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Fair Value Measurements

3 Months Ended

Jan. 28, 2024

(10) Fair Value Measurements

The fair values of financial instruments that do not approximate the carrying values were as follows:


	January 28, 2024				October 29, 2023				January 29, 2023
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	44,313.9	$	43,978.1	$	43,862.4	$	43,168.7	$	37,383.2	$	36,668.3
Retail notes securitized – net		6,399.9		6,224.9		7,335.4		7,055.8		5,088.9		4,868.9
Securitization borrowings		6,116.1		6,103.8		6,995.2		6,921.1		4,863.9		4,784.8
Current maturities of long-term external borrowings		5,705.1		5,610.7		6,059.9		5,953.0		6,080.1		5,957.2
Long-term external borrowings		28,720.4		28,775.5		27,439.3		27,057.7		23,493.4		23,126.2

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

Fair values of Receivables 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 Receivables. The fair values of the remaining Receivables approximated the carrying amounts.

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

Assets and liabilities measured at fair value on a recurring basis were as follows:


	January 28		October 29		January 29
	2024		2023		2023
Marketable securities
International debt securities	$	2.3	$	1.4	$	1.8
Receivables from John Deere
Derivatives		146.6		144.4		171.2
Other assets
Derivatives		22.2		11.3		1.2
Total assets	$	171.1	$	157.1	$	174.2

Other payables to John Deere
Derivatives	$	596.7	$	974.9	$	664.2
Accounts payable and accrued expenses
Derivatives		4.3		.5		29.1
Total liabilities	$	601.0	$	975.4	$	693.3

All fair value measurements in the table above were Level 2. Excluded from the table above were our cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of time deposits and money market funds.

The international debt securities mature over the next seven years. At January 28, 2024, the amortized cost basis and fair value of these available-for-sale debt securities were $5.1 and $2.3, respectively. Unrealized losses at January 28, 2024 were not recognized in income due to the ability and intent to hold to maturity.

There were no assets or liabilities measured at fair value on a nonrecurring basis, other than Receivables with specific allowances which were not material, during each of the periods ended January 28, 2024, October 29, 2023, and January 29, 2023.

The following is a description of the valuation methodologies we use to measure certain balance sheet items at fair value:

Marketable securities – The 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 and caps), foreign currency exchange contracts (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.

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).

- 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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