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FAIR VALUE MEASUREMENTS

6 Months Ended

Apr. 27, 2025

(17) FAIR VALUE MEASUREMENTS

The fair values of financial instruments that do not approximate the carrying values were as follows. Long-term borrowings exclude finance lease liabilities.


	April 27, 2025				October 27, 2024				April 28, 2024
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financing receivables – net	$	43,029	$	43,119	$	44,309	$	44,336	$	45,278	$	44,741
Financing receivables securitized – net		7,765		7,710		8,723		8,654		7,262		7,063
Receivables from unconsolidated affiliates		557		557
Short-term securitization borrowings		7,562		7,588		8,431		8,453		6,976		6,935
Long-term borrowings due within one year		8,928		8,869		9,115		9,079		9,560		9,434
Long-term borrowings		42,742		42,423		43,157		42,804		40,882		40,059

Fair value measurements above were Level 3 for receivables and Level 2 for all borrowings.

Fair values of the financing receivables and receivables from unconsolidated affiliates that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by us for similar financing receivables or at current market interest rates. The fair values of the remaining 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.

Assets and liabilities measured at fair value on a recurring basis follow, excluding our cash equivalents, which were carried at a cost that approximates fair value and consisted of money market funds and time deposits.


	April 27		October 27		April 28
	2025		2024		2024
Level 1:
Marketable securities:
International equity securities					$	3
U.S. equity fund						101
U.S. fixed income fund						24
U.S. government debt securities	$	259	$	239		263
Total Level 1 marketable securities		259		239		391

Level 2:
Marketable securities:
International fixed income fund		6
Corporate debt securities		452		423		213
International debt securities		154		143		148
Mortgage-backed securities		201		165		152
Municipal debt securities		87		74		67
U.S. government debt securities		113		110		123
Total Level 2 marketable securities		1,013		915		703
Other assets – Derivatives		434		357		191
Accounts payable and accrued expenses – Derivatives		614		582		1,005

Level 3:
Accounts payable and accrued expenses – Deferred consideration		128		147		164

The mortgage-backed securities are primarily issued by U.S. government-sponsored enterprises.

The contractual maturities of available-for-sale debt securities at April 27, 2025 follow:


	Amortized		Fair
	Cost		Value
Due in one year or less	$	57	$	57
Due after one through five years		366		358
Due after five through 10 years		496		477
Due after 10 years		203		173
Mortgage-backed securities		227		201
Debt securities	$	1,349	$	1,266

Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity.

Fair value, nonrecurring Level 3 measurements from impairments and other adjustments were as follows:


	Fair Value				Losses (Gains)
					Three Months Ended		Six Months Ended
	April 27	October 27		April 28	April 27	April 28	April 27		April 28
	2025	2024		2024	2025	2024	2025*		2024
Other assets		$	23
Assets held for sale			2,944				$	(32)

* The gain on “Assets held for sale” recorded in the first quarter of 2025 represents a reversal of prior period valuation allowance loss, not in excess of cumulative valuation allowance recorded on “Assets held for sale.”

The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value:

Marketable securities – The portfolio of investments is 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 valued using the fund’s net asset value, based on the fair value of the underlying securities. International debt securities are valued using quoted prices for identical assets in inactive markets.

Derivatives – Our derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (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.

Deferred consideration – The total purchase price consideration for three former Deere-Hitachi joint venture factories acquired in 2022 included supply agreement price increases beyond inflation adjustments. This deferred consideration will be paid as we purchase Deere-branded excavators, components, and service parts from Hitachi under the agreement with a duration that ranges from 5 to 30 years after the acquisition date. The deferred consideration balance is reduced as purchases are made and valued on a discounted cash flow approach using market rates.

Other assets (Investments in unconsolidated affiliates) – Other than temporary impairments of investments are measured as the difference between the implied fair value and the carrying value of the investments. The estimated fair value for privately held entities is determined by an income approach (discounted cash flows), which includes inputs such as interest rates and margins.

Assets held for sale – The disposal group was measured at the lower of the carrying amount or fair value less cost to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 20).

- 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.

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