FAIR VALUE MEASUREMENTS

12 Months Ended

Oct. 29, 2023

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 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. 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.

The fair values of financial instruments that do not approximate the carrying values at October 29, 2023 and October 30, 2022 follow:

	2023				2022
	Carrying		Fair		Carrying		Fair
	Value		Value*		Value		Value*
Financing receivables – net	$	43,673	$	42,777	$	36,634	$	35,526
Financing receivables securitized – net		7,335		7,056		5,936		5,698
Short-term securitization borrowings		6,995		6,921		5,711		5,577
Long-term borrowings due within one year**		8,331		8,156		7,466		7,322
Long-term borrowings**		38,428		36,873		33,566		31,852

*    Fair value measurements above were Level 3 for all financing 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 October 29, 2023 and October 30, 2022 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:

	2023		2022
Level 1:
Marketable securities
International equity securities	$	3	$	3
International mutual funds securities		101
U.S. equity fund		86		70
U.S. fixed income fund		32
U.S. government debt securities		78		62
Total Level 1 marketable securities		300		135
Level 2:
Marketable securities
Corporate debt securities		244		200
International debt securities		1		60
Mortgage-backed securities*		185		155
Municipal debt securities		75		63
U.S. government debt securities		141		121
Total Level 2 marketable securities		646		599
Other assets - Derivatives		292		373
Accounts payable and accrued expenses - Derivatives		1,130		1,231
Level 3:
Accounts payable and accrued expenses – Deferred consideration		186		236

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

Fair value, nonrecurring level 3 measurements from impairments at October 29, 2023 and October 30, 2022 follow:

	Fair Value			Losses
	2023	2022 1		2023	2022		2021
Inventories		$	19		$	19
Property and equipment – net			15			41	$	44
Other intangible assets – net						28
Other assets								6

¹ Related to assessments on the Russian operations, performed at May 1, 2022 and updated on July 31, 2022 and October 30, 2022.

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 Note 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.

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 (see Note 11).

Inventories – The impairment was based on net realizable value, less reasonably predictable selling and disposal costs.

Property and equipment – net – 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.

Other intangible assets – net – In 2022, we considered external valuations based on our probability weighted cash flow analysis.

Other assets – In 2021, the impairments were measured at the fair value of a right of use operating lease asset.