Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Jan. 31, 2015 | |
Document and Entity Information | |
Entity Registrant Name | DEERE & CO |
Entity Central Index Key | 315189 |
Document Type | 10-Q |
Document Period End Date | 31-Jan-15 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -21 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 339,496,187 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
STATEMENT_OF_CONSOLIDATED_INCO
STATEMENT OF CONSOLIDATED INCOME (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Net Sales and Revenues | ||
Net sales | $5,605.10 | $6,948.50 |
Finance and interest income | 593.6 | 531.5 |
Other income | 184.4 | 174 |
Total | 6,383.10 | 7,654 |
Costs and Expenses | ||
Cost of sales | 4,420.60 | 5,195.50 |
Research and development expenses | 333.2 | 323.7 |
Selling, administrative and general expenses | 659 | 765.9 |
Interest expense | 180.1 | 171.7 |
Other operating expenses | 222.6 | 232.3 |
Total | 5,815.50 | 6,689.10 |
Income of Consolidated Group before Income Taxes | 567.6 | 964.9 |
Provision for income taxes | 170.5 | 280.5 |
Income of Consolidated Group | 397.1 | 684.4 |
Equity in loss of unconsolidated affiliates | -10.2 | -3.1 |
Net Income | 386.9 | 681.3 |
Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 |
Net Income Attributable to Deere & Company | $386.80 | $681.10 |
Per Share Data | ||
Basic (in dollars per share) | $1.13 | $1.83 |
Diluted (in dollars per share) | $1.12 | $1.81 |
Average Shares Outstanding | ||
Basic (in shares) | 343.1 | 371.9 |
Diluted (in shares) | 345.7 | 375.4 |
STATEMENT_OF_CONSOLIDATED_COMP
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||
Net Income | $386.90 | $681.30 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||
Retirement benefits adjustment | 42.3 | 50.1 |
Cumulative translation adjustment | -510.4 | -168 |
Unrealized gain (loss) on derivatives | -1.5 | 2.9 |
Unrealized gain (loss) on investments | 7.3 | -1.3 |
Other Comprehensive Income (Loss), Net of Income Taxes | -462.3 | -116.3 |
Comprehensive Income (Loss) of Consolidated Group | -75.4 | 565 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | -0.2 | 0.2 |
Comprehensive Income (Loss) Attributable to Deere & Company | ($75.20) | $564.80 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $3,974.80 | $3,787 | $3,188.60 | $3,504 |
Marketable securities | 493.8 | 1,215.10 | 1,438.40 | |
Receivables from unconsolidated affiliates | 27.4 | 30.2 | 35.2 | |
Trade accounts and notes receivable - net | 3,334.60 | 3,277.60 | 3,716.80 | |
Financing receivables - net | 25,805.90 | 27,422.20 | 25,242.30 | |
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 | |
Other receivables | 921.1 | 1,500.30 | 1,157.60 | |
Equipment on operating leases - net | 3,834.60 | 4,015.50 | 3,026 | |
Inventories | 4,527.10 | 4,209.70 | 5,554.60 | |
Property and equipment - net | 5,347.50 | 5,577.80 | 5,351 | |
Investments in unconsolidated affiliates | 301.6 | 303.2 | 297.5 | |
Goodwill | 741.3 | 791.2 | 834.6 | 845 |
Other intangible assets - net | 62.3 | 68.8 | 74.6 | |
Retirement benefits | 283.5 | 262 | 583.5 | |
Deferred income taxes | 2,584.10 | 2,776.60 | 2,323.40 | |
Other assets | 1,772.30 | 1,496.90 | 1,344.20 | |
Assets held for sale | 384.9 | |||
Total Assets | 58,290.10 | 61,336.40 | 57,659.20 | |
Liabilities and Stockholders' Equity | ||||
Short-term borrowings | 8,622.70 | 8,019.20 | 8,657.30 | |
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 | |
Payables to unconsolidated affiliates | 119.2 | 101 | 89.1 | |
Accounts payable and accrued expenses | 6,421.90 | 8,554.10 | 7,330 | |
Deferred income taxes | 146.7 | 160.9 | 154.8 | |
Long-term borrowings | 24,106.70 | 24,380.70 | 22,265.20 | |
Retirement benefits and other liabilities | 6,469.40 | 6,496.50 | 5,414.20 | |
Liabilities held for sale | 266.8 | |||
Total liabilities | 50,041.30 | 52,270.90 | 47,401.40 | |
Commitments and contingencies (Note 14) | ||||
Common stock, $1 par value (issued shares at January 31, 2015 - 536,431,204) | 3,714 | 3,675.40 | 3,571.30 | |
Common stock in treasury | -13,408.20 | -12,834.20 | -10,643.10 | |
Retained earnings | 22,185.20 | 22,004.40 | 20,136.90 | |
Accumulated other comprehensive income (loss) | -4,245 | -3,783 | -2,809.40 | -2,693 |
Total Deere & Company stockholders' equity | 8,246 | 9,062.60 | 10,255.70 | |
Noncontrolling interests | 2.8 | 2.9 | 2.1 | |
Total stockholders' equity | 8,248.80 | 9,065.50 | 10,257.80 | 10,267.70 |
Total Liabilities and Stockholders' Equity | $58,290.10 | $61,336.40 | $57,659.20 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $) | Jan. 31, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEET | |
Common stock, par value (in dollars per share) | $1 |
Common stock, issued shares | 536,431,204 |
STATEMENT_OF_CONSOLIDATED_CASH
STATEMENT OF CONSOLIDATED CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Cash Flows from Operating Activities | ||
Net income | $386.90 | $681.30 |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Provision for credit losses | 1 | 2.4 |
Provision for depreciation and amortization | 342.9 | 343.1 |
Impairment charges | 26.3 | |
Share-based compensation expense | 18.1 | 23.2 |
Undistributed earnings of unconsolidated affiliates | 10.1 | 3 |
Provision (credit) for deferred income taxes | 176.1 | -8.6 |
Changes in assets and liabilities: | ||
Trade, notes and financing receivables related to sales | 349.1 | 126.7 |
Insurance receivables | 256.5 | 101.9 |
Inventories | -603.9 | -836.8 |
Accounts payable and accrued expenses | -1,442.50 | -1,387.10 |
Accrued income taxes payable/receivable | -185.5 | 137.5 |
Retirement benefits | 84.4 | 53.4 |
Other | 96.7 | -12.5 |
Net cash used for operating activities | -510.1 | -746.2 |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 4,694.60 | 4,660.70 |
Proceeds from maturities and sales of marketable securities | 673.4 | 403.6 |
Proceeds from sales of equipment on operating leases | 242.1 | 276.4 |
Proceeds from sales of businesses, net of cash sold | 303.7 | |
Cost of receivables acquired (excluding receivables related to sales) | -3,674.80 | -4,190.10 |
Purchases of marketable securities | -19.3 | -222.4 |
Purchases of property and equipment | -184 | -250.7 |
Cost of equipment on operating leases acquired | -299.7 | -251.6 |
Other | -47.2 | -56.3 |
Net cash provided by investing activities | 1,385.10 | 673.3 |
Cash Flows from Financing Activities | ||
Increase (decrease) in total short-term borrowings | 209.8 | -736.7 |
Proceeds from long-term borrowings | 1,227.80 | 2,241.10 |
Payments of long-term borrowings | -1,234.30 | -1,100 |
Proceeds from issuance of common stock | 44.7 | 54.3 |
Repurchases of common stock | -604.7 | -477.3 |
Dividends paid | -209.9 | -192.5 |
Excess tax benefits from share-based compensation | 6.3 | 14.6 |
Other | -22.2 | -13 |
Net cash used for financing activities | -582.5 | -209.5 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -104.7 | -33 |
