XML 45 R26.htm IDEA: XBRL DOCUMENT
v3.21.1

FAIR VALUE MEASUREMENTS | 6 Months Ended
--- | ---
May 02, 2021
FAIR VALUE MEASUREMENTS |
FAIR VALUE MEASUREMENTS | (19) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. 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. Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. 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 | ​
​ 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 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 | ​
​ The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data. Derivatives – The Company’s derivative financial instruments consist of interest rate swaps, foreign currency futures, forwards and swaps, and cross-currency interest rate swaps. The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Financing Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. Other Receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation (see Note 22). Equipment on Operating Leases – Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus estimates of return rates and equipment sale price at lease maturity. Inputs include historical return rates and realized sales values (see Note 22). Property and Equipment – Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence or quoted prices when available (see Note 22). Investment in Unconsolidated Affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value and the carrying value of the investments or the estimated realization amount (see Note 22). Other Assets – The impairments of matured operating lease inventory are measured at the fair value of that inventory. The valuations were based on a market approach. The inputs include sales of comparable assets (see Note 22).

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration