Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 29, 2017 | Nov. 30, 2017 | Apr. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | DEERE & CO | ||
Entity Central Index Key | 315,189 | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 29, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-29 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 35,641,157,591 | ||
Entity Common Stock, Shares Outstanding | 322,595,010 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
STATEMENT OF CONSOLIDATED INCOM
STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Net Sales and Revenues | |||||||||||
Net sales | $ 7,094 | $ 6,833 | $ 7,260 | $ 4,698 | $ 5,650 | $ 5,861 | $ 7,107 | $ 4,769 | $ 25,885.1 | $ 23,387.3 | $ 25,775.2 |
Finance and interest income | 2,731.5 | 2,511.2 | 2,381.1 | ||||||||
Other income | 1,121.1 | 745.5 | 706.5 | ||||||||
Total | 8,018 | 7,808 | 8,287 | 5,625 | 6,520 | 6,724 | 7,875 | 5,525 | 29,737.7 | 26,644 | 28,862.8 |
Costs and Expenses | |||||||||||
Cost of sales | 19,933.5 | 18,248.9 | 20,143.2 | ||||||||
Research and development expenses | 1,367.7 | 1,389.1 | 1,425.1 | ||||||||
Selling, administrative and general expenses | 3,066.6 | 2,763.7 | 2,873.3 | ||||||||
Interest expense | 899.5 | 763.7 | 680 | ||||||||
Other operating expenses | 1,316.6 | 1,254.6 | 961.1 | ||||||||
Total | 26,583.9 | 24,420 | 26,082.7 | ||||||||
Income of Consolidated Group before Income Taxes | 767 | 890 | 1,169 | 328 | 435 | 705 | 733 | 351 | 3,153.8 | 2,224 | 2,780.1 |
Provision for income taxes | 971.1 | 700.1 | 840.1 | ||||||||
Income of Consolidated Group | 2,182.7 | 1,523.9 | 1,940 | ||||||||
Equity in income (loss) of unconsolidated affiliates | (23.5) | (2.4) | 0.9 | ||||||||
Net Income | 2,159.2 | 1,521.5 | 1,940.9 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 0.1 | (2.4) | 0.9 | ||||||||
Net Income Attributable to Deere & Company | $ 510 | $ 642 | $ 808 | $ 199 | $ 285 | $ 489 | $ 496 | $ 254 | $ 2,159.1 | $ 1,523.9 | $ 1,940 |
Per Share Data | |||||||||||
Basic (in dollars per share) | $ 1.59 | $ 2 | $ 2.53 | $ 0.63 | $ 0.91 | $ 1.55 | $ 1.57 | $ 0.80 | $ 6.76 | $ 4.83 | $ 5.81 |
Diluted (in dollars per share) | 1.57 | 1.97 | 2.50 | 0.62 | 0.90 | 1.55 | 1.56 | 0.80 | 6.68 | 4.81 | 5.77 |
Dividends declared (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 2.40 | $ 2.40 | $ 2.40 |
Average Shares Outstanding | |||||||||||
Basic (in shares) | 319.5 | 315.2 | 333.6 | ||||||||
Diluted (in shares) | 323.3 | 316.6 | 336 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | |||
Net Income | $ 2,159.2 | $ 1,521.5 | $ 1,940.9 |
Other Comprehensive Income (Loss), Net of Income Taxes | |||
Retirement benefits adjustment | 828.8 | (907.6) | (7.7) |
Cumulative translation adjustment | 230.6 | 9 | (935.1) |
Unrealized gain (loss) on derivatives | 3.7 | 2.9 | (2.5) |
Unrealized loss on investments | (0.6) | (0.9) | (1.5) |
Other Comprehensive Income (Loss), Net of Income Taxes | 1,062.5 | (896.6) | (946.8) |
Comprehensive Income of Consolidated Group | 3,221.7 | 624.9 | 994.1 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.3 | (2.4) | 0.5 |
Comprehensive Income Attributable to Deere & Company | $ 3,221.4 | $ 627.3 | $ 993.6 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | Nov. 02, 2014 |
ASSETS | ||||
Cash and cash equivalents | $ 9,334.9 | $ 4,335.8 | $ 4,162.2 | $ 3,787 |
Marketable securities | 451.6 | 453.5 | ||
Receivables from unconsolidated affiliates | 35.9 | 16.5 | ||
Trade accounts and notes receivable - net | 3,924.9 | 3,011.3 | ||
Financing receivables - net | 25,104.1 | 23,702.3 | ||
Financing receivables securitized - net | 4,158.8 | 5,126.5 | ||
Other receivables | 1,200 | 1,018.5 | ||
Equipment on operating leases - net | 6,593.7 | 5,901.5 | ||
Inventories | 3,904.1 | 3,340.5 | ||
Property and equipment - net | 5,067.7 | 5,170.6 | 5,181 | |
Investments in unconsolidated affiliates | 182.5 | 232.6 | 303 | |
Goodwill | 1,033.3 | 815.7 | 726 | |
Other intangible assets - net | 218 | 104.1 | ||
Retirement benefits | 538.2 | 93.6 | ||
Deferred income taxes | 2,415 | 2,964.4 | ||
Other assets | 1,623.6 | 1,631.1 | ||
Total Assets | 65,786.3 | 57,918.5 | 57,883 | |
LIABILITIES | ||||
Short-term borrowings | 10,035.3 | 6,910.7 | ||
Short-term securitization borrowings | 4,118.7 | 4,997.8 | ||
Payables to unconsolidated affiliates | 121.9 | 81.6 | ||
Accounts payable and accrued expenses | 8,417 | 7,240.1 | ||
Deferred income taxes | 209.7 | 166 | ||
Long-term borrowings | 25,891.3 | 23,703 | ||
Retirement benefits and other liabilities | 7,417.9 | 8,274.5 | ||
Total liabilities | 56,211.8 | 51,373.7 | ||
Commitments and contingencies (Note 22) | ||||
Redeemable noncontrolling interest (Note 4) | 14 | 14 | ||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2017 and 2016), at paid-in amount | 4,280.5 | 3,911.8 | 3,826 | 3,675 |
Common stock in treasury, 214,589,902 shares in 2017 and 221,663,380 shares in 2016, at cost | (15,460.8) | (15,677.1) | ||
Retained earnings | 25,301.3 | 23,911.3 | ||
Accumulated other comprehensive income (loss) | (4,563.7) | (5,626) | ||
Total Deere & Company stockholders' equity | 9,557.3 | 6,520 | ||
Noncontrolling interests | 3.2 | 10.8 | ||
Total stockholders' equity | 9,560.5 | 6,530.8 | $ 6,757.6 | $ 9,065.5 |
Total Liabilities and Stockholders' Equity | $ 65,786.3 | $ 57,918.5 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | Nov. 02, 2014 |
CONSOLIDATED BALANCE SHEET | ||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 | ||
Common stock, issued shares | 536,431,204 | 536,431,204 | 536,400,000 | 536,400,000 |
Common stock in treasury, shares | 214,589,902 | 221,663,380 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Cash Flows from Operating Activities | |||
Net income | $ 2,159.2 | $ 1,521.5 | $ 1,940.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 98.3 | 94.3 | 55.4 |
Provision for depreciation and amortization | 1,715.5 | 1,559.8 | 1,382.4 |
Impairment charges | 39.8 | 85.1 | 34.8 |
Share-based compensation expense | 68.1 | 70.6 | 66.1 |
Gain on sale of unconsolidated affiliates and investments | (375.1) | (74.5) | |
Undistributed earnings of unconsolidated affiliates | (14.4) | (1.9) | (1) |
Provision (credit) for deferred income taxes | 100.1 | 282.7 | (18.4) |
Changes in assets and liabilities: | |||
Trade, notes and financing receivables related to sales | (838.9) | 335.2 | 811.6 |
Insurance receivables | 333.4 | ||
Inventories | (1,305.3) | (106.1) | (691.4) |
Accounts payable and accrued expenses | 968 | (155.2) | (503.6) |
Accrued income taxes payable/receivable | (84.2) | 7 | (119.1) |
Retirement benefits | (31.9) | 238.6 | 427.5 |
Other | (299.4) | (87.4) | 40.2 |
Net cash provided by operating activities | 2,199.8 | 3,769.7 | 3,758.8 |
Cash Flows from Investing Activities | |||
Collections of receivables (excluding receivables related to sales) | 14,671.1 | 14,611.4 | 14,919.7 |
Proceeds from maturities and sales of marketable securities | 404.2 | 169.4 | 860.7 |
Proceeds from sales of equipment on operating leases | 1,440.8 | 1,256.2 | 1,049.4 |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 113.9 | 81.1 | 149.2 |
Cost of receivables acquired (excluding receivables related to sales) | (15,221.8) | (13,954.5) | (14,996.5) |
Purchases of marketable securities | (118) | (171.2) | (154.9) |
Purchases of property and equipment | (594.9) | (644.4) | (694) |
Cost of equipment on operating leases acquired | (1,997.4) | (2,310.7) | (2,132.1) |
Acquisitions of businesses, net of cash acquired | (284.2) | (198.5) | |
Other | (58) | (16) | (60.2) |
Net cash used for investing activities | (1,644.3) | (1,177.2) | (1,058.7) |
Cash Flows from Financing Activities | |||
Increase (decrease) in total short-term borrowings | 1,310.6 | (1,213.6) | 501.6 |
Proceeds from long-term borrowings | 8,702.2 | 5,070.7 | 5,711 |
Payments of long-term borrowings | (5,397) | (5,267.6) | (4,863.2) |
Proceeds from issuance of common stock | 528.7 | 36 | 172.1 |
Repurchases of common stock | (6.2) | (205.4) | (2,770.7) |
Dividends paid | (764) | (761.3) | (816.3) |
Other | (87.8) | (64.7) | (72.1) |
Net cash provided by (used for) financing activities | 4,286.5 | (2,405.9) | (2,137.6) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 157.1 | (13) | (187.3) |
Net Increase in Cash and Cash Equivalents | 4,999.1 | 173.6 | 375.2 |
Cash and Cash Equivalents at Beginning of Year | 4,335.8 | 4,162.2 | 3,787 |
Cash and Cash Equivalents at End of Year | $ 9,334.9 | $ 4,335.8 | $ 4,162.2 |
STATEMENT OF CHANGES IN CONSOLI
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Balance at Nov. 02, 2014 | $ 3,675.4 | $ (12,834.2) | $ 22,004.4 | $ (3,783) | $ 2.9 | $ 9,065.5 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 1,940 | 0.9 | 1,940.9 | |||
Other comprehensive income (loss) | (946.4) | (0.4) | (946.8) | |||
Repurchases of common stock | (2,770.7) | (2,770.7) | ||||
Treasury shares reissued | 107.3 | 107.3 | ||||
Dividends declared | (799.5) | (1.3) | (800.8) | |||
Stock options and other | 150.2 | (0.1) | 12.1 | 162.2 | ||
Balance at Nov. 01, 2015 | 3,825.6 | (15,497.6) | 23,144.8 | (4,729.4) | 14.2 | 6,757.6 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 1,523.9 | (2.4) | 1,521.5 | |||
Other comprehensive income (loss) | (896.6) | (896.6) | ||||
Repurchases of common stock | (205.4) | (205.4) | ||||
Treasury shares reissued | 25.9 | 25.9 | ||||
Dividends declared | (757.1) | (0.9) | (758) | |||
Stock options and other | 86.2 | (0.3) | (0.1) | 85.8 | ||
Balance at Oct. 30, 2016 | 3,911.8 | (15,677.1) | 23,911.3 | (5,626) | 10.8 | 6,530.8 |
Increase in Redeemable Noncontrolling Interest | ||||||
Acquisition (Note 4) | 14 | |||||
Redeemable Noncontrolling Interest - Balance at Oct. 30, 2016 | 14 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 2,159.1 | 0.1 | 2,159.2 | |||
Other comprehensive income (loss) | 1,062.3 | 0.2 | 1,062.5 | |||
Repurchases of common stock | (6.2) | (6.2) | ||||
Treasury shares reissued | 222.5 | 222.5 | ||||
Dividends declared | (769.2) | (1.2) | (770.4) | |||
Stock options and other | 368.7 | 0.1 | (6.7) | 362.1 | ||
Balance at Oct. 29, 2017 | $ 4,280.5 | $ (15,460.8) | $ 25,301.3 | $ (4,563.7) | $ 3.2 | 9,560.5 |
Redeemable Noncontrolling Interest - Balance at Oct. 29, 2017 | $ 14 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 12 Months Ended |
Oct. 29, 2017 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | 1. ORGANIZATION AND CONSOLIDATION Structure of Operations The information in the notes and related commentary are presented in a format that includes data grouped as follows: Equipment Operations – Includes the company’s agriculture and turf operations and construction and forestry operations with financial services reflected on the equity basis. Financial Services – Includes primarily the company’s financing operations. Consolidated – Represents the consolidation of the equipment operations and financial services. References to “Deere & Company” or “the company” refer to the entire enterprise. Principles of Consolidation The consolidated financial statements represent primarily the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. Deere & Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 10). Other investments (less than 20 percent ownership) are recorded at cost. Fiscal Year The company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2017, 2016, and 2015 were October 29, 2017, October 30, 2016, and November 1, 2015, respectively. All fiscal years contained 52 weeks. Variable Interest Entities See Note 13 for VIEs related to securitization of financing receivables . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 29, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following are significant accounting policies in addition to those included in other notes to the consolidated financial statements. Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. Revenue Recognition Sales of equipment and service parts are recorded when the sales price is determinable and the risks and rewards of ownership are transferred to independent parties based on the sales agreements in effect. In the U.S. and most international locations, this transfer occurs primarily when goods are shipped. In Canada and some other international locations, certain goods are shipped to dealers on a consignment basis under which the risks and rewards of ownership are not transferred to the dealer. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. In all cases, when a sale is recorded by the company, no significant uncertainty exists surrounding the purchaser’s obligation to pay. No right of return exists on sales of equipment. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The company makes appropriate provisions based on experience for costs such as doubtful receivables, sales incentives, and product warranty. Financing revenue is recorded over the lives of related receivables using the interest method. Extended warranty premiums recorded in other income are generally recognized in proportion to the costs expected to be incurred over the contract period. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in finance revenue. Sales Incentives At the time a sale is recognized, the company records an estimate of the future sales incentive costs for allowances and financing programs that will be due when a dealer sells the equipment to a retail customer. The estimate is based on historical data, announced incentive programs, field inventory levels, and retail sales volumes. Product Warranties At the time a sale is recognized, the company records the estimated future warranty costs. These costs are usually estimated based on historical warranty claims and consideration of current quality developments (see Note 22). Sales Taxes The company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with revenue producing transactions between the company and its customers. These taxes may include sales, use, value-added, and some excise taxes. The company reports the collection of these taxes on a net basis (excluded from revenues). Shipping and Handling Costs Shipping and handling costs related to the sales of the company’s equipment are included in cost of sales. Advertising Costs Advertising costs are charged to expense as incurred. This expense was $169 million in 2017, $169 million in 2016, and $157 million in 2015. Depreciation and Amortization Property and equipment, capitalized software, and other intangible assets are generally stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives generally using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and revised products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are generally charged to expense as incurred. Securitization of Receivables Certain financing receivables are periodically transferred to special purpose entities (SPEs) in securitization transactions (see Note 13). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Financing receivables securitized - net.” The company recognizes finance income over the lives of these receivables using the interest method. Receivables and Allowances All financing and trade receivables are reported on the balance sheet at outstanding principal adjusted for any charge-offs, the allowance for credit losses, and any deferred fees or costs on originated financing receivables. Allowances for credit losses are maintained in amounts considered to be appropriate in relation to the receivables outstanding based on collection experience, economic conditions, and credit risk quality. Receivables are written-off to the allowance when the account is considered uncollectible. Impairment of Long-Lived Assets, Goodwill, and Other Intangible Assets The company evaluates the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. Goodwill and intangible assets with indefinite lives are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances indicate a reduction in the fair value below the carrying value. Goodwill is allocated and reviewed for impairment by reporting units, which consist primarily of the operating segments and certain other reporting units. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (see Notes 5 and 26). Derivative Financial Instruments It is the company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The company’s financial services manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as either a cash flow hedge or a fair value hedge or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income to the extent the hedge was effective by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All ineffective changes in derivative fair values are recognized currently in net income. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, the hedge accounting discussed above is discontinued (see Note 27). Foreign Currency Translation The functional currencies for most of the company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in other comprehensive income. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange forward contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2017, 2016, and 2015 was $(62) million, $(38) million, and $22 million, respectively. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 12 Months Ended |
Oct. 29, 2017 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | 3. NEW ACCOUNTING STANDARDS New Accounting Standards Adopted In the first quarter of 2017, the company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which amends Accounting Standards Codification (ASC) 835-30, Interest – Imputation of Interest. This ASU requires that debt issuance costs related to borrowings be presented in the balance sheet as a direct deduction from the carrying amount of the borrowing. As required, the presentation and disclosure requirements were adopted through retrospective application with the consolidated balance sheet and related notes in prior periods adjusted for a consistent presentation. Debt issuance costs of $63 million at October 30, 2016 were reclassified from other assets to borrowings in the consolidated balance sheet. In the third quarter of 2017, the company early adopted ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU changes the treatment of share based payment transactions by recognizing the impact of excess tax benefits or deficiencies related to exercised or vested awards in income tax expense in the period of exercise or vesting, instead of common stock. As required, this change was reflected for all periods in fiscal year 2017. Net income increased in fiscal year 2017 by approximately $30 million. The ASU also modified the presentation of excess tax benefits in the statement of consolidated cash flows by including that amount with other income tax cash flows as an operating activity and no longer presented separately as a financing activity. This change was recognized through a retrospective application that increased net cash flow provided by operating activities by approximately $30 million, $5 million, and $19 million in fiscal years 2017, 2016, and 2015. The ASU also requires that cash paid by an employer when directly withholding shares for tax withholding purposes should be presented as a financing activity in the statement of consolidated cash flows, which is the company’s existing presentation. The company will continue to recognize the impact of share-based payment award forfeitures as the forfeitures occur. In the third quarter of 2017, the company early adopted ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which amends ASC 350, Intangibles – Goodwill and Other. This ASU simplifies the goodwill impairment test by removing the requirement to perform a hypothetical purchase price allocation when the carrying value of a reporting unit exceeds its fair value. This ASU states the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. The adoption did not have a material effect on the company’s consolidated financial statement. The company also adopted the following standards in the first quarter of 2017, none of which had a material effect on the company’s consolidated financial statements: Accounting Standard Update 2014-12—Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which amends ASC 718, Compensation–Stock Compensation 2015-05—Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350-40, Intangibles–Goodwill and Other–Internal-Use Software 2015-11—Simplifying the Measurement of Inventory, which amends ASC 330, Inventory 2015-15—Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which amends ASC 835-30, Interest–Imputation of Interest New Accounting Standards to be Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue. In August 2015, the FASB amended the effective date to be the first quarter of fiscal year 2019 with early adoption permitted in the first quarter of fiscal year 2018. The FASB issued several amendments clarifying various aspects of the ASU, including revenue transactions that involve a third party, goods or services that are immaterial in the context of the contract, and licensing arrangements. The company plans to adopt the ASU effective the first quarter of fiscal year 2019 using a modified retrospective method. The company’s evaluation of the ASU is largely complete, with the exception of the Wirtgen acquisition (see Note 30). The ASU requires that a gross asset and liability rather than a net liability be recorded for the value of estimated service parts returns and the refund liability. The gross asset will be recorded in other assets and the gross liability will be recorded in accounts payable and accrued expenses. In addition, certain revenue disclosures will be expanded. At this point of the evaluation, the company has not identified an item that will have a material effect on the company’s consolidated financial statements. The company continues to evaluate the ASU’s potential effects on the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments - Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income and no longer in other comprehensive income. The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the company is not permitted. The ASU will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The company is evaluating the potential effects on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU does not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. Lessees and lessors will use a modified retrospective transition approach. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The company is evaluating the potential effects on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323, Investments - Equity Method and Joint Ventures. This ASU eliminates the requirement to retroactively restate the investment, results of operations, and retained earnings on a step by step basis when an investment qualifies for use of the equity method as a result of an increase in ownership or degree of influence. The effective date will be the first quarter of fiscal year 2018, with early adoption permitted, and will be adopted prospectively. The adoption will not have a material effect on the company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The ASU will be adopted using a modified-retrospective approach. The company is evaluating the potential effects on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach. The adoption will not have a material effect on the company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a modified-retrospective transition approach. The adoption will not have a material effect on the company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted, and will be adopted using a retrospective transition approach. The adoption will not have a material effect on the company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which amends ASC 805, Business Combinations. This ASU provides further guidance on the definition of a business to determine whether transactions should be accounted for as acquisitions of assets or businesses. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted in certain cases. The ASU will be adopted on a prospective basis and will not have a material effect on the company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends ASC 715, Compensation – Retirement Benefits. This ASU requires that employers report only the service cost component of the total defined benefit pension and postretirement benefit cost in the same income statement lines as compensation for the participating employees. The other components of these benefit costs are reported outside of income from operations. In addition, only the service cost component of the benefit costs is eligible for capitalization. The ASU will be adopted on a retrospective basis for the presentation of the benefit costs and on a prospective basis for the capitalization of only the service cost. The effective date is fiscal year 2019, with early adoption permitted. The company will adopt the ASU in the first quarter of fiscal year 2018. If adopted in fiscal year 2017, operating profit would have increased by approximately $31 million. The adoption is estimated to improve operating profit in fiscal year 2018 by approximately $25 million. In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables—Nonrefundable Fees and Other Costs. This ASU reduces the amortization period for certain callable debt securities held at a premium to the earliest call date. The treatment of securities held at a discount is unchanged. The effective date is the first quarter of fiscal year 2020, with early adoption permitted. The adoption will not have a material effect on the company’s consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. The ASU will be adopted on a prospective basis. The effective date is the first quarter of fiscal year 2019, with early adoption permitted. The adoption will not have a material effect on the company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. The company is evaluating the potential effects on the consolidated financial statements. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 12 Months Ended |
Oct. 29, 2017 | |
ACQUISITIONS AND DISPOSITIONS | |
ACQUISITIONS AND DISPOSITIONS | 4. ACQUISITIONS AND DISPOSITIONS In September 2017, the company acquired Blue River Technology (Blue River), which is based in Sunnyvale, California for an acquisition cost of approximately $284 million, net of cash acquired of $4 million and $21 million funded to escrow for post-acquisition expenses. Blue River has designed and integrated computer vision and machine learning technology to optimize the use of farm inputs. Machine learning technologies could eventually be applied to a wide range of the company’s products. The preliminary fair values assigned to the assets and liabilities related to the acquired entity were approximately $1 million of trade receivables, $2 million of property and equipment, $193 million of goodwill, $125 million of identifiable intangible assets, $1 million of accounts payable and accrued expenses, and $36 million of deferred tax liabilities. The identifiable intangibles were primarily related to in-process research and development, which will not be amortized until the research and development efforts are complete or end. The goodwill is not expected to be deducted for tax purposes. Blue River is included in the company’s agriculture and turf operating segment. In March 2016, the company acquired an 80 percent interest in Hagie Manufacturing Company, LLC, the U.S. market leader in high-clearance sprayers located in Clarion, Iowa, for a cost of approximately $53 million, net of cash acquired of $3 million. The fair values assigned to the assets and liabilities related to the acquired entity were approximately $2 million of trade receivables, $33 million of inventories, $17 million of property and equipment, $33 million of goodwill, $22 million of identifiable intangible assets, $3 million of other assets, and $43 million of accounts payable and accrued expenses, with a $14 million redeemable noncontrolling interest. The identifiable intangibles were primarily related to technology, trade name and customer relationships, which have a weighted average amortization period of eight years. The goodwill is deductible for tax purposes. If certain events occur, the minority interest holder has the right to exercise a put option that would require the company to purchase the holder’s membership interest. The company also has a call option exercisable after a certain period of time. The put and call options cannot be separated from the noncontrolling interest. Due to the redemption features, the minority interest holder’s value is classified as a redeemable noncontrolling interest in the company’s consolidated balance sheet. In February 2016, the company acquired Monosem for a cost of approximately $146 million, net of cash acquired of $20 million. Monosem, with four facilities in France and two in the U.S., is the European market leader in precision planters. The fair values assigned to the assets and liabilities related to the acquired entity were approximately $5 million of trade receivables, $2 million of other receivables, $29 million of inventories, $24 million of property and equipment, $62 million of goodwill, $42 million of identifiable intangible assets, $23 million of other assets, $22 million of accounts payable and accrued expenses, and $19 million of deferred tax liabilities. The identifiable intangibles were primarily related to trade name, customer relationships and technology, which have a weighted average amortization period of nine years. The goodwill is not deductible for tax purposes. For the 2017 and 2016 acquisitions, the entities were consolidated and the results of these operations have been included in the company’s consolidated financial statements in the agriculture and turf operating segment since the dates of acquisition. The pro forma results of operations as if the acquisitions had occurred at the beginning of the current or comparative fiscal year would not differ significantly from the reported results. In March 2015, the company closed the sale of all of the stock of its wholly-owned subsidiaries, John Deere Insurance Company and John Deere Risk Protection, Inc. to Farmers Mutual Hail Insurance Company of Iowa. These operations were included in the company’s financial services operating segment. The total amount of proceeds from the sale was approximately $154 million, including $5 million of cash and cash equivalents sold, with a gain recorded in other income of $42 million pretax and $40 million after-tax. The tax expense was partially offset by a change in a valuation allowance on a capital loss carryforward. The company provided certain business services for a fee during a transition period. |
SPECIAL ITEMS
SPECIAL ITEMS | 12 Months Ended |
Oct. 29, 2017 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | 5. SPECIAL ITEMS Impairments In the fourth quarter of 2017, the company recorded a non-cash charge of $40 million pretax in equity in loss of unconsolidated affiliates for an other than temporary decline in value of an investment in an international construction equipment manufacturer with a $14 million income tax benefit recorded in the provision for income taxes (see Note 26). In the fourth quarter of 2016, the company recorded a non-cash charge in cost of sales for the impairment of long-lived assets of $13 million pretax and after-tax. The assets are part of the company’s construction and forestry operations in China. The impairment is the result of a decline in forecasted financial performance that indicated it was probable the future cash flows would not cover the carrying amount of assets used to manufacture construction equipment in that country. In addition, the company recorded a non-cash charge of $12 million pretax and after-tax, in equity in loss of unconsolidated affiliates for an other than temporary decline in value of an investment in a construction equipment joint venture in Brazil (see Note 26). In 2016, the company recorded non-cash charges in other operating expenses of approximately $31 million pretax for the impairment of equipment on operating leases and approximately $29 million pretax on matured operating lease inventory recorded in other assets. The impairment was the result of lower estimated values of used agriculture and construction equipment than originally estimated with the probable effect that the future cash flows would not cover the carrying amount of the net assets. The assets are part of the financial services operations (see Note 26). Voluntary Employee-Separation Programs During the fourth quarter of 2016, the company announced voluntary employee-separation programs as part of its effort to reduce operating costs. The programs provided for cash payments based on previous years of service. The expense was recorded in the period the employees accepted the separation offer. The programs’ total pretax expenses were $113 million, of which $11 million was recorded in the fourth quarter of 2016 and $102 million in 2017. The total 2017 expenses were allocated approximately 30 percent cost of sales, 16 percent research and development, and 54 percent selling, administrative and general. In addition, the expenses were allocated 75 percent to agriculture and turf operations, 17 percent to the construction and forestry operations, and 8 percent to the financial services operations. Savings from these programs were estimated to be approximately $70 million in 2017 . Sale of Investment in Unconsolidated Affiliate In December 2016, the company sold approximately 38 percent of its interest in SiteOne Landscape Supply, Inc. (SiteOne) resulting in gross proceeds of $114 million and a gain of $105 million pretax or $66 million after-tax. In April 2017, the company sold an additional 68 percent of its then remaining interest in SiteOne resulting in gross proceeds of $184 million and a gain of $176 million pretax or $111 million after-tax. In July 2017, the company sold its remaining interest in SiteOne resulting in gross proceeds of $98 million and a gain of $94 million pretax or $59 million after-tax. The gains were recorded in other income in the agriculture and turf operating segment. After the December 2016 sale, the company retained approximately a 15 percent ownership interest in SiteOne and approximately a 5 percent ownership interest after the April sale. Prior to April 2017, the company’s representation on the SiteOne board of directors allowed the company to exercise significant influence, and therefore, the investment in SiteOne was accounted for using the equity method. In March 2017, the company reduced its representation on the SiteOne board of directors. As a result, beginning April 2017 the investment in SiteOne was recorded as an available-for-sale security and presented in marketable securities. In May 2016, the company received a distribution of $60 million from SiteOne that reduced the company’s investment in unconsolidated affiliates. The distribution included $4 million of a return on investment, which is shown in the statement of consolidated cash flows in undistributed earnings of unconsolidated affiliates in net cash provided by operating activities and $56 million of a return of investment shown in other cash flows from investing activities. In May 2016, the company also sold approximately 30 percent of its interest in SiteOne in an initial public offering and terminated a service agreement resulting in gross proceeds of approximately $81 million with a total gain of $75 million pretax or $47 million after-tax. The gain was recorded in other income in the agriculture and turf operating segment. The company retained approximately a 24 percent ownership interest in SiteOne after the May 2016 sale. |
CASH FLOW INFORMATION
CASH FLOW INFORMATION | 12 Months Ended |
Oct. 29, 2017 | |
CASH FLOW INFORMATION | |