Net Increase (Decrease) in Cash and Cash Equivalents | 187.8 | -315.4 |
Cash and Cash Equivalents at Beginning of Period | 3,787 | 3,504 |
Cash and Cash Equivalents at End of Period | $3,974.80 | $3,188.60 |
STATEMENT_OF_CHANGES_IN_CONSOL
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests |
In Millions, unless otherwise specified | ||||||
Balance at Oct. 31, 2013 | $10,267.70 | $3,524.20 | ($10,210.90) | $19,645.60 | ($2,693.10) | $1.90 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 681.3 | 681.1 | 0.2 | |||
Other comprehensive loss | -116.3 | -116.3 | ||||
Repurchases of common stock | -477.3 | -477.3 | ||||
Treasury shares reissued | 45.1 | 45.1 | ||||
Dividends declared | -189.8 | -189.8 | ||||
Stock options and other | 47.1 | 47.1 | ||||
Balance at Jan. 31, 2014 | 10,257.80 | 3,571.30 | -10,643.10 | 20,136.90 | -2,809.40 | 2.1 |
Balance at Oct. 31, 2014 | 9,065.50 | 3,675.40 | -12,834.20 | 22,004.40 | -3,783 | 2.9 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 386.9 | 386.8 | 0.1 | |||
Other comprehensive loss | -462.3 | -462 | -0.3 | |||
Repurchases of common stock | -604.7 | -604.7 | ||||
Treasury shares reissued | 30.7 | 30.7 | ||||
Dividends declared | -205.9 | -205.9 | ||||
Stock options and other | 38.6 | 38.6 | -0.1 | 0.1 | ||
Balance at Jan. 31, 2015 | $8,248.80 | $3,714 | ($13,408.20) | $22,185.20 | ($4,245) | $2.80 |
ORGANIZATION_AND_CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 3 Months Ended |
Jan. 31, 2015 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | (1) The information in the notes and related commentary are presented in a format which 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. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 3 Months Ended |
Jan. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) The consolidated financial statements of Deere & Company and consolidated subsidiaries have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations and cash flows at the dates and for the periods presented. It is suggested that these interim financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. |
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. | |
CASH FLOW INFORMATION | Cash Flow Information |
All cash flows from the changes in trade accounts and notes receivable 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 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 approximately $96 million and $116 million in the first three months of 2015 and 2014, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $43 million and $50 million at January 31, 2015 and 2014, respectively. | |
NEW_ACCOUNTING_STANDARDS
NEW ACCOUNTING STANDARDS | 3 Months Ended |
Jan. 31, 2015 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | (3) New accounting standards to be adopted are as follows: |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (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 and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date will be the first quarter of fiscal year 2018 using one of two retrospective application methods. The Company has not determined the potential effects on the consolidated financial statements. | |
In June 2014, the FASB issued ASU No. 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. This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Therefore, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The total compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The effective date will be the first quarter of fiscal year 2017. The adoption will not have a material effect on the Company’s consolidated financial statements. | |
OTHER_COMPREHENSIVE_INCOME_ITE
OTHER COMPREHENSIVE INCOME ITEMS | 3 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
OTHER COMPREHENSIVE INCOME ITEMS | |||||||||||||||||
OTHER COMPREHENSIVE INCOME ITEMS | (4) The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow: | ||||||||||||||||
Retirement | Cumulative | Unrealized | Unrealized | Total | |||||||||||||
Benefits | Translation | Gain (Loss) | Gain (Loss) | Accumulated | |||||||||||||
Adjustment | Adjustment | On | on | Other | |||||||||||||
Derivatives | Investments | Comprehensive | |||||||||||||||
Income (Loss) | |||||||||||||||||
Balance October 31, 2014 | $ | -3,493 | $ | -303 | $ | $ | 13 | $ | -3,783 | ||||||||
Other comprehensive income (loss) items before reclassification | -510 | -3 | 9 | -504 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 42 | 2 | -2 | 42 | |||||||||||||
Net current period other comprehensive income (loss) | 42 | -510 | -1 | 7 | -462 | ||||||||||||
Balance January 31, 2015 | $ | -3,451 | $ | -813 | $ | -1 | $ | 20 | $ | -4,245 | |||||||
Retirement | Cumulative | Unrealized | Unrealized | Total | |||||||||||||
Benefits | Translation | Gain (Loss) | Gain (Loss) | Accumulated | |||||||||||||
Adjustment | Adjustment | On | on | Other | |||||||||||||
Derivatives | Investments | Comprehensive | |||||||||||||||
Income (Loss) | |||||||||||||||||
Balance October 31, 2013 | $ | -2,809 | $ | 113 | $ | -3 | $ | 6 | $ | -2,693 | |||||||
Other comprehensive income (loss) items before reclassification | 12 | -168 | -3 | -1 | -160 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | 38 | 6 | 44 | ||||||||||||||
Net current period other comprehensive income (loss) | 50 | -168 | 3 | -1 | -116 | ||||||||||||
Balance January 31, 2014 | $ | -2,759 | $ | -55 | $ | 5 | $ | -2,809 | |||||||||
Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: | |||||||||||||||||
Three Months Ended January 31, 2015 | Before | Tax | After | ||||||||||||||
Tax | (Expense) | Tax | |||||||||||||||
Amount | Credit | Amount | |||||||||||||||
Cumulative translation adjustment: | $ | (508 | ) | $ | (2 | ) | $ | (510 | ) | ||||||||
Unrealized gain (loss) on derivatives: | |||||||||||||||||
Unrealized hedging (loss) | (4 | ) | 1 | (3 | ) | ||||||||||||
Reclassification of realized (gain) loss to: | |||||||||||||||||
Interest rate contracts — Interest expense | 3 | 3 | |||||||||||||||
Foreign exchange contracts — Other operating expense | (1 | ) | (1 | ) | |||||||||||||
Net unrealized (loss) on derivatives | (2 | ) | 1 | (1 | ) | ||||||||||||
Unrealized gain (loss) on investments: | |||||||||||||||||
Unrealized holding gain | 13 | (4 | ) | 9 | |||||||||||||
Reclassification of realized (gain) — Other income | (2 | ) | (2 | ) | |||||||||||||
Net unrealized gain on investments | 11 | (4 | ) | 7 | |||||||||||||
Retirement benefits adjustment: | |||||||||||||||||
Pensions | |||||||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 55 | (20 | ) | 35 | |||||||||||||
Prior service cost | 6 | (2 | ) | 4 | |||||||||||||
Settlements/curtailments | 1 | 1 | |||||||||||||||
Health care and life insurance | |||||||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 23 | (9 | ) | 14 | |||||||||||||
Prior service (credit) | (19 | ) | 7 | (12 | ) | ||||||||||||
Net unrealized gain on retirement benefits adjustments | 66 | (24 | ) | 42 | |||||||||||||
