | | $ | 855 | | | | | $ | 59 | | | | | | | | Investments in unconsolidated affiliates | | | | | | | | | | | | | | $ | 40 | | Other assets | | $ | 142 | | | | | $ | 18 | | | | | | | |
* Fair value losses at October 29, 2017 were a Level 1 measurement. See financing receivables with specific allowances in Note 13 that were not significant. See Note 5 for impairments.
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