CASH FLOW INFORMATION | 6. CASH FLOW INFORMATION For purposes of the statement of consolidated cash flows, the company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the company’s short-term borrowings, excluding the current maturities of long-term borrowings, mature or may require payment within three months or less. The equipment operations sell a significant portion of their trade receivables to financial services. These intercompany cash flows are eliminated in the consolidated cash flows. All cash flows from the changes in trade accounts and notes receivable (see Note 12) are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the company’s customers. Cash flows from financing receivables that are related to sales to the company’s customers (see Note 12) are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities. The company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The company transferred inventory to equipment on operating leases of $801 million, $685 million, and $674 million in 2017, 2016, and 2015, respectively. The company also had accounts payable related to purchases of property and equipment of $108 million, $114 million, and $89 million at October 29, 2017, October 30, 2016, and November 1, 2015, respectively. Cash payments for interest and income taxes consisted of the following in millions of dollars: 2017 2016 2015 Interest: Equipment operations $ 506 $ 442 $ 471 Financial services 665 524 443 Intercompany eliminations (268) (240) (253) Consolidated $ 903 $ 726 $ 661 Income taxes: Equipment operations $ 898 $ 314 $ 828 Financial services 92 (26) 190 Intercompany eliminations (9) 104 (117) Consolidated $ 981 $ 392 $ 901 |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Oct. 29, 2017 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | 7. PENSION AND OTHER POSTRETIREMENT BENEFITS The company has several defined benefit pension plans and postretirement health care and life insurance plans covering its U.S. employees and employees in certain foreign countries. The company uses an October 31 measurement date for these plans. The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2017 2016 2015 Pensions Service cost $ 274 $ 254 $ 282 Interest cost 361 391 474 Expected return on plan assets (790) (775) (769) Amortization of actuarial loss 247 211 223 Amortization of prior service cost 12 16 25 Other postemployment benefits 2 1 Settlements/curtailments 2 11 11 Net cost $ 106 $ 110 $ 247 Weighted-average assumptions Discount rates - service cost 3.5% Discount rates - interest cost 3.0% Rate of compensation increase 3.8% Expected long-term rates of return 7.3% The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2017 2016 2015 Health care and life insurance Service cost $ 42 $ 38 $ 46 Interest cost 194 204 259 Expected return on plan assets (17) (35) (55) Amortization of actuarial loss 99 73 91 Amortization of prior service credit (77) (78) (77) Settlements/curtailments 1 Net cost $ 241 $ 202 $ 265 Weighted-average assumptions Discount rates - service cost 4.7% Discount rates - interest cost 3.2% Expected long-term rates of return 6.3% In 2016, the company changed the method used to estimate the service and interest cost components of the net periodic pension and postretirement benefits cost. This method uses the spot yield curve approach to estimate the service and interest cost by applying the specific spot rates along the yield curve used to determine the benefit plan obligations to relevant projected cash outflows. For 2015, the service and interest cost components were determined using a single weighted-average discount rate. The change did not affect the measurement of the total benefit plan obligations as the change in service and interest cost offsets in the actuarial gains and losses recorded in other comprehensive income. The spot yield curve approach provides a more precise measure of service and interest cost by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The company accounted for this change as a change in estimate prospectively beginning in 2016. The decrease in the 2016 total service and interest cost was approximately $175 million compared to the previous method. The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2017 2016 2015 Pensions Net cost $ 106 $ 110 $ 247 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (702) 1,140 361 Prior service cost 1 66 Amortization of actuarial loss (247) (211) (223) Amortization of prior service cost (12) (16) (25) Settlements/curtailments (2) (14) (11) Total (gain) loss recognized in other comprehensive (income) loss (963) 900 168 Total recognized in comprehensive (income) loss $ (857) $ 1,010 $ 415 The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2017 2016 2015 Health care and life insurance Net cost $ 241 $ 202 $ 265 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (309) 496 (141) Prior service credit (3) (3) Amortization of actuarial loss (99) (73) (91) Amortization of prior service credit 77 78 77 Settlements/curtailments (2) Total (gain) loss recognized in other comprehensive (income) loss (331) 498 (160) Total recognized in comprehensive (income) loss $ (90) $ 700 $ 105 The benefit plan obligations, funded status, and the assumptions related to the obligations at October 29, 2017 and October 30, 2016, respectively, in millions of dollars follow: Health Care and Pensions Life Insurance 2017 2016 2017 2016 Change in benefit obligations Beginning of year balance $ (13,086) $ (12,186) $ (6,500) $ (6,084) Service cost (274) (254) (42) (38) Interest cost (361) (391) (194) (204) Actuarial gain (loss) (35) (1,001) 280 (478) Amendments (1) 3 Benefits paid 704 702 312 321 Health care subsidies (9) (16) Other postemployment benefits (2) Settlements/curtailments 2 6 Foreign exchange and other (116) 41 (9) (4) End of year balance (13,166) (13,086) (6,162) (6,500) Change in plan assets (fair value) Beginning of year balance 11,137 11,164 435 689 Actual return on plan assets 1,517 628 46 17 Employer contribution 62 80 366 47 Benefits paid (704) (702) (312) (321) Settlements (2) (3) Foreign exchange and other 83 (30) 4 3 End of year balance 12,093 11,137 539 435 Funded status $ (1,073) $ (1,949) $ (5,623) $ (6,065) Weighted-average assumptions Discount rates 3.6% 3.7% Rate of compensation increase 3.8% In the fourth quarter of 2015, the company decided to transition Medicare eligible wage and certain Medicare eligible salaried retirees to a Medicare Advantage plan offered by a private insurance company effective in January 2016. This change did not affect the participants’ level of benefits and resulted in cost savings for the company. The mortality assumptions for the 2017 and 2016 benefit plan obligations reflect the most recent tables issued by the Society of Actuaries at that time. The amounts recognized at October 29, 2017 and October 30, 2016, respectively, in millions of dollars consist of the following: Health Care and Pensions Life Insurance 2017 2016 2017 2016 Amounts recognized in balance sheet Noncurrent asset $ 538 $ 94 Current liability (40) (33) $ (63) $ (32) Noncurrent liability (1,571) (2,010) (5,560) (6,033) Total $ (1,073) $ (1,949) $ (5,623) $ (6,065) Amounts recognized in accumulated other comprehensive income – pretax Net actuarial loss $ 4,358 $ 5,309 $ 1,457 $ 1,865 Prior service cost (credit) 55 67 (182) (259) Total $ 4,413 $ 5,376 $ 1,275 $ 1,606 The total accumulated benefit obligations for all pension plans at October 29, 2017 and October 30, 2016, was $12,416 million and $12,410 million, respectively. The accumulated benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were $8,234 million and $7,345 million, respectively, at October 29, 2017 and $8,402 million and $7,016 million, respectively, at October 30, 2016. The projected benefit obligations and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $9,059 million and $7,448 million, respectively, at October 29, 2017 and $9,157 million and $7,114 million, respectively, at October 30, 2016. The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) and reported outside of income from operations during fiscal 2018 in millions of dollars follow: Health Care and Pensions Life Insurance Net actuarial loss $ 225 $ 67 Prior service cost (credit) 12 (77) Total $ 237 $ (10) Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10% of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. The company expects to contribute approximately $63 million to its pension plans and approximately $74 million to its health care and life insurance plans in 2018, which are primarily direct benefit payments for unfunded plans. The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars: Health Care and Pensions Life Insurance* 2018 $ 721 $ 334 2019 726 337 2020 713 342 2021 701 346 2022 693 352 2023 to 2027 3,458 1,758 * Net of prescription drug group benefit subsidy under Medicare Part D. The annual rates of increase in the per capita cost of covered health care benefits (the health care cost trend rates) used to determine accumulated postretirement benefit obligations were based on the trends for medical and prescription drug claims for pre- and post-65 age groups due to the effects of Medicare. For the 2017 actuarial valuation, the weighted-average composite trend rates for these obligations were assumed to be an 8.9 percent increase from 2017 to 2018, gradually decreasing to 4.8 percent from 2024 to 2025 and all future years. The 2016 obligations and the cost in 2017 assumed an 8.3 percent increase from 2016 to 2017, gradually decreasing to 4.8 percent from 2024 to 2025 and all future years. An increase of one percentage point in the assumed health care cost trend rate would increase the accumulated postretirement benefit obligations by $791 million and the aggregate of service and interest cost component of net periodic postretirement benefits cost for the year by $36 million. A decrease of one percentage point would decrease the obligations by $615 million and the cost by $27 million. The discount rate assumptions used to determine the postretirement obligations for all periods presented were based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which the company’s benefit obligations could effectively be settled at the October 31 measurement dates. Fair value measurement levels in the following tables are defined in Note 26. The fair values of the pension plan assets at October 29, 2017 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 618 $ 349 $ 269 Equity: U.S. equity securities 1,871 1,850 21 International equity securities 1,551 1,541 10 Fixed Income: Government and agency securities 483 241 242 Corporate debt securities 1,285 1,285 Mortgage-backed securities 42 42 Real estate 103 101 2 Derivative contracts - assets* 159 28 131 Derivative contracts - liabilities** (76) (2) (74) Receivables, payables, and other 1 1 Securities lending collateral 420 420 Securities lending liability (420) (420) Securities sold short (379) (375) (4) Total of Level 1 and Level 2 assets 5,658 $ 3,734 $ 1,924 Investments at net asset value: Short-term investments 203 U.S. equity funds 1,704 International equity funds 921 Corporate debt funds 28 Fixed income funds 772 Real estate 567 Hedge funds 651 Private equity/venture capital 1,560 Other investments 29 Total net assets $ 12,093 * Includes contracts for interest rates of $79 million, foreign currency of $49 million, equity of $27 million, and other of $4 million. ** Includes contracts for interest rates of $48 million, foreign currency of $26 million, and other of $2 million. The fair values of the health care assets at October 29, 2017 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 30 $ 28 $ 2 Equity: U.S. equity securities and funds 42 42 International equity securities 9 9 Fixed Income: Government and agency securities 40 37 3 Corporate debt securities 21 21 Mortgage-backed securities 10 10 Real estate 1 1 Interest rate derivative contracts - assets 1 1 Securities lending collateral 25 25 Securities lending liability (25) (25) Securities sold short (2) (2) Total of Level 1 and Level 2 assets 152 $ 115 $ 37 Investments at net asset value: Short-term investments 1 U.S. equity funds 164 International equity funds 117 Fixed income funds 87 Real estate funds 4 Hedge funds 4 Private equity/venture capital 10 Total net assets $ 539 The fair values of the pension plan assets at October 30, 2016 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 684 $ 322 $ 362 Equity: U.S. equity securities and funds 3,000 2,965 35 International equity securities and funds 1,711 1,697 14 Fixed Income: Government and agency securities 440 224 216 Corporate debt securities 1,205 1,205 Mortgage-backed securities 39 39 Fixed income funds 20 20 Real estate 121 118 3 Derivative contracts - assets* 191 3 188 Derivative contracts - liabilities** (59) (14) (45) Receivables, payables, and other 6 5 1 Securities lending collateral 693 108 585 Securities lending liability (693) (108) (585) Securities sold short (338) (333) (5) Total of Level 1 and Level 2 assets 7,020 $ 5,007 $ 2,013 Investments at net asset value: Short-term investments 216 U.S. equity funds 30 International equity funds 595 Corporate debt funds 25 Fixed income funds 482 Real estate 515 Hedge funds 624 Private equity/venture capital 1,603 Other investments 27 Total net assets $ 11,137 * Includes contracts for interest rates of $125 million, foreign currency of $59 million, equity of $4 million, and other of $3 million. ** Includes contracts for interest rates of $19 million, foreign currency of $33 million, equity of $6 million, and other of $1 million. The fair values of the health care assets at October 30, 2016 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 32 $ 27 $ 5 Equity: U.S. equity securities and funds 138 138 International equity securities and funds 25 25 Fixed Income: Government and agency securities 43 40 3 Corporate debt securities 30 30 Mortgage-backed securities 11 11 Real estate 2 2 Derivative contracts - assets* 3 3 Securities lending collateral 48 11 37 Securities lending liability (48) (11) (37) Securities sold short (5) (5) Total of Level 1 and Level 2 assets 279 $ 227 $ 52 Investments at net asset value: Short-term investments 3 International equity funds 60 Fixed income funds 20 Real estate funds 7 Hedge funds 44 Private equity/venture capital 22 Total net assets $ 435 * Includes contracts for interest rates of $2 million and foreign currency of $1 million. Investments at net asset value in the preceding tables are measured at fair value using net asset value per share, and therefore, are not classified in the fair value hierarchy. Fair values are determined as follows: Cash and Short-Term Investments – Includes accounts that are valued based on the account value, which approximates fair value, and investment funds that are valued on the fund’s net asset value (NAV) based on the fair value of the underlying securities. Also included are securities that are valued using a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data. Equity Securities and Funds – The values are determined primarily by closing prices in the active market in which the equity investment trades, or the fund’s NAV, based on the fair value of the underlying securities. Fixed Income Securities and Funds – The securities are valued using either 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, or they are valued using the closing prices in the active market in which the fixed income investment trades. Fixed income funds are valued using the fund’s NAV, based on the fair value of the underlying securities or closing prices in the active market in which the investment trades. Real Estate, Venture Capital, Private Equity, Hedge Funds, and Other – The investments that are structured as limited partnerships are valued at estimated fair value based on their proportionate share of the limited partnership’s fair value that is determined by the respective general partner. These investments are valued using a combination of NAV, an income approach (primarily estimated cash flows discounted over the expected holding period), or market approach (primarily the valuation of similar securities and properties). Real estate investment trusts are primarily valued at the closing prices in the active markets in which the investment trades. Real estate funds and other investments are primarily valued at NAV, based on the fair value of the underlying securities. Interest Rate, Foreign Currency, and Other Derivative Instruments – The derivatives are valued using either an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates, or a market approach (closing prices in the active market in which the derivative instrument trades). The primary investment objective for the pension and health care plans assets is to maximize the growth of these assets to support the projected obligations to the beneficiaries over a long period of time, and to do so in a manner that is consistent with the company’s risk tolerance. The asset allocation policy is the most important decision in managing the assets and it is reviewed regularly. The asset allocation policy considers the company’s long-term asset class risk/return expectations since the obligations are long-term in nature. The current target allocations for pension assets are approximately 49 percent for equity securities, 27 percent for debt securities, 5 percent for real estate, and 19 percent for other investments. The target allocations for health care assets are approximately 59 percent for equity securities, 29 percent for debt securities, 1 percent for real estate, and 11 percent for other investments. The allocation percentages above include the effects of combining derivatives with other investments to manage asset allocations and exposures to interest rates and foreign currency exchange. The assets are well diversified and are managed by professional investment firms as well as by investment professionals who are company employees. As a result of the company’s diversified investment policy, there were no significant concentrations of risk. The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value. The expected return is based on the outlook for inflation and for returns in multiple asset classes, while also considering historical returns, asset allocation, and investment strategy. The company’s approach has emphasized the long-term nature of the return estimate such that the return assumption is not changed significantly unless there are fundamental changes in capital markets that affect the company’s expectations for returns over an extended period of time (i.e., 10 to 20 years). The average annual return of the company’s U.S. pension fund was approximately 7.2 percent during the past ten years and approximately 8.3 percent during the past 20 years. Since return premiums over inflation and total returns for major asset classes vary widely even over ten-year periods, recent history is not necessarily indicative of long-term future expected returns. The company’s systematic methodology for determining the long-term rate of return for the company’s investment strategies supports its long-term expected return assumptions. The company has created certain Voluntary Employees’ Beneficiary Association trusts (VEBAs) for the funding of postretirement health care benefits. The future expected asset returns for these VEBAs are lower than the expected return on the other pension and health care plan assets due to investment in a higher proportion of liquid securities. These assets are in addition to the other postretirement health care plan assets that have been funded under Section 401(h) of the U.S. Internal Revenue Code and maintained in a separate account in the company’s pension plan trust. The company has defined contribution plans related to employee investment and savings plans primarily in the U.S. The company’s contributions and costs under these plans were $188 million in 2017, $193 million in 2016, and $185 million in 2015. The contribution rate varies primarily based on the company’s performance in the prior year and employee participation in the plans. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 29, 2017 | |
INCOME TAXES | |
INCOME TAXES | 8. INCOME TAXES The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars: 2017 2016 2015 Current: U.S.: Federal $ 360 $ 51 $ 377 State 48 26 32 Foreign 463 340 449 Total current 871 417 858 Deferred: U.S.: Federal 59 297 21 State 7 11 4 Foreign 34 (25) (43) Total deferred 100 283 (18) Provision for income taxes $ 971 $ 700 $ 840 Based upon the location of the company’s operations, the consolidated income before income taxes in the U.S. in 2017, 2016, and 2015 was $1,607 million, $967 million, and $1,838 million, respectively, and in foreign countries was $1,547 million, $1,257 million, and $942 million, respectively. Certain foreign operations are branches of Deere & Company and are subject to U.S. as well as foreign income tax regulations. The pretax income by location and the preceding analysis of the income tax provision by taxing jurisdiction are not directly related. A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follow: 2017 2016 2015 U.S. federal income tax provision at a statutory rate of 35 percent $ 1,104 $ 778 $ 973 Increase (decrease) resulting from: State and local income taxes, net of federal income tax benefit 35 26 23 Differences in taxability of foreign earnings (83) (107) (449) Nondeductible impairment charges 4 Research and business tax credits (63) (57) (76) Tax rates on foreign earnings (86) (27) (36) Valuation allowance on deferred taxes 89 79 384 Other-net (25) 4 21 Provision for income taxes $ 971 $ 700 $ 840 At October 29, 2017, accumulated earnings in certain subsidiaries outside the U.S. totaled $5,961 million for which no provision for U.S. income taxes or foreign withholding taxes has been made because it is expected that such earnings will be reinvested outside the U.S. indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. At October 29, 2017, the amount of cash and cash equivalents and marketable securities held by these foreign subsidiaries, in which earnings are considered indefinitely reinvested, was $3,386 million. Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of the deferred income tax assets and liabilities at October 29, 2017 and October 30, 2016 in millions of dollars follows: 2017 2016 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities Other postretirement benefit liabilities $ 2,011 $ 2,191 Lease transactions $ 933 $ 817 Tax loss and tax credit carryforwards 677 661 Accrual for sales allowances 680 592 Tax over book depreciation 569 578 Pension liability - net 420 706 Foreign unrealized losses 7 472 Accrual for employee benefits 141 133 Share-based compensation 116 152 Goodwill and other intangible assets 130 89 Allowance for credit losses 107 88 Deferred compensation 59 50 Undistributed foreign earnings 21 30 Other items 432 172 471 175 Less valuation allowances (620) (1,029) Deferred income tax assets and liabilities $ 4,030 $ 1,825 $ 4,487 $ 1,689 Deere & Company files a consolidated federal income tax return in the U.S., which includes the wholly-owned financial services subsidiaries. These subsidiaries account for income taxes generally as if they filed separate income tax returns. At October 29, 2017, certain tax loss and tax credit carryforwards of $677 million were available with $209 million expiring from 2018 through 2037 and $468 million with an indefinite carryforward period. A reconciliation of the total amounts of unrecognized tax benefits at October 29, 2017, October 30, 2016, and November 1, 2015 in millions of dollars follows: 2017 2016 2015 Beginning of year balance $ 198 $ 229 $ 213 Increases to tax positions taken during the current year 35 14 32 Increases to tax positions taken during prior years 13 11 29 Decreases to tax positions taken during prior years (17) (36) (15) Decreases due to lapse of statute of limitations (11) (7) (11) Settlements (1) (5) (6) Foreign exchange 4 (8) (13) End of year balance $ 221 $ 198 $ 229 The amount of unrecognized tax benefits at October 29, 2017 and October 30, 2016 that would affect the effective tax rate if the tax benefits were recognized was $86 million and $81 million, respectively. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant. The company files its tax returns according to the tax laws of the jurisdictions in which it operates, which includes the U.S. federal jurisdiction and various state and foreign jurisdictions. The U.S. Internal Revenue Service has completed the examination of the company’s federal income tax returns for periods prior to 2009. The years 2009 through 2014 federal income tax returns are currently under examination. Various state and foreign income tax returns, including major tax jurisdictions in Canada and Germany, also remain subject to examination by taxing authorities. The company’s policy is to recognize interest related to income taxes in interest expense and interest income and recognize penalties in selling, administrative and general expenses. During 2017, 2016, and 2015, the total amount of expense from interest and penalties was $6 million, none, and $23 million and the interest income was $6 million, none, and $3 million, respectively. At October 29, 2017 and October 30, 2016, the liability for accrued interest and penalties totaled $66 million and $68 million, respectively, and there was no receivable for interest at either year-end. |
OTHER INCOME AND OTHER OPERATIN
OTHER INCOME AND OTHER OPERATING EXPENSES | 12 Months Ended |
Oct. 29, 2017 | |
OTHER INCOME AND OTHER OPERATING EXPENSES | |
OTHER INCOME AND OTHER OPERATING EXPENSES | 9. OTHER INCOME AND OTHER OPERATING EXPENSES The major components of other income and other operating expenses consisted of the following in millions of dollars: 2017 2016 2015 Other income Revenues from services $ 288 $ 270 $ 280 Insurance premiums and fees earned** 211 195 173 SiteOne investment gains* 375 75 Investment income 17 16 26 Other 230 190 228 Total $ 1,121 $ 746 $ 707 Other operating expenses Depreciation of equipment on operating leases $ 853 $ 742 $ 577 Insurance claims and expenses** 187 188 183 Cost of services 168 162 160 Other 109 163 41 Total $ 1,317 $ 1,255 $ 961 * See Note 5. ** Primarily related to extended warranties (see Note 22). |
UNCONSOLIDATED AFFILIATED COMPA
UNCONSOLIDATED AFFILIATED COMPANIES | 12 Months Ended |
Oct. 29, 2017 | |
UNCONSOLIDATED AFFILIATED COMPANIES | |
UNCONSOLIDATED AFFILIATED COMPANIES | 10. UNCONSOLIDATED AFFILIATED COMPANIES Unconsolidated affiliated companies are companies in which Deere & Company generally owns 20 percent to 50 percent of the outstanding voting shares. Deere & Company does not control these companies and accounts for its investments in them on the equity basis. The investments in these companies primarily consist of Bell Equipment Limited (31 percent ownership), Deere-Hitachi Construction Machinery Corporation (50 percent ownership), and Deere-Hitachi Maquinas de Construcao do Brasil S.A. (50 percent ownership). In 2017, the company sold its interest in SiteOne (see Note 5). The unconsolidated affiliated companies primarily manufacture or market equipment. Deere & Company’s share of the income or loss of these companies is reported in the consolidated income statement under “Equity in income (loss) of unconsolidated affiliates.” The investment in these companies is reported in the consolidated balance sheet under “Investments in unconsolidated affiliates.” Combined financial information of the unconsolidated affiliated companies in millions of dollars follows: Operations 2017 2016 2015 Sales $ $ 3,206 $ 3,290 Net income 30 23 Deere & Company’s equity in net income (loss) (2) 1 Financial Position 2017 2016 Total assets $ $ Total external borrowings Total net assets Deere & Company’s share of the net assets Consolidated retained earnings at October 29, 2017 include undistributed earnings of the unconsolidated affiliates of $123 million. Dividends from unconsolidated affiliates were $4 million in 2017, $64 million in 2016 (see Note 5), and $1 million in 2015. In the ordinary course of business, the company purchases and sells components and finished goods to the unconsolidated affiliated companies. Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow : 2017 2016 2015 Net sales $ 84 $ 45 $ 37 Purchases 1,331 1,016 1,284 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Oct. 29, 2017 | |
MARKETABLE SECURITIES | |
MARKETABLE SECURITIES | 11. MARKETABLE SECURITIES All marketable securities are classified as available-for-sale, with unrealized gains and losses shown as a component of stockholders’ equity. Realized gains or losses from the sales of marketable securities are based on the specific identification method. The amortized cost and fair value of marketable securities at October 29, 2017 and October 30, 2016 in millions of dollars follow: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2017 Equity fund $ 37 $ $ 48 Fixed income fund 15 15 U.S. government debt securities 76 77 Municipal debt securities 39 $ 39 Corporate debt securities 133 135 International debt securities 22 20 Mortgage-backed securities* 119 118 Marketable securities $ 441 $ 17 $ $ 452 2016 Equity fund $ $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities $ Mortgage-backed securities* Marketable securities $ $ $ $ * Primarily issued by U.S. government sponsored enterprises. The contractual maturities of debt securities at October 29, 2017 in millions of dollars follow: Amortized Fair Cost Value Due in one year or less $ 26 $ 25 Due after one through five years 111 110 Due after five through 10 years 83 84 Due after 10 years 50 52 Mortgage-backed securities 119 118 Debt securities $ 389 $ 389 Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Proceeds from the sales of available-for-sale securities were $403 million in 2017, $62 million in 2016, and $120 million in 2015. Realized gains were $275 million in 2017 (see Note 5), and not significant in 2016 and 2015. Realized losses, the increase (decrease) in net unrealized gains or losses, and unrealized losses that have been continuous for over twelve months were not significant in 2017, 2016, and 2015. Unrealized losses at October 29, 2017 and October 30, 2016 were primarily the result of an increase in interest rates and were not recognized in income due to the ability and intent to hold to maturity. There were no significant impairment write-downs in the periods reported. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Oct. 29, 2017 | |
RECEIVABLES | |
RECEIVABLES | 12. RECEIVABLES Trade Accounts and Notes Receivable Trade accounts and notes receivable at October 29, 2017 and October 30, 2016 in millions of dollars follows: 2017 2016 Trade accounts and notes: Agriculture and turf $ 2,991 $ 2,438 Construction and forestry 934 573 Trade accounts and notes receivable – net $ 3,925 $ 3,011 At October 29, 2017 and October 30, 2016, dealer notes included in the previous table were $140 million and $143 million, and the allowance for credit losses was $56 million and $50 million, respectively. The equipment operations sell a significant portion of their trade receivables to financial services and provide compensation to these operations at approximate market rates of interest. Trade accounts and notes receivable primarily arise from sales of goods to independent dealers. Under the terms of the sales to dealers, interest is primarily charged to dealers on outstanding balances, from the earlier of the date when goods are sold to retail customers by the dealer or the expiration of certain interest-free periods granted at the time of the sale to the dealer, until payment is received by the company. Dealers cannot cancel purchases after the equipment is shipped and are responsible for payment even if the equipment is not sold to retail customers. The interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from one to twelve months for most equipment. Interest-free periods may not be extended. Interest charged may not be forgiven and the past due interest rates exceed market rates. The company evaluates and assesses dealers on an ongoing basis as to their creditworthiness and generally retains a security interest in the goods associated with the trade receivables. In certain jurisdictions, the company is obligated to repurchase goods sold to a dealer upon cancellation or termination of the dealer’s contract for such causes as change in ownership and closeout of the business. Trade accounts and notes receivable have significant concentrations of credit risk in the agriculture and turf sector and construction and forestry sector as shown in the previous table. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. Financing Receivables Financing receivables at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Unrestricted/Securitized Unrestricted/Securitized Retail notes: Agriculture and turf $ 15,200 $ 3,651 $ 14,152 $ 4,615 Construction and forestry 2,297 599 2,201 620 Total 17,497 4,250 16,353 5,235 Wholesale notes 3,653 3,971 Revolving charge accounts 3,629 3,135 Financing leases (direct and sales-type) 1,613 1,326 Total financing receivables 26,392 4,250 24,785 5,235 Less: Unearned finance income: Retail notes 972 78 812 94 Financing leases 142 109 Total 1,114 78 921 94 Allowance for credit losses 174 13 162 14 Financing receivables – net $ 25,104 $ 4,159 $ 23,702 $ 5,127 The residual values for investments in financing leases at October 29, 2017 and October 30, 2016 totaled $244 million and $156 million, respectively. Financing receivables have significant concentrations of credit risk in the agriculture and turf sector and construction and forestry sector as shown in the previous table. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. The company generally retains as collateral a security interest in the equipment associated with retail notes, wholesale notes, and financing leases. Financing receivables at October 29, 2017 and October 30, 2016 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars: 2017 2016 Unrestricted Unrestricted Retail notes*: Agriculture and turf $ 2,099 $ 1,896 Construction and forestry 368 336 Total 2,467 2,232 Wholesale notes 3,653 3,971 Sales-type leases 763 648 Total 6,883 6,851 Less: Unearned finance income: Retail notes 231 202 Sales-type leases 53 42 Total 284 244 Financing receivables related to the company’s sales of equipment $ 6,599 $ 6,607 * These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales. Financing receivable installments, including unearned finance income, at October 29, 2017 and October 30, 2016 are scheduled as follows in millions of dollars: 2017 2016 Unrestricted/Securitized Unrestricted/Securitized Due in months: 0 – 12 $ 13,237 $ 2,027 $ 12,835 $ 2,269 13 – 24 5,056 1,256 4,760 1,536 25 – 36 3,708 672 3,386 931 37 – 48 2,518 243 2,219 408 49 – 60 1,398 50 1,181 84 Thereafter 475 2 404 7 Total $ 26,392 $ 4,250 $ 24,785 $ 5,235 The maximum terms for retail notes are generally seven years for agriculture and turf equipment and five years for construction and forestry equipment. The maximum term for financing leases is generally five years, while the average term for wholesale notes is less than twelve months. At October 29, 2017 and October 30, 2016, the unpaid balances of receivables administered but not owned were $10 million and $15 million, respectively. At October 29, 2017 and October 30, 2016, worldwide financing receivables administered, which include financing receivables administered but not owned, totaled $29,273 million and $28,844 million, respectively. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables at October 29, 2017 and October 30, 2016 follows in millions of dollars: 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2017 Retail Notes: Agriculture and turf $ 118 $ 54 $ 49 $ 221 Construction and forestry 75 33 39 147 Other: Agriculture and turf 27 14 7 48 Construction and forestry 11 6 2 19 Total $ 231 $ 107 $ 97 $ 435 Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ 221 $ 173 $ 17,508 $ 17,902 Construction and forestry 147 30 2,618 2,795 Other: Agriculture and turf 48 12 7,610 7,670 Construction and forestry 19 5 1,059 1,083 Total $ 435 $ 220 $ 28,795 29,450 Less allowance for credit losses 187 Total financing receivables - net $ 29,263 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2016 Retail Notes: Agriculture and turf $ 115 $ 57 $ 65 $ 237 Construction and forestry 78 32 25 135 Other: Agriculture and turf 26 11 6 43 Construction and forestry 10 5 4 19 Total $ 229 $ 105 $ 100 $ 434 Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ 237 $ 191 $ 17,526 $ 17,954 Construction and forestry 135 35 2,558 2,728 Other: Agriculture and turf 43 9 7,286 7,338 Construction and forestry 19 9 957 985 Total $ 434 $ 244 $ 28,327 29,005 Less allowance for credit losses 176 Total financing receivables - net $ 28,829 An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars: Revolving Retail Charge Notes Accounts Other Total 2017 Allowance: Beginning of year balance $ $ 40 $ 23 $ 176 Provision 46 33 9 88 Write-offs (56) (53) (7) (116) Recoveries 20 20 1 41 Translation adjustments (2) (2) End of year balance* $ 121 $ 40 $ 26 $ 187 Financing receivables: End of year balance $ 20,697 $ 3,629 $ 5,124 $ 29,450 Balance individually evaluated $ 86 $ 3 $ 20 $ 109 2016 Allowance: Beginning of year balance $ 95 $ 40 $ 22 $ 157 Provision 43 36 5 84 Write-offs (43) (55) (5) (103) Recoveries 11 19 1 31 Translation adjustments 7 7 End of year balance* $ 113 $ 40 $ 23 $ 176 Financing receivables: End of year balance $ 20,682 $ 3,135 $ 5,188 $ 29,005 Balance individually evaluated $ 108 $ 8 $ 20 $ 136 2015 Allowance: Beginning of year balance $ 109 $ 41 $ 25 $ 175 Provision 22 21 3 46 Write-offs (26) (37) (4) (67) Recoveries 10 15 1 26 Translation adjustments (20) (3) (23) End of year balance* $ 95 $ 40 $ 22 $ 157 Financing receivables: End of year balance $ 21,567 $ 2,740 $ 5,494 $ 29,801 Balance individually evaluated $ 40 $ 6 $ 46 * Individual allowances were not significant. Past-due amounts over 30 days represented 1.48 percent and 1.50 percent of the receivables financed at October 29, 2017 and October 30, 2016, respectively. The allowance for credit losses represented .64 percent and .61 percent of financing receivables outstanding at October 29, 2017 and October 30, 2016, respectively. In addition, at October 29, 2017 and October 30, 2016, the company’s financial services operations had $155 million and $162 million, respectively, of deposits primarily withheld from dealers and merchants available for potential credit losses. Financing receivables are considered impaired when it is probable the company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing. An analysis of the impaired financing receivables at October 29, 2017 and October 30, 2016 follows in millions of dollars: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment 2017* Receivables with specific allowance** $ 36 $ 33 $ 10 $ 30 Receivables without a specific allowance*** 28 27 24 Total $ 64 $ 60 $ 10 $ 54 Agriculture and turf $ 49 $ 46 $ 10 $ 38 Construction and forestry $ 15 $ 14 $ 16 2016* Receivables with specific allowance** $ 31 $ 28 $ 9 $ 29 Receivables without a specific allowance*** 29 27 26 Total $ 60 $ 55 $ 9 $ 55 Agriculture and turf $ 33 $ 30 $ 8 $ 27 Construction and forestry $ 27 $ 25 $ 1 $ 28 * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During 2017, 2016, and 2015, the company identified 474, 167, and 107 financing receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $16 million, $19 million, and $8 million pre-modification and $15 million, $18 million, and $7 million post-modification, respectively. In 2017, there were $3 million of troubled debt restructurings that subsequently defaulted and were written off. In 2016 and 2015, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At October 29, 2017, the company had commitments to lend approximately $12 million to borrowers whose accounts were modified in troubled debt restructurings. Other Receivables Other receivables at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Taxes receivable $ 876 $ 702 Other 324 317 Other receivables $ 1,200 $ 1,019 |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 12 Months Ended |
Oct. 29, 2017 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | 13. SECURITIZATION OF FINANCING RECEIVABLES The company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into VIEs that are SPEs, or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors result in secured borrowings, which are recorded as “Short-term securitization borrowings” on the consolidated balance sheet. The securitized retail notes are recorded as “Financing receivables securitized - net” on the balance sheet. The total restricted assets on the balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs, and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,631 million and $2,718 million at October 29, 2017 and October 30, 2016, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,571 million and $2,655 million at October 29, 2017 and October 30, 2016, respectively. The credit holders of these SPEs do not have legal recourse to the company’s general credit. In certain securitizations, the company transfers retail notes to non-VIE banking operations, which are not consolidated since the company does not have a controlling interest in the entities. The company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses and other assets) of $478 million and $663 million at October 29, 2017 and October 30, 2016, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $454 million and $616 million at October 29, 2017 and October 30, 2016, respectively. In certain securitizations, the company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,155 million and $1,861 million at October 29, 2017 and October 30, 2016, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,096 million and $1,729 million at October 29, 2017 and October 30, 2016, respectively. The company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows at October 29 in millions of dollars: 2017 Carrying value of liabilities $ 1,096 Maximum exposure to loss 1,155 The total assets of unconsolidated VIEs related to securitizations were approximately $40 billion at October 29, 2017. The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 29, 2017 and October 30, 2016 were as follows in millions of dollars: 2017 2016 Financing receivables securitized (retail notes) $ 4,172 $ 5,141 Allowance for credit losses (13) (14) Other assets 105 115 Total restricted securitized assets $ 4,264 $ 5,242 The components of consolidated secured borrowings and other liabilities related to securitizations at October 29, 2017 and October 30, 2016 were as follows in millions of dollars: 2017 2016 Short-term securitization borrowings $ $ Accrued interest on borrowings Total liabilities related to restricted securitized assets $ $ The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At October 29, 2017, the maximum remaining term of all securitized retail notes was approximately five years. |
EQUIPMENT ON OPERATING LEASES
EQUIPMENT ON OPERATING LEASES | 12 Months Ended |
Oct. 29, 2017 | |
EQUIPMENT ON OPERATING LEASES | |
EQUIPMENT ON OPERATING LEASES | 14. EQUIPMENT ON OPERATING LEASES Operating leases arise primarily from the leasing of John Deere equipment to retail customers. Initial lease terms generally range from 12 to 60 months. Net equipment on operating leases at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment on operating leases: Agriculture and turf $ 5,385 $ Construction and forestry 1,209 Equipment on operating leases – net $ 6,594 $ The equipment is depreciated on a straight-line basis over the term of the lease. The accumulated depreciation on this equipment was $1,315 million and $1,054 million at October 29, 2017 and October 30, 2016, respectively. The corresponding depreciation expense was $853 million in 2017, $742 million in 2016, and $577 million in 2015. Future payments to be received on operating leases totaled $2,051 million at October 29, 2017 and are scheduled in millions of dollars as follows: 2018 - $878, 2019 - $602, 2020 - $347, 2021 - $182, and 2022 - $42. At October 29, 2017 and October 30, 2016, the company’s financial services operations had $52 million and $68 million, respectively, of deposits withheld from dealers available for potential losses on residual values. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Oct. 29, 2017 | |
INVENTORIES | |
INVENTORIES | 15. INVENTORIES Most inventories owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the “last-in, first-out” (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the “first-in, first-out” (FIFO) basis, or net realizable value. The value of gross inventories on the LIFO basis represented 61 percent of worldwide gross inventories at FIFO value at both October 29, 2017 and October 30, 2016, respectively. The pretax favorable income effect from the liquidation of LIFO inventory during 2016 was approximately $4 million. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 29, 2017 and October 30, 2016 in millions of dollars would have been as follows: 2017 2016 Raw materials and supplies $ 1,688 $ Work-in-process 495 Finished goods and parts 3,182 Total FIFO value 5,365 Less adjustment to LIFO value 1,461 Inventories $ 3,904 $ |
PROPERTY AND DEPRECIATION
PROPERTY AND DEPRECIATION | 12 Months Ended |
Oct. 29, 2017 | |
PROPERTY AND DEPRECIATION | |