Total other comprehensive income (loss) | $ | (433 | ) | $ | (29 | ) | $ | (462 | ) | ||||||||
* These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. | |||||||||||||||||
Three Months Ended January 31, 2014 | Before | Tax | After | ||||||||||||||
Tax | (Expense) | Tax | |||||||||||||||
Amount | Credit | Amount | |||||||||||||||
Cumulative translation adjustment: | $ | (169 | ) | $ | 1 | $ | (168 | ) | |||||||||
Unrealized gain (loss) on derivatives: | |||||||||||||||||
Unrealized hedging (loss) | (5 | ) | 2 | (3 | ) | ||||||||||||
Reclassification of realized loss to: | |||||||||||||||||
Interest rate contracts — Interest expense | 4 | (1 | ) | 3 | |||||||||||||
Foreign exchange contracts — Other operating expense | 5 | (2 | ) | 3 | |||||||||||||
Net unrealized gain on derivatives | 4 | (1 | ) | 3 | |||||||||||||
Unrealized gain (loss) on investments: | |||||||||||||||||
Unrealized holding (loss) | (2 | ) | 1 | (1 | ) | ||||||||||||
Net unrealized (loss) on investments | (2 | ) | 1 | (1 | ) | ||||||||||||
Retirement benefits adjustment: | |||||||||||||||||
Pensions | |||||||||||||||||
Net actuarial gain | 19 | (7 | ) | 12 | |||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 43 | (15 | ) | 28 | |||||||||||||
Prior service cost | 6 | (2 | ) | 4 | |||||||||||||
Settlements/curtailments | 2 | (1 | ) | 1 | |||||||||||||
Health care and life insurance | |||||||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 9 | (3 | ) | 6 | |||||||||||||
Prior service (credit) | (1 | ) | (1 | ) | |||||||||||||
Net unrealized gain on retirement benefits adjustments | 78 | (28 | ) | 50 | |||||||||||||
Total other comprehensive income (loss) | $ | (89 | ) | $ | (27 | ) | $ | (116 | ) | ||||||||
* These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. | |||||||||||||||||
In the first quarter of 2015 and 2014, the noncontrolling interests’ comprehensive income (loss) was $(.2) million and $.2 million, respectively, which consisted of net income of $.1 million in 2015 and $.2 million in 2014 and a cumulative translation adjustment of $(.3) million in 2015. | |||||||||||||||||
DIVIDENDS_DECLARED_AND_PAID
DIVIDENDS DECLARED AND PAID | 3 Months Ended | |||||||
Jan. 31, 2015 | ||||||||
DIVIDENDS DECLARED AND PAID | ||||||||
DIVIDENDS DECLARED AND PAID | (5) Dividends declared and paid on a per share basis were as follows: | |||||||
Three Months Ended | ||||||||
January 31 | ||||||||
2015 | 2014 | |||||||
Dividends declared | $ | 0.6 | $ | 0.51 | ||||
Dividends paid | $ | 0.6 | $ | 0.51 | ||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | |||||||||
Jan. 31, 2015 | ||||||||||
EARNINGS PER SHARE | ||||||||||
EARNINGS PER SHARE | (6) A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: | |||||||||
Three Months Ended | ||||||||||
January 31 | ||||||||||
2015 | 2014 | |||||||||
Net income attributable to Deere & Company | $ | 386.8 | $ | 681.1 | ||||||
Less income allocable to participating securities | 0.1 | 0.2 | ||||||||
Income allocable to common stock | $ | 386.7 | $ | 680.9 | ||||||
Average shares outstanding | 343.1 | 371.9 | ||||||||
Basic per share | $ | 1.13 | $ | 1.83 | ||||||
Average shares outstanding | 343.1 | 371.9 | ||||||||
Effect of dilutive share-based compensation | 2.6 | 3.5 | ||||||||
Total potential shares outstanding | 345.7 | 375.4 | ||||||||
Diluted per share | $ | 1.12 | $ | 1.81 | ||||||
During the first quarter of 2015 and 2014, 3.0 million shares and 2.4 million shares, respectively, related to share-based compensation were excluded from the above diluted per share computation because the incremental shares under the treasury stock method would have been antidilutive. | ||||||||||
PENSION_AND_OTHER_POSTRETIREME
PENSION AND OTHER POSTRETIREMENT BENEFITS | 3 Months Ended | |||||||
Jan. 31, 2015 | ||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | ||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | (7) The Company has several defined benefit pension plans and defined benefit postretirement health care and life insurance plans covering its U.S. employees and employees in certain foreign countries. | |||||||
The worldwide components of net periodic pension cost consisted of the following in millions of dollars: | ||||||||
Three Months Ended | ||||||||
January 31 | ||||||||
2015 | 2014 | |||||||
Service cost | $ | 73 | $ | 61 | ||||
Interest cost | 119 | 119 | ||||||
Expected return on plan assets | -193 | -193 | ||||||
Amortization of actuarial loss | 55 | 43 | ||||||
Amortization of prior service cost | 6 | 6 | ||||||
Settlements/curtailments | 1 | 2 | ||||||
Net cost | $ | 61 | $ | 38 | ||||
The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars: | ||||||||
Three Months Ended | ||||||||
January 31 | ||||||||
2015 | 2014 | |||||||
Service cost | $ | 11 | $ | 11 | ||||
Interest cost | 65 | 66 | ||||||
Expected return on plan assets | -14 | -18 | ||||||
Amortization of actuarial loss | 23 | 9 | ||||||
Amortization of prior service credit | -19 | -1 | ||||||
Net cost | $ | 66 | $ | 67 | ||||
During the first quarter of 2015, the Company contributed approximately $21 million to its pension plans and $15 million to its other postretirement benefit plans. The Company presently anticipates contributing an additional $54 million to its pension plans and $11 million to its other postretirement benefit plans during the remainder of fiscal year 2015. These contributions include payments from Company funds to either increase plan assets or make direct payments to plan participants. | ||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | (8) The Company’s unrecognized tax benefits at January 31, 2015 were $210 million, compared to $213 million at October 31, 2014. The liability at January 31, 2015 consisted of approximately $76 million, which would affect the effective tax rate if it was recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The changes in the unrecognized tax benefits for the first three months of 2015 were not significant. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be significant. |
SEGMENT_REPORTING
SEGMENT REPORTING | 3 Months Ended | |||||||||
Jan. 31, 2015 | ||||||||||
SEGMENT REPORTING | ||||||||||
SEGMENT REPORTING | (9) Worldwide net sales and revenues, operating profit and identifiable assets by segment in millions of dollars follow: | |||||||||
Three Months Ended January 31 | ||||||||||
% | ||||||||||
2015 | 2014 | Change | ||||||||
Net sales and revenues: | ||||||||||
Agriculture and turf | $ | 4,081 | $ | 5,596 | -27 | |||||
Construction and forestry | 1,524 | 1,353 | 13 | |||||||
Total net sales | 5,605 | 6,949 | -19 | |||||||
Financial services | 648 | 587 | 10 | |||||||
Other revenues | 130 | 118 | 10 | |||||||
Total net sales and revenues | $ | 6,383 | $ | 7,654 | -17 | |||||
Operating profit: * | ||||||||||
Agriculture and turf | $ | 268 | $ | 797 | -66 | |||||
Construction and forestry | 146 | 94 | 55 | |||||||
Financial services | 233 | 182 | 28 | |||||||
