FAIR VALUE MEASUREMENTS

12 Months Ended

Nov. 02, 2025

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

25. 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, we use various methods including market and income approaches. We utilize 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.

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. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings include adjustments related to fair value hedges.

The fair values of financial instruments that do not approximate the carrying values at November 2, 2025, and October 27, 2024, follow:

	2025				2024
	Carrying		​ ​ ​ ​Fair		Carrying		​ ​ ​ ​Fair
	Value		Value*		Value		Value*
Financing receivables – net	$	44,575	$	44,779	$	44,309	$	44,336
Financing receivables securitized – net		6,831		6,855		8,723		8,654
Receivables from unconsolidated affiliates		392		400
Short-term securitization borrowings		6,596		6,631		8,431		8,453
Long-term borrowings due within one year**		8,888		8,911		9,115		9,079
Long-term borrowings**		43,471		43,527		43,157		42,804

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

**  Values exclude finance lease liabilities that are presented as borrowings (see Note 24).

Assets and liabilities measured at November 2, 2025, and October 27, 2024, at fair value on a recurring basis follow, excluding items which were carried at a cost that approximates fair value, consisting of our cash equivalents, money market funds and time deposits, and held-to-maturity debt securities (see Note 10):

	2025		2024
Level 1:
Marketable securities
U.S. government debt securities	$	196	$	239
Total Level 1 marketable securities		196		239
Level 2:
Marketable securities
International fixed income fund		7
Corporate debt securities		510		423
International debt securities		174		143
Mortgage-backed securities*		234		165
Municipal debt securities		113		74
U.S. government debt securities		117		110
Total Level 2 marketable securities		1,155		915
Other assets – Derivatives		393		357
Accounts payable and accrued expenses – Derivatives		389		582
Level 3:
Accounts payable and accrued expenses – Deferred consideration		113		147

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

Fair value, nonrecurring Level 3 measurements from impairments and other adjustments at November 2, 2025, and October 27, 2024, follow:

	Fair Value				Losses (Gains)
	2025		2024		2025		2024		2023
Property and equipment – net	$	1			$	8
Other intangible assets – net		3				53
Other assets		8	$	23		12	$	28
Assets held for sale				2,944		(32)		97

The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value. For more information on asset impairments, see Notes 3 and 4.

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.

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.

Property and equipment – net – The valuations were based on the cost approach. The inputs include reproduction cost estimates adjusted for physical deterioration and functional obsolescence (see Note 4).

Other intangible assets – net – The impairment of customer relationships and tradename of our external overseas battery operations was measured using an income approach (see Note 4).

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 (see Note 4).

Assets held for sale – The disposal group was measured at the lower of the carrying amount or fair value less costs to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 4). The gain recorded in 2025 represents a reversal of the prior period valuation allowance, not in excess of the cumulative valuation allowance recorded on “Assets held for sale.”