PROPERTY AND DEPRECIATION | 16. PROPERTY AND DEPRECIATION A summary of property and equipment at October 29, 2017 and October 30, 2016 in millions of dollars follows: Useful Lives* (Years) 2017 2016 Equipment Operations Land $ 122 $ 119 Buildings and building equipment 22 3,396 3,230 Machinery and equipment 11 5,378 5,180 Dies, patterns, tools, etc. 8 1,647 1,604 All other 5 942 893 Construction in progress 358 370 Total at cost 11,843 11,396 Less accumulated depreciation 6,826 6,277 Total 5,017 5,119 Financial Services Land 4 4 Buildings and building equipment 26 74 73 All other 6 38 36 Total at cost 116 113 Less accumulated depreciation 65 61 Total 51 52 Property and equipment – net $ 5,068 $ 5,171 * Weighted-averages Total property and equipment additions in 2017, 2016, and 2015 were $602 million, $674 million, and $666 million and depreciation was $726 million, $701 million, and $692 million, respectively. Capitalized interest was $3 million, $3 million, and $6 million in the same periods, respectively. The cost of leased property and equipment under capital leases of $40 million and $33 million and accumulated depreciation of $15 million and $16 million at October 29, 2017 and October 30, 2016, respectively, is included in property and equipment. Capitalized software has an estimated useful life of three years. The amounts of total capitalized software costs, including purchased and internally developed software, classified as “Other Assets” at October 29, 2017 and October 30, 2016 were $1,078 million and $1,035 million, less accumulated amortization of $826 million and $770 million, respectively. Capitalized interest on software was $1 million and $3 million at October 29, 2017 and October 30, 2016, respectively. Amortization of these software costs in 2017, 2016, and 2015 was $118 million, $102 million, and $103 million, respectively. The cost of compliance with foreseeable environmental requirements has been accrued and did not have a material effect on the company’s consolidated financial statements. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 12 Months Ended |
Oct. 29, 2017 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 17. GOODWILL AND OTHER INTANGIBLE ASSETS – NET The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and and Turf Forestry Total Goodwill at November 1, 2015 $ 227 $ 499 $ 726 Acquisitions* 95 95 Translation adjustments and other 1 (6) (5) Goodwill at October 30, 2016 323 493 816 Acquisitions* 193 193 Translation adjustments and other 5 19 24 Goodwill at October 29, 2017 $ 521 $ 512 $ 1,033 * See Note 4. There were no accumulated impairment losses in the reported periods. The components of other intangible assets are as follows in millions of dollars: Useful Lives* (Years) 2017 2016 Amortized intangible assets: Customer lists and relationships 11 $ 42 $ Technology, patents, trademarks, and other 13 139 Total at cost 181 Less accumulated amortization** 86 Total 95 Unamortized intangible assets: In-process research and development*** 123 Other intangible assets – net $ 218 $ * Weighted-averages ** Accumulated amortization at 2017 and 2016 for customer lists and relationships was $17 million and $11 million and technology, patents, trademarks, and other was $69 million and $58 million, respectively. ***See Note 4. Other intangible assets are stated at cost less accumulated amortization. The amortization of other intangible assets in 2017, 2016, and 2015 was $18 million, $15 million, and $10 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: 2018 - $16, 2019 - $15, 2020 - $12, 2021 - $9, and 2022 - $9. |
TOTAL SHORT-TERM BORROWINGS
TOTAL SHORT-TERM BORROWINGS | 12 Months Ended |
Oct. 29, 2017 | |
TOTAL SHORT-TERM BORROWINGS | |
TOTAL SHORT-TERM BORROWINGS | 18. TOTAL SHORT-TERM BORROWINGS Total short-term borrowings at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment Operations Notes payable to banks $ $ Long-term borrowings due within one year Total Financial Services Commercial paper Notes payable to banks Long-term borrowings due within one year* Total Short-term borrowings Financial Services Short-term securitization borrowings** Total short-term borrowings $ $ * Includes unamortized fair value adjustments related to interest rate swaps. Unamortized debt issuance costs were $2 million and $1 million, respectively. ** Includes unamortized debt issuance costs of $4 million and $5 million, respectively. The short-term securitization borrowings for financial services are secured by financing receivables (retail notes) on the balance sheet (see Note 13). Although these securitization borrowings are classified as short-term since payment is required if the retail notes are liquidated early, the payment schedule for these borrowings of $4,119 million, which are net of debt acquisition costs, at October 29, 2017 based on the expected liquidation of the retail notes in millions of dollars is as follows: 2018 - $2,234, 2019 - $1,249, 2020 - $489, 2021 - $146, and 2022 - $5. The weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings, at October 29, 2017 and October 30, 2016 were 1.8 percent and 1.6 percent, respectively. Lines of credit available from U.S. and foreign banks were $7,878 million at October 29, 2017. At October 29, 2017, $4,061 million of these worldwide lines of credit were unused. For the purpose of computing the unused credit lines, commercial paper, and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were primarily considered to constitute utilization. Included in the total credit lines at October 29, 2017 were 364-day credit facility agreements of $1,750 million, expiring in February 2018, and $750 million, expiring in October 2018. In addition, total credit lines included long-term credit facility agreements of $2,500 million, expiring in April 2021, and $2,500 million, expiring in April 2022. The agreements are mutually extendable and the annual facility fees are not significant. These credit agreements require Capital Corporation to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. The credit agreements also require the equipment operations to maintain a ratio of total debt to total capital (total debt and stockholders’ equity excluding accumulated other comprehensive income (loss)) of 65 percent or less at the end of each fiscal quarter. Under this provision, the company’s excess equity capacity and retained earnings balance free of restriction at October 29, 2017 was $10,965 million. Alternatively under this provision, the equipment operations had the capacity to incur additional debt of $20,364 million at October 29, 2017. All of these requirements of the credit agreements have been met during the periods included in the consolidated financial statements. Deere & Company has an agreement with Capital Corporation pursuant to which it has agreed to continue to own, directly or through one or more wholly-owned subsidiaries, at least 51 percent of the voting shares of capital stock of Capital Corporation and to maintain Capital Corporation’s consolidated tangible net worth at not less than $50 million. This agreement also obligates Deere & Company to make payments to Capital Corporation such that its consolidated ratio of earnings to fixed charges is not less than 1.05 to 1 for each fiscal quarter. Deere & Company’s obligations to make payments to Capital Corporation under the agreement are independent of whether Capital Corporation is in default on its indebtedness, obligations or other liabilities. Further, Deere & Company’s obligations under the agreement are not measured by the amount of Capital Corporation’s indebtedness, obligations or other liabilities. Deere & Company’s obligations to make payments under this agreement are expressly stated not to be a guaranty of any specific indebtedness, obligation or liability of Capital Corporation and are enforceable only by or in the name of Capital Corporation. No payments were required under this agreement during the periods included in the consolidated financial statements. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Oct. 29, 2017 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 19. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment Operations Accounts payable: Trade payables $ 2,069 $ 1,598 Dividends payable 194 189 Other 164 193 Accrued expenses: Dealer sales discounts 1,559 1,371 Product warranties 1,007 779 Employee benefits 861 861 Unearned revenue 520 401 Other 1,344 1,269 Total 7,718 6,661 Financial Services Accounts payable: Deposits withheld from dealers and merchants 207 230 Other 275 268 Accrued expenses: Unearned revenue 797 735 Accrued interest 148 125 Employee benefits 55 52 Other 345 185 Total 1,827 1,595 Eliminations* 1,128 1,016 Accounts payable and accrued expenses $ 8,417 $ 7,240 * Primarily trade receivable valuation accounts which are reclassified as accrued expenses by the equipment operations as a result of their trade receivables being sold to financial services. |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 12 Months Ended |
Oct. 29, 2017 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | 20. LONG-TERM BORROWINGS Long-term borrowings at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment Operations U.S. dollar notes and debentures: 4.375% notes due 2019 $ 750 $ 750 8-1/2% debentures due 2022 105 105 2.60% notes due 2022 1,000 1,000 6.55% debentures due 2028 200 200 5.375% notes due 2029 500 500 8.10% debentures due 2030 250 250 7.125% notes due 2031 300 300 3.90% notes due 2042 1,250 1,250 Euro notes: Medium-term notes due 2020 - 2023: (principal €850 - 2017) Average interest rate of .3% - 2017 990 Other notes 166 231 Less debt issuance costs 20 21 Total 5,491 4,565 Financial Services Notes and debentures: Medium-term notes due 2018 - 2027: (principal $18,678 - 2017, $17,203 - 2016) Average interest rates of 2.0% - 2017, 1.7% - 2016 18,601 * 17,434 * 2.75% senior note due 2022: ($500 principal) Swapped $500 to variable interest rate of 2.0% - 2017, 1.6% - 2016 502 * 519 * Other notes 1,339 1,221 Less debt issuance costs 42 36 Total 20,400 19,138 Long-term borrowings** $ 25,891 $ 23,703 * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year end. The approximate principal amounts of the equipment operations’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2018 - $154, 2019 - $873, 2020 - $451, 2021 - $4 and 2022 - $1,108. The approximate principal amounts of the financial services’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2018 - $6,050, 2019 - $5,383, 2020 - $5,056, 2021 - $2,486, and 2022 - $3,502. |
LEASES
LEASES | 12 Months Ended |
Oct. 29, 2017 | |
LEASES | |
LEASES | 21. LEASES At October 29, 2017, future minimum lease payments under capital leases amounted to $26 million as follows: 2018 - $10, 2019 - $6, 2020 - $5, 2021 - $3, 2022 - $1, and later years $1. Total rental expense for operating leases was $167 million in 2017, $185 million in 2016, and $200 million in 2015. At October 29, 2017, future minimum lease payments under operating leases amounted to $371 million as follows: 2018 - $98, 2019 - $76, 2020 - $58, 2021 - $44, 2022 - $39, and later years $56 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 29, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 22. COMMITMENTS AND CONTINGENCIES The company generally determines its warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments. The premiums for the company’s extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (unearned revenue) included in the following table totaled $461 million and $447 million at October 29, 2017 and October 30, 2016, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Warranty Liability/ Unearned Premiums 2017 2016 Beginning of year balance $ $ Payments Amortization of premiums received Accruals for warranties Premiums received Foreign exchange End of year balance $ $ At October 29, 2017, the company had approximately $131 million of guarantees issued primarily to banks outside the U.S. related to third-party receivables for the retail financing of John Deere equipment. The company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At October 29, 2017, the company had accrued losses of approximately $4 million under these agreements. The maximum remaining term of the receivables guaranteed at October 29, 2017 was approximately five years. At October 29, 2017, the company had commitments of approximately $170 million for the construction and acquisition of property and equipment. At October 29, 2017, the company also had pledged or restricted assets of $122 million, primarily as collateral for borrowings and restricted other assets. In addition, see Note 13 for restricted assets associated with borrowings related to securitizations. The company also had other miscellaneous contingencies totaling approximately $70 million at October 29, 2017, for which it believes the probability for payment is substantially remote. The accrued liability for these contingencies was not material at October 29, 2017. The company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, software licensing, patent, trademark, and environmental matters. The company believes the reasonably possible range of losses for these unresolved legal actions in addition to the amounts accrued would not have a material effect on its financial statements. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Oct. 29, 2017 | |
CAPITAL STOCK | |
CAPITAL STOCK | 23. CAPITAL STOCK Changes in the common stock account in millions were as follows: Number of Shares Issued Amount Balance at November 2, 2014 536.4 $ Stock options and other Balance at November 1, 2015 536.4 Stock options and other Balance at October 30, 2016 536.4 Stock options and other 369 Balance at October 29, 2017 536.4 $ 4,281 The number of common shares the company is authorized to issue is 1,200 million. The number of authorized preferred shares, none of which has been issued, is nine million. The Board of Directors at its meeting in December 2013 authorized the repurchase of up to $8,000 million of common stock (60.0 million shares based on the fiscal year end closing common stock price of $133.25 per share). At the end of the fiscal year, this repurchase program had $3,260 million (24.5 million shares at the same price) remaining to be repurchased. Repurchases of the company’s common stock under this plan will be made from time to time, at the company’s discretion, in the open market. A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: 2017 2016 2015 Net income attributable to Deere & Company $ 2,159.1 $ $ Less income allocable to participating securities .6 .7 .8 Income allocable to common stock $ 2,158.5 $ $ Average shares outstanding 319.5 Basic per share $ 6.76 $ $ Average shares outstanding 319.5 Effect of dilutive stock options 3.8 Total potential shares outstanding 323.3 Diluted per share $ 6.68 $ $ All stock options outstanding were included in the computation during 2017, 2016, and 2015, except .2 million in 2017 and 9.9 million in 2016 that had an antidilutive effect under the treasury stock method. |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 12 Months Ended |
Oct. 29, 2017 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | 24. STOCK OPTION AND RESTRICTED STOCK AWARDS The company issues stock options and restricted stock awards to key employees under plans approved by stockholders. Restricted stock is also issued to nonemployee directors for their services as directors under a plan approved by stockholders. Options are awarded with the exercise price equal to the market price and become exercisable in one to three years after grant. Options expire ten years after the date of grant. Restricted stock awards generally vest after three years. The compensation cost for stock options, service based restricted stock units, and market/service based restricted stock units, which is based on the fair value at the grant date, is recognized on a straight-line basis over the requisite period the employee is required to render service. The compensation cost for performance/service based units, which is based on the fair value at the grant date, is recognized over the employees’ requisite service period and periodically adjusted for the probable number of shares to be awarded. According to these plans at October 29, 2017, the company is authorized to grant an additional 11.3 million shares related to stock options or restricted stock. The fair value of each option award was estimated on the date of grant using a binomial lattice option valuation model. Expected volatilities are based on implied volatilities from traded call options on the company’s stock. The expected volatilities are constructed from the following three components: the starting implied volatility of short-term call options traded within a few days of the valuation date; the predicted implied volatility of long-term call options; and the trend in implied volatilities over the span of the call options’ time to maturity. The company uses historical data to estimate option exercise behavior and employee termination within the valuation model. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rates utilized for periods throughout the contractual life of the options are based on U.S. Treasury security yields at the time of grant. The assumptions used for the binomial lattice model to determine the fair value of options follow: 2017 2016 2015 Risk-free interest rate .88% - 2.5% .23% - 2.3% .04% - 2.3% Expected dividends 2.4% 2.8% 2.5% Expected volatility 24.0% - 24.8% 25.2% - 29.0% 23.4% - 25.7% Weighted-average volatility 24.5% 26.5% 25.6% Expected term (in years) 7.8 - 8.6 7.0 - 8.6 7.2 - 8.2 Stock option activity at October 29, 2017 and changes during 2017 in millions of dollars and shares follow: Remaining Contractual Aggregate Exercise Term Intrinsic Shares Price* (Years) Value Outstanding at beginning of year 17.5 $ Granted .7 100.55 Exercised 76.56 Expired or forfeited (.1) 86.81 Outstanding at end of year 11.2 81.39 6.17 $ 581.6 Exercisable at end of year 7.8 79.64 5.34 418.9 * Weighted-averages The weighted-average grant-date fair values of options granted during 2017, 2016, and 2015 were $24.46, $16.88, and $19.67, respectively. The total intrinsic values of options exercised during 2017, 2016, and 2015 were $225 million, $23 million, and $98 million, respectively. During 2017, 2016, and 2015, cash received from stock option exercises was $529 million, $36 million, and $172 million with tax benefits of $83 million, $8 million, and $36 million, respectively. The company granted 579 thousand, 255 thousand, and 248 thousand restricted stock units to employees and nonemployee directors in 2017, 2016, and 2015, of which 465 thousand, 113 thousand, and 122 thousand are subject to service based only conditions, 57 thousand, 71 thousand, and 63 thousand are subject to performance/service based conditions, 57 thousand, 71 thousand, and 63 thousand are subject to market/service based conditions, respectively. The service based only units award one share of common stock for each unit at the end of the vesting period and include dividend equivalent payments. The performance/service based units are subject to a performance metric based on the company’s compound annual revenue growth rate, compared to a benchmark group of companies over the vesting period. The market/service based units are subject to a market related metric based on total shareholder return, compared to the same benchmark group of companies over the vesting period. The performance/service based units and the market/service based units both award common stock in a range of zero to 200 percent for each unit granted based on the level of the metric achieved and do not include dividend equivalent payments over the vesting period. The weighted-average fair values of the service based only units at the grant dates during 2017, 2016, and 2015 were $101.03, $79.84, and $88.66 per unit, respectively, based on the market price of a share of underlying common stock. The fair value of the performance/service based units at the grant date during 2017, 2016, and 2015 were $93.86, $72.93, and $81.78 per unit, respectively, based on the market price of a share of underlying common stock excluding dividends. The fair value of the market/service based units at the grant date during 2017, 2016, and 2015 were $129.70, $103.66, and $113.97 per unit, respectively, based on a lattice valuation model excluding dividends. The company’s restricted shares at October 29, 2017 and changes during 2017 in millions of shares follow: Grant-Date Shares Fair Value* Service based only Nonvested at beginning of year .3 $ Granted .5 Vested (.1) Nonvested at end of year .7 Performance/service and market/service based Nonvested at beginning of year .4 $ Granted .1 Performance change (.1) Nonvested at end of year .4 * Weighted-averages During 2017, 2016, and 2015, the total share-based compensation expense was $68 million, $71 million, and $66 million, respectively, with recognized income tax benefits of $25 million, $26 million, and $25 million, respectively. At October 29, 2017, there was $46 million of total unrecognized compensation cost from share-based compensation arrangements granted under the plans, which is related to restricted shares and options. This compensation is expected to be recognized over a weighted-average period of approximately two years. The total grant-date fair values of stock options and restricted shares vested during 2017, 2016, and 2015 were $72 million, $69 million, and $74 million, respectively. The company currently uses shares that have been repurchased through its stock repurchase programs to satisfy share option exercises. At fiscal year end, the company had 215 million shares in treasury stock and 24 million shares remaining to be repurchased under its current publicly announced repurchase program (see Note 23). |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 12 Months Ended |
Oct. 29, 2017 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | 25. OTHER COMPREHENSIVE INCOME ITEMS The after-tax changes in accumulated other comprehensive income at November 2, 2014, November 1, 2015, October 30, 2016, and October 29, 2017 in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) 2014 $ (3,493) $ (303) $ 13 $ (3,783) Period Change (8) (935) $ (2) (1) (946) 2015 (3,501) (1,238) (2) 12 (4,729) Period Change (908) 9 3 (1) (897) 2016 (4,409) (1,229) 1 11 (5,626) Period Change 829 230 4 (1) 1,062 2017 $ (3,580) $ (999) $ 5 $ 10 $ (4,564) Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Amount Credit Amount 2017 Cumulative translation adjustment $ 232 $ (2) $ 230 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 3 (1) 2 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 2 (1) 1 Foreign exchange contracts – Other operating expenses 1 1 Net unrealized gain (loss) on derivatives 6 (2) 4 Unrealized gain (loss) on investments: Unrealized holding gain (loss) 274 (101) 173 Reclassification of realized (gain) loss – Other income (275) 101 (174) Net unrealized gain (loss) on investments (1) (1) Retirement benefits adjustment: Pensions Net actuarial gain (loss) 702 (248) 454 Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 247 (89) 158 Prior service (credit) cost 12 (4) 8 Settlements/curtailments 2 (1) 1 Health care and life insurance Net actuarial gain (loss) 309 (115) 194 Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 99 (36) 63 Prior service (credit) cost (77) 28 (49) Net unrealized gain (loss) on retirement benefits adjustment 1,294 (465) 829 Total other comprehensive income (loss) $ 1,531 $ (469) $ 1,062 * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2016 Cumulative translation adjustment $ 8 $ 1 $ 9 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (2) 1 (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 7 (2) 5 Foreign exchange contracts – Other operating expenses (1) (1) Net unrealized gain (loss) on derivatives 4 (1) 3 Unrealized gain (loss) on investments: Unrealized holding gain (loss) 2 2 Reclassification of realized (gain) loss – Other income (4) 1 (3) Net unrealized gain (loss) on investments (2) 1 (1) Retirement benefits adjustment: Pensions Net actuarial gain (loss) and prior service credit (cost) (1,141) 397 (744) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 211 (77) 134 Prior service (credit) cost 16 (6) 10 Settlements/curtailments 14 (4) 10 Health care and life insurance Net actuarial gain (loss) and prior service credit (cost) (493) 178 (315) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 73 (27) 46 Prior service (credit) cost (78) 29 (49) Net unrealized gain (loss) on retirement benefits adjustment (1,398) 490 (908) Total other comprehensive income (loss) $ (1,388) $ 491 $ (897) * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2015 Cumulative translation adjustment $ (938) $ 3 $ (935) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (12) 4 (8) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 12 (4) 8 Foreign exchange contracts – Other operating expenses (4) 2 (2) Net unrealized gain (loss) on derivatives (4) 2 (2) Unrealized gain (loss) on investments: Unrealized holding gain (loss) 12 (4) 8 Reclassification of realized (gain) loss – Other income (14) 5 (9) Net unrealized gain (loss) on investments (2) 1 (1) Retirement benefits adjustment: Pensions Net actuarial gain (loss) and prior service credit (cost) (427) 151 (276) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 223 (81) 142 Prior service (credit) cost 25 (9) 16 Settlements/curtailments 11 (4) 7 Health care and life insurance Net actuarial gain (loss) and prior service credit (cost) 145 (52) 93 Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 91 (34) 57 Prior service (credit) cost (77) 29 (48) Settlements/curtailments 1 1 Net unrealized gain (loss) on retirement benefits adjustment (8) (8) Total other comprehensive income (loss) $ (952) $ 6 $ (946) * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. The noncontrolling interests’ comprehensive income (loss) was $.3 million in 2017, $(2.4) million in 2016, and $.5 million in 2015, which consisted of net income (loss) of $.1 million in 2017, $(2.4) million in 2016, and $.9 million in 2015 and cumulative translation adjustments of $.2 million in 2017, none in 2016, and $(.4) million in 2015. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Oct. 29, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 26. 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 f air 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 at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Carrying Fair Carrying Fair Value Value* Value Value* Financing receivables – net $ 25,104 $ 24,946 $ $ Financing receivables securitized – net $ 4,159 $ 4,130 $ $ Short-term securitization borrowings $ 4,119 $ 4,118 $ $ Long-term borrowings due within one year: Equipment operations $ 154 $ 154 $ $ Financial services 6,064 6,079 Total $ 6,218 $ 6,233 $ $ Long-term borrowings: Equipment operations $ 5,491 $ 6,026 $ $ Financial services 20,400 20,606 Total $ 25,891 $ 26,632 $ $ * Fair value measurements above were Level 3 for all financing receivables and Level 2 for all 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 October 29, 2017 and October 30, 2016 at fair value on a recurring basis in millions of dollars follow: 2017* 2016* Marketable securities Equity fund $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities Mortgage-backed securities** Total marketable securities Other assets Derivatives: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total assets*** $ $ Accounts payable and accrued expenses Derivatives: Interest rate contracts $ $ Foreign exchange contracts Cross-currency interest rate contracts Total liabilities $ $ * All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $48 million and $45 million at October 29, 2017 and October 30, 2016, respectively, the fixed income fund of $15 million and $15 million at October 29, 2017 and October 30, 2016, respectively, and U.S. government debt securities of $44 million and $53 million at October 29, 2017 and October 30, 2016, respectively. In addition, $17 million and $28 million of the international debt securities were Level 3 measurements at October 29, 2017 and October 30, 2016, respectively. There were no transfers between Level 1 and Level 2 during 2017 and 2016. ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. Fair value, recurring Level 3 measurements from available-for-sale marketable securities at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Beginning of period balance $ $ Purchases Principal payments Change in unrealized gain (loss) End of period balance $ $ Fair value, nonrecurring measurements from impairments at October 29, 2017 and October 30, 2016 in millions of dollars follow: Fair Value* Losses* 2017 2016 2017 2016 2015 Equipment on operating leases – net $ 654 $ 31 $ 10 Property and equipment – net $ 31 $ 13 $ 10 Investments in unconsolidated affiliates $ 28 $ 1 $ 40 $ 12 Other assets $ 184 $ 29 $ 15 * Fair value at October 29, 2017 was a Level 1 measurement, while fair values at October 30, 2016 were Level 3 measurements. See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments. The following is a description of the valuation methodologies the company uses to measure certain financial instruments on the balance sheet and nonmonetary assets 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 and caps, 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 (see Note 12). Equipment on Operating Leases-Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of equipment sale price at lease maturity. Inputs include realized sales values (see Note 5). Property and Equipment-Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on a cost approach. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence (see Note 5). 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. 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. The fair value for publicly traded entities is the share price multiplied by the shares owned (see Note 5). Other Assets – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on a market approach. The inputs include sales of comparable assets (see Note 5). |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Oct. 29, 2017 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | 27. DERIVATIVE INSTRUMENTS Cash Flow Hedges Certain interest rate and cross-currency interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/ pay-fixed interest rate contracts at October 29, 2017 and October 30, 2016 were $1,700 million and $1,600 million, respectively. The total notional amounts of the cross-currency interest rate contracts were $22 million and $42 million at October 29, 2017 and October 30, 2016, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense or other operating expenses (foreign exchange) in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate or foreign currency exchange rate changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as cash flow hedges were recognized currently in interest expense or other operating expenses (foreign exchange) and were not material during any years presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of gain recorded in OCI at October 29, 2017 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $2 million after-tax. These contracts mature in up to 28 months. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at October 29, 2017 and October 30, 2016 were $8,661 million and $8,844 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were a gain of $3 million and loss of $2 million in 2017 and 2016, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars: 2017 2016 Interest rate contracts* $ $ Borrowings** 287 * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $79 million and $146 million during 2017 and 2016, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $243 million and $290 million during 2017 and 2016, respectively. Derivatives Not Designated as Hedging Instruments The company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings and purchases or sales of inventory. The total notional amounts of the interest rate swaps at October 29, 2017 and October 30, 2016 were $6,757 million and $6,060 million, the foreign exchange contracts were $8,499 million and $3,919 million, and the cross-currency interest rate contracts were $66 million and $63 million, respectively. The increase in the total notional amounts of foreign exchange contracts primarily relates to the Wirtgen acquisition, which closed on December 1, 2017 (see Note 30). At October 29, 2017 and October 30, 2016, there were also $253 million and $579 million, respectively, of interest rate caps purchased and the same amounts sold at the same capped interest rate to facilitate borrowings through securitization of retail notes. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows. Fair values of derivative instruments in the consolidated balance sheet at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Other Assets Designated as hedging instruments: Interest rate contracts $ $ Cross-currency interest rate contracts Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivative assets $ $ Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ $ Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivative liabilities $ $ The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars: 2017 2016 2015 Fair Value Hedges Interest rate contracts – Interest expense $ $ $ Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts – OCI (pretax)* Foreign exchange contracts – OCI (pretax)* Reclassified from OCI (Effective Portion): Interest rate contracts – Interest expense* Foreign exchange contracts – Other expense* Recognized Directly in Income (Ineffective Portion) ** ** ** Not Designated as Hedges Interest rate contracts – Interest expense* $ $ $ Foreign exchange contracts – Cost of sales Foreign exchange contracts – Other expense* Total not designated $ $ $ * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts are not significant. Counterparty Risk and Collateral Certain of the company’s derivative agreements contain credit support provisions that may require the company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at October 29, 2017 and October 30, 2016, was $132 million and $29 million, respectively. The company, due to its credit rating and amounts of net liability position, has not posted any collateral. If the credit-risk-related contingent features were triggered, the company would be required to post collateral up to an amount equal to this liability position prior to considering applicable netting provisions. Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid at October 29, 2017 and October 30, 2016 in millions of dollars follows: Gross Amounts Netting Collateral Net Recognized Arrangements Received Amount 2017 Assets $ 235 $ $ 170 Liabilities 158 93 2016 Assets $ $ $ $ Liabilities |
SEGMENT AND GEOGRAPHIC AREA DAT
SEGMENT AND GEOGRAPHIC AREA DATA | 12 Months Ended |
Oct. 29, 2017 | |
SEGMENT AND GEOGRAPHIC AREA DATA | |
SEGMENT AND GEOGRAPHIC AREA DATA | 28. SEGMENT AND GEOGRAPHIC AREA DATA The company’s operations are presently organized and reported in three major business segments described as follows: The agriculture and turf segment primarily manufactures and distributes a full line of agriculture and turf equipment and related service parts – including large, medium and utility tractors; tractor loaders; combines, cotton pickers, cotton strippers, and sugarcane harvesters; related harvesting front-end equipment; sugarcane loaders and pull-behind scrapers; tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery; hay and forage equipment, including self-propelled forage harvesters and attachments, balers and mowers; turf and utility equipment, including riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements; integrated agricultural management systems technology and solutions; and other outdoor power products. The construction and forestry segment primarily manufactures and distributes a broad range of machines and service parts used in construction, earthmoving, material handling, and timber harvesting – including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments. The products and services produced by the segments above are marketed primarily through independent retail dealer networks and major retail outlets. The financial services segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties. Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment and geographic area data. Intersegment sales and revenues represent sales of components and finance charges, which are generally based on market prices. Information relating to operations by operating segment in millions of dollars follows for the years ended October 29, 2017, October 30, 2016, and November 1, 2015. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2017, 2016, and 2015 were as follows: agriculture and turf net sales of $39 million, $31 million, and $49 million, construction and forestry net sales of $1 million, $1 million, and $1 million, and financial services revenues of $244 million, $225 million, and $225 million, respectively. OPERATING SEGMENTS 2017 2016 2015 Net sales and revenues Unaffiliated customers: Agriculture and turf net sales $ 20,167 $ $ Construction and forestry net sales 5,718 Total net sales 25,885 Financial services revenues 2,935 Other revenues* 918 Total $ 29,738 $ $ * Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income as disclosed in Note 31, net of certain intercompany eliminations. Operating profit Agriculture and turf $ $ $ Construction and forestry Financial services* Total operating profit Interest income Interest expense Foreign exchange gains (losses) from equipment operations’ financing activities Corporate expenses – net Income taxes Total Net income Less: Net income (loss) attributable to noncontrolling interests Net income attributable to Deere & Company $ $ $ * Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses. Interest income* Agriculture and turf $ $ $ Construction and forestry Financial services Corporate Intercompany Total $ $ $ * Does not include finance rental income for equipment on operating leases. Interest expense Agriculture and turf $ $ 173 $ 160 Construction and forestry 44 45 Financial services 536 455 Corporate 251 273 Intercompany (268) (240) (253) Total $ 900 $ 764 $ 680 Depreciation* and amortization expense Agriculture and turf $ 695 $ 667 $ 659 Construction and forestry 145 136 133 Financial services 876 757 590 Total $ 1,716 $ 1,560 $ 1,382 * Includes depreciation for equipment on operating leases. Equity in income (loss) of unconsolidated affiliates Agriculture and turf $ 2 $ 9 $ 7 Construction and forestry (27) (13) (7) Financial services 1 2 1 Total $ (24) $ (2) $ 1 Identifiable operating assets Agriculture and turf $ 9,359 $ 8,405 $ 8,332 Construction and forestry 3,212 3,017 3,295 Financial services 42,596 40,837 40,866 Corporate* 10,619 5,659 5,390 Total $ 65,786 $ 57,918 $ 57,883 * Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, marketable securities, and cash and cash equivalents as disclosed in Note 31, net of certain intercompany eliminations. Capital additions Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ Investments in unconsolidated affiliates Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ The company views and has historically disclosed its operations as consisting of two geographic areas, the U.S. and Canada, and outside the U.S. and Canada, shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. GEOGRAPHIC AREAS 2017 2016 2015 Net sales and revenues Unaffiliated customers: U.S. and Canada: Equipment operations net sales (88%)* $ 15,031 $ $ Financial services revenues (79%)* 2,526 Total 17,557 Outside U.S. and Canada: Equipment operations net sales 10,854 Financial services revenues 409 Total 11,263 Other revenues 918 Total $ 29,738 $ $ * The percentages indicate the approximate proportion of each amount that relates to the U.S. only and are based upon a three-year average for 2017, 2016, and 2015. Operating profit U.S. and Canada: Equipment operations $ 1,724 $ $ Financial services 523 Total 2,247 Outside U.S. and Canada: Equipment operations 1,097 Financial services 199 Total 1,296 Total $ 3,543 $ $ Property and equipment U.S. $ 2,976 $ $ Germany 598 Other countries 1,494 Total $ 5,068 $ $ |
SUPPLEMENTAL INFORMATION (UNAUD
SUPPLEMENTAL INFORMATION (UNAUDITED) | 12 Months Ended |
Oct. 29, 2017 | |
SUPPLEMENTAL INFORMATION (UNAUDITED) | |