Total operating profit | 647 | 1,073 | -40 | |||||||
Reconciling items ** | -89 | -112 | -21 | |||||||
Income taxes | -171 | -280 | -39 | |||||||
Net income attributable to Deere & Company | $ | 387 | $ | 681 | -43 | |||||
Intersegment sales and revenues: | ||||||||||
Agriculture and turf net sales | $ | 13 | $ | 20 | -35 | |||||
Construction and forestry net sales | 1 | |||||||||
Financial services | 50 | 46 | 9 | |||||||
Equipment operations outside the U.S. and Canada: | ||||||||||
Net sales | $ | 1,873 | $ | 2,608 | -28 | |||||
Operating profit | 77 | 211 | -64 | |||||||
January 31 | October 31 | |||||||||
2015 | 2014 | |||||||||
Identifiable assets: | ||||||||||
Agriculture and turf | $ | 9,354 | $ | 9,442 | -1 | |||||
Construction and forestry | 3,332 | 3,405 | -2 | |||||||
Financial services | 40,376 | 42,784 | -6 | |||||||
Corporate | 5,228 | 5,705 | -8 | |||||||
Total assets | $ | 58,290 | $ | 61,336 | -5 | |||||
* Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. | ||||||||||
** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses and net income attributable to noncontrolling interests. | ||||||||||
FINANCING_RECEIVABLES
FINANCING RECEIVABLES | 3 Months Ended | |||||||||||||||||
Jan. 31, 2015 | ||||||||||||||||||
FINANCING RECEIVABLES | ||||||||||||||||||
FINANCING RECEIVABLES | (10) 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, if any, 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 in millions of dollars follows: | ||||||||||||||||||
January 31, 2015 | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days | Total | |||||||||||||||
Past Due | Past Due | or Greater | Past Due | |||||||||||||||
Past Due | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 122 | $ | 41 | $ | 40 | $ | 203 | ||||||||||
Construction and forestry | 59 | 25 | 11 | 95 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 32 | 10 | 3 | 45 | ||||||||||||||
Construction and forestry | 16 | 6 | 3 | 25 | ||||||||||||||
Total | $ | 229 | $ | 82 | $ | 57 | $ | 368 | ||||||||||
Total | Total | Current | Total | |||||||||||||||
Past Due | Non- | Financing | ||||||||||||||||
Performing | Receivables | |||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 203 | $ | 102 | $ | 19,027 | $ | 19,332 | ||||||||||
Construction and forestry | 95 | 12 | 2,529 | 2,636 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 45 | 17 | 6,791 | 6,853 | ||||||||||||||
Construction and forestry | 25 | 5 | 1,016 | 1,046 | ||||||||||||||
Total | $ | 368 | $ | 136 | $ | 29,363 | 29,867 | |||||||||||
Less allowance for credit losses | 168 | |||||||||||||||||
Total financing receivables - net | $ | 29,699 | ||||||||||||||||
October 31, 2014 | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days | Total | |||||||||||||||
Past Due | Past Due | or Greater | Past Due | |||||||||||||||
Past Due | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 93 | $ | 34 | $ | 28 | $ | 155 | ||||||||||
Construction and forestry | 54 | 16 | 7 | 77 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 23 | 12 | 2 | 37 | ||||||||||||||
Construction and forestry | 12 | 3 | 4 | 19 | ||||||||||||||
Total | $ | 182 | $ | 65 | $ | 41 | $ | 288 | ||||||||||
Total | Total | Current | Total | |||||||||||||||
Past Due | Non- | Financing | ||||||||||||||||
Performing | Receivables | |||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 155 | $ | 107 | $ | 19,966 | $ | 20,228 | ||||||||||
Construction and forestry | 77 | 17 | 2,462 | 2,556 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 37 | 15 | 8,208 | 8,260 | ||||||||||||||
Construction and forestry | 19 | 2 | 1,134 | 1,155 | ||||||||||||||
Total | $ | 288 | $ | 141 | $ | 31,770 | 32,199 | |||||||||||
Less allowance for credit losses | 175 | |||||||||||||||||
Total financing receivables - net | $ | 32,024 | ||||||||||||||||
January 31, 2014 | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days | Total | |||||||||||||||
Past Due | Past Due | or Greater | Past Due | |||||||||||||||
Past Due | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 103 | $ | 39 | $ | 26 | $ | 168 | ||||||||||
Construction and forestry | 51 | 19 | 10 | 80 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 28 | 10 | 4 | 42 | ||||||||||||||
Construction and forestry | 12 | 4 | 3 | 19 | ||||||||||||||
Total | $ | 194 | $ | 72 | $ | 43 | $ | 309 | ||||||||||
Total | Total | Current | Total | |||||||||||||||
Past Due | Non-Performing | Financing | ||||||||||||||||
Receivables | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 168 | $ | 106 | $ | 18,802 | $ | 19,076 | ||||||||||
Construction and forestry | 80 | 14 | 2,017 | 2,111 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 42 | 13 | 6,614 | 6,669 | ||||||||||||||
Construction and forestry | 19 | 3 | 1,022 | 1,044 | ||||||||||||||
Total | $ | 309 | $ | 136 | $ | 28,455 | 28,900 | |||||||||||
Less allowance for credit losses | 167 | |||||||||||||||||
Total financing receivables - net | $ | 28,733 | ||||||||||||||||
An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
January 31, 2015 | ||||||||||||||||||
Retail | Revolving | Other | Total | |||||||||||||||
Notes | Charge | |||||||||||||||||
Accounts | ||||||||||||||||||
Allowance: | ||||||||||||||||||
Beginning of period balance | $ | 109 | $ | 41 | $ | 25 | $ | 175 | ||||||||||
Provision | 1 | 1 | ||||||||||||||||
Write-offs | -3 | -4 | -7 | |||||||||||||||
Recoveries | 2 | 4 | 6 | |||||||||||||||
Translation adjustments | -5 | -2 | -7 | |||||||||||||||
End of period balance * | $ | 104 | $ | 41 | $ | 23 | $ | 168 | ||||||||||
Financing receivables: | ||||||||||||||||||
End of period balance | $ | 21,968 | $ | 1,882 | $ | 6,017 | $ | 29,867 | ||||||||||
Balance individually evaluated ** | $ | 23 | $ | 1 | $ | 1 | $ | 25 | ||||||||||
Three Months Ended | ||||||||||||||||||
January 31, 2014 | ||||||||||||||||||
Allowance: | ||||||||||||||||||
Beginning of period balance | $ | 101 | $ | 41 | $ | 31 | $ | 173 | ||||||||||
Provision | 1 | 1 | 2 | |||||||||||||||
Write-offs | -3 | -5 | -8 | |||||||||||||||
Recoveries | 2 | 3 | 5 | |||||||||||||||
Translation adjustments | -4 | -1 | -5 | |||||||||||||||
End of period balance * | $ | 97 | $ | 40 | $ | 30 | $ | 167 | ||||||||||
Financing receivables: | ||||||||||||||||||
End of period balance | $ | 21,187 | $ | 1,801 | $ | 5,912 | $ | 28,900 | ||||||||||
Balance individually evaluated ** | $ | 14 | $ | 26 | $ | 40 | ||||||||||||
* Individual allowances were not significant. | ||||||||||||||||||
** Remainder is collectively evaluated. | ||||||||||||||||||
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 in millions of dollars follows: | ||||||||||||||||||
Recorded | Unpaid | Specific | Average | |||||||||||||||
Investment | Principal | Allowance | Recorded | |||||||||||||||
Balance | Investment | |||||||||||||||||
January 31, 2015 * | ||||||||||||||||||
Receivables with specific allowance ** | $ | 6 | $ | 6 | $ | 2 | $ | 7 | ||||||||||
Receivables without a specific allowance ** | 6 | 5 | 6 | |||||||||||||||