SUPPLEMENTAL INFORMATION (UNAUDITED) | 29. SUPPLEMENTAL INFORMATION (UNAUDITED) Common stock per share sales prices from New York Stock Exchange composite transactions quotations follow: First Second Third Fourth Quarter Quarter Quarter Quarter 2017 Market price High $ 108.06 $ 113.15 $ 128.91 $ 133.25 Low $ 88.06 $ 107.05 $ 110.79 $ 115.44 2016 Market price High $ 80.19 $ 85.68 $ 87.48 $ 88.09 Low $ 71.78 $ 74.58 $ 77.71 $ 76.83 At October 29, 2017, there were 21,242 holders of record of the company’s $1 par value common stock. Quarterly information with respect to net sales and revenues and earnings is shown in the following schedule. The company’s fiscal year ends in October and its interim periods (quarters) end in January, April, and July. Such information is shown in millions of dollars except for per share amounts. First Second Third Fourth Quarter Quarter Quarter Quarter 2017* Net sales and revenues $ 5,625 $ 8,287 $ 7,808 $ 8,018 Net sales 4,698 7,260 6,833 7,094 Gross profit 901 1,815 1,568 1,668 Income before income taxes 328 1,169 890 767 Net income attributable to Deere & Company** 199 808 642 510 Per share data: Basic** .63 2.53 2.00 1.59 Diluted** .62 2.50 1.97 1.57 Dividends declared .60 .60 .60 .60 Dividends paid .60 .60 .60 .60 2016* Net sales and revenues $ 5,525 $ 7,875 $ 6,724 $ 6,520 Net sales 4,769 7,107 5,861 5,650 Gross profit 929 1,575 1,367 1,267 Income before income taxes 351 733 705 435 Net income attributable to Deere & Company 254 496 489 285 Per share data: Basic .80 1.57 1.55 .91 Diluted .80 1.56 1.55 .90 Dividends declared .60 .60 .60 .60 Dividends paid .60 .60 .60 .60 Net income per share for each quarter must be computed independently. As a result, their sum may not equal the total net income per share for the year. * See Note 5 for “Special Items.” ** Presents restated first and second quarter values for the adoption of FASB ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. Net income attributable to Deere & Company was $194 million and $802 million, respectively. Adjustments to basic and diluted per share data were not significant. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 29, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 30. SUBSEQUENT EVENTS A quarterly dividend of $.60 per share was declared at the Board of Directors meeting on December 6, 2017, payable on February 1, 2018 to stockholders of record on December 29, 2017. On December 1, 2017, the company acquired the stock and certain assets of substantially all of Wirtgen Group Holding GmbH’s (Wirtgen) business operations. Wirtgen, which was a privately-held international company, is the leading manufacturer worldwide of road construction equipment. Headquartered in Germany, Wirtgen has six brands across the road construction sector spanning processing, mixing, paving, compaction, and rehabilitation. Wirtgen sells products in more than 100 countries and has approximately 8,200 employees. The total cash purchase price was €4,475 million (or approximately US $5,327 million based on the exchange rate at the closing date), a portion of which has been held in escrow to secure certain indemnity obligations of Wirtgen. In addition to the purchase price, the company assumed substantially all liabilities of Wirtgen. The company financed the acquisition and the transaction expenses from a combination of cash and new debt financing. Wirtgen will be included in the company’s construction and forestry operating segment. Due to the recent closing of the acquisition, the formal process necessary to allocate the purchase price to the acquired assets and liabilities has not been completed. The purchase price allocation and proforma results of operations will be completed as soon as practicable within the measurement period. In November 2017, the company’s financial services operations entered into a retail note securitization using its bank conduit facility that resulted in securitization borrowings of approximately $985 million. |
SUPPLEMENTAL CONSOLIDATING DATA
SUPPLEMENTAL CONSOLIDATING DATA | 12 Months Ended |
Oct. 29, 2017 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
SUPPLEMENTAL CONSOLIDATING DATA | d 31. SUPPLEMENTAL CONSOLIDATING DATA INCOME STATEMENT For the Years Ended October 29, 2017, October 30, 2016, and November 1, 2015 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2017 2016 2015 2017 2016 2015 Net Sales and Revenues Net sales $ 25,885.1 $ 23,387.3 $ 25,775.2 Finance and interest income 71.7 61.1 77.0 $ 2,928.2 $ 2,690.1 $ 2,557.0 Other income 1,065.0 653.7 602.7 250.9 229.0 258.9 Total 27,021.8 24,102.1 26,454.9 3,179.1 2,919.1 2,815.9 Costs and Expenses Cost of sales 19,935.2 18,250.8 20,145.2 Research and development expenses 1,367.7 1,389.1 1,425.1 Selling, administrative and general expenses 2,530.7 2,262.5 2,393.8 542.3 508.5 487.3 Interest expense 263.7 250.5 272.8 669.2 536.5 455.0 Interest compensation to Financial Services 234.5 216.6 204.8 Other operating expenses 257.0 215.7 195.0 1,246.8 1,167.0 911.7 Total 24,588.8 22,585.2 24,636.7 2,458.3 2,212.0 1,854.0 Income of Consolidated Group before Income Taxes 2,433.0 1,516.9 1,818.2 720.8 707.1 961.9 Provision for income taxes 726.0 459.0 509.9 245.1 241.1 330.2 Income of Consolidated Group 1,707.0 1,057.9 1,308.3 475.7 466.0 631.7 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services 476.9 467.6 632.9 1.2 1.6 1.2 Other (4.0) (.3) Total 452.2 463.6 632.6 1.2 1.6 1.2 Net Income 2,159.2 1,521.5 1,940.9 476.9 467.6 632.9 Less: Net income (loss) attributable to noncontrolling interests .1 (2.4) .9 Net Income Attributable to Deere & Company $ 2,159.1 $ 1,523.9 $ 1,940.0 $ 476.9 $ 467.6 $ 632.9 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. The consolidated group data in the “Equipment Operations” income statement reflect the results of the agriculture and turf operations and construction and forestry operations. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. 31. SUPPLEMENTAL CONSOLIDATING DATA (continued) BALANCE SHEET As of October 29, 2017 and October 30, 2016 (In millions of dollars except per share amounts) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2017 2016 2017 2016 ASSETS Cash and cash equivalents $ 8,168.4 $ 3,140.5 $ 1,166.5 $ 1,195.3 Marketable securities 20.2 34.2 431.4 419.3 Receivables from unconsolidated subsidiaries and affiliates 1,032.1 3,150.1 Trade accounts and notes receivable - net 876.3 654.2 4,134.1 3,370.5 Financing receivables - net .4 25,104.1 23,701.9 Financing receivables securitized - net 4,158.8 5,126.5 Other receivables 1,045.6 855.4 195.5 164.0 Equipment on operating leases - net 6,593.7 5,901.5 Inventories 3,904.1 3,340.5 Property and equipment - net 5,017.3 5,118.5 50.4 52.1 Investments in unconsolidated subsidiaries and affiliates 4,812.3 4,697.0 13.8 11.9 Goodwill 1,033.3 815.7 Other intangible assets - net 218.0 104.1 Retirement benefits 538.1 93.6 16.9 20.5 Deferred income taxes 3,098.8 3,556.0 79.8 75.5 Other assets 973.9 834.9 651.4 798.1 Total Assets $ 30,738.4 $ 26,395.1 $ 42,596.4 $ 40,837.1 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Short-term borrowings $ 375.5 $ 249.0 $ 9,659.8 $ 6,661.7 Short-term securitization borrowings 4,118.7 4,997.8 Payables to unconsolidated subsidiaries and affiliates 121.9 81.5 996.2 3,133.6 Accounts payable and accrued expenses 7,718.1 6,661.2 1,827.1 1,595.2 Deferred income taxes 115.6 87.3 857.7 745.9 Long-term borrowings 5,490.9 4,565.3 20,400.4 19,137.7 Retirement benefits and other liabilities 7,341.9 8,206.0 92.9 89.0 Total liabilities 21,163.9 19,850.3 37,952.8 36,360.9 Commitments and contingencies (Note 22) Redeemable noncontrolling interest (Note 4) 14.0 14.0 STOCKHOLDERS’ EQUITY Common stock, $1 par value (authorized – 1,200,000,000 shares; 4,280.5 3,911.8 2,099.1 2,079.1 Common stock in treasury, 214,589,902 shares in 2017 (15,460.8) (15,677.1) Retained earnings 25,301.3 23,911.3 2,782.0 2,670.3 Accumulated other comprehensive income (loss) (4,563.7) (5,626.0) (237.5) (273.2) Total Deere & Company stockholders’ equity 9,557.3 6,520.0 4,643.6 4,476.2 Noncontrolling interests 3.2 10.8 Total stockholders’ equity 9,560.5 6,530.8 4,643.6 4,476.2 Total Liabilities and Stockholders’ Equity $ 30,738.4 $ 26,395.1 $ 42,596.4 $ 40,837.1 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. 31. SUPPLEMENTAL CONSOLIDATING DATA (continued) STATEMENT OF CASH FLOWS For the Years Ended October 29, 2017, October 30, 2016, and November 1, 2015 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2017 2016 2015 2017 2016 2015 Cash Flows from Operating Activities Net income $ 2,159.2 $ 1,521.5 $ 1,940.9 $ 476.9 $ 467.6 $ 632.9 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 9.9 8.2 5.5 88.4 86.1 49.9 Provision for depreciation and amortization 839.3 803.4 791.8 984.3 846.7 688.5 Impairment charges 39.8 25.4 15.3 59.7 19.5 Gain on sale of unconsolidated affiliates and investments (74.5) Undistributed earnings of unconsolidated subsidiaries and affiliates 94.0 46.6 (1.5) (1.0) Provision (credit) for deferred income taxes 13.2 (139.8) 106.8 269.5 121.4 Changes in assets and liabilities: Trade receivables (175.3) 113.4 Insurance receivables 333.4 Inventories 578.4 (17.0) Accounts payable and accrued expenses 946.2 (169.6) (253.8) 93.9 40.6 (245.4) Accrued income taxes payable/receivable 18.2 (114.5) 38.5 (11.2) (4.6) Retirement benefits 232.4 414.3 7.3 6.2 13.2 Other 36.5 271.1 81.5 97.1 (25.7) Net cash provided by operating activities 2,438.0 2,911.8 3,073.8 1,876.5 1,860.8 1,582.1 Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) 15,963.2 15,831.4 16,266.1 Proceeds from maturities and sales of marketable securities 297.9 81.9 700.1 106.3 87.5 160.6 Proceeds from sales of equipment on operating leases 1,440.8 1,256.2 1,049.4 Proceeds from sales of businesses and unconsolidated 113.9 81.1 149.2 Cost of receivables acquired (excluding trade and wholesale) (15,168.2) (16,327.8) Purchases of marketable securities (59.4) (60.0) (111.8) (94.9) Purchases of property and equipment (641.8) (688.1) (2.6) (5.9) Cost of equipment on operating leases acquired (3,235.7) (3,043.6) Increase in investment in Financial Services (28.2) (27.4) Acquisitions of businesses, net of cash acquired (198.5) Decrease (increase) in trade and wholesale receivables 492.5 657.0 Other (55.2) 6.8 24.6 (45.1) Net cash used for investing activities (516.5) (820.1) (68.6) (2,897.3) (826.1) (1,235.0) Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings 64.5 (207.2) 211.9 1,246.1 (1,006.4) 289.7 Change in intercompany receivables/payables 2,142.0 (756.0) 928.6 756.0 (928.6) Proceeds from long-term borrowings 1,107.0 173.4 6.2 7,595.2 4,897.3 5,704.8 Payments of long-term borrowings (72.8) (214.2) (5,194.8) (4,649.0) Proceeds from issuance of common stock 528.7 36.0 172.1 Repurchases of common stock (205.4) (2,770.7) Capital investment from Equipment Operations 20.0 28.2 27.4 Dividends paid (761.3) (816.3) (562.1) (679.6) Other (36.7) (45.4) (28.0) (26.7) Net cash provided by (used for) financing activities 2,951.3 (1,830.0) (2,527.8) 990.0 (1,109.8) (262.0) Effect of Exchange Rate Changes on Cash and Cash Equivalents 155.1 (21.2) (146.6) 2.0 8.2 (40.7) Net Increase (Decrease) in Cash and Cash Equivalents 5,027.9 240.5 330.8 (28.8) (66.9) 44.4 Cash and Cash Equivalents at Beginning of Year 3,140.5 2,900.0 2,569.2 1,195.3 1,262.2 1,217.8 Cash and Cash Equivalents at End of Year $ 8,168.4 $ 3,140.5 $ 2,900.0 $ 1,166.5 $ 1,195.3 $ 1,262.2 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Oct. 29, 2017 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES For the Years Ended October 29, 2017, October 30, 2016, and November 1, 2015 (in thousands of dollars) Column A Column B Column C Column D Column E Additions Balance at Charged to Balance beginning costs and Charged to other accounts Deductions at end Description of period expenses Description Amount Description Amount of period YEAR ENDED OCTOBER 29, 2017 Allowance for credit losses: Equipment operations: Trade receivable allowances $ 44,913 $ 10,145 Bad debt recoveries $ 319 Trade receivable write-offs $ 3,398 $ 50,224 Other-primarily translation 1,755 Financial services: Trade receivable allowances 4,880 952 Bad debt recoveries 53 Trade receivable write-offs 239 5,694 Other-primarily translation 48 Financing receivable allowances 176,440 87,525 Bad debt recoveries 40,835 Financing receivable write-offs 115,895 187,562 Other-primarily translation 1,343 Consolidated receivable allowances $ 226,233 $ 98,622 $ 41,255 $ 122,630 $ 243,480 YEAR ENDED OCTOBER 30, 2016 Allowance for credit losses: Equipment operations: Trade receivable allowances $ 34,891 $ 8,132 Bad debt recoveries $ 294 Trade receivable write-offs $ 3,073 $ 44,913 Other-primarily translation 4,669 Financial services: Trade receivable allowances 5,932 2,893 Bad debt recoveries 81 Trade receivable write-offs 4,073 4,880 Other-primarily translation 47 Financing receivable allowances 157,621 84,230 Bad debt recoveries 30,838 Financing receivable write-offs 103,111 176,440 Other-primarily translation 6,862 Consolidated receivable allowances $ 198,444 $ 95,255 $ 42,791 $ 110,257 $ 226,233 YEAR ENDED NOVEMBER 1, 2015 Allowance for credit losses: Equipment operations: Trade receivable allowances $ 50,248 $ 5,270 Bad debt recoveries $ 116 Trade receivable write-offs $ 5,260 $ 34,891 Other-primarily translation 15,483 Financial services: Trade receivable allowances 5,298 1,172 Bad debt recoveries 230 Trade receivable write-offs 329 5,932 Other-primarily translation 439 Financing receivable allowances 174,632 46,481 Bad debt recoveries 25,987 Financing receivable write-offs 66,807 157,621 Other-primarily translation 22,672 Consolidated receivable allowances $ 230,178 $ 52,923 $ 26,333 $ 110,990 $ 198,444 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 29, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Consolidation, Policy | The consolidated financial statements represent primarily the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. Deere & Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 10). Other investments (less than 20 percent ownership) are recorded at cost. |
Fiscal Period, Policy | The company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2017, 2016, and 2015 were October 29, 2017, October 30, 2016, and November 1, 2015, respectively. All fiscal years contained 52 weeks. |
Use of Estimates in Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Revenue Recognition | Sales of equipment and service parts are recorded when the sales price is determinable and the risks and rewards of ownership are transferred to independent parties based on the sales agreements in effect. In the U.S. and most international locations, this transfer occurs primarily when goods are shipped. In Canada and some other international locations, certain goods are shipped to dealers on a consignment basis under which the risks and rewards of ownership are not transferred to the dealer. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. In all cases, when a sale is recorded by the company, no significant uncertainty exists surrounding the purchaser’s obligation to pay. No right of return exists on sales of equipment. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The company makes appropriate provisions based on experience for costs such as doubtful receivables, sales incentives, and product warranty. Financing revenue is recorded over the lives of related receivables using the interest method. Extended warranty premiums recorded in other income are generally recognized in proportion to the costs expected to be incurred over the contract period. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in finance revenue. |
Sales Incentives | At the time a sale is recognized, the company records an estimate of the future sales incentive costs for allowances and financing programs that will be due when a dealer sells the equipment to a retail customer. The estimate is based on historical data, announced incentive programs, field inventory levels, and retail sales volumes. |
Product Warranties | At the time a sale is recognized, the company records the estimated future warranty costs. These costs are usually estimated based on historical warranty claims and consideration of current quality developments (see Note 22). |
Sales Taxes | The company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with revenue producing transactions between the company and its customers. These taxes may include sales, use, value-added, and some excise taxes. The company reports the collection of these taxes on a net basis (excluded from revenues). |
Shipping and Handling Costs | Shipping and handling costs related to the sales of the company’s equipment are included in cost of sales. |
Advertising Costs | Advertising costs are charged to expense as incurred. This expense was $169 million in 2017, $169 million in 2016, and $157 million in 2015. |
Depreciation and Amortization | Property and equipment, capitalized software, and other intangible assets are generally stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives generally using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and revised products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are generally charged to expense as incurred. |
Securitization of Receivables | Certain financing receivables are periodically transferred to special purpose entities (SPEs) in securitization transactions (see Note 13). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Financing receivables securitized - net.” The company recognizes finance income over the lives of these receivables using the interest method. |
Receivables and Allowances | All financing and trade receivables are reported on the balance sheet at outstanding principal adjusted for any charge-offs, the allowance for credit losses, and any deferred fees or costs on originated financing receivables. Allowances for credit losses are maintained in amounts considered to be appropriate in relation to the receivables outstanding based on collection experience, economic conditions, and credit risk quality. Receivables are written-off to the allowance when the account is considered uncollectible. |
Impairment of Long-Lived Assets, Goodwill, and Other Intangible Assets | The company evaluates the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. Goodwill and intangible assets with indefinite lives are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances indicate a reduction in the fair value below the carrying value. Goodwill is allocated and reviewed for impairment by reporting units, which consist primarily of the operating segments and certain other reporting units. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (see Notes 5 and 26). |
Derivative Financial Instruments | It is the company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The company’s financial services manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as either a cash flow hedge or a fair value hedge or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income to the extent the hedge was effective by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All ineffective changes in derivative fair values are recognized currently in net income. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, the hedge accounting discussed above is discontinued (see Note 27). |
Foreign Currency Translation | The functional currencies for most of the company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in other comprehensive income. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange forward contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2017, 2016, and 2015 was $(62) million, $(38) million, and $22 million, respectively. |
Cash and Cash Equivalents, Policy | For purposes of the statement of consolidated cash flows, the company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the company’s short-term borrowings, excluding the current maturities of long-term borrowings, mature or may require payment within three months or less. |
Pension and Other Postretirement Plans | In 2016, the company changed the method used to estimate the service and interest cost components of the net periodic pension and postretirement benefits cost. This method uses the spot yield curve approach to estimate the service and interest cost by applying the specific spot rates along the yield curve used to determine the benefit plan obligations to relevant projected cash outflows. For 2015, the service and interest cost components were determined using a single weighted-average discount rate. Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10% of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. The discount rate assumptions used to determine the postretirement obligations for all periods presented were based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which the company’s benefit obligations could effectively be settled at the October 31 measurement dates. A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value. |
Unremitted Earnings in Foreign Investment, Policy | At October 29, 2017, accumulated earnings in certain subsidiaries outside the U.S. totaled $5,961 million for which no provision for U.S. income taxes or foreign withholding taxes has been made because it is expected that such earnings will be reinvested outside the U.S. indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. At October 29, 2017, the amount of cash and cash equivalents and marketable securities held by these foreign subsidiaries, in which earnings are considered indefinitely reinvested, was $3,386 million. |
Marketable Securities, Policy | Realized gains or losses from the sales of marketable securities are based on the specific identification method. |
Financing Receivables - Non-Performing, Policy | Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. Financing receivables are considered impaired when it is probable the company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Inventory Valuation, Policy | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the “last-in, first-out” (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the “first-in, first-out” (FIFO) basis, or net realizable value. |
Extended Product Warranty, Policy | The premiums for the company’s extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. |
Stock Option and Restricted Stock Awards, Policy | The company issues stock options and restricted stock awards to key employees under plans approved by stockholders. Restricted stock is also issued to nonemployee directors for their services as directors under a plan approved by stockholders. Options are awarded with the exercise price equal to the market price and become exercisable in one to three years after grant. Options expire ten years after the date of grant. Restricted stock awards generally vest after three years. The compensation cost for stock options, service based restricted stock units, and market/service based restricted stock units, which is based on the fair value at the grant date, is recognized on a straight-line basis over the requisite period the employee is required to render service. The compensation cost for performance/service based units, which is based on the fair value at the grant date, is recognized over the employees’ requisite service period and periodically adjusted for the probable number of shares to be awarded. |
Fair Value of Financial Instruments, Policy | 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 f air 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. |
CASH FLOW INFORMATION (Tables)
CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
CASH FLOW INFORMATION | |
Cash Payments for Interest and Income Taxes | Cash payments for interest and income taxes consisted of the following in millions of dollars: 2017 2016 2015 Interest: Equipment operations $ 506 $ 442 $ 471 Financial services 665 524 443 Intercompany eliminations (268) (240) (253) Consolidated $ 903 $ 726 $ 661 Income taxes: Equipment operations $ 898 $ 314 $ 828 Financial services 92 (26) 190 Intercompany eliminations (9) 104 (117) Consolidated $ 981 $ 392 $ 901 |
PENSION AND OTHER POSTRETIREM42
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
Components of Pension and Postretirement Benefit Costs | The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2017 2016 2015 Pensions Service cost $ 274 $ 254 $ 282 Interest cost 361 391 474 Expected return on plan assets (790) (775) (769) Amortization of actuarial loss 247 211 223 Amortization of prior service cost 12 16 25 Other postemployment benefits 2 1 Settlements/curtailments 2 11 11 Net cost $ 106 $ 110 $ 247 Weighted-average assumptions Discount rates - service cost 3.5% Discount rates - interest cost 3.0% Rate of compensation increase 3.8% Expected long-term rates of return 7.3% The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2017 2016 2015 Health care and life insurance Service cost $ 42 $ 38 $ 46 Interest cost 194 204 259 Expected return on plan assets (17) (35) (55) Amortization of actuarial loss 99 73 91 Amortization of prior service credit (77) (78) (77) Settlements/curtailments 1 Net cost $ 241 $ 202 $ 265 Weighted-average assumptions Discount rates - service cost 4.7% Discount rates - interest cost 3.2% Expected long-term rates of return 6.3% |
Schedule of Benefit Plan Costs Recorded in Net Income and Other Changes in Plan Assets and Benefit Obligations Recorded in Other Comprehensive Income | The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2017 2016 2015 Pensions Net cost $ 106 $ 110 $ 247 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (702) 1,140 361 Prior service cost 1 66 Amortization of actuarial loss (247) (211) (223) Amortization of prior service cost (12) (16) (25) Settlements/curtailments (2) (14) (11) Total (gain) loss recognized in other comprehensive (income) loss (963) 900 168 Total recognized in comprehensive (income) loss $ (857) $ 1,010 $ 415 The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2017 2016 2015 Health care and life insurance Net cost $ 241 $ 202 $ 265 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (309) 496 (141) Prior service credit (3) (3) Amortization of actuarial loss (99) (73) (91) Amortization of prior service credit 77 78 77 Settlements/curtailments (2) Total (gain) loss recognized in other comprehensive (income) loss (331) 498 (160) Total recognized in comprehensive (income) loss $ (90) $ 700 $ 105 |
Schedule of Benefit Plan Obligations, Funded Status and the Assumptions Related to Obligations | The benefit plan obligations, funded status, and the assumptions related to the obligations at October 29, 2017 and October 30, 2016, respectively, in millions of dollars follow: Health Care and Pensions Life Insurance 2017 2016 2017 2016 Change in benefit obligations Beginning of year balance $ (13,086) $ (12,186) $ (6,500) $ (6,084) Service cost (274) (254) (42) (38) Interest cost (361) (391) (194) (204) Actuarial gain (loss) (35) (1,001) 280 (478) Amendments (1) 3 Benefits paid 704 702 312 321 Health care subsidies (9) (16) Other postemployment benefits (2) Settlements/curtailments 2 6 Foreign exchange and other (116) 41 (9) (4) End of year balance (13,166) (13,086) (6,162) (6,500) Change in plan assets (fair value) Beginning of year balance 11,137 11,164 435 689 Actual return on plan assets 1,517 628 46 17 Employer contribution 62 80 366 47 Benefits paid (704) (702) (312) (321) Settlements (2) (3) Foreign exchange and other 83 (30) 4 3 End of year balance 12,093 11,137 539 435 Funded status $ (1,073) $ (1,949) $ (5,623) $ (6,065) Weighted-average assumptions Discount rates 3.6% 3.7% Rate of compensation increase 3.8% |
Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income - Pretax | The amounts recognized at October 29, 2017 and October 30, 2016, respectively, in millions of dollars consist of the following: Health Care and Pensions Life Insurance 2017 2016 2017 2016 Amounts recognized in balance sheet Noncurrent asset $ 538 $ 94 Current liability (40) (33) $ (63) $ (32) Noncurrent liability (1,571) (2,010) (5,560) (6,033) Total $ (1,073) $ (1,949) $ (5,623) $ (6,065) Amounts recognized in accumulated other comprehensive income – pretax Net actuarial loss $ 4,358 $ 5,309 $ 1,457 $ 1,865 Prior service cost (credit) 55 67 (182) (259) Total $ 4,413 $ 5,376 $ 1,275 $ 1,606 |
Schedule of Accumulated Other Comprehensive Income Expected to be Amortized as Net Expense (Income) During Next Fiscal Year | The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) and reported outside of income from operations during fiscal 2018 in millions of dollars follow: Health Care and Pensions Life Insurance Net actuarial loss $ 225 $ 67 Prior service cost (credit) 12 (77) Total $ 237 $ (10) |
Schedule of Future Benefits Expected to be Paid from the Benefit Plans | The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars: Health Care and Pensions Life Insurance* 2018 $ 721 $ 334 2019 726 337 2020 713 342 2021 701 346 2022 693 352 2023 to 2027 3,458 1,758 * Net of prescription drug group benefit subsidy under Medicare Part D. |
Fair Values of Pension Plan and Health Care Assets | The fair values of the pension plan assets at October 29, 2017 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 618 $ 349 $ 269 Equity: U.S. equity securities 1,871 1,850 21 International equity securities 1,551 1,541 10 Fixed Income: Government and agency securities 483 241 242 Corporate debt securities 1,285 1,285 Mortgage-backed securities 42 42 Real estate 103 101 2 Derivative contracts - assets* 159 28 131 Derivative contracts - liabilities** (76) (2) (74) Receivables, payables, and other 1 1 Securities lending collateral 420 420 Securities lending liability (420) (420) Securities sold short (379) (375) (4) Total of Level 1 and Level 2 assets 5,658 $ 3,734 $ 1,924 Investments at net asset value: Short-term investments 203 U.S. equity funds 1,704 International equity funds 921 Corporate debt funds 28 Fixed income funds 772 Real estate 567 Hedge funds 651 Private equity/venture capital 1,560 Other investments 29 Total net assets $ 12,093 * Includes contracts for interest rates of $79 million, foreign currency of $49 million, equity of $27 million, and other of $4 million. ** Includes contracts for interest rates of $48 million, foreign currency of $26 million, and other of $2 million. The fair values of the health care assets at October 29, 2017 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 30 $ 28 $ 2 Equity: U.S. equity securities and funds 42 42 International equity securities 9 9 Fixed Income: Government and agency securities 40 37 3 Corporate debt securities 21 21 Mortgage-backed securities 10 10 Real estate 1 1 Interest rate derivative contracts - assets 1 1 Securities lending collateral 25 25 Securities lending liability (25) (25) Securities sold short (2) (2) Total of Level 1 and Level 2 assets 152 $ 115 $ 37 Investments at net asset value: Short-term investments 1 U.S. equity funds 164 International equity funds 117 Fixed income funds 87 Real estate funds 4 Hedge funds 4 Private equity/venture capital 10 Total net assets $ 539 The fair values of the pension plan assets at October 30, 2016 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 684 $ 322 $ 362 Equity: U.S. equity securities and funds 3,000 2,965 35 International equity securities and funds 1,711 1,697 14 Fixed Income: Government and agency securities 440 224 216 Corporate debt securities 1,205 1,205 Mortgage-backed securities 39 39 Fixed income funds 20 20 Real estate 121 118 3 Derivative contracts - assets* 191 3 188 Derivative contracts - liabilities** (59) (14) (45) Receivables, payables, and other 6 5 1 Securities lending collateral 693 108 585 Securities lending liability (693) (108) (585) Securities sold short (338) (333) (5) Total of Level 1 and Level 2 assets 7,020 $ 5,007 $ 2,013 Investments at net asset value: Short-term investments 216 U.S. equity funds 30 International equity funds 595 Corporate debt funds 25 Fixed income funds 482 Real estate 515 Hedge funds 624 Private equity/venture capital 1,603 Other investments 27 Total net assets $ 11,137 * Includes contracts for interest rates of $125 million, foreign currency of $59 million, equity of $4 million, and other of $3 million. ** Includes contracts for interest rates of $19 million, foreign currency of $33 million, equity of $6 million, and other of $1 million. The fair values of the health care assets at October 30, 2016 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 32 $ 27 $ 5 Equity: U.S. equity securities and funds 138 138 International equity securities and funds 25 25 Fixed Income: Government and agency securities 43 40 3 Corporate debt securities 30 30 Mortgage-backed securities 11 11 Real estate 2 2 Derivative contracts - assets* 3 3 Securities lending collateral 48 11 37 Securities lending liability (48) (11) (37) Securities sold short (5) (5) Total of Level 1 and Level 2 assets 279 $ 227 $ 52 Investments at net asset value: Short-term investments 3 International equity funds 60 Fixed income funds 20 Real estate funds 7 Hedge funds 44 Private equity/venture capital 22 Total net assets $ 435 * Includes contracts for interest rates of $2 million and foreign currency of $1 million. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
INCOME TAXES | |
Provision for Income Taxes by Taxing Jurisdiction and by Significant Component | The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars: 2017 2016 2015 Current: U.S.: Federal $ 360 $ 51 $ 377 State 48 26 32 Foreign 463 340 449 Total current 871 417 858 Deferred: U.S.: Federal 59 297 21 State 7 11 4 Foreign 34 (25) (43) Total deferred 100 283 (18) Provision for income taxes $ 971 $ 700 $ 840 |
Comparison of Statutory and Effective Income Tax Provision | A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follow: 2017 2016 2015 U.S. federal income tax provision at a statutory rate of 35 percent $ 1,104 $ 778 $ 973 Increase (decrease) resulting from: State and local income taxes, net of federal income tax benefit 35 26 23 Differences in taxability of foreign earnings (83) (107) (449) Nondeductible impairment charges 4 Research and business tax credits (63) (57) (76) Tax rates on foreign earnings (86) (27) (36) Valuation allowance on deferred taxes 89 79 384 Other-net (25) 4 21 Provision for income taxes $ 971 $ 700 $ 840 |
Analysis of the Deferred Income Tax Assets and Liabilities | An analysis of the deferred income tax assets and liabilities at October 29, 2017 and October 30, 2016 in millions of dollars follows: 2017 2016 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities Other postretirement benefit liabilities $ 2,011 $ 2,191 Lease transactions $ 933 $ 817 Tax loss and tax credit carryforwards 677 661 Accrual for sales allowances 680 592 Tax over book depreciation 569 578 Pension liability - net 420 706 Foreign unrealized losses 7 472 Accrual for employee benefits 141 133 Share-based compensation 116 152 Goodwill and other intangible assets 130 89 Allowance for credit losses 107 88 Deferred compensation 59 50 Undistributed foreign earnings 21 30 Other items 432 172 471 175 Less valuation allowances (620) (1,029) Deferred income tax assets and liabilities $ 4,030 $ 1,825 $ 4,487 $ 1,689 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at October 29, 2017, October 30, 2016, and November 1, 2015 in millions of dollars follows: 2017 2016 2015 Beginning of year balance $ 198 $ 229 $ 213 Increases to tax positions taken during the current year 35 14 32 Increases to tax positions taken during prior years 13 11 29 Decreases to tax positions taken during prior years (17) (36) (15) Decreases due to lapse of statute of limitations (11) (7) (11) Settlements (1) (5) (6) Foreign exchange 4 (8) (13) End of year balance $ 221 $ 198 $ 229 |
OTHER INCOME AND OTHER OPERAT44
OTHER INCOME AND OTHER OPERATING EXPENSES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
OTHER INCOME AND OTHER OPERATING EXPENSES | |
Major Components of Other Income and Other Operating Expenses | The major components of other income and other operating expenses consisted of the following in millions of dollars: 2017 2016 2015 Other income Revenues from services $ 288 $ 270 $ 280 Insurance premiums and fees earned** 211 195 173 SiteOne investment gains* 375 75 Investment income 17 16 26 Other 230 190 228 Total $ 1,121 $ 746 $ 707 Other operating expenses Depreciation of equipment on operating leases $ 853 $ 742 $ 577 Insurance claims and expenses** 187 188 183 Cost of services 168 162 160 Other 109 163 41 Total $ 1,317 $ 1,255 $ 961 * See Note 5. ** Primarily related to extended warranties (see Note 22). |
UNCONSOLIDATED AFFILIATED COM45
UNCONSOLIDATED AFFILIATED COMPANIES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
UNCONSOLIDATED AFFILIATED COMPANIES | |
Unconsolidated Affiliated Companies | Combined financial information of the unconsolidated affiliated companies in millions of dollars follows: Operations 2017 2016 2015 Sales $ $ 3,206 $ 3,290 Net income 30 23 Deere & Company’s equity in net income (loss) (2) 1 Financial Position 2017 2016 Total assets $ $ Total external borrowings Total net assets Deere & Company’s share of the net assets |
Transactions with Unconsolidated Affiliated Companies | Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow : 2017 2016 2015 Net sales $ 84 $ 45 $ 37 Purchases 1,331 1,016 1,284 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
MARKETABLE SECURITIES | |
Amortized Cost and Fair Value of Marketable Securities | The amortized cost and fair value of marketable securities at October 29, 2017 and October 30, 2016 in millions of dollars follow: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2017 Equity fund $ 37 $ $ 48 Fixed income fund 15 15 U.S. government debt securities 76 77 Municipal debt securities 39 $ 39 Corporate debt securities 133 135 International debt securities 22 20 Mortgage-backed securities* 119 118 Marketable securities $ 441 $ 17 $ $ 452 2016 Equity fund $ $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities $ Mortgage-backed securities* Marketable securities $ $ $ $ * Primarily issued by U.S. government sponsored enterprises. |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at October 29, 2017 in millions of dollars follow: Amortized Fair Cost Value Due in one year or less $ 26 $ 25 Due after one through five years 111 110 Due after five through 10 years 83 84 Due after 10 years 50 52 Mortgage-backed securities 119 118 Debt securities $ 389 $ 389 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Financing Receivable Installments | Financing receivable installments, including unearned finance income, at October 29, 2017 and October 30, 2016 are scheduled as follows in millions of dollars: 2017 2016 Unrestricted/Securitized Unrestricted/Securitized Due in months: 0 – 12 $ 13,237 $ 2,027 $ 12,835 $ 2,269 13 – 24 5,056 1,256 4,760 1,536 25 – 36 3,708 672 3,386 931 37 – 48 2,518 243 2,219 408 49 – 60 1,398 50 1,181 84 Thereafter 475 2 404 7 Total $ 26,392 $ 4,250 $ 24,785 $ 5,235 |
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables at October 29, 2017 and October 30, 2016 follows in millions of dollars: 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2017 Retail Notes: Agriculture and turf $ 118 $ 54 $ 49 $ 221 Construction and forestry 75 33 39 147 Other: Agriculture and turf 27 14 7 48 Construction and forestry 11 6 2 19 Total $ 231 $ 107 $ 97 $ 435 Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ 221 $ 173 $ 17,508 $ 17,902 Construction and forestry 147 30 2,618 2,795 Other: Agriculture and turf 48 12 7,610 7,670 Construction and forestry 19 5 1,059 1,083 Total $ 435 $ 220 $ 28,795 29,450 Less allowance for credit losses 187 Total financing receivables - net $ 29,263 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2016 Retail Notes: Agriculture and turf $ 115 $ 57 $ 65 $ 237 Construction and forestry 78 32 25 135 Other: Agriculture and turf 26 11 6 43 Construction and forestry 10 5 4 19 Total $ 229 $ 105 $ 100 $ 434 Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ 237 $ 191 $ 17,526 $ 17,954 Construction and forestry 135 35 2,558 2,728 Other: Agriculture and turf 43 9 7,286 7,338 Construction and forestry 19 9 957 985 Total $ 434 $ 244 $ 28,327 29,005 Less allowance for credit losses 176 Total financing receivables - net $ 28,829 |
Analysis of the Allowance for Credit Losses and Investment in Financing Receivables | An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars: Revolving Retail Charge Notes Accounts Other Total 2017 Allowance: Beginning of year balance $ $ 40 $ 23 $ 176 Provision 46 33 9 88 Write-offs (56) (53) (7) (116) Recoveries 20 20 1 41 Translation adjustments (2) (2) End of year balance* $ 121 $ 40 $ 26 $ 187 Financing receivables: End of year balance $ 20,697 $ 3,629 $ 5,124 $ 29,450 Balance individually evaluated $ 86 $ 3 $ 20 $ 109 2016 Allowance: Beginning of year balance $ 95 $ 40 $ 22 $ 157 Provision 43 36 5 84 Write-offs (43) (55) (5) (103) Recoveries 11 19 1 31 Translation adjustments 7 7 End of year balance* $ 113 $ 40 $ 23 $ 176 Financing receivables: End of year balance $ 20,682 $ 3,135 $ 5,188 $ 29,005 Balance individually evaluated $ 108 $ 8 $ 20 $ 136 2015 Allowance: Beginning of year balance $ 109 $ 41 $ 25 $ 175 Provision 22 21 3 46 Write-offs (26) (37) (4) (67) Recoveries 10 15 1 26 Translation adjustments (20) (3) (23) End of year balance* $ 95 $ 40 $ 22 $ 157 Financing receivables: End of year balance $ 21,567 $ 2,740 $ 5,494 $ 29,801 Balance individually evaluated $ 40 $ 6 $ 46 * Individual allowances were not significant. |