Total | $ | 12 | $ | 11 | $ | 2 | $ | 13 | ||||||||||
Agriculture and turf | $ | 10 | $ | 10 | $ | 2 | $ | 11 | ||||||||||
Construction and forestry | $ | 2 | $ | 1 | $ | 2 | ||||||||||||
October 31, 2014 * | ||||||||||||||||||
Receivables with specific allowance ** | $ | 9 | $ | 9 | $ | 2 | $ | 10 | ||||||||||
Receivables without a specific allowance ** | 6 | 6 | 7 | |||||||||||||||
Total | $ | 15 | $ | 15 | $ | 2 | $ | 17 | ||||||||||
Agriculture and turf | $ | 12 | $ | 12 | $ | 2 | $ | 13 | ||||||||||
Construction and forestry | $ | 3 | $ | 3 | $ | 4 | ||||||||||||
January 31, 2014 * | ||||||||||||||||||
Receivables with specific allowance *** | $ | 18 | $ | 18 | $ | 4 | $ | 18 | ||||||||||
Receivables without a specific allowance ** | 7 | 6 | 7 | |||||||||||||||
Total | $ | 25 | $ | 24 | $ | 4 | $ | 25 | ||||||||||
Agriculture and turf | $ | 22 | $ | 22 | $ | 4 | $ | 23 | ||||||||||
Construction and forestry | $ | 3 | $ | 2 | $ | 2 | ||||||||||||
* | Finance income recognized was not material. | |||||||||||||||||
** | Primarily retail notes. | |||||||||||||||||
*** | Primarily operating loans. | |||||||||||||||||
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 the first quarter of 2015, the Company identified nine financing receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $.1 million pre-modification and $.1 million post-modification. During the first quarter of 2014, there were six financing receivable contracts, primarily retail notes, with aggregate balances of $.2 million pre-modification and $.2 post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At January 31, 2015, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. | ||||||||||||||||||
SECURITIZATION_OF_FINANCING_RE
SECURITIZATION OF FINANCING RECEIVABLES | 3 Months Ended | |||||||||||||
Jan. 31, 2015 | ||||||||||||||
SECURITIZATION OF FINANCING RECEIVABLES | ||||||||||||||
SECURITIZATION OF FINANCING RECEIVABLES | (11) Securitization of financing receivables: | |||||||||||||
The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or a non-VIE banking operation, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the criteria of 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-VIE is restricted by terms of the documents governing the securitization transactions. | ||||||||||||||
In securitizations of retail notes related to secured borrowings, the retail notes are transferred to certain SPEs or to a non-VIE banking operation, which in turn issue debt to investors. The resulting secured borrowings are recorded as “Short-term securitization borrowings” on the 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 $2,563 million, $3,011 million and $2,223 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,500 million, $2,942 million and $2,159 million at January 31, 2015, October 31, 2014 and January 31, 2014, 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 a non-VIE banking operation, which is not consolidated since the Company does not have a controlling interest in the entity. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIE were restricted assets (retail notes securitized, allowance for credit losses and other assets) of $184 million, $368 million and $296 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $179 million, $351 million and $289 million at January 31, 2015, October 31, 2014 and January 31, 2014, 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 interests related to these conduits were restricted assets (retail notes securitized, allowance for credit losses and other assets) of $1,246 million, $1,331 million and $1,069 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,211 million, $1,267 million and $1,044 million at January 31, 2015, October 31, 2014 and January 31, 2014, 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 in millions of dollars: | ||||||||||||||
January 31, 2015 | ||||||||||||||
Carrying value of liabilities | $ | 1,211 | ||||||||||||
Maximum exposure to loss | 1,246 | |||||||||||||
The total assets of unconsolidated VIEs related to securitizations were approximately $53 billion at January 31, 2015. | ||||||||||||||
The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: | ||||||||||||||
January 31 | October 31 | January 31 | ||||||||||||
2015 | 2014 | 2014 | ||||||||||||
Financing receivables securitized (retail notes) | $ | 3,905 | $ | 4,616 | $ | 3,502 | ||||||||
Allowance for credit losses | (12 | ) | (14 | ) | (11 | ) | ||||||||
Other assets | 100 | 108 | 97 | |||||||||||
Total restricted securitized assets | $ | 3,993 | $ | 4,710 | $ | 3,588 | ||||||||
The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: | ||||||||||||||
January 31 | October 31 | January 31 | ||||||||||||
2015 | 2014 | 2014 | ||||||||||||
Short-term securitization borrowings | $ | 3,888 | $ | 4,559 | $ | 3,491 | ||||||||
Accrued interest on borrowings | 2 | 1 | 1 | |||||||||||
Total liabilities related to restricted securitized assets | $ | 3,890 | $ | 4,560 | $ | 3,492 | ||||||||
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 restricted collection account until immediately prior to the time payment is required to the secured creditors. At January 31, 2015, the maximum remaining term of all restricted securitized retail notes was approximately six years. | ||||||||||||||
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||||||||
Jan. 31, 2015 | ||||||||||||||
INVENTORIES | ||||||||||||||
INVENTORIES | (12) Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows: | |||||||||||||
January 31 | October 31 | January 31 | ||||||||||||
2015 | 2014 | 2014 | ||||||||||||
Raw materials and supplies | $ | 1,723 | $ | 1,724 | $ | 2,108 | ||||||||
Work-in-process | 697 | 654 | 847 | |||||||||||
Finished goods and parts | 3,622 | 3,360 | 4,151 | |||||||||||
Total FIFO value | 6,042 | 5,738 | 7,106 | |||||||||||
Less adjustment to LIFO value | 1,515 | 1,528 | 1,551 | |||||||||||
Inventories | $ | 4,527 | $ | 4,210 | $ | 5,555 | ||||||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 3 Months Ended | |||||||||||||||
Jan. 31, 2015 | ||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | ||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | (13) The changes in amounts of goodwill by operating segments were as follows in millions of dollars: | |||||||||||||||
Agriculture | Construction | Total | ||||||||||||||
and Turf | and Forestry | |||||||||||||||
Balance October 31, 2013: | ||||||||||||||||
Goodwill | $ | 302 | $ | 603 | $ | 905 | ||||||||||
Less accumulated impairment losses | 60 | 60 | ||||||||||||||
Goodwill - net | 242 | 603 | 845 | |||||||||||||
Translation adjustments | (3 | ) | (7 | ) | (10 | ) | ||||||||||
Balance January 31, 2014: | ||||||||||||||||
Goodwill | 299 | 596 | 895 | |||||||||||||
Less accumulated impairment losses | 60 | 60 | ||||||||||||||
Goodwill - net | $ | 239 | $ | 596 | $ | 835 | ||||||||||
Balance October 31, 2014: | ||||||||||||||||
Goodwill | $ | 235 | $ | 556 | $ | 791 | ||||||||||
Less accumulated impairment losses * | ||||||||||||||||
Goodwill - net | 235 | 556 | 791 | |||||||||||||
Translation adjustments | (8 | ) | (42 | ) | (50 | ) | ||||||||||
Balance January 31, 2015: | ||||||||||||||||
Goodwill - net | $ | 227 | $ | 514 | $ | 741 | ||||||||||
* Accumulated impairment losses were reduced by $60 million related to the divestiture of the Water operations, which occurred in May 2014. | ||||||||||||||||
The components of other intangible assets were as follows in millions of dollars: | ||||||||||||||||
Useful Lives * | January 31 | October 31 | January 31 | |||||||||||||
Years | 2015 | 2014 | 2014 | |||||||||||||
Amortized intangible assets: | ||||||||||||||||
Customer lists and relationships | 15 | $ | 20 | $ | 20 | $ | 20 | |||||||||
Technology, patents, trademarks and other | 18 | 90 | 90 | 88 | ||||||||||||
Total at cost | 110 | 110 | 108 | |||||||||||||
Less accumulated amortization ** | 48 | 45 | 37 | |||||||||||||
Total | 62 | 65 | 71 | |||||||||||||
Unamortized intangible assets: | ||||||||||||||||
Licenses *** | 4 | 4 | ||||||||||||||
Other intangible assets - net | $ | 62 | $ | 69 | $ | 75 | ||||||||||
* Weighted-averages | ||||||||||||||||
** Accumulated amortization at January 31, 2015, October 31, 2014 and January 31, 2014 for customer lists and relationships totaled $10 million, $9 million and $8 million and technology, patents, trademarks and other totaled $38 million, $36 million and $29 million, respectively. | ||||||||||||||||
*** Licenses were reduced by $4 million related to the Crop Insurance operations reclassification to assets held for sale (see Note 18). | ||||||||||||||||
The amortization of other intangible assets in the first quarter of 2015 and 2014 was $3 million and $2 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2015 - $8, 2016 - $10, 2017 - $9, 2018 - $6 and 2019 - $5. | ||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | |||||||||
Jan. 31, 2015 | ||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
COMMITMENTS AND CONTINGENCIES | (14) Commitments and contingencies: | |||||||||
The Company generally determines its total 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 extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $422 million and $360 million at January 31, 2015 and 2014, respectively. | ||||||||||
A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: | ||||||||||
Three Months Ended | ||||||||||
January 31 | ||||||||||
2015 | 2014 | |||||||||
Beginning of period balance | $ | 1,234 | $ | 1,164 | ||||||
Payments | (178 | ) | (189 | ) | ||||||
Amortization of premiums received | (41 | ) | (28 | ) | ||||||
Accruals for warranties | 181 | 185 | ||||||||
Premiums received | 45 | 46 | ||||||||
Foreign exchange | (24 | ) | (6 | ) | ||||||
End of period balance | $ | 1,217 | $ | 1,172 | ||||||
At January 31, 2015, the Company had approximately $220 million of guarantees issued primarily to banks outside the U.S. and Canada 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 January 31, 2015, the Company had accrued losses of approximately $7 million under these agreements. The maximum remaining term of the receivables guaranteed at January 31, 2015 was approximately five years. | ||||||||||
At January 31, 2015, the Company had commitments of approximately $236 million for the construction and acquisition of property and equipment. Also, at January 31, 2015, the Company had restricted assets of $115 million, primarily as collateral for borrowings and restricted other assets. See Note 11 for additional restricted assets associated with borrowings related to securitizations. | ||||||||||
The Company also had other miscellaneous contingent liabilities totaling approximately $40 million at January 31, 2015, for which it believes the probability for payment is substantially remote. The accrued liability for these contingencies was not material at January 31, 2015. | ||||||||||
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, 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 consolidated financial statements. | ||||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | ||||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | (15) The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow: | ||||||||||||||||||
January 31, 2015 | October 31, 2014 | January 31, 2014 | |||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | ||||||||||||||
Value | Value * | Value | Value * | Value | Value * | ||||||||||||||
Financing receivables - net | $ | 25,806 | $ | 25,733 | $ | 27,422 | $ | 27,337 | $ | 25,242 | $ | 25,129 | |||||||
Financing receivables securitized - net | 3,893 | 3,868 | 4,602 | 4,573 | 3,491 | 3,463 | |||||||||||||
Short-term securitization borrowings | 3,888 | 3,891 | 4,559 | 4,562 | 3,491 | 3,492 | |||||||||||||
Long-term borrowings due within one year: | |||||||||||||||||||
Equipment operations | $ | 216 | $ | 207 | $ | 243 | $ | 233 | $ | 815 | $ | 821 | |||||||
Financial services | 4,660 | 4,669 | 4,730 | 4,743 | 4,501 | 4,511 | |||||||||||||
Total | $ | 4,876 | $ | 4,876 | $ | 4,973 | $ | 4,976 | $ | 5,316 | $ | 5,332 | |||||||
Long-term borrowings: | |||||||||||||||||||
Equipment operations | $ | 4,622 | $ | 5,344 | $ | 4,643 | $ | 5,095 | $ | 4,828 | $ | 5,102 | |||||||
Financial services | 19,485 | 19,687 | 19,738 | 19,886 | 17,437 | 17,619 | |||||||||||||
Total | $ | 24,107 | $ | 25,031 | $ | 24,381 | $ | 24,981 | $ | 22,265 | $ | 22,721 | |||||||
* Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. | |||||||||||||||||||
Fair values of 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 fair value on a recurring basis in millions of dollars follow: | |||||||||||||||||||
January 31 | October 31 | January 31 | |||||||||||||||||
2015 * | 2014 * | 2014 * | |||||||||||||||||
Marketable securities | |||||||||||||||||||
Equity fund | $ | 45 | $ | 45 | $ | 20 | |||||||||||||
Fixed income fund | 10 | ||||||||||||||||||
U.S. government debt securities | 179 | 808 | 1,113 | ||||||||||||||||
Municipal debt securities | 29 | 34 | 36 | ||||||||||||||||
Corporate debt securities | 134 | 172 | 147 | ||||||||||||||||
Mortgage-backed securities ** | 107 | 146 | 122 | ||||||||||||||||
Total marketable securities | 494 | 1,215 | 1,438 | ||||||||||||||||
Other assets | |||||||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate contracts | 478 | 319 | 329 | ||||||||||||||||
Foreign exchange contracts | 125 | 18 | 70 | ||||||||||||||||
Cross-currency interest rate contracts | 22 | 16 | 19 | ||||||||||||||||
Total assets *** | $ | 1,119 | $ | 1,568 | $ | 1,856 | |||||||||||||
Accounts payable and accrued expenses | |||||||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate contracts | $ | 80 | $ | 81 | $ | 144 | |||||||||||||
Foreign exchange contracts | 49 | 29 | 24 | ||||||||||||||||
Total liabilities | $ | 129 | $ | 110 | $ | 168 | |||||||||||||