Analysis of the Impaired Financing Receivables | An analysis of the impaired financing receivables at October 29, 2017 and October 30, 2016 follows in millions of dollars: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment 2017* Receivables with specific allowance** $ 36 $ 33 $ 10 $ 30 Receivables without a specific allowance*** 28 27 24 Total $ 64 $ 60 $ 10 $ 54 Agriculture and turf $ 49 $ 46 $ 10 $ 38 Construction and forestry $ 15 $ 14 $ 16 2016* Receivables with specific allowance** $ 31 $ 28 $ 9 $ 29 Receivables without a specific allowance*** 29 27 26 Total $ 60 $ 55 $ 9 $ 55 Agriculture and turf $ 33 $ 30 $ 8 $ 27 Construction and forestry $ 27 $ 25 $ 1 $ 28 * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. |
Schedule of Other Receivables | Other receivables at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Taxes receivable $ 876 $ 702 Other 324 317 Other receivables $ 1,200 $ 1,019 |
Trade Accounts and Notes Receivable | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Trade accounts and notes receivable at October 29, 2017 and October 30, 2016 in millions of dollars follows: 2017 2016 Trade accounts and notes: Agriculture and turf $ 2,991 $ 2,438 Construction and forestry 934 573 Trade accounts and notes receivable – net $ 3,925 $ 3,011 |
Financing Receivables | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Financing receivables at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Unrestricted/Securitized Unrestricted/Securitized Retail notes: Agriculture and turf $ 15,200 $ 3,651 $ 14,152 $ 4,615 Construction and forestry 2,297 599 2,201 620 Total 17,497 4,250 16,353 5,235 Wholesale notes 3,653 3,971 Revolving charge accounts 3,629 3,135 Financing leases (direct and sales-type) 1,613 1,326 Total financing receivables 26,392 4,250 24,785 5,235 Less: Unearned finance income: Retail notes 972 78 812 94 Financing leases 142 109 Total 1,114 78 921 94 Allowance for credit losses 174 13 162 14 Financing receivables – net $ 25,104 $ 4,159 $ 23,702 $ 5,127 |
Financing Receivables | Related to Sales of Equipment | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Financing receivables at October 29, 2017 and October 30, 2016 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars: 2017 2016 Unrestricted Unrestricted Retail notes*: Agriculture and turf $ 2,099 $ 1,896 Construction and forestry 368 336 Total 2,467 2,232 Wholesale notes 3,653 3,971 Sales-type leases 763 648 Total 6,883 6,851 Less: Unearned finance income: Retail notes 231 202 Sales-type leases 53 42 Total 284 244 Financing receivables related to the company’s sales of equipment $ 6,599 $ 6,607 * These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales. |
SECURITIZATION OF FINANCING R48
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows at October 29 in millions of dollars: 2017 Carrying value of liabilities $ 1,096 Maximum exposure to loss 1,155 |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 29, 2017 and October 30, 2016 were as follows in millions of dollars: 2017 2016 Financing receivables securitized (retail notes) $ 4,172 $ 5,141 Allowance for credit losses (13) (14) Other assets 105 115 Total restricted securitized assets $ 4,264 $ 5,242 The components of consolidated secured borrowings and other liabilities related to securitizations at October 29, 2017 and October 30, 2016 were as follows in millions of dollars: 2017 2016 Short-term securitization borrowings $ $ Accrued interest on borrowings Total liabilities related to restricted securitized assets $ $ |
EQUIPMENT ON OPERATING LEASES (
EQUIPMENT ON OPERATING LEASES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
EQUIPMENT ON OPERATING LEASES | |
Equipment on Operating Leases - Net | Net equipment on operating leases at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment on operating leases: Agriculture and turf $ 5,385 $ Construction and forestry 1,209 Equipment on operating leases – net $ 6,594 $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
INVENTORIES | |
Major Classification of Inventories | If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 29, 2017 and October 30, 2016 in millions of dollars would have been as follows: 2017 2016 Raw materials and supplies $ 1,688 $ Work-in-process 495 Finished goods and parts 3,182 Total FIFO value 5,365 Less adjustment to LIFO value 1,461 Inventories $ 3,904 $ |
PROPERTY AND DEPRECIATION (Tabl
PROPERTY AND DEPRECIATION (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
PROPERTY AND DEPRECIATION | |
Schedule of Property and Equipment | A summary of property and equipment at October 29, 2017 and October 30, 2016 in millions of dollars follows: Useful Lives* (Years) 2017 2016 Equipment Operations Land $ 122 $ 119 Buildings and building equipment 22 3,396 3,230 Machinery and equipment 11 5,378 5,180 Dies, patterns, tools, etc. 8 1,647 1,604 All other 5 942 893 Construction in progress 358 370 Total at cost 11,843 11,396 Less accumulated depreciation 6,826 6,277 Total 5,017 5,119 Financial Services Land 4 4 Buildings and building equipment 26 74 73 All other 6 38 36 Total at cost 116 113 Less accumulated depreciation 65 61 Total 51 52 Property and equipment – net $ 5,068 $ 5,171 * Weighted-averages |
GOODWILL AND OTHER INTANGIBLE52
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and and Turf Forestry Total Goodwill at November 1, 2015 $ 227 $ 499 $ 726 Acquisitions* 95 95 Translation adjustments and other 1 (6) (5) Goodwill at October 30, 2016 323 493 816 Acquisitions* 193 193 Translation adjustments and other 5 19 24 Goodwill at October 29, 2017 $ 521 $ 512 $ 1,033 * See Note 4. |
Components of Other Intangible Assets | The components of other intangible assets are as follows in millions of dollars: Useful Lives* (Years) 2017 2016 Amortized intangible assets: Customer lists and relationships 11 $ 42 $ Technology, patents, trademarks, and other 13 139 Total at cost 181 Less accumulated amortization** 86 Total 95 Unamortized intangible assets: In-process research and development*** 123 Other intangible assets – net $ 218 $ * Weighted-averages ** Accumulated amortization at 2017 and 2016 for customer lists and relationships was $17 million and $11 million and technology, patents, trademarks, and other was $69 million and $58 million, respectively. ***See Note 4. |
TOTAL SHORT-TERM BORROWINGS (Ta
TOTAL SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
TOTAL SHORT-TERM BORROWINGS | |
Short-Term Borrowings | Total short-term borrowings at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment Operations Notes payable to banks $ $ Long-term borrowings due within one year Total Financial Services Commercial paper Notes payable to banks Long-term borrowings due within one year* Total Short-term borrowings Financial Services Short-term securitization borrowings** Total short-term borrowings $ $ * Includes unamortized fair value adjustments related to interest rate swaps. Unamortized debt issuance costs were $2 million and $1 million, respectively. ** Includes unamortized debt issuance costs of $4 million and $5 million, respectively. |
ACCOUNTS PAYABLE AND ACCRUED 54
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment Operations Accounts payable: Trade payables $ 2,069 $ 1,598 Dividends payable 194 189 Other 164 193 Accrued expenses: Dealer sales discounts 1,559 1,371 Product warranties 1,007 779 Employee benefits 861 861 Unearned revenue 520 401 Other 1,344 1,269 Total 7,718 6,661 Financial Services Accounts payable: Deposits withheld from dealers and merchants 207 230 Other 275 268 Accrued expenses: Unearned revenue 797 735 Accrued interest 148 125 Employee benefits 55 52 Other 345 185 Total 1,827 1,595 Eliminations* 1,128 1,016 Accounts payable and accrued expenses $ 8,417 $ 7,240 * Primarily trade receivable valuation accounts which are reclassified as accrued expenses by the equipment operations as a result of their trade receivables being sold to financial services. |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
LONG-TERM BORROWINGS | |
Long-Term Borrowings | Long-term borrowings at October 29, 2017 and October 30, 2016 consisted of the following in millions of dollars: 2017 2016 Equipment Operations U.S. dollar notes and debentures: 4.375% notes due 2019 $ 750 $ 750 8-1/2% debentures due 2022 105 105 2.60% notes due 2022 1,000 1,000 6.55% debentures due 2028 200 200 5.375% notes due 2029 500 500 8.10% debentures due 2030 250 250 7.125% notes due 2031 300 300 3.90% notes due 2042 1,250 1,250 Euro notes: Medium-term notes due 2020 - 2023: (principal €850 - 2017) Average interest rate of .3% - 2017 990 Other notes 166 231 Less debt issuance costs 20 21 Total 5,491 4,565 Financial Services Notes and debentures: Medium-term notes due 2018 - 2027: (principal $18,678 - 2017, $17,203 - 2016) Average interest rates of 2.0% - 2017, 1.7% - 2016 18,601 * 17,434 * 2.75% senior note due 2022: ($500 principal) Swapped $500 to variable interest rate of 2.0% - 2017, 1.6% - 2016 502 * 519 * Other notes 1,339 1,221 Less debt issuance costs 42 36 Total 20,400 19,138 Long-term borrowings** $ 25,891 $ 23,703 * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year end. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Reconciliation of the Changes in Warranty Liability and Unearned Premiums | A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Warranty Liability/ Unearned Premiums 2017 2016 Beginning of year balance $ $ Payments Amortization of premiums received Accruals for warranties Premiums received Foreign exchange End of year balance $ $ |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
CAPITAL STOCK | |
Changes in the Common Stock Account | Changes in the common stock account in millions were as follows: Number of Shares Issued Amount Balance at November 2, 2014 536.4 $ Stock options and other Balance at November 1, 2015 536.4 Stock options and other Balance at October 30, 2016 536.4 Stock options and other 369 Balance at October 29, 2017 536.4 $ 4,281 |
Reconciliation of Basic and Diluted Net Income Per Share | A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: 2017 2016 2015 Net income attributable to Deere & Company $ 2,159.1 $ $ Less income allocable to participating securities .6 .7 .8 Income allocable to common stock $ 2,158.5 $ $ Average shares outstanding 319.5 Basic per share $ 6.76 $ $ Average shares outstanding 319.5 Effect of dilutive stock options 3.8 Total potential shares outstanding 323.3 Diluted per share $ 6.68 $ $ |
STOCK OPTION AND RESTRICTED S58
STOCK OPTION AND RESTRICTED STOCK AWARDS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
Assumptions Used for the Binomial Lattice Model to Determine Fair Value of Options | The assumptions used for the binomial lattice model to determine the fair value of options follow: 2017 2016 2015 Risk-free interest rate .88% - 2.5% .23% - 2.3% .04% - 2.3% Expected dividends 2.4% 2.8% 2.5% Expected volatility 24.0% - 24.8% 25.2% - 29.0% 23.4% - 25.7% Weighted-average volatility 24.5% 26.5% 25.6% Expected term (in years) 7.8 - 8.6 7.0 - 8.6 7.2 - 8.2 |
Stock Option Activity | Stock option activity at October 29, 2017 and changes during 2017 in millions of dollars and shares follow: Remaining Contractual Aggregate Exercise Term Intrinsic Shares Price* (Years) Value Outstanding at beginning of year 17.5 $ Granted .7 100.55 Exercised 76.56 Expired or forfeited (.1) 86.81 Outstanding at end of year 11.2 81.39 6.17 $ 581.6 Exercisable at end of year 7.8 79.64 5.34 418.9 * Weighted-averages |
Restricted Share Activity | The company’s restricted shares at October 29, 2017 and changes during 2017 in millions of shares follow: Grant-Date Shares Fair Value* Service based only Nonvested at beginning of year .3 $ Granted .5 Vested (.1) Nonvested at end of year .7 Performance/service and market/service based Nonvested at beginning of year .4 $ Granted .1 Performance change (.1) Nonvested at end of year .4 * Weighted-averages |
OTHER COMPREHENSIVE INCOME IT59
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income at November 2, 2014, November 1, 2015, October 30, 2016, and October 29, 2017 in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) 2014 $ (3,493) $ (303) $ 13 $ (3,783) Period Change (8) (935) $ (2) (1) (946) 2015 (3,501) (1,238) (2) 12 (4,729) Period Change (908) 9 3 (1) (897) 2016 (4,409) (1,229) 1 11 (5,626) Period Change 829 230 4 (1) 1,062 2017 $ (3,580) $ (999) $ 5 $ 10 $ (4,564) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Amount Credit Amount 2017 Cumulative translation adjustment $ 232 $ (2) $ 230 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 3 (1) 2 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 2 (1) 1 Foreign exchange contracts – Other operating expenses 1 1 Net unrealized gain (loss) on derivatives 6 (2) 4 Unrealized gain (loss) on investments: Unrealized holding gain (loss) 274 (101) 173 Reclassification of realized (gain) loss – Other income (275) 101 (174) Net unrealized gain (loss) on investments (1) (1) Retirement benefits adjustment: Pensions Net actuarial gain (loss) 702 (248) 454 Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 247 (89) 158 Prior service (credit) cost 12 (4) 8 Settlements/curtailments 2 (1) 1 Health care and life insurance Net actuarial gain (loss) 309 (115) 194 Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 99 (36) 63 Prior service (credit) cost (77) 28 (49) Net unrealized gain (loss) on retirement benefits adjustment 1,294 (465) 829 Total other comprehensive income (loss) $ 1,531 $ (469) $ 1,062 * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2016 Cumulative translation adjustment $ 8 $ 1 $ 9 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (2) 1 (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 7 (2) 5 Foreign exchange contracts – Other operating expenses (1) (1) Net unrealized gain (loss) on derivatives 4 (1) 3 Unrealized gain (loss) on investments: Unrealized holding gain (loss) 2 2 Reclassification of realized (gain) loss – Other income (4) 1 (3) Net unrealized gain (loss) on investments (2) 1 (1) Retirement benefits adjustment: Pensions Net actuarial gain (loss) and prior service credit (cost) (1,141) 397 (744) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 211 (77) 134 Prior service (credit) cost 16 (6) 10 Settlements/curtailments 14 (4) 10 Health care and life insurance Net actuarial gain (loss) and prior service credit (cost) (493) 178 (315) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 73 (27) 46 Prior service (credit) cost (78) 29 (49) Net unrealized gain (loss) on retirement benefits adjustment (1,398) 490 (908) Total other comprehensive income (loss) $ (1,388) $ 491 $ (897) * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2015 Cumulative translation adjustment $ (938) $ 3 $ (935) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (12) 4 (8) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 12 (4) 8 Foreign exchange contracts – Other operating expenses (4) 2 (2) Net unrealized gain (loss) on derivatives (4) 2 (2) Unrealized gain (loss) on investments: Unrealized holding gain (loss) 12 (4) 8 Reclassification of realized (gain) loss – Other income (14) 5 (9) Net unrealized gain (loss) on investments (2) 1 (1) Retirement benefits adjustment: Pensions Net actuarial gain (loss) and prior service credit (cost) (427) 151 (276) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 223 (81) 142 Prior service (credit) cost 25 (9) 16 Settlements/curtailments 11 (4) 7 Health care and life insurance Net actuarial gain (loss) and prior service credit (cost) 145 (52) 93 Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial (gain) loss 91 (34) 57 Prior service (credit) cost (77) 29 (48) Settlements/curtailments 1 1 Net unrealized gain (loss) on retirement benefits adjustment (8) (8) Total other comprehensive income (loss) $ (952) $ 6 $ (946) * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Carrying Fair Carrying Fair Value Value* Value Value* Financing receivables – net $ 25,104 $ 24,946 $ $ Financing receivables securitized – net $ 4,159 $ 4,130 $ $ Short-term securitization borrowings $ 4,119 $ 4,118 $ $ Long-term borrowings due within one year: Equipment operations $ 154 $ 154 $ $ Financial services 6,064 6,079 Total $ 6,218 $ 6,233 $ $ Long-term borrowings: Equipment operations $ 5,491 $ 6,026 $ $ Financial services 20,400 20,606 Total $ 25,891 $ 26,632 $ $ * Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at October 29, 2017 and October 30, 2016 at fair value on a recurring basis in millions of dollars follow: 2017* 2016* Marketable securities Equity fund $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities Mortgage-backed securities** Total marketable securities Other assets Derivatives: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total assets*** $ $ Accounts payable and accrued expenses Derivatives: Interest rate contracts $ $ Foreign exchange contracts Cross-currency interest rate contracts Total liabilities $ $ * All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $48 million and $45 million at October 29, 2017 and October 30, 2016, respectively, the fixed income fund of $15 million and $15 million at October 29, 2017 and October 30, 2016, respectively, and U.S. government debt securities of $44 million and $53 million at October 29, 2017 and October 30, 2016, respectively. In addition, $17 million and $28 million of the international debt securities were Level 3 measurements at October 29, 2017 and October 30, 2016, respectively. There were no transfers between Level 1 and Level 2 during 2017 and 2016. ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. |
Fair Value, Recurring, Level 3 Measurements | Fair value, recurring Level 3 measurements from available-for-sale marketable securities at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Beginning of period balance $ $ Purchases Principal payments Change in unrealized gain (loss) End of period balance $ $ |
Fair Value, Nonrecurring, Level 3 Measurements | Fair value, nonrecurring measurements from impairments at October 29, 2017 and October 30, 2016 in millions of dollars follow: Fair Value* Losses* 2017 2016 2017 2016 2015 Equipment on operating leases – net $ 654 $ 31 $ 10 Property and equipment – net $ 31 $ 13 $ 10 Investments in unconsolidated affiliates $ 28 $ 1 $ 40 $ 12 Other assets $ 184 $ 29 $ 15 * Fair value at October 29, 2017 was a Level 1 measurement, while fair values at October 30, 2016 were Level 3 measurements. See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
DERIVATIVE INSTRUMENTS | |
Fair Value Hedge Interest Rate Contracts and Underlying Borrowings | The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars: 2017 2016 Interest rate contracts* $ $ Borrowings** 287 * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $79 million and $146 million during 2017 and 2016, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $243 million and $290 million during 2017 and 2016, respectively. |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet at October 29, 2017 and October 30, 2016 in millions of dollars follow: 2017 2016 Other Assets Designated as hedging instruments: Interest rate contracts $ $ Cross-currency interest rate contracts Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivative assets $ $ Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ $ Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivative liabilities $ $ |
Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income | The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars: 2017 2016 2015 Fair Value Hedges Interest rate contracts – Interest expense $ $ $ Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts – OCI (pretax)* Foreign exchange contracts – OCI (pretax)* Reclassified from OCI (Effective Portion): Interest rate contracts – Interest expense* Foreign exchange contracts – Other expense* Recognized Directly in Income (Ineffective Portion) ** ** ** Not Designated as Hedges Interest rate contracts – Interest expense* $ $ $ Foreign exchange contracts – Cost of sales Foreign exchange contracts – Other expense* Total not designated $ $ $ * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts are not significant. |
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid at October 29, 2017 and October 30, 2016 in millions of dollars follows: Gross Amounts Netting Collateral Net Recognized Arrangements Received Amount 2017 Assets $ 235 $ $ 170 Liabilities 158 93 2016 Assets $ $ $ $ Liabilities |
SEGMENT AND GEOGRAPHIC SEGMENT
SEGMENT AND GEOGRAPHIC SEGMENT DATA (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
SEGMENT AND GEOGRAPHIC AREA DATA | |
Schedule of Segment Reporting Information | Information relating to operations by operating segment in millions of dollars follows for the years ended October 29, 2017, October 30, 2016, and November 1, 2015. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2017, 2016, and 2015 were as follows: agriculture and turf net sales of $39 million, $31 million, and $49 million, construction and forestry net sales of $1 million, $1 million, and $1 million, and financial services revenues of $244 million, $225 million, and $225 million, respectively. OPERATING SEGMENTS 2017 2016 2015 Net sales and revenues Unaffiliated customers: Agriculture and turf net sales $ 20,167 $ $ Construction and forestry net sales 5,718 Total net sales 25,885 Financial services revenues 2,935 Other revenues* 918 Total $ 29,738 $ $ * Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income as disclosed in Note 31, net of certain intercompany eliminations. Operating profit Agriculture and turf $ $ $ Construction and forestry Financial services* Total operating profit Interest income Interest expense Foreign exchange gains (losses) from equipment operations’ financing activities Corporate expenses – net Income taxes Total Net income Less: Net income (loss) attributable to noncontrolling interests Net income attributable to Deere & Company $ $ $ * Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses. Interest income* Agriculture and turf $ $ $ Construction and forestry Financial services Corporate Intercompany Total $ $ $ * Does not include finance rental income for equipment on operating leases. Interest expense Agriculture and turf $ $ 173 $ 160 Construction and forestry 44 45 Financial services 536 455 Corporate 251 273 Intercompany (268) (240) (253) Total $ 900 $ 764 $ 680 Depreciation* and amortization expense Agriculture and turf $ 695 $ 667 $ 659 Construction and forestry 145 136 133 Financial services 876 757 590 Total $ 1,716 $ 1,560 $ 1,382 * Includes depreciation for equipment on operating leases. Equity in income (loss) of unconsolidated affiliates Agriculture and turf $ 2 $ 9 $ 7 Construction and forestry (27) (13) (7) Financial services 1 2 1 Total $ (24) $ (2) $ 1 Identifiable operating assets Agriculture and turf $ 9,359 $ 8,405 $ 8,332 Construction and forestry 3,212 3,017 3,295 Financial services 42,596 40,837 40,866 Corporate* 10,619 5,659 5,390 Total $ 65,786 $ 57,918 $ 57,883 * Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, marketable securities, and cash and cash equivalents as disclosed in Note 31, net of certain intercompany eliminations. Capital additions Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ Investments in unconsolidated affiliates Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ |
Schedule of Geographic Area Reporting Information | The company views and has historically disclosed its operations as consisting of two geographic areas, the U.S. and Canada, and outside the U.S. and Canada, shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. GEOGRAPHIC AREAS 2017 2016 2015 Net sales and revenues Unaffiliated customers: U.S. and Canada: Equipment operations net sales (88%)* $ 15,031 $ $ Financial services revenues (79%)* 2,526 Total 17,557 Outside U.S. and Canada: Equipment operations net sales 10,854 Financial services revenues 409 Total 11,263 Other revenues 918 Total $ 29,738 $ $ * The percentages indicate the approximate proportion of each amount that relates to the U.S. only and are based upon a three-year average for 2017, 2016, and 2015. Operating profit U.S. and Canada: Equipment operations $ 1,724 $ $ Financial services 523 Total 2,247 Outside U.S. and Canada: Equipment operations 1,097 Financial services 199 Total 1,296 Total $ 3,543 $ $ Property and equipment U.S. $ 2,976 $ $ Germany 598 Other countries 1,494 Total $ 5,068 $ $ |
SUPPLEMENTAL INFORMATION (UNA63
SUPPLEMENTAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
SUPPLEMENTAL INFORMATION (UNAUDITED) | |
Quarterly Common Stock Per Share Sales Prices | Common stock per share sales prices from New York Stock Exchange composite transactions quotations follow: First Second Third Fourth Quarter Quarter Quarter Quarter 2017 Market price High $ 108.06 $ 113.15 $ 128.91 $ 133.25 Low $ 88.06 $ 107.05 $ 110.79 $ 115.44 2016 Market price High $ 80.19 $ 85.68 $ 87.48 $ 88.09 Low $ 71.78 $ 74.58 $ 77.71 $ 76.83 |
Quarterly Financial Information | Quarterly information with respect to net sales and revenues and earnings is shown in the following schedule. The company’s fiscal year ends in October and its interim periods (quarters) end in January, April, and July. Such information is shown in millions of dollars except for per share amounts. First Second Third Fourth Quarter Quarter Quarter Quarter 2017* Net sales and revenues $ 5,625 $ 8,287 $ 7,808 $ 8,018 Net sales 4,698 7,260 6,833 7,094 Gross profit 901 1,815 1,568 1,668 Income before income taxes 328 1,169 890 767 Net income attributable to Deere & Company** 199 808 642 510 Per share data: Basic** .63 2.53 2.00 1.59 Diluted** .62 2.50 1.97 1.57 Dividends declared .60 .60 .60 .60 Dividends paid .60 .60 .60 .60 2016* Net sales and revenues $ 5,525 $ 7,875 $ 6,724 $ 6,520 Net sales 4,769 7,107 5,861 5,650 Gross profit 929 1,575 1,367 1,267 Income before income taxes 351 733 705 435 Net income attributable to Deere & Company 254 496 489 285 Per share data: Basic .80 1.57 1.55 .91 Diluted .80 1.56 1.55 .90 Dividends declared .60 .60 .60 .60 Dividends paid .60 .60 .60 .60 Net income per share for each quarter must be computed independently. As a result, their sum may not equal the total net income per share for the year. * See Note 5 for “Special Items.” ** Presents restated first and second quarter values for the adoption of FASB ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. Net income attributable to Deere & Company was $194 million and $802 million, respectively. Adjustments to basic and diluted per share data were not significant. |
SUPPLEMENTAL CONSOLIDATING DA64
SUPPLEMENTAL CONSOLIDATING DATA (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
Supplemental Consolidating Data Income Statement | INCOME STATEMENT For the Years Ended October 29, 2017, October 30, 2016, and November 1, 2015 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2017 2016 2015 2017 2016 2015 Net Sales and Revenues Net sales $ 25,885.1 $ 23,387.3 $ 25,775.2 Finance and interest income 71.7 61.1 77.0 $ 2,928.2 $ 2,690.1 $ 2,557.0 Other income 1,065.0 653.7 602.7 250.9 229.0 258.9 Total 27,021.8 24,102.1 26,454.9 3,179.1 2,919.1 2,815.9 Costs and Expenses Cost of sales 19,935.2 18,250.8 20,145.2 Research and development expenses 1,367.7 1,389.1 1,425.1 Selling, administrative and general expenses 2,530.7 2,262.5 2,393.8 542.3 508.5 487.3 Interest expense 263.7 250.5 272.8 669.2 536.5 455.0 Interest compensation to Financial Services 234.5 216.6 204.8 Other operating expenses 257.0 215.7 195.0 1,246.8 1,167.0 911.7 Total 24,588.8 22,585.2 24,636.7 2,458.3 2,212.0 1,854.0 Income of Consolidated Group before Income Taxes 2,433.0 1,516.9 1,818.2 720.8 707.1 961.9 Provision for income taxes 726.0 459.0 509.9 245.1 241.1 330.2 Income of Consolidated Group 1,707.0 1,057.9 1,308.3 475.7 466.0 631.7 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services 476.9 467.6 632.9 1.2 1.6 1.2 Other (4.0) (.3) Total 452.2 463.6 632.6 1.2 1.6 1.2 Net Income 2,159.2 1,521.5 1,940.9 476.9 467.6 632.9 Less: Net income (loss) attributable to noncontrolling interests .1 (2.4) .9 Net Income Attributable to Deere & Company $ 2,159.1 $ 1,523.9 $ 1,940.0 $ 476.9 $ 467.6 $ 632.9 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. The consolidated group data in the “Equipment Operations” income statement reflect the results of the agriculture and turf operations and construction and forestry operations. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
Supplemental Consolidating Data Balance Sheet | BALANCE SHEET As of October 29, 2017 and October 30, 2016 (In millions of dollars except per share amounts) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2017 2016 2017 2016 ASSETS Cash and cash equivalents $ 8,168.4 $ 3,140.5 $ 1,166.5 $ 1,195.3 Marketable securities 20.2 34.2 431.4 419.3 Receivables from unconsolidated subsidiaries and affiliates 1,032.1 3,150.1 Trade accounts and notes receivable - net 876.3 654.2 4,134.1 3,370.5 Financing receivables - net .4 25,104.1 23,701.9 Financing receivables securitized - net 4,158.8 5,126.5 Other receivables 1,045.6 855.4 195.5 164.0 Equipment on operating leases - net 6,593.7 5,901.5 Inventories 3,904.1 3,340.5 Property and equipment - net 5,017.3 5,118.5 50.4 52.1 Investments in unconsolidated subsidiaries and affiliates 4,812.3 4,697.0 13.8 11.9 Goodwill 1,033.3 815.7 Other intangible assets - net 218.0 104.1 Retirement benefits 538.1 93.6 16.9 20.5 Deferred income taxes 3,098.8 3,556.0 79.8 75.5 Other assets 973.9 834.9 651.4 798.1 Total Assets $ 30,738.4 $ 26,395.1 $ 42,596.4 $ 40,837.1 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Short-term borrowings $ 375.5 $ 249.0 $ 9,659.8 $ 6,661.7 Short-term securitization borrowings 4,118.7 4,997.8 Payables to unconsolidated subsidiaries and affiliates 121.9 81.5 996.2 3,133.6 Accounts payable and accrued expenses 7,718.1 6,661.2 1,827.1 1,595.2 Deferred income taxes 115.6 87.3 857.7 745.9 Long-term borrowings 5,490.9 4,565.3 20,400.4 19,137.7 Retirement benefits and other liabilities 7,341.9 8,206.0 92.9 89.0 Total liabilities 21,163.9 19,850.3 37,952.8 36,360.9 Commitments and contingencies (Note 22) Redeemable noncontrolling interest (Note 4) 14.0 14.0 STOCKHOLDERS’ EQUITY Common stock, $1 par value (authorized – 1,200,000,000 shares; 4,280.5 3,911.8 2,099.1 2,079.1 Common stock in treasury, 214,589,902 shares in 2017 (15,460.8) (15,677.1) Retained earnings 25,301.3 23,911.3 2,782.0 2,670.3 Accumulated other comprehensive income (loss) (4,563.7) (5,626.0) (237.5) (273.2) Total Deere & Company stockholders’ equity 9,557.3 6,520.0 4,643.6 4,476.2 Noncontrolling interests 3.2 10.8 Total stockholders’ equity 9,560.5 6,530.8 4,643.6 4,476.2 Total Liabilities and Stockholders’ Equity $ 30,738.4 $ 26,395.1 $ 42,596.4 $ 40,837.1 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
Supplemental Consolidating Data Statement of Cash Flows | STATEMENT OF CASH FLOWS For the Years Ended October 29, 2017, October 30, 2016, and November 1, 2015 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2017 2016 2015 2017 2016 2015 Cash Flows from Operating Activities Net income $ 2,159.2 $ 1,521.5 $ 1,940.9 $ 476.9 $ 467.6 $ 632.9 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 9.9 8.2 5.5 88.4 86.1 49.9 Provision for depreciation and amortization 839.3 803.4 791.8 984.3 846.7 688.5 Impairment charges 39.8 25.4 15.3 59.7 19.5 Gain on sale of unconsolidated affiliates and investments (74.5) Undistributed earnings of unconsolidated subsidiaries and affiliates 94.0 46.6 (1.5) (1.0) Provision (credit) for deferred income taxes 13.2 (139.8) 106.8 269.5 121.4 Changes in assets and liabilities: Trade receivables (175.3) 113.4 Insurance receivables 333.4 Inventories 578.4 (17.0) Accounts payable and accrued expenses 946.2 (169.6) (253.8) 93.9 40.6 (245.4) Accrued income taxes payable/receivable 18.2 (114.5) 38.5 (11.2) (4.6) Retirement benefits 232.4 414.3 7.3 6.2 13.2 Other 36.5 271.1 81.5 97.1 (25.7) Net cash provided by operating activities 2,438.0 2,911.8 3,073.8 1,876.5 1,860.8 1,582.1 Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) 15,963.2 15,831.4 16,266.1 Proceeds from maturities and sales of marketable securities 297.9 81.9 700.1 106.3 87.5 160.6 Proceeds from sales of equipment on operating leases 1,440.8 1,256.2 1,049.4 Proceeds from sales of businesses and unconsolidated 113.9 81.1 149.2 Cost of receivables acquired (excluding trade and wholesale) (15,168.2) (16,327.8) Purchases of marketable securities (59.4) (60.0) (111.8) (94.9) Purchases of property and equipment (641.8) (688.1) (2.6) (5.9) Cost of equipment on operating leases acquired (3,235.7) (3,043.6) Increase in investment in Financial Services (28.2) (27.4) Acquisitions of businesses, net of cash acquired (198.5) Decrease (increase) in trade and wholesale receivables 492.5 657.0 Other (55.2) 6.8 24.6 (45.1) Net cash used for investing activities (516.5) (820.1) (68.6) (2,897.3) (826.1) (1,235.0) Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings 64.5 (207.2) 211.9 1,246.1 (1,006.4) 289.7 Change in intercompany receivables/payables 2,142.0 (756.0) 928.6 756.0 (928.6) Proceeds from long-term borrowings 1,107.0 173.4 6.2 7,595.2 4,897.3 5,704.8 Payments of long-term borrowings (72.8) (214.2) (5,194.8) (4,649.0) Proceeds from issuance of common stock 528.7 36.0 172.1 Repurchases of common stock (205.4) (2,770.7) Capital investment from Equipment Operations 20.0 28.2 27.4 Dividends paid (761.3) (816.3) (562.1) (679.6) Other (36.7) (45.4) (28.0) (26.7) Net cash provided by (used for) financing activities 2,951.3 (1,830.0) (2,527.8) 990.0 (1,109.8) (262.0) Effect of Exchange Rate Changes on Cash and Cash Equivalents 155.1 (21.2) (146.6) 2.0 8.2 (40.7) Net Increase (Decrease) in Cash and Cash Equivalents 5,027.9 240.5 330.8 (28.8) (66.9) 44.4 Cash and Cash Equivalents at Beginning of Year 3,140.5 2,900.0 2,569.2 1,195.3 1,262.2 1,217.8 Cash and Cash Equivalents at End of Year $ 8,168.4 $ 3,140.5 $ 2,900.0 $ 1,166.5 $ 1,195.3 $ 1,262.2 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
ORGANIZATION AND CONSOLIDATION | |||
Fiscal year duration | 364 days | 364 days | 364 days |
SUMMARY OF SIGNIFICANT ACCOUN66
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising costs | $ 169 | $ 169 | $ 157 |
Foreign exchange pretax net gains (losses) | $ (62) | $ (38) | $ 22 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
New accounting standards adopted | ||||||||||||
Debt issuance costs | $ 63 | $ 63 | ||||||||||
Net income attributable to Deere & Company | $ 510 | $ 642 | $ 808 | $ 199 | $ 285 | $ 489 | $ 496 | $ 254 | $ 2,159.1 | 1,523.9 | $ 1,940 | |
Operating profit (loss) | 3,543 | 2,589 | 3,140 | |||||||||
Cash flow provided by operating activities | 2,199.8 | 3,769.7 | 3,758.8 | |||||||||
ASU 2016-09 | Early Adoption | ||||||||||||
New accounting standards adopted | ||||||||||||
Net income attributable to Deere & Company | 30 | |||||||||||
Cash flow provided by operating activities | 30 | $ 5 | $ 19 | |||||||||
ASU 2017-07 | If adopted | ||||||||||||
New accounting standards adopted | ||||||||||||
Operating profit (loss) | $ 31 | |||||||||||
ASU 2017-07 | Forecasted Adjustment | ||||||||||||
New accounting standards adopted | ||||||||||||
Operating profit (loss) | $ 25 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Acquisitions (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Sep. 24, 2017USD ($) | Mar. 27, 2016USD ($) | Feb. 28, 2016USD ($)location | Oct. 29, 2017USD ($) | Oct. 30, 2016USD ($) | Nov. 01, 2015USD ($) | |
Acquisitions | ||||||
Acquisitions of businesses, net of cash acquired | $ 284.2 | $ 198.5 | ||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Goodwill | 1,033.3 | 815.7 | $ 726 | |||
Redeemable noncontrolling interest | $ 14 | $ 14 | ||||
Blue River Technology | ||||||
Acquisitions | ||||||
Acquisitions of businesses, net of cash acquired | $ 284 | |||||
Cash acquired | 4 | |||||
Payments to fund escrow for post-acquisition expenses | 21 | |||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Trade accounts and notes receivable - net | 1 | |||||
Property and equipment - net | 2 | |||||
Goodwill | 193 | |||||
Other intangible assets - net | 125 | |||||
Accounts payable and accrued expenses | 1 | |||||
Deferred tax liabilities | $ 36 | |||||
Hagie Manufacturing Company, LLC | ||||||
Acquisitions | ||||||
Percentage of business interest acquired | 80.00% | |||||
Acquisitions of businesses, net of cash acquired | $ 53 | |||||
Cash acquired | 3 | |||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Trade accounts and notes receivable - net | 2 | |||||
Inventories | 33 | |||||
Property and equipment - net | 17 | |||||
Goodwill | 33 | |||||
Other intangible assets - net | 22 | |||||
Other assets | 3 | |||||
Accounts payable and accrued expenses | 43 | |||||
Redeemable noncontrolling interest | $ 14 | |||||
Weighted average amortization period (in years) | 8 years | |||||
Monosem | ||||||
Acquisitions | ||||||
Acquisitions of businesses, net of cash acquired | $ 146 | |||||
Cash acquired | 20 | |||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Trade accounts and notes receivable - net | 5 | |||||
Other receivables | 2 | |||||
Inventories | 29 | |||||
Property and equipment - net | 24 | |||||
Goodwill | 62 | |||||
Other intangible assets - net | 42 | |||||
Other assets | 23 | |||||
Accounts payable and accrued expenses | 22 | |||||
Deferred tax liabilities | $ 19 | |||||
Weighted average amortization period (in years) | 9 years | |||||
Monosem | FRANCE | ||||||
Acquisitions | ||||||
Facilities | location | 4 | |||||
Monosem | U.S. | ||||||
Acquisitions | ||||||
Facilities | location | 2 |
ACQUISITIONS AND DISPOSITIONS69
ACQUISITIONS AND DISPOSITIONS - Dispositions (Details) - Crop Insurance Operations - Disposal Group $ in Millions | 1 Months Ended |
Mar. 29, 2015USD ($) | |
Dispositions | |
Proceeds from sale of operations | $ 154 |
Cash and cash equivalents sold | 5 |
Gain from sale of Crop Insurance Operations, pretax, recorded in Other Income | 42 |
Gain from sale of Crop Insurance Operations, after-tax, recorded in Other Income | $ 40 |
SPECIAL ITEMS - Impairments (De
SPECIAL ITEMS - Impairments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 30, 2016 | |
Construction and Forestry | |||
Asset Impairment | |||
Non-cash charge in equity in loss of unconsolidated affiliates for an other than temporary decline in value, pretax | $ 40 | $ 12 | |
Non-cash charge in equity in loss of unconsolidated affiliates for an other than temporary decline in value, income tax benefit | $ 14 | ||
Non-cash charge in equity in loss of unconsolidated affiliates for an other than temporary decline in value, after-tax | 12 | ||
Construction and Forestry | Cost of Sales | |||
Asset Impairment | |||
Non-cash charge for impairment of long-lived assets, pretax | 13 | ||
Non-cash charge for impairment of long-lived assets, after-tax | $ 13 | ||
Financial Services | Other Operating Expense | |||
Asset Impairment | |||
Non-cash charge for impairment of equipment on operating leases, pretax | $ 31 | ||
Non-cash charge for impairment of other assets, pretax | $ 29 |
SPECIAL ITEMS - Voluntary Emplo
SPECIAL ITEMS - Voluntary Employee-Separation Programs (Details) - Voluntary Employee-Separation Programs - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 15 Months Ended |
Oct. 30, 2016 | Oct. 29, 2017 | Oct. 29, 2017 | |
Voluntary Employee-Separation Programs | |||
Total voluntary employee-separation programs' expenses, pretax | $ 11 | $ 102 | $ 113 |
Voluntary employee-separation programs savings | $ 70 | ||
Agriculture and Turf | |||
Voluntary Employee-Separation Programs | |||
Voluntary employee-separation programs' expenses allocation (as a percent) | 75.00% | ||
Construction and Forestry | |||
Voluntary Employee-Separation Programs | |||
Voluntary employee-separation programs' expenses allocation (as a percent) | 17.00% | ||
Financial Services | |||
Voluntary Employee-Separation Programs | |||
Voluntary employee-separation programs' expenses allocation (as a percent) | 8.00% | ||
Cost of Sales | |||
Voluntary Employee-Separation Programs | |||
Voluntary employee-separation programs' expenses allocation (as a percent) | 30.00% | ||
Research and Development | |||
Voluntary Employee-Separation Programs | |||
Voluntary employee-separation programs' expenses allocation (as a percent) | 16.00% | ||
Selling, Administrative and General Expenses | |||
Voluntary Employee-Separation Programs | |||
Voluntary employee-separation programs' expenses allocation (as a percent) | 54.00% |
SPECIAL ITEMS - Sale of Investm
SPECIAL ITEMS - Sale of Investment in Unconsolidated Affiliate (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Jul. 30, 2017 | Apr. 30, 2017 | Dec. 25, 2016 | May 29, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Equity Method Investments | |||||||
Dividends from unconsolidated affiliates | $ 4 | $ 64 | $ 1 | ||||
Partial Sale of SiteOne - Equity Method | |||||||
Gain on sale of partial interest, pretax | $ 75 | ||||||