* | All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $129 million, $741 million and $1,046 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively, and the equity fund of $45 million, $45 million and $20 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively, and the fixed income fund of $10 million at October 31, 2014. There were no transfers between Level 1 and Level 2 during the first three months of 2015 or 2014. | ||||||||||||||||||
** | Primarily issued by U.S. government sponsored enterprises. | ||||||||||||||||||
*** | Excluded from this table are the Company’s 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. | ||||||||||||||||||
The contractual maturities of debt securities at January 31, 2015 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. | |||||||||||||||||||
Amortized | Fair | ||||||||||||||||||
Cost | Value | ||||||||||||||||||
Due in one year or less | $ | 113 | $ | 113 | |||||||||||||||
Due after one through five years | 70 | 73 | |||||||||||||||||
Due after five through 10 years | 110 | 117 | |||||||||||||||||
Due after 10 years | 34 | 39 | |||||||||||||||||
Mortgage-backed securities | 103 | 107 | |||||||||||||||||
Debt securities | $ | 430 | $ | 449 | |||||||||||||||
Fair value, nonrecurring, Level 3 measurements from impairments in millions of dollars follow: | |||||||||||||||||||
Fair Value * | Losses | ||||||||||||||||||
Three Months Ended | |||||||||||||||||||
January 31 | October 31 | January 31 | January 31 | ||||||||||||||||
2015 | 2014 | 2014 | 2015 | 2014 | |||||||||||||||
Property and equipment - net | $ | 53 | $ | 26 | |||||||||||||||
Other assets | $ | 15 | |||||||||||||||||
* See financing receivables with specific allowances in Note 10 that were not significant. | |||||||||||||||||||
The fair value measurement and impairment losses shown above were the result of changes in circumstances that indicate it was probable the future cash flows would not cover the carrying amounts of certain long-lived assets. The non-cash charge of $26 million pretax and after-tax was recognized in the first quarter of 2014 in cost of sales. The impairment was associated with the Company’s John Deere Water operations, which were included in the agriculture and turf operating segment. The impairment was due to a decline in forecasted financial performance and a review of strategic options for the business, which was sold in May 2014. | |||||||||||||||||||
Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. | |||||||||||||||||||
Fair 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. In determining fair 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. | |||||||||||||||||||
The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: | |||||||||||||||||||
Marketable Securities – The portfolio of investments 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. | |||||||||||||||||||
Derivatives – The Company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency 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 collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. | |||||||||||||||||||
Property and Equipment – Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on an income approach using probability weighted cash flows of potential outcomes of the ongoing strategic option review. The inputs include estimates of the cash flow related to each of the alternatives being considered and management’s estimate of the likelihood of each alternative. | |||||||||||||||||||
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. | |||||||||||||||||||
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended | |||||||||||||
Jan. 31, 2015 | ||||||||||||||
DERIVATIVE INSTRUMENTS | ||||||||||||||
DERIVATIVE INSTRUMENTS | (16) 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 operations 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 a cash flow hedge, a fair value hedge, or remains undesignated. 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, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement. | ||||||||||||||
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 January 31, 2015, October 31, 2014 and January 31, 2014 were $2,550 million, $3,050 million and $3,600 million, respectively. The notional amounts of cross-currency interest rate contracts at January 31, 2015, October 31, 2014 and January 31, 2014 were $70 million for all periods. 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 changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as hedges were recognized currently in interest expense or other operating expenses (foreign exchange) and were not material during any periods presented. The cash flows from these contracts were recorded in operating activities in the consolidated statement of cash flows. | ||||||||||||||
The amount of loss recorded in OCI at January 31, 2015 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 $5 million after-tax. These contracts mature in up to 44 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 these receive-fixed/pay-variable interest rate contracts at January 31, 2015, October 31, 2014 and January 31, 2014 were $8,408 million, $8,798 million and $8,185 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. During the first three months of 2015 and 2014, the ineffective portions were a gain of $3 million and a loss of $2 million, 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 were as follows in millions of dollars: | ||||||||||||||
Three Months Ended | ||||||||||||||
January 31 | ||||||||||||||
2015 | 2014 | |||||||||||||
Interest rate contracts * | $ | 176 | $ | -69 | ||||||||||
Borrowings ** | -173 | 67 | ||||||||||||
* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $45 million and $36 million during the first three months of 2015 and 2014, respectively. | ||||||||||||||
** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $70 million and $59 million during the first three months of 2015 and 2014, respectively. | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||
The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (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 these interest rate swaps at January 31, 2015, October 31, 2014 and January 31, 2014 were $6,252 million, $6,317 million and $5,636 million, the foreign exchange contracts were $3,939 million, $3,524 million and $4,274 million and the cross-currency interest rate contracts were $97 million, $98 million and $86 million, respectively. At January 31, 2015, October 31, 2014 and January 31, 2014, there were also $1,502 million, $1,703 million and $1,458 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 condensed consolidated balance sheet in millions of dollars follow: | ||||||||||||||
Other Assets | January 31 | October 31 | January 31 | |||||||||||
2015 | 2014 | 2014 | ||||||||||||
Designated as hedging instruments: | ||||||||||||||
Interest rate contracts | $ | 410 | $ | 266 | $ | 283 | ||||||||
Cross-currency interest rate contracts | 12 | 13 | 15 | |||||||||||
Total designated | 422 | 279 | 298 | |||||||||||