Partial Sale of SiteOne - Available-for-Sale | |||||||
Gain on sale of partial remaining interest, pretax | $ 275 | ||||||
SiteOne Landscapes Supply, LLC | |||||||
Equity Method Investments | |||||||
Dividends from unconsolidated affiliates | $ 60 | ||||||
Return on investment distribution (cash flow - operating activities) | 4 | ||||||
Return of investment distribution (cash flow - investing activities) | $ 56 | ||||||
Partial Sale of SiteOne - Equity Method | |||||||
Sale of interest in SiteOne (as a percent) | 38.00% | 30.00% | |||||
Proceeds from sale of partial interest in SiteOne | $ 114 | $ 81 | |||||
Gain on sale of partial interest, pretax | 105 | 75 | |||||
Gain on sale of partial interest, after-tax | $ 66 | $ 47 | |||||
Ownership interest in SiteOne (as a percent) | 15.00% | 24.00% | |||||
Partial Sale of SiteOne - Available-for-Sale | |||||||
Sale of interest in SiteOne (as a percent) | 68.00% | ||||||
Proceeds from sale of interest in SiteOne | $ 98 | $ 184 | |||||
Gain on sale of partial remaining interest, pretax | 94 | 176 | |||||
Gain on sale of partial remaining interest, after-tax | $ 59 | $ 111 | |||||
Remaining ownership interest in SiteOne (as a percent) | 5.00% |
CASH FLOW INFORMATION (Details)
CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Cash Flow Information | |||
Transfer of inventory to equipment on operating leases | $ 801 | $ 685 | $ 674 |
Accounts payable related to purchases of property and equipment | 108 | 114 | 89 |
Interest: | |||
Interest | 903 | 726 | 661 |
Income taxes: | |||
Income taxes | 981 | 392 | 901 |
Intercompany Eliminations | |||
Interest: | |||
Interest | (268) | (240) | (253) |
Income taxes: | |||
Income taxes | (9) | 104 | (117) |
Equipment Operations | |||
Interest: | |||
Interest | 506 | 442 | 471 |
Income taxes: | |||
Income taxes | 898 | 314 | 828 |
Financial Services | |||
Interest: | |||
Interest | 665 | 524 | 443 |
Income taxes: | |||
Income taxes | $ 92 | $ (26) | $ 190 |
PENSION AND OTHER POSTRETIREM74
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Benefit Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Change in Accounting Method Accounted for as Change in Estimate | |||
Net Periodic Cost | |||
Decrease in service and interest costs compared to previous method | $ 175 | ||
Pensions | |||
Net Periodic Cost | |||
Service cost | $ 274 | 254 | $ 282 |
Interest cost | 361 | 391 | 474 |
Expected return on plan assets | (790) | (775) | (769) |
Amortization of actuarial (gain) loss | 247 | 211 | 223 |
Amortization of prior service (credit) cost | 12 | 16 | 25 |
Other postemployment benefits | 2 | 1 | |
Settlements/curtailments | 2 | 11 | 11 |
Net cost | $ 106 | $ 110 | $ 247 |
Weighted-Average Assumptions | |||
Discount rates - service cost (as a percent) | 3.50% | 4.30% | 4.00% |
Discount rates - interest cost (as a percent) | 3.00% | 3.40% | 4.00% |
Rate of compensation increase (as a percent) | 3.80% | 3.80% | 3.80% |
Expected long-term rates of return (as a percent) | 7.30% | 7.30% | 7.30% |
Health Care and Life Insurance | |||
Net Periodic Cost | |||
Service cost | $ 42 | $ 38 | $ 46 |
Interest cost | 194 | 204 | 259 |
Expected return on plan assets | (17) | (35) | (55) |
Amortization of actuarial (gain) loss | 99 | 73 | 91 |
Amortization of prior service (credit) cost | (77) | (78) | (77) |
Settlements/curtailments | 1 | ||
Net cost | $ 241 | $ 202 | $ 265 |
Weighted-Average Assumptions | |||
Discount rates - service cost (as a percent) | 4.70% | 5.00% | 4.20% |
Discount rates - interest cost (as a percent) | 3.20% | 3.50% | 4.20% |
Expected long-term rates of return (as a percent) | 6.30% | 6.60% | 7.00% |
PENSION AND OTHER POSTRETIREM75
PENSION AND OTHER POSTRETIREMENT BENEFITS - Plan Benefit Costs Recognized in Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Pensions | |||
Benefit Plan Costs Recognized in Other Comprehensive Income | |||
Net cost | $ 106 | $ 110 | $ 247 |
Retirement Benefits Adjustments Included in Other Comprehensive (Income) Loss: | |||
Net actuarial (gain) loss | (702) | 1,140 | 361 |
Prior service (credit) cost | 1 | 66 | |
Amortization of actuarial (loss) gain | (247) | (211) | (223) |
Amortization of prior service (cost) credit | (12) | (16) | (25) |
Settlements/curtailments | (2) | (14) | (11) |
Total (gain) loss recognized in other comprehensive (income) loss | (963) | 900 | 168 |
Total recognized in comprehensive (income) loss | (857) | 1,010 | 415 |
Health Care and Life Insurance | |||
Benefit Plan Costs Recognized in Other Comprehensive Income | |||
Net cost | 241 | 202 | 265 |
Retirement Benefits Adjustments Included in Other Comprehensive (Income) Loss: | |||
Net actuarial (gain) loss | (309) | 496 | (141) |
Prior service (credit) cost | (3) | (3) | |
Amortization of actuarial (loss) gain | (99) | (73) | (91) |
Amortization of prior service (cost) credit | 77 | 78 | 77 |
Settlements/curtailments | (2) | ||
Total (gain) loss recognized in other comprehensive (income) loss | (331) | 498 | (160) |
Total recognized in comprehensive (income) loss | $ (90) | $ 700 | $ 105 |
PENSION AND OTHER POSTRETIREM76
PENSION AND OTHER POSTRETIREMENT BENEFITS - Plan Obligations and Assumptions and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Pensions | |||
Change in benefit obligations | |||
Beginning of year balance | $ (13,086) | $ (12,186) | |
Service cost | (274) | (254) | $ (282) |
Interest cost | (361) | (391) | (474) |
Actuarial gain (loss) | (35) | (1,001) | |
Amendments | (1) | ||
Benefits paid | 704 | 702 | |
Other postemployment benefits | (2) | ||
Settlements/curtailments | 2 | 6 | |
Foreign exchange and other | (116) | 41 | |
End of year balance | (13,166) | (13,086) | (12,186) |
Change in plan assets (fair value) | |||
Beginning of year balance | 11,137 | 11,164 | |
Actual return on plan assets | 1,517 | 628 | |
Employer contribution | 62 | 80 | |
Benefits paid | (704) | (702) | |
Settlements | (2) | (3) | |
Foreign exchange and other | 83 | (30) | |
End of year balance | 12,093 | 11,137 | 11,164 |
Funded (unfunded) status | $ (1,073) | $ (1,949) | |
Weighted-average assumptions | |||
Discount rates (as a percent) | 3.60% | 3.60% | |
Rate of compensation increase (as a percent) | 3.80% | 3.80% | |
Health Care and Life Insurance | |||
Change in benefit obligations | |||
Beginning of year balance | $ (6,500) | $ (6,084) | |
Service cost | (42) | (38) | (46) |
Interest cost | (194) | (204) | (259) |
Actuarial gain (loss) | 280 | (478) | |
Amendments | 3 | ||
Benefits paid | 312 | 321 | |
Health care subsidies | (9) | (16) | |
Foreign exchange and other | (9) | (4) | |
End of year balance | (6,162) | (6,500) | (6,084) |
Change in plan assets (fair value) | |||
Beginning of year balance | 435 | 689 | |
Actual return on plan assets | 46 | 17 | |
Employer contribution | 366 | 47 | |
Benefits paid | (312) | (321) | |
Foreign exchange and other | 4 | 3 | |
End of year balance | 539 | 435 | $ 689 |
Funded (unfunded) status | $ (5,623) | $ (6,065) | |
Weighted-average assumptions | |||
Discount rates (as a percent) | 3.70% | 3.80% |
PENSION AND OTHER POSTRETIREM77
PENSION AND OTHER POSTRETIREMENT BENEFITS - Other (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Amounts recognized in balance sheet | ||
Noncurrent asset | $ 538.2 | $ 93.6 |
Pensions | ||
Amounts recognized in balance sheet | ||
Noncurrent asset | 538 | 94 |
Current liability | (40) | (33) |
Noncurrent liability | (1,571) | (2,010) |
Funded (unfunded) status | (1,073) | (1,949) |
Amounts recognized in accumulated other comprehensive income - pretax | ||
Net actuarial loss | 4,358 | 5,309 |
Prior service cost (credit) | 55 | 67 |
Total | 4,413 | 5,376 |
Accumulated Benefit Obligations - Additional Disclosures | ||
Accumulated benefit obligation for pension plans | 12,416 | 12,410 |
Accumulated Benefit Obligations in Excess of Plan Assets | ||
Defined benefit plan, pension plans with accumulated benefit obligations in excess of plan assets, accumulated benefit obligations | 8,234 | 8,402 |
Defined benefit plan, pension plans with accumulated benefit obligations in excess of plan assets, aggregate fair value of plan assets | 7,345 | 7,016 |
Projected Benefit Obligations in Excess of Plan Assets | ||
Defined benefit plan, pension plans with projected benefit obligations in excess of plan assets, projected benefit obligations | 9,059 | 9,157 |
Defined benefit plan, plans with projected benefit obligations in excess of plan assets, fair value of plan assets | 7,448 | 7,114 |
Amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) and reported outside of income from operations during fiscal 2018 | ||
Net actuarial loss | 225 | |
Prior service cost (credit) | 12 | |
Total | 237 | |
Expected future employer contributions towards defined benefit plans, which are primarily direct benefit payments for unfunded plans | 63 | |
Benefits expected to be paid from the benefit plans, which reflect expected future years of service | ||
Defined benefit plan, expected future benefit payments, next twelve months | 721 | |
Defined benefit plan, expected future benefit payments, year two | 726 | |
Defined benefit plan, expected future benefit payments, year three | 713 | |
Defined benefit plan, expected future benefit payments, year four | 701 | |
Defined benefit plan, expected future benefit payments, year five | 693 | |
Defined benefit plan, expected future benefit payments, five fiscal years thereafter | 3,458 | |
Health Care and Life Insurance | ||
Amounts recognized in balance sheet | ||
Current liability | (63) | (32) |
Noncurrent liability | (5,560) | (6,033) |
Funded (unfunded) status | (5,623) | (6,065) |
Amounts recognized in accumulated other comprehensive income - pretax | ||
Net actuarial loss | 1,457 | 1,865 |
Prior service cost (credit) | (182) | (259) |
Total | 1,275 | $ 1,606 |
Amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) and reported outside of income from operations during fiscal 2018 | ||
Net actuarial loss | 67 | |
Prior service cost (credit) | (77) | |
Total | (10) | |
Expected future employer contributions towards defined benefit plans, which are primarily direct benefit payments for unfunded plans | 74 | |
Benefits expected to be paid from the benefit plans, which reflect expected future years of service | ||
Defined benefit plan, expected future benefit payments, next twelve months | 334 | |
Defined benefit plan, expected future benefit payments, year two | 337 | |
Defined benefit plan, expected future benefit payments, year three | 342 | |
Defined benefit plan, expected future benefit payments, year four | 346 | |
Defined benefit plan, expected future benefit payments, year five | 352 | |
Defined benefit plan, expected future benefit payments, five fiscal years thereafter | $ 1,758 |
PENSION AND OTHER POSTRETIREM78
PENSION AND OTHER POSTRETIREMENT BENEFITS - Assumptions (Details) - Health Care and Life Insurance - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Health care costs trend rates | ||
Weighted-average health care cost trend rate, next fiscal year (as a percent) | 8.90% | 8.30% |
Ultimate weighted-average health care cost trend rate (as a percent) | 4.80% | 4.80% |
Year that weighted-average health care cost trend rate reaches ultimate rate (year) | 2,025 | 2,025 |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rate | ||
Defined benefit plan, effect of one percentage point increase on accumulated postretirement benefit obligation | $ 791 | |
Defined benefit plan, effect of one percentage point increase on service and interest cost components | 36 | |
Defined benefit plan, effect of one percentage point decrease on accumulated postretirement benefit obligation | 615 | |
Defined benefit plan, effect of one percentage point decrease on service and interest cost components | $ 27 |
PENSION AND OTHER POSTRETIREM79
PENSION AND OTHER POSTRETIREMENT BENEFITS - Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 |
Pensions | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | $ 12,093 | $ 11,137 | $ 11,164 |
Pensions | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 5,658 | 7,020 | |
Pensions | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3,734 | 5,007 | |
Pensions | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,924 | 2,013 | |
Pensions | Cash and Short-term Investments | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 618 | 684 | |
Pensions | Cash and Short-term Investments | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 349 | 322 | |
Pensions | Cash and Short-term Investments | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 269 | 362 | |
Pensions | U.S. Equity Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,871 | ||
Pensions | U.S. Equity Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,850 | ||
Pensions | U.S. Equity Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 21 | ||
Pensions | U.S. Equity Securities and Funds | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3,000 | ||
Pensions | U.S. Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 2,965 | ||
Pensions | U.S. Equity Securities and Funds | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 35 | ||
Pensions | International Equity Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,551 | ||
Pensions | International Equity Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,541 | ||
Pensions | International Equity Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | ||
Pensions | International Equity Securities and Funds | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,711 | ||
Pensions | International Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,697 | ||
Pensions | International Equity Securities and Funds | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 14 | ||
Pensions | Government and Agency Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 483 | 440 | |
Pensions | Government and Agency Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 241 | 224 | |
Pensions | Government and Agency Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 242 | 216 | |
Pensions | Corporate Debt Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,285 | 1,205 | |
Pensions | Corporate Debt Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,285 | 1,205 | |
Pensions | Mortgage-backed Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 42 | 39 | |
Pensions | Mortgage-backed Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 42 | 39 | |
Pensions | Fixed Income Funds | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 20 | ||
Pensions | Fixed Income Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 20 | ||
Pensions | Real Estate | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 103 | 121 | |
Pensions | Real Estate | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 101 | 118 | |
Pensions | Real Estate | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 2 | 3 | |
Pensions | Derivative Contracts - Assets | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 159 | 191 | |
Pensions | Derivative Contracts - Assets | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 28 | 3 | |
Pensions | Derivative Contracts - Assets | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 131 | 188 | |
Pensions | Derivative Contracts - Assets | Interest Rate Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 79 | 125 | |
Pensions | Derivative Contracts - Assets | Foreign Exchange Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 49 | 59 | |
Pensions | Derivative Contracts - Assets | Equity Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 27 | 4 | |
Pensions | Derivative Contracts - Assets | Other Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 3 | |
Pensions | Derivative Contracts - Liabilities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (76) | (59) | |
Pensions | Derivative Contracts - Liabilities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (2) | (14) | |
Pensions | Derivative Contracts - Liabilities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (74) | (45) | |
Pensions | Derivative Contracts - Liabilities | Interest Rate Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (48) | (19) | |
Pensions | Derivative Contracts - Liabilities | Foreign Exchange Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (26) | (33) | |
Pensions | Derivative Contracts - Liabilities | Equity Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (6) | ||
Pensions | Derivative Contracts - Liabilities | Other Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (2) | (1) | |
Pensions | Receivables, Payables, and Other | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 6 | |
Pensions | Receivables, Payables, and Other | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 5 | |
Pensions | Receivables, Payables, and Other | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | ||
Pensions | Securities Lending Collateral | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 420 | 693 | |
Pensions | Securities Lending Collateral | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 108 | ||
Pensions | Securities Lending Collateral | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 420 | 585 | |
Pensions | Securities Lending Liability | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (420) | (693) | |
Pensions | Securities Lending Liability | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (108) | ||
Pensions | Securities Lending Liability | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (420) | (585) | |
Pensions | Securities Sold Short | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (379) | (338) | |
Pensions | Securities Sold Short | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (375) | (333) | |
Pensions | Securities Sold Short | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (4) | (5) | |
Pensions | Investments at Net Asset Value - Short-Term Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 203 | 216 | |
Pensions | Investments at Net Asset Value - U.S. Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,704 | 30 | |
Pensions | Investments at Net Asset Value - International Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 921 | 595 | |
Pensions | Investments at Net Asset Value - Corporate Debt Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 28 | 25 | |
Pensions | Investments at Net Asset Value - Fixed Income Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 772 | 482 | |
Pensions | Investments at Net Asset Value - Real Estate | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 567 | 515 | |
Pensions | Investments at Net Asset Value - Hedge Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 651 | 624 | |
Pensions | Investments at Net Asset Value - Private Equity/Venture Capital | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,560 | 1,603 | |
Pensions | Investments at Net Asset Value - Other Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 29 | 27 | |
Health Care and Life Insurance | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 539 | 435 | $ 689 |
Health Care and Life Insurance | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 152 | 279 | |
Health Care and Life Insurance | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 115 | 227 | |
Health Care and Life Insurance | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 37 | 52 | |
Health Care and Life Insurance | Cash and Short-term Investments | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 30 | 32 | |
Health Care and Life Insurance | Cash and Short-term Investments | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 28 | 27 | |
Health Care and Life Insurance | Cash and Short-term Investments | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 2 | 5 | |
Health Care and Life Insurance | U.S. Equity Securities and Funds | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 42 | 138 | |
Health Care and Life Insurance | U.S. Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 42 | 138 | |
Health Care and Life Insurance | International Equity Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 9 | ||
Health Care and Life Insurance | International Equity Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 9 | ||
Health Care and Life Insurance | International Equity Securities and Funds | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 25 | ||
Health Care and Life Insurance | International Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 25 | ||
Health Care and Life Insurance | Government and Agency Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 40 | 43 | |
Health Care and Life Insurance | Government and Agency Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 37 | 40 | |
Health Care and Life Insurance | Government and Agency Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3 | 3 | |
Health Care and Life Insurance | Corporate Debt Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 21 | 30 | |
Health Care and Life Insurance | Corporate Debt Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 21 | 30 | |
Health Care and Life Insurance | Mortgage-backed Securities | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | 11 | |
Health Care and Life Insurance | Mortgage-backed Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | 11 | |
Health Care and Life Insurance | Real Estate | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 2 | |
Health Care and Life Insurance | Real Estate | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 2 | |
Health Care and Life Insurance | Derivative Contracts - Assets | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3 | ||
Health Care and Life Insurance | Derivative Contracts - Assets | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3 | ||
Health Care and Life Insurance | Derivative Contracts - Assets | Interest Rate Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 2 | |
Health Care and Life Insurance | Derivative Contracts - Assets | Interest Rate Contracts | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | ||
Health Care and Life Insurance | Derivative Contracts - Assets | Foreign Exchange Contracts | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | ||
Health Care and Life Insurance | Securities Lending Collateral | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 25 | 48 | |
Health Care and Life Insurance | Securities Lending Collateral | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 11 | ||
Health Care and Life Insurance | Securities Lending Collateral | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 25 | 37 | |
Health Care and Life Insurance | Securities Lending Liability | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (25) | (48) | |
Health Care and Life Insurance | Securities Lending Liability | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (11) | ||
Health Care and Life Insurance | Securities Lending Liability | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (25) | (37) | |
Health Care and Life Insurance | Securities Sold Short | Level 1 and Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (2) | (5) | |
Health Care and Life Insurance | Securities Sold Short | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (2) | (5) | |
Health Care and Life Insurance | Investments at Net Asset Value - Short-Term Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 3 | |
Health Care and Life Insurance | Investments at Net Asset Value - U.S. Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 164 | ||
Health Care and Life Insurance | Investments at Net Asset Value - International Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 117 | 60 | |
Health Care and Life Insurance | Investments at Net Asset Value - Fixed Income Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 87 | 20 | |
Health Care and Life Insurance | Investments at Net Asset Value - Real Estate Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 7 | |
Health Care and Life Insurance | Investments at Net Asset Value - Hedge Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 44 | |
Health Care and Life Insurance | Investments at Net Asset Value - Private Equity/Venture Capital | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | $ 10 | $ 22 |
PENSION AND OTHER POSTRETIREM80
PENSION AND OTHER POSTRETIREMENT BENEFITS - Plan Asset Information (Details) | 12 Months Ended |
Oct. 29, 2017 | |
Pensions | |
Expected return on plan assets | |
Market related value period | 5 years |
Pensions | U.S. | |
Actual pension asset returns | |
Time period for fundamental changes in capital markets affecting return expectations, low end of range | 10 years |
Time period for fundamental changes in capital markets affecting return expectations, high end of range | 20 years |
Average annual return over past 10 years (as a percent) | 7.20% |
Average annual return over past 20 years (as a percent) | 8.30% |
Pensions | Real Estate | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 5.00% |
Pensions | Equity Securities | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 49.00% |
Pensions | Debt Securities | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 27.00% |
Pensions | Other Investments | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 19.00% |
Health Care and Life Insurance | Real Estate | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 1.00% |
Health Care and Life Insurance | Equity Securities | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 59.00% |
Health Care and Life Insurance | Debt Securities | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 29.00% |
Health Care and Life Insurance | Other Investments | |
Target asset allocations, pension and health care plan assets | |
Target allocation percentage for plan assets | 11.00% |
PENSION AND OTHER POSTRETIREM81
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Contributions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |||
Defined contribution plans employer contributions and costs (primarily in the U.S.) | $ 188 | $ 193 | $ 185 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes and Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Current: | |||
U.S. - Federal | $ 360 | $ 51 | $ 377 |
U.S. - State | 48 | 26 | 32 |
Foreign | 463 | 340 | 449 |
Total current | 871 | 417 | 858 |
Deferred: | |||
U.S. - Federal | 59 | 297 | 21 |
U.S. - State | 7 | 11 | 4 |
Foreign | 34 | (25) | (43) |
Total deferred | 100.1 | 282.7 | (18.4) |
Provision for income taxes | 971.1 | 700.1 | 840.1 |
Consolidated income before income taxes, U.S. | 1,607 | 967 | 1,838 |
Consolidated income before income taxes, foreign | $ 1,547 | $ 1,257 | $ 942 |
INCOME TAXES - Statutory and Ef
INCOME TAXES - Statutory and Effective (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Comparison of the statutory and effective income tax provision | |||
U.S. federal income tax provision statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
U.S. federal income tax provision at a statutory rate of 35 percent | $ 1,104 | $ 778 | $ 973 |
Increase (decrease) resulting from: | |||
State and local income taxes, net of federal income tax benefit | 35 | 26 | 23 |
Differences in taxability of foreign (earnings) losses | (83) | (107) | (449) |
Nondeductible impairment charges | 4 | ||
Research and business tax credits | (63) | (57) | (76) |
Tax rates on foreign activities | (86) | (27) | (36) |
Valuation allowance on deferred taxes | 89 | 79 | 384 |
Other - net | (25) | 4 | 21 |
Provision for income taxes | 971.1 | $ 700.1 | $ 840.1 |
Accumulated earnings of certain foreign subsidiaries for which no provision for U.S. income or foreign withholding taxes has been made | 5,961 | ||
Determination of the amount of unrecognized deferred tax liability on unremitted earnings | 0 | ||
Cash and cash equivalents and marketable securities held by foreign subsidiaries, in which earnings are considered indefinitely reinvested | $ 3,386 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Deferred Tax Assets | ||
Other postretirement benefit liabilities | $ 2,011 | $ 2,191 |
Tax loss and tax credit carryforwards | 677 | 661 |
Accrual for sales allowances | 680 | 592 |
Pension liabilities - net | 420 | 706 |
Foreign unrealized losses | 7 | 472 |
Accrual for employee benefits | 141 | 133 |
Share-based compensation | 116 | 152 |
Allowance for credit losses | 107 | 88 |
Deferred compensation | 59 | 50 |
Other items, assets | 432 | 471 |
Less valuation allowances | (620) | (1,029) |
Deferred income tax, assets | 4,030 | 4,487 |
Deferred Tax Liabilities | ||
Lease transactions | 933 | 817 |
Tax over book depreciation | 569 | 578 |
Goodwill and other intangible assets | 130 | 89 |
Undistributed foreign earnings | 21 | 30 |
Other items, liabilities | 172 | 175 |
Deferred income tax, liabilities | 1,825 | $ 1,689 |
Additional Deferred Income Tax Information | ||
Tax loss and tax credit carryforwards, expiring from 2018 through 2037 | 209 | |
Tax loss and tax credit carryforwards with an indefinite carryforward period | $ 468 |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Reconciliation of the Total Amounts of Unrecognized Tax Benefits | |||
Beginning of year balance | $ 198 | $ 229 | $ 213 |
Increases to tax positions taken during the current year | 35 | 14 | 32 |
Increases to tax positions taken during prior years | 13 | 11 | 29 |
Decreases to tax positions taken during prior years | (17) | (36) | (15) |
Decreases due to lapse of statute of limitations | (11) | (7) | (11) |
Settlements | (1) | (5) | (6) |
Foreign exchange | 4 | (8) | (13) |
End of year balance | 221 | 198 | 229 |
Unrecognized tax benefits affecting effective tax rate if recognized | 86 | 81 | |
Total amount of expense from interest and penalties | 6 | 0 | 23 |
Interest income on income tax examination | 6 | 0 | $ 3 |
Accrued interest and penalties on income tax | 66 | 68 | |
Interest income receivable on income tax examination | $ 0 | $ 0 |
OTHER INCOME AND OTHER OPERAT86
OTHER INCOME AND OTHER OPERATING EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Other Income | |||
Revenues from services | $ 288 | $ 270 | $ 280 |
Insurance premiums and fees earned | 211 | 195 | 173 |
SiteOne investment gains | 75 | ||
SiteOne investment gains | 375 | ||
Investment income | 17 | 16 | 26 |
Other | 230 | 190 | 228 |
Total | 1,121.1 | 745.5 | 706.5 |
Other Operating Expenses | |||
Depreciation of equipment on operating leases | 853 | 742 | 577 |
Insurance claims and expenses | 187 | 188 | 183 |
Cost of services | 168 | 162 | 160 |
Other | 109 | 163 | 41 |
Total | $ 1,316.6 | $ 1,254.6 | $ 961.1 |
UNCONSOLIDATED AFFILIATED COM87
UNCONSOLIDATED AFFILIATED COMPANIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Operations | |||
Sales | $ 2,638 | $ 3,206 | $ 3,290 |
Net income (loss) | 7 | 30 | 23 |
Deere & Company's equity in net income (loss) | (23.5) | (2.4) | 0.9 |
Financial Position | |||
Total assets | 1,488 | 2,201 | |
Total external borrowings | 451 | 909 | |
Total net assets | 542 | 677 | |
Deere & Company's share of the net assets | 182.5 | 232.6 | 303 |
Undistributed earnings of the unconsolidated affiliates included in consolidated retained earnings | 123 | ||
Dividends from unconsolidated affiliates | 4 | 64 | 1 |
Transactions with Unconsolidated Affiliated Companies | |||
Net Sales | 84 | 45 | 37 |
Purchases | $ 1,331 | $ 1,016 | $ 1,284 |
Bell Equipment Limited | |||
Equity Method Investments | |||
Ownership interest in equity method investee (as a percent) | 31.00% | ||
Deere-Hitachi Construction Machinery Corporation | |||
Equity Method Investments | |||
Ownership interest in equity method investee (as a percent) | 50.00% | ||
Deere-Hitachi Maquinas de Construcao do Brasil S.A. | |||
Equity Method Investments | |||
Ownership interest in equity method investee (as a percent) | 50.00% |
MARKETABLE SECURITIES - Amortiz
MARKETABLE SECURITIES - Amortized Cost and Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Amortized cost and fair value of marketable securities | ||
Amortized Cost | $ 441 | $ 442 |
Gross Unrealized Gains | 17 | 17 |
Gross Unrealized Losses | 6 | 5 |
Fair Value | 451.6 | 453.5 |
Equity Fund | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 37 | 40 |
Gross Unrealized Gains | 11 | 5 |
Fair Value | 48 | 45 |
Fixed Income Funds | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 15 | 15 |
Fair Value | 15 | 15 |
U.S. Government Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 76 | 85 |
Gross Unrealized Gains | 1 | 3 |
Fair Value | 77 | 88 |
Municipal Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 39 | 41 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | 1 | |
Fair Value | 39 | 43 |
Corporate Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 133 | 113 |
Gross Unrealized Gains | 3 | 5 |
Gross Unrealized Losses | 1 | |
Fair Value | 135 | 118 |
International Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 22 | 39 |
Gross Unrealized Losses | 2 | 5 |
Fair Value | 20 | 34 |
Mortgage-backed Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 119 | 109 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | 2 | |
Fair Value | $ 118 | $ 111 |
MARKETABLE SECURITIES - Contrac
MARKETABLE SECURITIES - Contractual Maturities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Contractual Maturities of Debt Securities, Amortized Cost | |||
Amortized cost, due in one year or less | $ 26 | ||
Amortized cost, due after one through five years | 111 | ||
Amortized cost, due after five through 10 years | 83 | ||
Amortized cost, due after 10 years | 50 | ||
Amortized cost, mortgage-backed securities | 119 | ||
Amortized cost, debt securities | 389 | ||
Contractual Maturities of Debt Securities, Fair Value | |||
Fair value, due in one year or less | 25 | ||
Fair value, due after one through five years | 110 | ||
Fair value, due after five through 10 years | 84 | ||
Fair value, due after 10 years | 52 | ||
Fair value, mortgage-backed securities | 118 | ||
Fair value, debt securities | 389 | ||
Proceeds from the sales of available-for-sale securities | 403 | $ 62 | $ 120 |
Realized gains from sales of available-for-sale securities | 275 | ||
Losses related to impairment write-downs | $ 0 | $ 0 | $ 0 |
RECEIVABLES - Trade Accounts an
RECEIVABLES - Trade Accounts and Notes Receivable (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Trade Accounts and Notes Receivable | ||
Trade accounts and notes receivable - net | $ 3,924.9 | $ 3,011.3 |
Dealer notes receivable | 140 | 143 |
Allowance for credit losses | $ 56 | 50 |
Trade Accounts and Notes Receivable | ||
Trade Accounts and Notes Receivable | ||
Interest-free periods granted at the time of sale to the dealer, low end of range | 1 month | |
Interest-free periods granted at the time of sale to the dealer, high end of range | 12 months | |
Agriculture and Turf | ||
Trade Accounts and Notes Receivable | ||
Trade accounts and notes receivable - net | $ 2,991 | 2,438 |
Construction and Forestry | ||
Trade Accounts and Notes Receivable | ||
Trade accounts and notes receivable - net | $ 934 | $ 573 |
RECEIVABLES - Financing Receiva
RECEIVABLES - Financing Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Financing receivables | ||
Financing receivables - net | $ 25,104.1 | $ 23,702.3 |
Financing Receivables - Other Disclosures | ||
Unpaid balances of receivables administered but not owned | 10 | 15 |
Financing receivables administered | 29,273 | 28,844 |
Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | 26,392 | 24,785 |
Unearned finance income | 1,114 | 921 |
Allowance for credit losses | 174 | 162 |
Financing receivables - net | 25,104 | 23,702 |
Unrestricted | Finance Receivables - Company's Sales of Equipment | ||
Financing receivables | ||
Financing receivables, gross | 6,883 | 6,851 |
Unearned finance income | 284 | 244 |
Financing receivables - net | 6,599 | 6,607 |
Securitized | ||
Financing receivables | ||
Financing receivables, gross | 4,250 | 5,235 |
Unearned finance income | 78 | 94 |
Allowance for credit losses | 13 | 14 |
Financing receivables - net | 4,159 | 5,127 |
Retail Notes | Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | 17,497 | 16,353 |
Unearned finance income | 972 | 812 |
Retail Notes | Unrestricted | Finance Receivables - Company's Sales of Equipment | ||
Financing receivables | ||
Financing receivables, gross | 2,467 | 2,232 |
Unearned finance income | 231 | 202 |
Retail Notes | Securitized | ||
Financing receivables | ||
Financing receivables, gross | 4,250 | 5,235 |
Unearned finance income | $ 78 | 94 |
Retail Notes | Agriculture and Turf | ||
Financing Receivables - Other Disclosures | ||
Maximum terms for notes and financing leases | 7 years | |
Retail Notes | Agriculture and Turf | Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | $ 15,200 | 14,152 |
Retail Notes | Agriculture and Turf | Unrestricted | Finance Receivables - Company's Sales of Equipment | ||
Financing receivables | ||
Financing receivables, gross | 2,099 | 1,896 |
Retail Notes | Agriculture and Turf | Securitized | ||
Financing receivables | ||
Financing receivables, gross | $ 3,651 | 4,615 |
Retail Notes | Construction and Forestry | ||
Financing Receivables - Other Disclosures | ||
Maximum terms for notes and financing leases | 5 years | |
Retail Notes | Construction and Forestry | Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | $ 2,297 | 2,201 |
Retail Notes | Construction and Forestry | Unrestricted | Finance Receivables - Company's Sales of Equipment | ||
Financing receivables | ||
Financing receivables, gross | 368 | 336 |
Retail Notes | Construction and Forestry | Securitized | ||
Financing receivables | ||
Financing receivables, gross | $ 599 | 620 |
Wholesale Notes | ||
Financing Receivables - Other Disclosures | ||
Term that the average term for wholesale notes is less than | 12 months | |
Wholesale Notes | Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | $ 3,653 | 3,971 |
Wholesale Notes | Unrestricted | Finance Receivables - Company's Sales of Equipment | ||
Financing receivables | ||
Financing receivables, gross | 3,653 | 3,971 |
Sales-type Leases | Unrestricted | Finance Receivables - Company's Sales of Equipment | ||
Financing receivables | ||
Financing receivables, gross | 763 | 648 |
Unearned finance income | 53 | 42 |
Revolving Charge Accounts | Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | $ 3,629 | 3,135 |
Financing Leases | ||
Financing Receivables - Other Disclosures | ||
Maximum terms for notes and financing leases | 5 years | |
Financing Leases | Unrestricted | ||
Financing receivables | ||
Financing receivables, gross | $ 1,613 | 1,326 |
Unearned finance income | 142 | 109 |
Residual values for investments in financing leases | $ 244 | $ 156 |
RECEIVABLES - Financing Recei92
RECEIVABLES - Financing Receivable Installments (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Unrestricted | ||
Financing receivable installments, due in months: | ||
Financing receivables, Due in months: 0 - 12 | $ 13,237 | $ 12,835 |
Financing receivables, Due in months: 13 - 24 | 5,056 | 4,760 |
Financing receivables, Due in months: 25 - 36 | 3,708 | 3,386 |
Financing receivables, Due in months: 37 - 48 | 2,518 | 2,219 |
Financing receivables, Due in months: 49 - 60 | 1,398 | 1,181 |
Financing receivables, Due in months: Thereafter (greater than 60 months) | 475 | 404 |
Financing receivables - gross | 26,392 | 24,785 |
Securitized | ||
Financing receivable installments, due in months: | ||
Financing receivables, Due in months: 0 - 12 | 2,027 | 2,269 |
Financing receivables, Due in months: 13 - 24 | 1,256 | 1,536 |
Financing receivables, Due in months: 25 - 36 | 672 | 931 |
Financing receivables, Due in months: 37 - 48 | 243 | 408 |
Financing receivables, Due in months: 49 - 60 | 50 | 84 |
Financing receivables, Due in months: Thereafter (greater than 60 months) | 2 | 7 |
Financing receivables - gross | $ 4,250 | $ 5,235 |
RECEIVABLES - Past Due Age Anal
RECEIVABLES - Past Due Age Analysis (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | Nov. 02, 2014 | |
Financing Receivable, Past Due | ||||
Minimum number of days for a financing receivable to be considered past due | 30 days | |||
Generally the number of days before a receivable is considered to be non-performing, accrual of finance income is ceased and the estimated uncollectible amount is written off | 120 days | |||
Percentage of past-due amounts to total financing receivables | 1.48% | 1.50% | ||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | $ 435 | $ 434 | ||
Total Non-Performing | 220 | 244 | ||
Current | 28,795 | 28,327 | ||
Total Financing Receivables | 29,450 | 29,005 | $ 29,801 | |
Less allowance for credit losses | 187 | 176 | 157 | $ 175 |
Total financing receivables - net | 29,263 | 28,829 | ||
30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 231 | 229 | ||
60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 107 | 105 | ||
90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 97 | 100 | ||
Retail Notes | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Financing Receivables | 20,697 | 20,682 | 21,567 | |
Less allowance for credit losses | 121 | 113 | $ 95 | $ 109 |
Retail Notes | Agriculture and Turf | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 221 | 237 | ||
Total Non-Performing | 173 | 191 | ||
Current | 17,508 | 17,526 | ||
Total Financing Receivables | 17,902 | 17,954 | ||
Retail Notes | Agriculture and Turf | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 118 | 115 | ||
Retail Notes | Agriculture and Turf | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 54 | 57 | ||
Retail Notes | Agriculture and Turf | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 49 | 65 | ||
Retail Notes | Construction and Forestry | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 147 | 135 | ||
Total Non-Performing | 30 | 35 | ||
Current | 2,618 | 2,558 | ||
Total Financing Receivables | 2,795 | 2,728 | ||
Retail Notes | Construction and Forestry | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 75 | 78 | ||
Retail Notes | Construction and Forestry | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 33 | 32 | ||
Retail Notes | Construction and Forestry | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 39 | 25 | ||
Other Financing Receivables | Agriculture and Turf | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 48 | 43 | ||
Total Non-Performing | 12 | 9 | ||
Current | 7,610 | 7,286 | ||
Total Financing Receivables | 7,670 | 7,338 | ||
Other Financing Receivables | Agriculture and Turf | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 27 | 26 | ||
Other Financing Receivables | Agriculture and Turf | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 14 | 11 | ||
Other Financing Receivables | Agriculture and Turf | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 7 | 6 | ||
Other Financing Receivables | Construction and Forestry | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 19 | 19 | ||
Total Non-Performing | 5 | 9 | ||
Current | 1,059 | 957 | ||
Total Financing Receivables | 1,083 | 985 | ||
Other Financing Receivables | Construction and Forestry | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 11 | 10 | ||
Other Financing Receivables | Construction and Forestry | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 6 | 5 | ||
Other Financing Receivables | Construction and Forestry | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | $ 2 | $ 4 |
RECEIVABLES - Allowance for Cre
RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Financing Receivable, Allowance for Credit Losses | |||
Allowance for credit losses as a percentage of financing receivables outstanding | 0.64% | 0.61% | |
Allowance: | |||
Beginning of year balance | $ 176 | $ 157 | $ 175 |
Provision (credit) | 88 | 84 | 46 |
Write-offs | (116) | (103) | (67) |
Recoveries | 41 | 31 | 26 |
Translation adjustments | (2) | 7 | (23) |
End of year balance | 187 | 176 | 157 |
Financing receivables: | |||
End of year balance | 29,450 | 29,005 | 29,801 |
Balance individually evaluated | 109 | 136 | 46 |
Financial Services | |||
Financing Receivable, Allowance for Credit Losses | |||
Deposits primarily withheld from dealers and merchants available for potential credit losses | 155 | 162 | |
Retail Notes | |||
Allowance: | |||
Beginning of year balance | 113 | 95 | 109 |
Provision (credit) | 46 | 43 | 22 |
Write-offs | (56) | (43) | (26) |
Recoveries | 20 | 11 | 10 |
Translation adjustments | (2) | 7 | (20) |
End of year balance | 121 | 113 | 95 |
Financing receivables: | |||
End of year balance | 20,697 | 20,682 | 21,567 |
Balance individually evaluated | 86 | 108 | 40 |
Revolving Charge Accounts | |||
Allowance: | |||
Beginning of year balance | 40 | 40 | 41 |
Provision (credit) | 33 | 36 | 21 |
Write-offs | (53) | (55) | (37) |
Recoveries | 20 | 19 | 15 |
End of year balance | 40 | 40 | 40 |
Financing receivables: | |||
End of year balance | 3,629 | 3,135 | 2,740 |
Balance individually evaluated | 3 | 8 | |
Other Financing Receivables | |||
Allowance: | |||
Beginning of year balance | 23 | 22 | 25 |
Provision (credit) | 9 | 5 | 3 |
Write-offs | (7) | (5) | (4) |
Recoveries | 1 | 1 | 1 |
Translation adjustments | (3) | ||
End of year balance | 26 | 23 | 22 |
Financing receivables: | |||
End of year balance | 5,124 | 5,188 | 5,494 |
Balance individually evaluated | $ 20 | $ 20 | $ 6 |
RECEIVABLES - Impaired Financin
RECEIVABLES - Impaired Financing Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Analysis of Impaired Financing Receivables | ||
Recorded investment, with specific allowance | $ 36 | $ 31 |
Recorded investment, without specific allowance | 28 | 29 |
Recorded Investment | 64 | 60 |
Unpaid principal balance, with specific allowance | 33 | 28 |
Unpaid principal balance, without specific allowance | 27 | 27 |
Unpaid Principal Balance | 60 | 55 |
Specific Allowance | 10 | 9 |
Average recorded investment, with specific allowance | 30 | 29 |
Average recorded investment, without specific allowance | 24 | 26 |
Average Recorded Investment | 54 | 55 |
Agriculture and Turf | ||
Analysis of Impaired Financing Receivables | ||
Recorded Investment | 49 | 33 |
Unpaid Principal Balance | 46 | 30 |
Specific Allowance | 10 | 8 |
Average Recorded Investment | 38 | 27 |
Construction and Forestry | ||
Analysis of Impaired Financing Receivables | ||
Recorded Investment | 15 | 27 |
Unpaid Principal Balance | 14 | 25 |
Specific Allowance | 1 | |
Average Recorded Investment | $ 16 | $ 28 |
RECEIVABLES - Other (Details)
RECEIVABLES - Other (Details) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017USD ($)item | Oct. 30, 2016USD ($)item | Nov. 01, 2015USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | |||
Financing receivable contracts in troubled debt restructuring, number | item | 474 | 167 | 107 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 16 | $ 19 | $ 8 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 15 | 18 | $ 7 |
Troubled debt restructurings that subsequently defaulted and were written off | 3 | ||
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | 12 | ||
Other Receivables: | |||
Taxes receivable | 876 | 702 | |
Other | 324 | 317 | |
Other receivables | $ 1,200 | $ 1,018.5 |
SECURITIZATION OF FINANCING R97
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Securitization Transactions | ||
Unconsolidated conduits, carrying value of liabilities | $ 1,096 | |
Unconsolidated conduits, maximum exposure to loss | 1,155 | |
Short-term securitization borrowings | 4,118.7 | $ 4,997.8 |
Accrued interest on borrowings - securitization transactions | 2 | 2 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,121 | 5,000 |
Maximum remaining term of all restricted securitized retail notes | 5 years | |
Securitized | ||
Securitization Transactions | ||
Financing receivables securitized (retail notes) | $ 4,172 | 5,141 |
Allowance for credit losses - securitization transactions | (13) | (14) |
Other assets - securitization transactions | 105 | 115 |
Total restricted securitized assets - securitization transactions | 4,264 | 5,242 |
VIE-Primary Beneficiary | ||
Securitization Transactions | ||
Total restricted securitized assets - securitization transactions | 2,631 | 2,718 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,571 | 2,655 |
Non-VIE Banking Operation | ||
Securitization Transactions | ||
Total restricted securitized assets - securitization transactions | 478 | 663 |
Total liabilities related to restricted securitized assets - securitization transactions | 454 | 616 |
VIE-Not Primary Beneficiary | ||
Securitization Transactions | ||
Total Assets | 40,000 | |
Total restricted securitized assets - securitization transactions | 1,155 | 1,861 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,096 | $ 1,729 |
EQUIPMENT ON OPERATING LEASES98
EQUIPMENT ON OPERATING LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Initial lease terms, operating, low end of range | 12 months | ||
Initial lease terms, operating, high end of range | 60 months | ||
Equipment on operating leases - net | $ 6,593.7 | $ 5,901.5 | |
Accumulated depreciation for equipment on operating leases | 1,315 | 1,054 | |
Depreciation expense for equipment on operating leases | 853 | 742 | $ 577 |
Future payments to be received on operating leases | |||
Future payments receivable, operating leases, total | 2,051 | ||
Future payments receivable, operating leases, 2018 | 878 | ||
Future payments receivable, operating leases, 2019 | 602 | ||
Future payments receivable, operating leases, 2020 | 347 | ||
Future payments receivable, operating leases, 2021 | 182 | ||
Future payments receivable, operating leases, 2022 | 42 | ||
Financial Services | |||
Deposits withheld from dealers available for potential losses on residual values | 52 | 68 | |
Agriculture and Turf | |||
Equipment on operating leases - net | 5,385 | 4,758 | |
Construction and Forestry | |||
Equipment on operating leases - net | $ 1,209 | $ 1,144 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 30, 2016 | Oct. 29, 2017 | |
INVENTORIES | ||
Gross inventories on LIFO basis expressed as percentage of worldwide gross inventories at FIFO | 61.00% | 61.00% |
Pretax favorable income effect from the liquidation of LIFO inventory | $ 4 | |
Raw materials and supplies | 1,369 | $ 1,688 |
Work-in-process | 453 | 495 |
Finished goods and parts | 2,976 | 3,182 |
Total FIFO value | 4,798 | 5,365 |
Less adjustment to LIFO value | 1,457 | 1,461 |
Inventories | $ 3,340.5 | $ 3,904.1 |
PROPERTY AND DEPRECIATION (Deta
PROPERTY AND DEPRECIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Summary of property and equipment | |||
Property and equipment-net | $ 5,067.7 | $ 5,170.6 | $ 5,181 |
Property and equipment, additions | 602 | 674 | 666 |
Depreciation | 726 | 701 | 692 |
Capitalized interest | 3 | 3 | 6 |
Leased property and equipment under capital leases, at cost | 40 | 33 | |
Accumulated depreciation on leased property and equipment under capital leases | $ 15 | 16 | |
Capitalized computer software estimated useful life | 3 years | ||
Capitalized software costs, including purchased and internally developed software | $ 1,078 | 1,035 | |
Capitalized software, accumulated amortization | 826 | 770 | |
Capitalized interest on software | 1 | 3 | |
Amortization of capitalized computer software costs | 118 | 102 | $ 103 |
Equipment Operations | |||
Summary of property and equipment | |||
Total property and equipment at cost | 11,843 | 11,396 | |
Less accumulated depreciation | 6,826 | 6,277 | |
Property and equipment-net | 5,017.3 | 5,118.5 | |
Equipment Operations | Land | |||
Summary of property and equipment | |||
Total property and equipment at cost | $ 122 | 119 | |
Equipment Operations | Buildings and Building Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 22 years | ||
Total property and equipment at cost | $ 3,396 | 3,230 | |
Equipment Operations | Machinery and Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 11 years | ||
Total property and equipment at cost | $ 5,378 | 5,180 | |
Equipment Operations | Dies, Patterns, Tools, etc | |||
Summary of property and equipment | |||
Weighted-average useful lives | 8 years | ||
Total property and equipment at cost | $ 1,647 | 1,604 | |
Equipment Operations | All Other | |||
Summary of property and equipment | |||
Weighted-average useful lives | 5 years | ||
Total property and equipment at cost | $ 942 | 893 | |
Equipment Operations | Construction in Progress | |||
Summary of property and equipment | |||
Total property and equipment at cost | 358 | 370 | |
Financial Services | |||
Summary of property and equipment | |||
Total property and equipment at cost | 116 | 113 | |
Less accumulated depreciation | 65 | 61 | |
Property and equipment-net | 50.4 | 52.1 | |
Financial Services | Land | |||
Summary of property and equipment | |||
Total property and equipment at cost | $ 4 | 4 | |
Financial Services | Buildings and Building Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 26 years | ||
Total property and equipment at cost | $ 74 | 73 | |
Financial Services | All Other | |||
Summary of property and equipment | |||
Weighted-average useful lives | 6 years | ||
Total property and equipment at cost | $ 38 | $ 36 |
GOODWILL AND OTHER INTANGIBL101
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 815.7 | $ 726 |
Acquisitions | 193 | 95 |
Translation adjustments and other | 24 | (5) |
Goodwill - net, ending balance | 1,033.3 | 815.7 |
Accumulated impairment loss | 0 | 0 |
Agriculture and Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 323 | 227 |
Acquisitions | 193 | 95 |
Translation adjustments and other | 5 | 1 |
Goodwill - net, ending balance | 521 | 323 |
Construction and Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 493 | 499 |
Translation adjustments and other | 19 | (6) |
Goodwill - net, ending balance | $ 512 | $ 493 |
GOODWILL AND OTHER INTANGIBL102
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Amortized intangible assets: | ||
Amortized intangible assets | $ 181 | $ 173 |
Less accumulated amortization | 86 | 69 |
Total | 95 | 104 |
Unamortized intangible assets: | ||
Other intangible assets - net | $ 218 | 104.1 |
Customer Lists and Relationships | ||
Amortized intangible assets: | ||
Useful Lives (weighted averages) | 11 years | |
Amortized intangible assets | $ 42 | 42 |
Less accumulated amortization | $ 17 | 11 |
Technology, Patents, Trademarks, and Other | ||
Amortized intangible assets: | ||
Useful Lives (weighted averages) | 13 years | |
Amortized intangible assets | $ 139 | 131 |
Less accumulated amortization | 69 | $ 58 |
In-process Research and Development | ||
Unamortized intangible assets: | ||
Unamortized intangible assets | $ 123 |
GOODWILL AND OTHER INTANGIBL103
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Amortized Intangible Assets: | |||
Amortization expense of other intangible assets | $ 18 | $ 15 | $ 10 |
Amortization expense of other intangible assets - 2018 | 16 | ||
Amortization expense of other intangible assets - 2019 | 15 | ||
Amortization expense of other intangible assets - 2020 | 12 | ||
Amortization expense of other intangible assets - 2021 | 9 | ||
Amortization expense of other intangible assets - 2022 | $ 9 |
TOTAL SHORT-TERM BORROWINGS (De
TOTAL SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Short-term borrowings | ||
Short-term borrowings | $ 10,035.3 | $ 6,910.7 |
Short-term securitization borrowings | 4,118.7 | 4,997.8 |
Total short-term borrowings | $ 14,154 | $ 11,909 |
Weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings (as a percent) | 1.80% | 1.60% |
Equipment Operations | ||
Short-term borrowings | ||
Short-term borrowings | $ 375.5 | $ 249 |
Equipment Operations | Notes Payable to Banks | ||
Short-term borrowings | ||
Short-term borrowings | 221 | 164 |
Equipment Operations | Long-term Borrowings Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | 154 | 85 |
Financial Services | ||
Short-term borrowings | ||
Short-term borrowings | 9,659.8 | 6,661.7 |
Short-term securitization borrowings | 4,118.7 | 4,997.8 |
Unamortized debt issuance costs | 4 | 5 |
Financial Services | Commercial Paper | ||
Short-term borrowings | ||
Short-term borrowings | 3,439 | 1,253 |
Financial Services | Notes Payable to Banks | ||
Short-term borrowings | ||
Short-term borrowings | 157 | 151 |
Financial Services | Long-term Borrowings Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | 6,064 | 5,258 |
Unamortized debt issuance costs | 2 | $ 1 |
Financial Services | Short-term Securitization Borrowings | ||
Short-term borrowings | ||
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2018 | 2,234 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2019 | 1,249 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2020 | 489 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2021 | 146 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2022 | $ 5 |
TOTAL SHORT-TERM BORROWINGS - O
TOTAL SHORT-TERM BORROWINGS - Other (Details) $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($) | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 7,878 |
Lines of credit unused | $ 4,061 |
Agreement with Capital Corporation | |
Minimum ownership percentage of Capital Corporation's capital stock | 51.00% |
Minimum consolidated tangible net worth of Capital Corporation to be maintained | $ 50 |
Minimum ratio of earnings to fixed charges to be maintained (as a percent) | 1.05 |
Capital Corporation | |
Line of Credit Facility | |
Consolidated ratio of earnings to fixed charges required by the credit agreements, minimum at the end of each fiscal quarter (as a percent) | 1.05 |
Ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder's equity excluding accumulated other comprehensive income (loss)) required by the credit agreements, maximum at the end of any fiscal quarter (as a percent) | 11 |
Equipment Operations | |
Line of Credit Facility | |
Ratio of total debt to total capital (total debt and stockholders' equity excluding accumulated other comprehensive income (loss)) required by the credit agreements, maximum at the end of each fiscal quarter (as a percent) | 65.00% |
Excess equity capacity and retained earnings balance free of restriction | $ 10,965 |
Additional debt capacity | 20,364 |
364-Day Credit Facilities Expiring February, 2018 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 1,750 |
364-Day Credit Facilities Expiring October, 2018 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 750 |
Line of Credit Facilities Expiring April, 2021 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 2,500 |
Line of Credit Facilities Expiring April, 2022 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 2,500 |
ACCOUNTS PAYABLE AND ACCRUED106
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Accrued expenses: | ||
Total | $ 8,417 | $ 7,240.1 |
Eliminations | ||
Accrued expenses: | ||
Total | (1,128) | (1,016) |
Equipment Operations | ||
Accounts payable: | ||
Trade payables | 2,069 | 1,598 |
Dividends payable | 194 | 189 |
Other | 164 | 193 |
Accrued expenses: | ||
Dealer sales discounts | 1,559 | 1,371 |
Product warranties | 1,007 | 779 |
Employee benefits | 861 | 861 |
Unearned revenue | 520 | 401 |
Other | 1,344 | 1,269 |
Total | 7,718.1 | 6,661.2 |
Financial Services | ||
Accounts payable: | ||
Deposits withheld from dealers and merchants | 207 | 230 |
Other | 275 | 268 |
Accrued expenses: | ||
Employee benefits | 55 | 52 |
Unearned revenue | 797 | 735 |
Accrued interest | 148 | 125 |
Other | 345 | 185 |
Total | $ 1,827.1 | $ 1,595.2 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) € in Millions, $ in Millions | Oct. 29, 2017EUR (€) | Oct. 29, 2017USD ($) | Oct. 30, 2016USD ($) |
Notes and debentures | |||
Less debt issuance costs | $ 63 | ||
Total long-term borrowings | $ 25,891.3 | 23,703 | |
Equipment Operations | |||
Notes and debentures | |||
Less debt issuance costs | 20 | 21 | |
Total long-term borrowings | 5,490.9 | 4,565.3 | |
Principal Amounts of Long-Term Borrowings Maturing In Next Five Years | |||
2,018 | 154 | ||
2,019 | 873 | ||
2,020 | 451 | ||
2,021 | 4 | ||
2,022 | 1,108 | ||
Equipment Operations | 4.375% Notes Due 2019 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 750 | $ 750 | |
Debt instrument, stated interest rate | 4.375% | 4.375% | 4.375% |
Equipment Operations | 8-1/2% Debentures Due 2022 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 105 | $ 105 | |
Debt instrument, stated interest rate | 8.50% | 8.50% | 8.50% |
Equipment Operations | 2.60% Notes Due 2022 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 1,000 | $ 1,000 | |
Debt instrument, stated interest rate | 2.60% | 2.60% | 2.60% |
Equipment Operations | 6.55% Debentures Due 2028 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 200 | $ 200 | |
Debt instrument, stated interest rate | 6.55% | 6.55% | 6.55% |
Equipment Operations | 5.375% Notes Due 2029 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 500 | $ 500 | |
Debt instrument, stated interest rate | 5.375% | 5.375% | 5.375% |
Equipment Operations | 8.10% Debentures Due 2030 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 250 | $ 250 | |
Debt instrument, stated interest rate | 8.10% | 8.10% | 8.10% |
Equipment Operations | 7.125% Notes Due 2031 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 300 | $ 300 | |
Debt instrument, stated interest rate | 7.125% | 7.125% | 7.125% |
Equipment Operations | 3.90% Notes Due 2042 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 1,250 | $ 1,250 | |
Debt instrument, stated interest rate | 3.90% | 3.90% | 3.90% |
Equipment Operations | Medium-term notes due 2020 - 2023 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 990 | ||
Principal amount | € | € 850 | ||
Average interest rates | 0.30% | 0.30% | |
Equipment Operations | Other Notes | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 166 | $ 231 | |
Financial Services | |||
Notes and debentures | |||
Less debt issuance costs | 42 | 36 | |
Total long-term borrowings | 20,400.4 | 19,137.7 | |
Principal Amounts of Long-Term Borrowings Maturing In Next Five Years | |||
2,018 | 6,050 | ||
2,019 | 5,383 | ||
2,020 | 5,056 | ||
2,021 | 2,486 | ||
2,022 | 3,502 | ||
Financial Services | Medium-term notes due 2018 - 2027 | |||
Notes and debentures | |||
Long-term borrowings, gross | 18,601 | 17,434 | |
Principal amount | $ 18,678 | $ 17,203 | |
Average interest rates | 2.00% | 2.00% | 1.70% |
Financial Services | 2.75% Senior Note Due 2022 | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 502 | $ 519 | |
Debt instrument, stated interest rate | 2.75% | 2.75% | 2.75% |
Principal amount | $ 500 | $ 500 | |
Portion of debt swapped to variable interest rates, amount | $ 500 | $ 500 | |
Variable interest rates, debt swaps | 2.00% | 2.00% | 1.60% |
Financial Services | Other Notes | |||
Notes and debentures | |||
Long-term borrowings, gross | $ 1,339 | $ 1,221 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Capital leases, future minimum lease payments | |||
Future minimum lease payments under capital leases | $ 26 | ||
2,018 | 10 | ||
2,019 | 6 | ||
2,020 | 5 | ||
2,021 | 3 | ||
2,022 | 1 | ||
Later years | 1 | ||
Operating leases, total rent expense | |||
Total rental expense for operating leases | 167 | $ 185 | $ 200 |
Operating leases, future minimum lease payments | |||
Future minimum lease payments under operating leases | 371 | ||
2,018 | 98 | ||
2,019 | 76 | ||
2,020 | 58 | ||
2,021 | 44 | ||
2,022 | 39 | ||
Later years | $ 56 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | ||
Historical claims rate, review period | 5 years | |
Unamortized extended warranty premiums (deferred revenue) | $ 461 | $ 447 |
Change in Warranty Liability and Unearned Premiums | ||
Beginning of year balance | 1,226 | 1,261 |
Payments | (743) | (783) |
Amortization of premiums received | (207) | (202) |
Accruals for warranties | 959 | 758 |
Premiums received | 224 | 181 |
Foreign exchange | 9 | 11 |
End of year balance | $ 1,468 | $ 1,226 |
COMMITMENTS AND CONTINGENCIE110
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 170 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 122 |
Miscellaneous contingent liabilities | 70 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 131 |
Guarantee obligations accrued losses | $ 4 |
Guarantee obligations term | P5Y |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Changes in common stock | |||||||||||
Common stock, beginning of period (in shares) | 536,431,204 | 536,400,000 | 536,431,204 | 536,400,000 | 536,400,000 | ||||||
Common stock, end of period (in shares) | 536,431,204 | 536,431,204 | 536,431,204 | 536,431,204 | 536,400,000 | ||||||
Common stock, beginning of period | $ 3,911.8 | $ 3,826 | $ 3,911.8 | $ 3,826 | $ 3,675 | ||||||
Stock options and other | 86 | 151 | |||||||||
Stock options and other | 369 | ||||||||||
Common stock, end of period | $ 4,280.5 | $ 3,911.8 | $ 4,280.5 | $ 3,911.8 | 3,826 | ||||||
Common stock, authorized (in shares) | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | |||||||
Preferred stock, authorized (in shares) | 9,000,000 | 9,000,000 | |||||||||
Preferred stock, issued (in shares) | 0 | 0 | |||||||||
Common stock repurchase plans | |||||||||||
Repurchase of common stock shares, December 2013 plan maximum authorization (in dollars) | $ 8,000 | $ 8,000 | |||||||||
Repurchase of common stock shares, December 2013 plan maximum authorization (in shares) | 60,000,000 | 60,000,000 | |||||||||
Closing common stock price (in dollars per share) | $ 133.25 | $ 133.25 | |||||||||
Common stock shares remaining to be repurchased under repurchase plan (in dollars) | $ 3,260 | $ 3,260 | |||||||||
Common stock shares remaining to be repurchased under repurchase plan (in shares) | 24,500,000 | 24,500,000 | |||||||||
Reconciliation of Basic and Diluted Net Income Per Share | |||||||||||
Net income attributable to Deere & Company (in dollars) | $ 510 | $ 642 | $ 808 | $ 199 | $ 285 | $ 489 | $ 496 | $ 254 | $ 2,159.1 | $ 1,523.9 | 1,940 |
Less income allocable to participating securities (in dollars) | 0.6 | 0.7 | 0.8 | ||||||||
Income allocable to common stock (in dollars) | $ 2,158.5 | $ 1,523.2 | $ 1,939.2 | ||||||||
Average shares outstanding | 319,500,000 | 315,200,000 | 333,600,000 | ||||||||
Basic per share (in dollars per share) | $ 1.59 | $ 2 | $ 2.53 | $ 0.63 | $ 0.91 | $ 1.55 | $ 1.57 | $ 0.80 | $ 6.76 | $ 4.83 | $ 5.81 |
Diluted Earnings Per Share | |||||||||||
Average shares outstanding | 319,500,000 | 315,200,000 | 333,600,000 | ||||||||
Effect of dilutive stock options (in shares) | 3,800,000 | 1,400,000 | 2,400,000 | ||||||||
Total potential shares outstanding | 323,300,000 | 316,600,000 | 336,000,000 | ||||||||
Diluted per share (in dollars per share) | $ 1.57 | $ 1.97 | $ 2.50 | $ 0.62 | $ 0.90 | $ 1.55 | $ 1.56 | $ 0.80 | $ 6.68 | $ 4.81 | $ 5.77 |
Antidilutive incremental shares related to share-based compensation excluded from computation of earnings per share | 200,000 | 9,900,000 |
STOCK OPTION AND RESTRICTED 112
STOCK OPTION AND RESTRICTED STOCK AWARDS - Stock Option Activity and Assumptions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Number of additional shares authorized for grant related to stock options or restricted stock | 11.3 | ||
Stock Option Activity - Aggregate Intrinsic Value | |||
Cash received from stock option exercises | $ 528.7 | $ 36 | $ 172.1 |
Stock Options | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Options term after date of grant | 10 years | ||
Assumptions used for the binomial lattice model to determine the fair value of options | |||
Risk-free interest rate, low end of range (as a percent) | 0.88% | 0.23% | 0.04% |
Risk-free interest rate, high end of range (as a percent) | 2.50% | 2.30% | 2.30% |
Expected dividends (as a percent) | 2.40% | 2.80% | 2.50% |
Expected volatility, low end of range (as a percent) | 24.00% | 25.20% | 23.40% |
Expected volatility, high end of range (as a percent) | 24.80% | 29.00% | 25.70% |
Weighted-average volatility (as a percent) | 24.50% | 26.50% | 25.60% |
Stock Option Activity - Shares | |||
Outstanding at beginning of year (in shares) | 17.5 | ||
Granted (in shares) | 0.7 | ||
Exercised (in shares) | (6.9) | ||
Expired or forfeited (in shares) | (0.1) | ||
Outstanding at end of year (in shares) | 11.2 | 17.5 | |
Exercisable at end of year (in shares) | 7.8 | ||
Stock Option Activity - Exercise Price, Weighted-averages | |||
Outstanding, weighted average exercise price at beginning of year (in dollars per share) | $ 78.73 | ||
Granted, weighted average exercise price (in dollars per share) | 100.55 | ||
Exercised, weighted average exercise price (in dollars per share) | 76.56 | ||
Expired or Forfeited, weighted average exercise price (in dollars per share) | 86.81 | ||
Outstanding, weighted average exercise price at end of year (in dollars per share) | 81.39 | $ 78.73 | |
Exercisable, weighted average exercise price at end of year (in dollars per share) | $ 79.64 | ||
Stock Option Activity - Remaining Contractual Term (Years) | |||
Outstanding at end of year, Remaining Contractual Term | 6 years 2 months 1 day | ||
Exercisable at end of year, Remaining Contractual Term | 5 years 4 months 2 days | ||
Stock Option Activity - Aggregate Intrinsic Value | |||
Outstanding at end of year, Aggregate Intrinsic Value | $ 581.6 | ||
Exercisable at end of year, Aggregate Intrinsic Value | $ 418.9 | ||
Weighted-average grant-date fair values of options granted (in dollars per share) | $ 24.46 | $ 16.88 | $ 19.67 |
Total intrinsic values of options exercised | $ 225 | $ 23 | $ 98 |
Cash received from stock option exercises | 529 | 36 | 172 |
Tax benefits, exercise of stock options | $ 83 | $ 8 | $ 36 |
Stock Options | Minimum | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 1 year | ||
Assumptions used for the binomial lattice model to determine the fair value of options | |||
Expected term | 7 years 9 months 18 days | 7 years | 7 years 2 months 12 days |
Stock Options | Maximum | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 3 years | ||
Assumptions used for the binomial lattice model to determine the fair value of options | |||
Expected term | 8 years 7 months 6 days | 8 years 7 months 6 days | 8 years 2 months 12 days |
Restricted Stock Units | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 3 years |
STOCK OPTION AND RESTRICTED 113
STOCK OPTION AND RESTRICTED STOCK AWARDS - Other (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Restricted Stock Units | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 579 | 255 | 248 |
Restricted Stock Units Subject to Service Based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 465 | 113 | 122 |
Common shares awarded for each unit of restricted stock at the end of vesting period | one share of common stock | ||
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 101.03 | $ 79.84 | $ 88.66 |
Restricted Stock Units Subject to Performance/Service and Market/Service Based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 100 | ||
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 111.78 | ||
Restricted Stock Units Subject to Performance/Service and Market/Service Based Conditions | Minimum | |||
Share-based Compensation, Aggregate Disclosures | |||
Percent of common stock that may be awarded based on metric | 0.00% | ||
Restricted Stock Units Subject to Performance/Service and Market/Service Based Conditions | Maximum | |||
Share-based Compensation, Aggregate Disclosures | |||
Percent of common stock that may be awarded based on metric | 200.00% | ||
Restricted Stock Units Subject to Performance/Service Based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 57 | 71 | 63 |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 93.86 | $ 72.93 | $ 81.78 |
Restricted Stock Units Subject to Market/Service Based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 57 | 71 | 63 |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 129.70 | $ 103.66 | $ 113.97 |
Fair value assumptions method used | lattice valuation model |
STOCK OPTION AND RESTRICTED 114
STOCK OPTION AND RESTRICTED STOCK AWARDS - Restricted Shares and Changes (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Share-based Compensation - General Disclosures | |||
Total share-based compensation expense | $ 68 | $ 71 | $ 66 |
Recognized income tax benefits | 25 | 26 | 25 |
Total unrecognized compensation cost from share-based compensation related to restricted shares and options | $ 46 | ||
Weighted-average period during which unrecognized compensation is expected to be recognized | 2 years | ||
Total grant-date fair values of stock options and restricted shares vested | $ 72 | $ 69 | $ 74 |
Shares in Treasury Stock | 214,589,902 | 221,663,380 | |
Shares remaining to be repurchased under current publicly announced repurchase program | 24,500,000 | ||
Restricted Stock Units Subject to Service Based Conditions | |||
Restricted Shares - Shares | |||
Nonvested at beginning of year (in shares) | 300,000 | ||
Granted (in shares) | 465,000 | 113,000 | 122,000 |
Vested (in shares) | (100,000) | ||
Nonvested at end of year (in shares) | 700,000 | 300,000 | |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Nonvested weighted-average grant-date fair value, at beginning of year (in dollars per share) | $ 84.86 | ||
Granted, weighted-average grant-date fair value (in dollars per share) | 101.03 | $ 79.84 | $ 88.66 |
Vested, weighted-average grant-date fair value (in dollars per share) | 86.40 | ||
Nonvested weighted-average grant-date fair value, at end of year (in dollars per share) | $ 95.90 | $ 84.86 | |
Restricted Stock Units Subject to Performance/Service and Market/Service Based Conditions | |||
Restricted Shares - Shares | |||
Nonvested at beginning of year (in shares) | 400,000 | ||
Granted (in shares) | 100,000 | ||
Performance change (in shares) | (100,000) | ||
Nonvested at end of year (in shares) | 400,000 | 400,000 | |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Nonvested weighted-average grant-date fair value, at beginning of year (in dollars per share) | $ 94.88 | ||
Granted, weighted-average grant-date fair value (in dollars per share) | 111.78 | ||
Performance change, weighted-average grant-date fair value (in dollars per share) | 81.53 | ||
Nonvested weighted-average grant-date fair value, at end of year (in dollars per share) | $ 98.46 | $ 94.88 |
OTHER COMPREHENSIVE INCOME I115
OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Changes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Accumulated other comprehensive income (loss) | |||
Balance | $ 6,530.8 | $ 6,757.6 | $ 9,065.5 |
Period Change | 1,062.5 | (896.6) | (946.8) |
Balance | 9,560.5 | 6,530.8 | 6,757.6 |
Total Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Balance | (5,626) | (4,729) | (3,783) |
Period Change | 1,062 | (897) | (946) |
Balance | (4,564) | (5,626) | (4,729) |
Retirement Benefits Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Balance | (4,409) | (3,501) | (3,493) |
Period Change | 829 | (908) | (8) |
Balance | (3,580) | (4,409) | (3,501) |
Cumulative Translation Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Balance | (1,229) | (1,238) | (303) |
Period Change | 230 | 9 | (935) |
Balance | (999) | (1,229) | (1,238) |
Unrealized Gain (Loss) on Derivatives | |||
Accumulated other comprehensive income (loss) | |||
Balance | 1 | (2) | |
Period Change | 4 | 3 | (2) |
Balance | 5 | 1 | (2) |
Unrealized Gain (Loss) on Investments | |||
Accumulated other comprehensive income (loss) | |||
Balance | 11 | 12 | 13 |
Period Change | (1) | (1) | (1) |
Balance | $ 10 | $ 11 | $ 12 |
OTHER COMPREHENSIVE INCOME I116
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Other Comprehensive Income (Loss), Before Tax | |||
Interest expense | $ (899.5) | $ (763.7) | $ (680) |
Other operating expenses | (1,316.6) | (1,254.6) | (961.1) |
Other income | 1,121.1 | 745.5 | 706.5 |
Total other comprehensive income (loss), before tax | 1,531 | (1,388) | (952) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Total other comprehensive income (loss), tax (expense) credit | (469) | 491 | 6 |
Other Comprehensive Income (Loss), After Tax | |||
Other Comprehensive Income (Loss), Net of Income Taxes | 1,062.5 | (896.6) | (946.8) |
Cumulative Translation Adjustment | |||
Other Comprehensive Income (Loss), Before Tax | |||
Total other comprehensive income (loss), before tax | 232 | 8 | (938) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Total other comprehensive income (loss), tax (expense) credit | (2) | 1 | 3 |
Other Comprehensive Income (Loss), After Tax | |||
Other Comprehensive Income (Loss), Net of Income Taxes | 230 | 9 | (935) |
Unrealized Gain (Loss) on Derivatives | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 3 | (2) | (12) |
Total other comprehensive income (loss), before tax | 6 | 4 | (4) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (1) | 1 | 4 |
Total other comprehensive income (loss), tax (expense) credit | (2) | (1) | 2 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 2 | (1) | (8) |
Other Comprehensive Income (Loss), Net of Income Taxes | 4 | 3 | (2) |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of accumulated other comprehensive income (loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Interest expense | 2 | 7 | 12 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (2) | (4) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 1 | 5 | 8 |
Unrealized Gain (Loss) on Derivatives | Foreign Exchange Contracts | Reclassification out of accumulated other comprehensive income (loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expenses | 1 | (1) | (4) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 2 | ||
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 1 | (1) | (2) |
Unrealized Gain (Loss) on Investments | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 274 | 2 | 12 |
Total other comprehensive income (loss), before tax | (1) | (2) | (2) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (101) | (4) | |
Total other comprehensive income (loss), tax (expense) credit | 1 | 1 | |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 173 | 2 | 8 |
Other Comprehensive Income (Loss), Net of Income Taxes | (1) | (1) | (1) |
Unrealized Gain (Loss) on Investments | Reclassification out of accumulated other comprehensive income (loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other income | (275) | (4) | (14) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 101 | 1 | 5 |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | (174) | (3) | (9) |
Retirement Benefits Adjustment | |||
Other Comprehensive Income (Loss), Before Tax | |||
Total other comprehensive income (loss), before tax | 1,294 | (1,398) | (8) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Total other comprehensive income (loss), tax (expense) credit | (465) | 490 | |
Other Comprehensive Income (Loss), After Tax | |||
Other Comprehensive Income (Loss), Net of Income Taxes | 829 | (908) | (8) |
Retirement Benefits Adjustment | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 702 | (1,141) | (427) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (248) | 397 | 151 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 454 | (744) | (276) |
Retirement Benefits Adjustment | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 309 | (493) | 145 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (115) | 178 | (52) |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 194 | (315) | 93 |
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 247 | 211 | 223 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (89) | (77) | (81) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 158 | 134 | 142 |
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 99 | 73 | 91 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (36) | (27) | (34) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 63 | 46 | 57 |
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 12 | 16 | 25 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (4) | (6) | (9) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 8 | 10 | 16 |
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | (77) | (78) | (77) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 28 | 29 | 29 |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | (49) | (49) | (48) |
Settlements/Curtailments | Reclassification out of accumulated other comprehensive income (loss) | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 2 | 14 | 11 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (4) | (4) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | $ 1 | $ 10 | 7 |
Settlements/Curtailments | Reclassification out of accumulated other comprehensive income (loss) | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 1 | ||
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | $ 1 |
OTHER COMPREHENSIVE INCOME I117
OTHER COMPREHENSIVE INCOME ITEMS - Noncontrolling Interests' (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | |||
Comprehensive income (loss) attributable to noncontrolling interests | $ 0.3 | $ (2.4) | $ 0.5 |
Net income (loss) attributable to noncontrolling interests | 0.1 | (2.4) | 0.9 |
Cumulative translation adjustments attributable to noncontrolling interests | $ 0.2 | $ 0 | $ (0.4) |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Fair Values of Financial Instruments | ||
Financing receivables - net | $ 25,104.1 | $ 23,702.3 |
Financing receivables securitized - net | 4,158.8 | 5,126.5 |
Short-term securitization borrowings | 4,118.7 | 4,997.8 |
Long-term borrowings | 25,891.3 | 23,703 |
Level 2 | ||
Fair Values of Financial Instruments | ||
Short-term securitization borrowings | 4,118 | 5,005 |
Long-term borrowings due within one year | 6,233 | 5,339 |
Long-term borrowings | 26,632 | 24,457 |
Level 3 | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 24,946 | 23,564 |
Financing receivables securitized - net | 4,130 | 5,114 |
Carrying Value | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 25,104 | 23,702 |
Financing receivables securitized - net | 4,159 | 5,127 |
Short-term securitization borrowings | 4,119 | 4,998 |
Long-term borrowings due within one year | 6,218 | 5,343 |
Long-term borrowings | 25,891 | 23,703 |
Equipment Operations | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 0.4 | |
Long-term borrowings | 5,490.9 | 4,565.3 |
Equipment Operations | Level 2 | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 154 | 80 |
Long-term borrowings | 6,026 | 5,184 |
Equipment Operations | Carrying Value | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 154 | 85 |
Long-term borrowings | 5,491 | 4,565 |
Financial Services | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 25,104.1 | 23,701.9 |
Financing receivables securitized - net | 4,158.8 | 5,126.5 |
Short-term securitization borrowings | 4,118.7 | 4,997.8 |
Long-term borrowings | 20,400.4 | 19,137.7 |
Financial Services | Level 2 | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 6,079 | 5,259 |
Long-term borrowings | 20,606 | 19,273 |
Financial Services | Carrying Value | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 6,064 | 5,258 |
Long-term borrowings | $ 20,400 | $ 19,138 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | $ 451.6 | $ 453.5 |
Derivative assets | 235 | 375 |
Derivative liabilities | 158 | 72 |
Transfer from Level 1 to Level 2, assets | 0 | 0 |
Transfer from Level 2 to Level 1, assets | 0 | 0 |
Transfer from Level 1 to Level 2, liabilities | 0 | 0 |
Transfer from Level 2 to Level 1, liabilities | 0 | 0 |
Other Assets | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 235 | 375 |
Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative liabilities | 158 | 72 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Total Estimated Fair Value | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 452 | 454 |
Total assets | 687 | 829 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 and Level 2 | U.S. Government Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 77 | 88 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 48 | 45 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Fixed Income Funds | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 15 | 15 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 44 | 53 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Total liabilities | 158 | 72 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 116 | 294 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative liabilities | 131 | 29 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 108 | 60 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative liabilities | 26 | 43 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 11 | 21 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative liabilities | 1 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 39 | 43 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 135 | 118 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-backed Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 118 | 111 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 and Level 3 | International Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 20 | 34 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | $ 17 | $ 28 |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring, Level 3 Measurements (Details) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Fair Value, Recurring Level 3 Measurements from Available for Sale Marketable Securities | ||
Beginning of period balance | $ 28 | $ 29 |
Purchases | 25 | |
Principal payments | (13) | (22) |
Change in unrealized gain (loss) | 2 | (4) |
End of period balance | $ 17 | $ 28 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||
Equipment on operating leases - net | $ 6,593.7 | $ 5,901.5 | |
Fair Value, Nonrecurring Measurements | Level 1 | |||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||
Investments in unconsolidated affiliates | 28 | ||
Losses, Investments in unconsolidated affiliates | $ 40 | ||
Fair Value, Nonrecurring Measurements | Level 3 | |||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||
Equipment on operating leases - net | 654 | ||
Losses, Equipment on operating leases - net | 31 | $ 10 | |
Property and equipment - net | 31 | ||
Losses, Property and equipment - net | 13 | 10 | |
Investments in unconsolidated affiliates | 1 | ||
Losses, Investments in unconsolidated affiliates | 12 | ||
Other assets | 184 | ||
Losses, Other assets | $ 29 | $ 15 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Cash Flow Hedges | ||
Cash flow hedge gain recorded in OCI to be reclassified within twelve months | $ (2) | |
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 28 months | |
Gains or losses reclassified from OCI to earnings | $ 0 | |
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | ||
Cash Flow Hedges | ||
Notional amount of cash flow hedge derivatives | 1,700 | $ 1,600 |
Cross-Currency Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | ||
Cash Flow Hedges | ||
Notional amount of cash flow hedge derivatives | $ 22 | $ 42 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Fair Value Hedges | ||
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives | $ 3 | $ (2) |
Gain (Loss) on Fair Value Hedges | ||
Gains (losses) on interest rate contracts | (284) | 7 |
Net accrued interest income on interest rate contracts | 79 | 146 |
Gains (losses) on borrowings | 287 | (9) |
Accrued interest expense on borrowings | 243 | 290 |
Fair Value Hedges | Designated as Hedging Instruments | ||
Fair Value Hedges | ||
Notional amount of interest rate fair value hedge derivatives | $ 8,661 | $ 8,844 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Interest Rate Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 6,757 | $ 6,060 |
Interest Rate Cap Contracts | Purchased | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 253 | 579 |
Interest Rate Cap Contracts | Sold | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 253 | 579 |
Foreign Exchange Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 8,499 | 3,919 |
Cross-Currency Interest Rate Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 66 | $ 63 |
DERIVATIVE INSTRUMENTS - Fai125
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Fair Value of Derivative Instruments | ||
Total derivative assets | $ 235 | $ 375 |
Total derivative liabilities | 158 | 72 |
Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 235 | 375 |
Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 158 | 72 |
Designated as Hedging Instruments | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 79 | 279 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 112 | 10 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 74 | 268 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 112 | 10 |
Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 5 | 11 |
Not Designated as Hedging Instruments | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 156 | 96 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 46 | 62 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 42 | 26 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 19 | 19 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 108 | 60 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 26 | 43 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 6 | $ 10 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | $ 1 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ (107) | $ 58 | $ 384 |
Interest Rate Contracts | OCI | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | 4 | (3) | (16) |
Interest Rate Contracts | Interest Expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Fair value hedges, gains (losses) | (205) | 153 | 277 |
Not designated as hedges, gains (losses) | 11 | (1) | (17) |
Interest Rate Contracts | Interest Expense | Cash Flow Hedges Member | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | (2) | (7) | (12) |
Foreign Exchange Contracts | OCI | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | (1) | 1 | 4 |
Foreign Exchange Contracts | Cost of Sales | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | (12) | (15) | 97 |
Foreign Exchange Contracts | Other Operating Expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | (106) | 74 | 304 |
Foreign Exchange Contracts | Other Operating Expense | Cash Flow Hedges Member | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | $ (1) | $ 1 | $ 4 |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
DERIVATIVE INSTRUMENTS | ||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 132 | $ 29 |
Derivative Assets | ||
Gross amounts recognized | 235 | 375 |
Netting arrangements | (65) | (32) |
Collateral received | (6) | |
Net amount | 170 | 337 |
Derivative Liabilities | ||
Gross amounts recognized | 158 | 72 |
Netting arrangements | (65) | (32) |
Net amount | $ 93 | $ 40 |
SEGMENT AND GEOGRAPHIC AREA 128
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Net Sales and Revenues (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017USD ($) | Jul. 30, 2017USD ($) | Apr. 30, 2017USD ($) | Jan. 29, 2017USD ($) | Oct. 30, 2016USD ($) | Jul. 31, 2016USD ($) | May 01, 2016USD ($) | Jan. 31, 2016USD ($) | Oct. 29, 2017USD ($)item | Oct. 30, 2016USD ($) | Nov. 01, 2015USD ($) | |
Operating Segments | |||||||||||
Number of major business segments | item | 3 | ||||||||||
Net Sales and Revenues | |||||||||||
Total net sales | $ 7,094 | $ 6,833 | $ 7,260 | $ 4,698 | $ 5,650 | $ 5,861 | $ 7,107 | $ 4,769 | $ 25,885.1 | $ 23,387.3 | $ 25,775.2 |
Total | $ 8,018 | $ 7,808 | $ 8,287 | $ 5,625 | $ 6,520 | $ 6,724 | $ 7,875 | $ 5,525 | 29,737.7 | 26,644 | 28,862.8 |
Other Revenues | |||||||||||
Net Sales and Revenues | |||||||||||
Total | 918 | 563 | 497 | ||||||||
Agriculture and Turf | |||||||||||
Net Sales and Revenues | |||||||||||
Intersegment sales and revenues | 39 | 31 | 49 | ||||||||
Total net sales | 20,167 | 18,487 | 19,812 | ||||||||
Construction and Forestry | |||||||||||
Net Sales and Revenues | |||||||||||
Intersegment sales and revenues | 1 | 1 | 1 | ||||||||
Total net sales | 5,718 | 4,900 | 5,963 | ||||||||
Financial Services | |||||||||||
Net Sales and Revenues | |||||||||||
Intersegment sales and revenues | 244 | 225 | 225 | ||||||||
Total | $ 2,935 | $ 2,694 | $ 2,591 |
SEGMENT AND GEOGRAPHIC AREA 129
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Operating Profit (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | $ 3,543 | $ 2,589 | $ 3,140 | ||||||||
Interest income | 1,575 | 1,471 | 1,511 | ||||||||
Interest expense | (899.5) | (763.7) | (680) | ||||||||
Income taxes | (971.1) | (700.1) | (840.1) | ||||||||
Net Income | 2,159.2 | 1,521.5 | 1,940.9 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 0.1 | (2.4) | 0.9 | ||||||||
Net Income Attributable to Deere & Company | $ 510 | $ 642 | $ 808 | $ 199 | $ 285 | $ 489 | $ 496 | $ 254 | 2,159.1 | 1,523.9 | 1,940 |
Agriculture and Turf | |||||||||||
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | 2,484 | 1,700 | 1,649 | ||||||||
Construction and Forestry | |||||||||||
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | 337 | 180 | 528 | ||||||||
Financial Services | |||||||||||
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | 722 | 709 | 963 | ||||||||
Corporate | |||||||||||
Operating Profit (Loss) | |||||||||||
Interest income | 55 | 48 | 61 | ||||||||
Interest expense | (264) | (251) | (273) | ||||||||
Foreign exchange gain (loss) from equipment operations' financing activities | (12) | (12) | 13 | ||||||||
Corporate expenses - net | (192) | (153) | (160) | ||||||||
Income taxes | (971) | (700) | (840) | ||||||||
Total | $ (1,384) | $ (1,068) | $ (1,199) |
SEGMENT AND GEOGRAPHIC AREA 130
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Interest Income and Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Operating Segments | |||
Interest income | $ 1,575 | $ 1,471 | $ 1,511 |
Interest expense | 899.5 | 763.7 | 680 |
Operating Segment | Agriculture and Turf | |||
Operating Segments | |||
Interest income | 16 | 12 | 14 |
Interest expense | 182 | 173 | 160 |
Operating Segment | Construction and Forestry | |||
Operating Segments | |||
Interest income | 1 | 1 | 2 |
Interest expense | 53 | 44 | 45 |
Operating Segment | Financial Services | |||
Operating Segments | |||
Interest income | 1,771 | 1,650 | 1,687 |
Interest expense | 669 | 536 | 455 |
Corporate | |||
Operating Segments | |||
Interest income | 55 | 48 | 61 |
Interest expense | 264 | 251 | 273 |
Intercompany Eliminations | |||
Operating Segments | |||
Interest income | (268) | (240) | (253) |
Interest expense | $ (268) | $ (240) | $ (253) |
SEGMENT AND GEOGRAPHIC AREA 131
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Other Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Operating Segments | |||
Depreciation and amortization expense | $ 1,715.5 | $ 1,559.8 | $ 1,382.4 |
Equity in income (loss) of unconsolidated affiliates | (23.5) | (2.4) | 0.9 |
Identifiable operating assets | 65,786.3 | 57,918.5 | 57,883 |
Capital additions | 602 | 674 | 666 |
Investments in unconsolidated affiliates | 182.5 | 232.6 | 303 |
Agriculture and Turf | |||
Operating Segments | |||
Depreciation and amortization expense | 695 | 667 | 659 |
Equity in income (loss) of unconsolidated affiliates | 2 | 9 | 7 |
Identifiable operating assets | 9,359 | 8,405 | 8,332 |
Capital additions | 485 | 556 | 522 |
Investments in unconsolidated affiliates | 25 | 56 | 116 |
Construction and Forestry | |||
Operating Segments | |||
Depreciation and amortization expense | 145 | 136 | 133 |
Equity in income (loss) of unconsolidated affiliates | (27) | (13) | (7) |
Identifiable operating assets | 3,212 | 3,017 | 3,295 |
Capital additions | 114 | 115 | 138 |
Investments in unconsolidated affiliates | 143 | 165 | 177 |
Financial Services | |||
Operating Segments | |||
Depreciation and amortization expense | 876 | 757 | 590 |
Equity in income (loss) of unconsolidated affiliates | 1 | 2 | 1 |
Identifiable operating assets | 42,596 | 40,837 | 40,866 |
Capital additions | 3 | 3 | 6 |
Investments in unconsolidated affiliates | 14 | 12 | 10 |
Corporate | |||
Operating Segments | |||
Identifiable operating assets | $ 10,619 | $ 5,659 | $ 5,390 |
SEGMENT AND GEOGRAPHIC AREA 132
SEGMENT AND GEOGRAPHIC AREA DATA - Geographic Areas Net Sales and Revenue and Operating Profit (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Geographic Area Information | |||||||||||
Net sales | $ 7,094 | $ 6,833 | $ 7,260 | $ 4,698 | $ 5,650 | $ 5,861 | $ 7,107 | $ 4,769 | $ 25,885.1 | $ 23,387.3 | $ 25,775.2 |
Revenues | $ 8,018 | $ 7,808 | $ 8,287 | $ 5,625 | $ 6,520 | $ 6,724 | $ 7,875 | $ 5,525 | 29,737.7 | 26,644 | 28,862.8 |
Operating profit (loss) | 3,543 | 2,589 | 3,140 | ||||||||
Equipment Operations | |||||||||||
Geographic Area Information | |||||||||||
Net sales | 25,885.1 | 23,387.3 | 25,775.2 | ||||||||
Revenues | 27,021.8 | 24,102.1 | 26,454.9 | ||||||||
Financial Services | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 3,179.1 | 2,919.1 | 2,815.9 | ||||||||
U.S. and Canada: | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 17,557 | 16,742 | 18,750 | ||||||||
Operating profit (loss) | $ 2,247 | 1,856 | 2,445 | ||||||||
Number of years used in average percentage of U.S. only as a proportion of the combined U.S. and Canada net sales and revenues | 3 years | ||||||||||
U.S. and Canada: | Equipment Operations | |||||||||||
Geographic Area Information | |||||||||||
Net sales | $ 15,031 | 14,376 | 16,498 | ||||||||
Approximate percentage of net sales and revenues that relates to the U.S. only, based on three-year average | 88.00% | ||||||||||
Operating profit (loss) | $ 1,724 | 1,305 | 1,643 | ||||||||
U.S. and Canada: | Financial Services | |||||||||||
Geographic Area Information | |||||||||||
Revenues | $ 2,526 | 2,366 | 2,252 | ||||||||
Approximate percentage of net sales and revenues that relates to the U.S. only, based on three-year average | 79.00% | ||||||||||
Operating profit (loss) | $ 523 | 551 | 802 | ||||||||
Outside U.S. and Canada: | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 11,263 | 9,339 | 9,616 | ||||||||
Operating profit (loss) | 1,296 | 733 | 695 | ||||||||
Outside U.S. and Canada: | Equipment Operations | |||||||||||
Geographic Area Information | |||||||||||
Net sales | 10,854 | 9,011 | 9,277 | ||||||||
Operating profit (loss) | 1,097 | 575 | 534 | ||||||||
Outside U.S. and Canada: | Financial Services | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 409 | 328 | 339 | ||||||||
Operating profit (loss) | 199 | 158 | 161 | ||||||||
Other Revenues | |||||||||||
Geographic Area Information | |||||||||||
Revenues | $ 918 | $ 563 | $ 497 |
SEGMENT AND GEOGRAPHIC AREA 133
SEGMENT AND GEOGRAPHIC AREA DATA - Geographic Areas Property and Equipment (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 |
Geographic Area Information | |||
Property and equipment | $ 5,067.7 | $ 5,170.6 | $ 5,181 |
U.S. | |||
Geographic Area Information | |||
Property and equipment | 2,976 | 3,077 | 3,098 |
Germany | |||
Geographic Area Information | |||
Property and equipment | 598 | 569 | 568 |
Other Countries | |||
Geographic Area Information | |||
Property and equipment | $ 1,494 | $ 1,525 | $ 1,515 |
SUPPLEMENTAL INFORMATION (UN134
SUPPLEMENTAL INFORMATION (UNAUDITED) (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017USD ($)item$ / shares | Jul. 30, 2017USD ($)$ / shares | Apr. 30, 2017USD ($)$ / shares | Jan. 29, 2017USD ($)$ / shares | Oct. 30, 2016USD ($)$ / shares | Jul. 31, 2016USD ($)$ / shares | May 01, 2016USD ($)$ / shares | Jan. 31, 2016USD ($)$ / shares | Oct. 29, 2017USD ($)item$ / shares | Oct. 30, 2016USD ($)$ / shares | Nov. 01, 2015USD ($)$ / shares | |
Market price of shares | |||||||||||
Share price | $ 133.25 | $ 133.25 | |||||||||
Number of common stockholders | |||||||||||
Number of holders of record of the company's $1 par value common stock | item | 21,242 | 21,242 | |||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 | |||||||
Quarterly information with respect to net sales and revenues and earnings | |||||||||||
Net sales and revenues | $ | $ 8,018 | $ 7,808 | $ 8,287 | $ 5,625 | $ 6,520 | $ 6,724 | $ 7,875 | $ 5,525 | $ 29,737.7 | $ 26,644 | $ 28,862.8 |
Net sales | $ | 7,094 | 6,833 | 7,260 | 4,698 | 5,650 | 5,861 | 7,107 | 4,769 | 25,885.1 | 23,387.3 | 25,775.2 |
Gross profit | $ | 1,668 | 1,568 | 1,815 | 901 | 1,267 | 1,367 | 1,575 | 929 | |||
Income before income taxes | $ | 767 | 890 | 1,169 | 328 | 435 | 705 | 733 | 351 | 3,153.8 | 2,224 | 2,780.1 |
Net income attributable to Deere & Company | $ | $ 510 | $ 642 | $ 808 | $ 199 | $ 285 | $ 489 | $ 496 | $ 254 | $ 2,159.1 | $ 1,523.9 | $ 1,940 |
Per Share Data | |||||||||||
Basic (in dollars per share) | $ 1.59 | $ 2 | $ 2.53 | $ 0.63 | $ 0.91 | $ 1.55 | $ 1.57 | $ 0.80 | $ 6.76 | $ 4.83 | $ 5.81 |
Diluted (in dollars per share) | 1.57 | 1.97 | 2.50 | 0.62 | 0.90 | 1.55 | 1.56 | 0.80 | 6.68 | 4.81 | 5.77 |
Dividends declared (in dollars per share) | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 2.40 | 2.40 | $ 2.40 |
Dividends paid (in dollars per share) | 0.60 | 0.60 | $ 0.60 | $ 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | |||
Previously Reported | |||||||||||
Quarterly information with respect to net sales and revenues and earnings | |||||||||||
Net income attributable to Deere & Company | $ | $ 802 | $ 194 | |||||||||
Common Stock | Maximum | |||||||||||
Market price of shares | |||||||||||
Share price | 133.25 | 128.91 | $ 113.15 | $ 108.06 | 88.09 | 87.48 | 85.68 | 80.19 | 133.25 | 88.09 | |
Common Stock | Minimum | |||||||||||
Market price of shares | |||||||||||
Share price | $ 115.44 | $ 110.79 | $ 107.05 | $ 88.06 | $ 76.83 | $ 77.71 | $ 74.58 | $ 71.78 | $ 115.44 | $ 76.83 |
SUBSEQUENT EVENTS - Quarterly D
SUBSEQUENT EVENTS - Quarterly Dividend (Details) - $ / shares | Dec. 06, 2017 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 |
Subsequent Events | ||||||||||||
Quarterly dividend declared (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 2.40 | $ 2.40 | $ 2.40 | |
Subsequent Event | ||||||||||||
Subsequent Events | ||||||||||||
Quarterly dividend declared (in dollars per share) | $ 0.60 |
SUBSEQUENT EVENTS - Acquisition
SUBSEQUENT EVENTS - Acquisition (Details) - Wirtgen Group Holding GmbH (Wirtgen) - Subsequent Event € in Millions, $ in Millions | 1 Months Ended | ||
Dec. 24, 2017EUR (€) | Dec. 24, 2017USD ($) | Dec. 01, 2017item | |
Acquisition | |||
Number of brands | 6 | ||
Number of countries entity sells products | 100 | ||
Number of employees | 8,200 | ||
Cash purchase price | € 4,475 | $ 5,327 |
SUBSEQUENT EVENTS - Securitizat
SUBSEQUENT EVENTS - Securitization Borrowings (Details) - USD ($) $ in Millions | Nov. 26, 2017 | Oct. 29, 2017 | Oct. 30, 2016 |
Subsequent Events | |||
Securitization borrowings | $ 4,118.7 | $ 4,997.8 | |
Financial Services | |||
Subsequent Events | |||
Securitization borrowings | $ 4,118.7 | $ 4,997.8 | |
Financial Services | Subsequent Event | |||
Subsequent Events | |||
Securitization borrowings | $ 985 |
SUPPLEMENTAL CONSOLIDATING D138
SUPPLEMENTAL CONSOLIDATING DATA - Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Net Sales and Revenues | |||||||||||
Net sales | $ 7,094 | $ 6,833 | $ 7,260 | $ 4,698 | $ 5,650 | $ 5,861 | $ 7,107 | $ 4,769 | $ 25,885.1 | $ 23,387.3 | $ 25,775.2 |
Finance and interest income | 2,731.5 | 2,511.2 | 2,381.1 | ||||||||
Other income | 1,121.1 | 745.5 | 706.5 | ||||||||
Total | 8,018 | 7,808 | 8,287 | 5,625 | 6,520 | 6,724 | 7,875 | 5,525 | 29,737.7 | 26,644 | 28,862.8 |
Costs and Expenses | |||||||||||
Cost of sales | 19,933.5 | 18,248.9 | 20,143.2 | ||||||||
Research and development expenses | 1,367.7 | 1,389.1 | 1,425.1 | ||||||||
Selling, administrative and general expenses | 3,066.6 | 2,763.7 | 2,873.3 | ||||||||
Interest expense | 899.5 | 763.7 | 680 | ||||||||
Other operating expenses | 1,316.6 | 1,254.6 | 961.1 | ||||||||
Total | 26,583.9 | 24,420 | 26,082.7 | ||||||||
Income of Consolidated Group before Income Taxes | 767 | 890 | 1,169 | 328 | 435 | 705 | 733 | 351 | 3,153.8 | 2,224 | 2,780.1 |
Provision for income taxes | 971.1 | 700.1 | 840.1 | ||||||||
Income of Consolidated Group | 2,182.7 | 1,523.9 | 1,940 | ||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Net Income | 2,159.2 | 1,521.5 | 1,940.9 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 0.1 | (2.4) | 0.9 | ||||||||
Net Income Attributable to Deere & Company | $ 510 | $ 642 | $ 808 | $ 199 | $ 285 | $ 489 | $ 496 | $ 254 | 2,159.1 | 1,523.9 | 1,940 |
Equipment Operations | |||||||||||
Net Sales and Revenues | |||||||||||
Net sales | 25,885.1 | 23,387.3 | 25,775.2 | ||||||||
Finance and interest income | 71.7 | 61.1 | 77 | ||||||||
Other income | 1,065 | 653.7 | 602.7 | ||||||||
Total | 27,021.8 | 24,102.1 | 26,454.9 | ||||||||
Costs and Expenses | |||||||||||
Cost of sales | 19,935.2 | 18,250.8 | 20,145.2 | ||||||||
Research and development expenses | 1,367.7 | 1,389.1 | 1,425.1 | ||||||||
Selling, administrative and general expenses | 2,530.7 | 2,262.5 | 2,393.8 | ||||||||
Interest expense | 263.7 | 250.5 | 272.8 | ||||||||
Interest compensation to Financial Services | 234.5 | 216.6 | 204.8 | ||||||||
Other operating expenses | 257 | 215.7 | 195 | ||||||||
Total | 24,588.8 | 22,585.2 | 24,636.7 | ||||||||
Income of Consolidated Group before Income Taxes | 2,433 | 1,516.9 | 1,818.2 | ||||||||
Provision for income taxes | 726 | 459 | 509.9 | ||||||||
Income of Consolidated Group | 1,707 | 1,057.9 | 1,308.3 | ||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 452.2 | 463.6 | 632.6 | ||||||||
Net Income | 2,159.2 | 1,521.5 | 1,940.9 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 0.1 | (2.4) | 0.9 | ||||||||
Net Income Attributable to Deere & Company | 2,159.1 | 1,523.9 | 1,940 | ||||||||
Equipment Operations | Financial Services | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 476.9 | 467.6 | 632.9 | ||||||||
Equipment Operations | Other | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | (24.7) | (4) | (0.3) | ||||||||
Financial Services | |||||||||||
Net Sales and Revenues | |||||||||||
Finance and interest income | 2,928.2 | 2,690.1 | 2,557 | ||||||||
Other income | 250.9 | 229 | 258.9 | ||||||||
Total | 3,179.1 | 2,919.1 | 2,815.9 | ||||||||
Costs and Expenses | |||||||||||
Selling, administrative and general expenses | 542.3 | 508.5 | 487.3 | ||||||||
Interest expense | 669.2 | 536.5 | 455 | ||||||||
Other operating expenses | 1,246.8 | 1,167 | 911.7 | ||||||||
Total | 2,458.3 | 2,212 | 1,854 | ||||||||
Income of Consolidated Group before Income Taxes | 720.8 | 707.1 | 961.9 | ||||||||
Provision for income taxes | 245.1 | 241.1 | 330.2 | ||||||||
Income of Consolidated Group | 475.7 | 466 | 631.7 | ||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 1.2 | 1.6 | 1.2 | ||||||||
Net Income | 476.9 | 467.6 | 632.9 | ||||||||
Net Income Attributable to Deere & Company | 476.9 | 467.6 | 632.9 | ||||||||
Financial Services | Financial Services | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | $ 1.2 | $ 1.6 | $ 1.2 |
SUPPLEMENTAL CONSOLIDATING D139
SUPPLEMENTAL CONSOLIDATING DATA - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | Nov. 02, 2014 |
ASSETS | ||||
Cash and cash equivalents | $ 9,334.9 | $ 4,335.8 | $ 4,162.2 | $ 3,787 |
Marketable securities | 451.6 | 453.5 | ||
Receivables from unconsolidated subsidiaries and affiliates | 35.9 | 16.5 | ||
Trade accounts and notes receivable - net | 3,924.9 | 3,011.3 | ||
Financing receivables - net | 25,104.1 | 23,702.3 | ||
Financing receivables securitized - net | 4,158.8 | 5,126.5 | ||
Other receivables | 1,200 | 1,018.5 | ||
Equipment on operating leases - net | 6,593.7 | 5,901.5 | ||
Inventories | 3,904.1 | 3,340.5 | ||
Property and equipment - net | 5,067.7 | 5,170.6 | 5,181 | |
Investments in unconsolidated subsidiaries and affiliates | 182.5 | 232.6 | 303 | |
Goodwill | 1,033.3 | 815.7 | 726 | |
Other intangible assets - net | 218 | 104.1 | ||
Retirement benefits | 538.2 | 93.6 | ||
Deferred income taxes | 2,415 | 2,964.4 | ||
Other assets | 1,623.6 | 1,631.1 | ||
Total Assets | 65,786.3 | 57,918.5 | 57,883 | |
LIABILITIES | ||||
Short-term borrowings | 10,035.3 | 6,910.7 | ||
Short-term securitization borrowings | 4,118.7 | 4,997.8 | ||
Payables to unconsolidated subsidiaries and affiliates | 121.9 | 81.6 | ||
Accounts payable and accrued expenses | 8,417 | 7,240.1 | ||
Deferred income taxes | 209.7 | 166 | ||
Long-term borrowings | 25,891.3 | 23,703 | ||
Retirement benefits and other liabilities | 7,417.9 | 8,274.5 | ||
Total liabilities | 56,211.8 | 51,373.7 | ||
Commitments and contingencies (Note 22) | ||||
Redeemable noncontrolling interest (Note 4) | 14 | 14 | ||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2017 and 2016), at paid-in amount | $ 4,280.5 | $ 3,911.8 | $ 3,826 | $ 3,675 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 | ||
Common stock, issued shares | 536,431,204 | 536,431,204 | 536,400,000 | 536,400,000 |
Common stock in treasury, 214,589,902 shares in 2017 and 221,663,380 shares in 2016, at cost | $ (15,460.8) | $ (15,677.1) | ||
Common stock in treasury (in shares) | 214,589,902 | 221,663,380 | ||
Retained earnings | $ 25,301.3 | $ 23,911.3 | ||
Accumulated other comprehensive income (loss) | (4,563.7) | (5,626) | ||
Total Deere & Company stockholders' equity | 9,557.3 | 6,520 | ||
Noncontrolling interests | 3.2 | 10.8 | ||
Total stockholders' equity | 9,560.5 | 6,530.8 | $ 6,757.6 | $ 9,065.5 |
Total Liabilities and Stockholders' Equity | 65,786.3 | 57,918.5 | ||
Equipment Operations | ||||
ASSETS | ||||
Cash and cash equivalents | 8,168.4 | 3,140.5 | 2,900 | 2,569.2 |
Marketable securities | 20.2 | 34.2 | ||
Receivables from unconsolidated subsidiaries and affiliates | 1,032.1 | 3,150.1 | ||
Trade accounts and notes receivable - net | 876.3 | 654.2 | ||
Financing receivables - net | 0.4 | |||
Other receivables | 1,045.6 | 855.4 | ||
Inventories | 3,904.1 | 3,340.5 | ||
Property and equipment - net | 5,017.3 | 5,118.5 | ||
Investments in unconsolidated subsidiaries and affiliates | 4,812.3 | 4,697 | ||
Goodwill | 1,033.3 | 815.7 | ||
Other intangible assets - net | 218 | 104.1 | ||
Retirement benefits | 538.1 | 93.6 | ||
Deferred income taxes | 3,098.8 | 3,556 | ||
Other assets | 973.9 | 834.9 | ||
Total Assets | 30,738.4 | 26,395.1 | ||
LIABILITIES | ||||
Short-term borrowings | 375.5 | 249 | ||
Payables to unconsolidated subsidiaries and affiliates | 121.9 | 81.5 | ||
Accounts payable and accrued expenses | 7,718.1 | 6,661.2 | ||
Deferred income taxes | 115.6 | 87.3 | ||
Long-term borrowings | 5,490.9 | 4,565.3 | ||
Retirement benefits and other liabilities | 7,341.9 | 8,206 | ||
Total liabilities | 21,163.9 | 19,850.3 | ||
Commitments and contingencies (Note 22) | ||||
Redeemable noncontrolling interest (Note 4) | 14 | 14 | ||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2017 and 2016), at paid-in amount | $ 4,280.5 | $ 3,911.8 | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 | ||
Common stock, issued shares | 536,431,204 | 536,431,204 | ||
Common stock in treasury, 214,589,902 shares in 2017 and 221,663,380 shares in 2016, at cost | $ (15,460.8) | $ (15,677.1) | ||
Common stock in treasury (in shares) | 214,589,902 | 221,663,380 | ||
Retained earnings | $ 25,301.3 | $ 23,911.3 | ||
Accumulated other comprehensive income (loss) | (4,563.7) | (5,626) | ||
Total Deere & Company stockholders' equity | 9,557.3 | 6,520 | ||
Noncontrolling interests | 3.2 | 10.8 | ||
Total stockholders' equity | 9,560.5 | 6,530.8 | ||
Total Liabilities and Stockholders' Equity | 30,738.4 | 26,395.1 | ||
Financial Services | ||||
ASSETS | ||||
Cash and cash equivalents | 1,166.5 | 1,195.3 | $ 1,262.2 | $ 1,217.8 |
Marketable securities | 431.4 | 419.3 | ||
Trade accounts and notes receivable - net | 4,134.1 | 3,370.5 | ||
Financing receivables - net | 25,104.1 | 23,701.9 | ||
Financing receivables securitized - net | 4,158.8 | 5,126.5 | ||
Other receivables | 195.5 | 164 | ||
Equipment on operating leases - net | 6,593.7 | 5,901.5 | ||
Property and equipment - net | 50.4 | 52.1 | ||
Investments in unconsolidated subsidiaries and affiliates | 13.8 | 11.9 | ||
Retirement benefits | 16.9 | 20.5 | ||
Deferred income taxes | 79.8 | 75.5 | ||
Other assets | 651.4 | 798.1 | ||
Total Assets | 42,596.4 | 40,837.1 | ||
LIABILITIES | ||||
Short-term borrowings | 9,659.8 | 6,661.7 | ||
Short-term securitization borrowings | 4,118.7 | 4,997.8 | ||
Payables to unconsolidated subsidiaries and affiliates | 996.2 | 3,133.6 | ||
Accounts payable and accrued expenses | 1,827.1 | 1,595.2 | ||
Deferred income taxes | 857.7 | 745.9 | ||
Long-term borrowings | 20,400.4 | 19,137.7 | ||
Retirement benefits and other liabilities | 92.9 | 89 | ||
Total liabilities | 37,952.8 | 36,360.9 | ||
Commitments and contingencies (Note 22) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2017 and 2016), at paid-in amount | $ 2,099.1 | $ 2,079.1 | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||
Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 | ||
Common stock, issued shares | 536,431,204 | 536,431,204 | ||
Retained earnings | $ 2,782 | $ 2,670.3 | ||
Accumulated other comprehensive income (loss) | (237.5) | (273.2) | ||
Total Deere & Company stockholders' equity | 4,643.6 | 4,476.2 | ||
Total stockholders' equity | 4,643.6 | 4,476.2 | ||
Total Liabilities and Stockholders' Equity | $ 42,596.4 | $ 40,837.1 |
SUPPLEMENTAL CONSOLIDATING D140
SUPPLEMENTAL CONSOLIDATING DATA - Statement of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ 2,159.2 | $ 1,521.5 | $ 1,940.9 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||
Provision (credit) for credit losses | 98.3 | 94.3 | 55.4 |
Provision for depreciation and amortization | 1,715.5 | 1,559.8 | 1,382.4 |
Impairment charges | 39.8 | 85.1 | 34.8 |
Gain on sale of unconsolidated affiliates and investments | (375.1) | (74.5) | |
Undistributed earnings of unconsolidated subsidiaries and affiliates | (14.4) | (1.9) | (1) |
Provision (credit) for deferred income taxes | 100.1 | 282.7 | (18.4) |
Changes in assets and liabilities: | |||
Trade receivables | (838.9) | 335.2 | 811.6 |
Insurance receivables | 333.4 | ||
Inventories | (1,305.3) | (106.1) | (691.4) |
Accounts payable and accrued expenses | 968 | (155.2) | (503.6) |
Accrued income taxes payable/receivable | (84.2) | 7 | (119.1) |
Retirement benefits | (31.9) | 238.6 | 427.5 |
Other | (299.4) | (87.4) | 40.2 |
Net cash provided by (used for) operating activities | 2,199.8 | 3,769.7 | 3,758.8 |
Cash Flows from Investing Activities | |||
Proceeds from maturities and sales of marketable securities | 404.2 | 169.4 | 860.7 |
Proceeds from sales of equipment on operating leases | 1,440.8 | 1,256.2 | 1,049.4 |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 113.9 | 81.1 | 149.2 |
Purchases of marketable securities | (118) | (171.2) | (154.9) |
Purchases of property and equipment | (594.9) | (644.4) | (694) |
Cost of equipment on operating leases acquired | (1,997.4) | (2,310.7) | (2,132.1) |
Acquisitions of businesses, net of cash acquired | (284.2) | (198.5) | |
Other | (58) | (16) | (60.2) |
Net cash provided by (used for) investing activities | (1,644.3) | (1,177.2) | (1,058.7) |
Cash Flows from Financing Activities | |||
Increase (decrease) in total short-term borrowings | 1,310.6 | (1,213.6) | 501.6 |
Proceeds from long-term borrowings | 8,702.2 | 5,070.7 | 5,711 |
Payments of long-term borrowings | (5,397) | (5,267.6) | (4,863.2) |
Proceeds from issuance of common stock | 528.7 | 36 | 172.1 |
Repurchases of common stock | (6.2) | (205.4) | (2,770.7) |
Dividends paid | (764) | (761.3) | (816.3) |
Other | (87.8) | (64.7) | (72.1) |
Net cash provided by (used for) financing activities | 4,286.5 | (2,405.9) | (2,137.6) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 157.1 | (13) | (187.3) |
Net Increase (Decrease) in Cash and Cash Equivalents | 4,999.1 | 173.6 | 375.2 |
Cash and Cash Equivalents at Beginning of Year | 4,335.8 | 4,162.2 | 3,787 |
Cash and Cash Equivalents at End of Year | 9,334.9 | 4,335.8 | 4,162.2 |
Equipment Operations | |||
Cash Flows from Operating Activities | |||
Net income (loss) | 2,159.2 | 1,521.5 | 1,940.9 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||
Provision (credit) for credit losses | 9.9 | 8.2 | 5.5 |
Provision for depreciation and amortization | 839.3 | 803.4 | 791.8 |
Impairment charges | 39.8 | 25.4 | 15.3 |
Gain on sale of unconsolidated affiliates and investments | (375.1) | (74.5) | |
Undistributed earnings of unconsolidated subsidiaries and affiliates | (125) | 94 | 46.6 |
Provision (credit) for deferred income taxes | (6.7) | 13.2 | (139.8) |
Changes in assets and liabilities: | |||
Trade receivables | (243.9) | (175.3) | 113.4 |
Inventories | (504.3) | 578.4 | (17) |
Accounts payable and accrued expenses | 946.2 | (169.6) | (253.8) |
Accrued income taxes payable/receivable | (122.7) | 18.2 | (114.5) |
Retirement benefits | (39.2) | 232.4 | 414.3 |
Other | (139.5) | 36.5 | 271.1 |
Net cash provided by (used for) operating activities | 2,438 | 2,911.8 | 3,073.8 |
Cash Flows from Investing Activities | |||
Proceeds from maturities and sales of marketable securities | 297.9 | 81.9 | 700.1 |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 113.9 | 81.1 | |
Purchases of marketable securities | (59.4) | (60) | |
Purchases of property and equipment | (591.4) | (641.8) | (688.1) |
Increase in investment in Financial Services | (20) | (28.2) | (27.4) |
Acquisitions of businesses, net of cash acquired | (284.2) | (198.5) | |
Other | (32.7) | (55.2) | 6.8 |
Net cash provided by (used for) investing activities | (516.5) | (820.1) | (68.6) |
Cash Flows from Financing Activities | |||
Increase (decrease) in total short-term borrowings | 64.5 | (207.2) | 211.9 |
Change in intercompany receivables/payables | 2,142 | (756) | 928.6 |
Proceeds from long-term borrowings | 1,107 | 173.4 | 6.2 |
Payments of long-term borrowings | (66.3) | (72.8) | (214.2) |
Proceeds from issuance of common stock | 528.7 | 36 | 172.1 |
Repurchases of common stock | (6.2) | (205.4) | (2,770.7) |
Dividends paid | (764) | (761.3) | (816.3) |
Other | (54.4) | (36.7) | (45.4) |
Net cash provided by (used for) financing activities | 2,951.3 | (1,830) | (2,527.8) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 155.1 | (21.2) | (146.6) |
Net Increase (Decrease) in Cash and Cash Equivalents | 5,027.9 | 240.5 | 330.8 |
Cash and Cash Equivalents at Beginning of Year | 3,140.5 | 2,900 | 2,569.2 |
Cash and Cash Equivalents at End of Year | 8,168.4 | 3,140.5 | 2,900 |
Financial Services | |||
Cash Flows from Operating Activities | |||
Net income (loss) | 476.9 | 467.6 | 632.9 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||
Provision (credit) for credit losses | 88.4 | 86.1 | 49.9 |
Provision for depreciation and amortization | 984.3 | 846.7 | 688.5 |
Impairment charges | 59.7 | 19.5 | |
Undistributed earnings of unconsolidated subsidiaries and affiliates | (1.1) | (1.5) | (1) |
Provision (credit) for deferred income taxes | 106.8 | 269.5 | 121.4 |
Changes in assets and liabilities: | |||
Insurance receivables | 333.4 | ||
Accounts payable and accrued expenses | 93.9 | 40.6 | (245.4) |
Accrued income taxes payable/receivable | 38.5 | (11.2) | (4.6) |
Retirement benefits | 7.3 | 6.2 | 13.2 |
Other | 81.5 | 97.1 | (25.7) |
Net cash provided by (used for) operating activities | 1,876.5 | 1,860.8 | 1,582.1 |
Cash Flows from Investing Activities | |||
Collections of receivables (excluding trade and wholesale) | 15,963.2 | 15,831.4 | 16,266.1 |
Proceeds from maturities and sales of marketable securities | 106.3 | 87.5 | 160.6 |
Proceeds from sales of equipment on operating leases | 1,440.8 | 1,256.2 | 1,049.4 |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 149.2 | ||
Cost of receivables acquired (excluding trade and wholesale) | (16,799.9) | (15,168.2) | (16,327.8) |
Purchases of marketable securities | (118) | (111.8) | (94.9) |
Purchases of property and equipment | (3.5) | (2.6) | (5.9) |
Cost of equipment on operating leases acquired | (3,079.8) | (3,235.7) | (3,043.6) |
Decrease (increase) in trade and wholesale receivables | (379.9) | 492.5 | 657 |
Other | (26.5) | 24.6 | (45.1) |
Net cash provided by (used for) investing activities | (2,897.3) | (826.1) | (1,235) |
Cash Flows from Financing Activities | |||
Increase (decrease) in total short-term borrowings | 1,246.1 | (1,006.4) | 289.7 |
Change in intercompany receivables/payables | (2,142) | 756 | (928.6) |
Proceeds from long-term borrowings | 7,595.2 | 4,897.3 | 5,704.8 |
Payments of long-term borrowings | (5,330.7) | (5,194.8) | (4,649) |
Capital investment from Equipment Operations | 20 | 28.2 | 27.4 |
Dividends paid | (365.2) | (562.1) | (679.6) |
Other | (33.4) | (28) | (26.7) |
Net cash provided by (used for) financing activities | 990 | (1,109.8) | (262) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 2 | 8.2 | (40.7) |
Net Increase (Decrease) in Cash and Cash Equivalents | (28.8) | (66.9) | 44.4 |
Cash and Cash Equivalents at Beginning of Year | 1,195.3 | 1,262.2 | 1,217.8 |
Cash and Cash Equivalents at End of Year | $ 1,166.5 | $ 1,195.3 | $ 1,262.2 |
SCHEDULE II - VALUATION AND 141
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Consolidated Receivable Allowances | |||
Allowance for credit losses: | |||
Balance at beginning of period | $ 226,233 | $ 198,444 | $ 230,178 |
Charged to costs and expenses | 98,622 | 95,255 | 52,923 |
Charged to other accounts | 41,255 | 42,791 | 26,333 |
Deductions | 122,630 | 110,257 | 110,990 |
Balance at end of period | 243,480 | 226,233 | 198,444 |
Trade Receivable Allowances | Equipment Operations | |||
Allowance for credit losses: | |||
Balance at beginning of period | 44,913 | 34,891 | 50,248 |
Charged to costs and expenses | 10,145 | 8,132 | 5,270 |
Charged to other accounts - bad debt recoveries | 319 | 294 | 116 |
Charged to other accounts - other (primarily translation) | 4,669 | ||
Deductions - receivable write-offs | 3,398 | 3,073 | 5,260 |
Deductions - Other (primarily translation) | 1,755 | 15,483 | |
Balance at end of period | 50,224 | 44,913 | 34,891 |
Trade Receivable Allowances | Financial Services | |||
Allowance for credit losses: | |||
Balance at beginning of period | 4,880 | 5,932 | 5,298 |
Charged to costs and expenses | 952 | 2,893 | 1,172 |
Charged to other accounts - bad debt recoveries | 53 | 81 | 230 |
Charged to other accounts - other (primarily translation) | 48 | 47 | |
Deductions - receivable write-offs | 239 | 4,073 | 329 |
Deductions - Other (primarily translation) | 439 | ||
Balance at end of period | 5,694 | 4,880 | 5,932 |
Financing Receivable Allowances | Financial Services | |||
Allowance for credit losses: | |||
Balance at beginning of period | 176,440 | 157,621 | 174,632 |
Charged to costs and expenses | 87,525 | 84,230 | 46,481 |
Charged to other accounts - bad debt recoveries | 40,835 | 30,838 | 25,987 |
Charged to other accounts - other (primarily translation) | 6,862 | ||
Deductions - receivable write-offs | 115,895 | 103,111 | 66,807 |
Deductions - Other (primarily translation) | 1,343 | 22,672 | |
Balance at end of period | $ 187,562 | $ 176,440 | $ 157,621 |