Not designated as hedging instruments: | ||||||||||||||
Interest rate contracts | 68 | 53 | 46 | |||||||||||
Foreign exchange contracts | 125 | 18 | 70 | |||||||||||
Cross-currency interest rate contracts | 10 | 3 | 4 | |||||||||||
Total not designated | 203 | 74 | 120 | |||||||||||
Total derivatives | $ | 625 | $ | 353 | $ | 418 | ||||||||
Accounts Payable and Accrued Expenses | ||||||||||||||
Designated as hedging instruments: | ||||||||||||||
Interest rate contracts | $ | 7 | $ | 35 | $ | 95 | ||||||||
Total designated | 7 | 35 | 95 | |||||||||||
Not designated as hedging instruments: | ||||||||||||||
Interest rate contracts | 73 | 46 | 49 | |||||||||||
Foreign exchange contracts | 49 | 29 | 24 | |||||||||||
Total not designated | 122 | 75 | 73 | |||||||||||
Total derivatives | $ | 129 | $ | 110 | $ | 168 | ||||||||
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: | ||||||||||||||
Expense or | Three Months Ended | |||||||||||||
OCI | January 31 | |||||||||||||
Classification | 2015 | 2014 | ||||||||||||
Fair Value Hedges: | ||||||||||||||
Interest rate contracts | Interest | $ | 221 | $ | -33 | |||||||||
Cash Flow Hedges: | ||||||||||||||
Recognized in OCI | ||||||||||||||
(Effective Portion): | ||||||||||||||
Interest rate contracts | OCI (pretax) * | -5 | -2 | |||||||||||
Foreign exchange contracts | OCI (pretax) * | 1 | -3 | |||||||||||
Reclassified from OCI | ||||||||||||||
(Effective Portion): | ||||||||||||||
Interest rate contracts | Interest * | -3 | -4 | |||||||||||
Foreign exchange contracts | Other operating* | 1 | -5 | |||||||||||
Recognized Directly in Income | ||||||||||||||
(Ineffective Portion) | ** | ** | ||||||||||||
Not Designated as Hedges: | ||||||||||||||
Interest rate contracts | Interest * | $ | -13 | $ | 2 | |||||||||
Foreign exchange contracts | Cost of sales | 45 | 56 | |||||||||||
Foreign exchange contracts | Other operating* | 234 | 87 | |||||||||||
Total not designated | $ | 266 | $ | 145 | ||||||||||
* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. | ||||||||||||||
** The amount is 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 January 31, 2015, October 31, 2014 and January 31, 2014, was $53 million, $57 million and $114 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 follows: | ||||||||||||||
January 31, 2015 | Gross Amounts | Netting | Collateral | Net Amount | ||||||||||
Recognized | Arrangements | Received | ||||||||||||
Derivatives: | ||||||||||||||
Assets | $ | 625 | $ | -82 | $ | -1 | $ | 542 | ||||||
Liabilities | 129 | -82 | 47 | |||||||||||
October 31, 2014 | Gross Amounts | Netting | Collateral | Net Amount | ||||||||||
Recognized | Arrangements | Received | ||||||||||||
Derivatives: | ||||||||||||||
Assets | $ | 353 | $ | -76 | $ | -5 | $ | 272 | ||||||
Liabilities | 110 | -76 | 34 | |||||||||||
January 31, 2014 | Gross Amounts | Netting | Collateral | Net Amount | ||||||||||
Recognized | Arrangements | Received | ||||||||||||
Derivatives: | ||||||||||||||
Assets | $ | 418 | $ | -113 | $ | -9 | $ | 296 | ||||||
Liabilities | 168 | -113 | 55 | |||||||||||
STOCK_OPTION_AND_RESTRICTED_ST
STOCK OPTION AND RESTRICTED STOCK AWARDS | 3 Months Ended |
Jan. 31, 2015 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (17) In December 2014, the Company granted stock options to employees for the purchase of 3.0 million shares of common stock at an exercise price of $88.19 per share and a binomial lattice model fair value of $19.67 per share at the grant date. At January 31, 2015, options for 17.1 million shares were outstanding with a weighted-average exercise price of $75.35 per share. The Company also granted 209 thousand restricted stock units to employees and non-employee directors in the first three months of 2015, of which 83 thousand are subject to service based only conditions, 63 thousand are subject to performance/service based conditions and 63 thousand are subject to market/service based conditions. The fair value of the service based only units at the grant date was $88.04 per unit 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 was $81.78 per unit 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 was $113.97 per unit based on a lattice valuation model excluding dividends. At January 31, 2015, the Company was authorized to grant an additional 3.8 million shares related to stock option and restricted stock awards. |
DISPOSITION
DISPOSITION | 3 Months Ended | ||||
Jan. 31, 2015 | |||||
DISPOSITION | |||||
DISPOSITION | (18) In December 2014, the Company entered into an agreement to sell all the stock of its wholly-owned subsidiaries, John Deere Insurance Company and John Deere Risk Protection, Inc. (collectively the Crop Insurance operations) to Farmers Mutual Hail Insurance Company of Iowa. The Company is projecting to close the sale by April 2015 and does not anticipate a significant pretax or after-tax gain resulting from the sale. These operations are reflected as assets and liabilities held for sale and are included in the Company’s financial services segment. The sale is a result of the Company’s intention to invest its resources in growing its core businesses. | ||||
The carrying amounts of the major classes of assets and liabilities of the Crop Insurance operations that were classified as held for sale on the consolidated balance sheet in millions of dollars follow: | |||||
January 31, 2015 | |||||
Cash and cash equivalents | $ | 13 | |||
Marketable securities | 79 | ||||
Other receivables | 265 | ||||
Other intangible assets - net | 4 | ||||
Deferred income taxes | 4 | ||||
Other assets | 20 | ||||
Total assets held for sale | $ | 385 | |||
Account payable and accrued expenses, and Total liabilities held for sale | $ | 267 | |||
SUPPLEMENTAL_CONSOLIDATING_DAT
SUPPLEMENTAL CONSOLIDATING DATA | 3 Months Ended | |||||||||||||||||||
Jan. 31, 2015 | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA | (19) SUPPLEMENTAL CONSOLIDATING DATA | |||||||||||||||||||
STATEMENT OF INCOME | ||||||||||||||||||||
For the Three Months Ended January 31, 2015 and 2014 | ||||||||||||||||||||
(In millions of dollars) Unaudited | EQUIPMENT OPERATIONS* | FINANCIAL SERVICES | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Net Sales and Revenues | ||||||||||||||||||||
Net sales | $ | 5,605.10 | $ | 6,948.50 | ||||||||||||||||
Finance and interest income | 20.5 | 17.2 | $ | 633 | $ | 569.2 | ||||||||||||||
Other income | 160 | 150.5 | 64.9 | 64.4 | ||||||||||||||||
Total | 5,785.60 | 7,116.20 | 697.9 | 633.6 | ||||||||||||||||
Costs and Expenses | ||||||||||||||||||||
Cost of sales | 4,421.10 | 5,195.90 | ||||||||||||||||||
Research and development expenses | 333.2 | 323.7 | ||||||||||||||||||
Selling, administrative and general expenses | 540.2 | 643.2 | 121.2 | 126 | ||||||||||||||||
Interest expense | 71 | 75.3 | 122.9 | 107.8 | ||||||||||||||||
Interest compensation to Financial Services | 46 | 42.3 | ||||||||||||||||||
Other operating expenses | 39.1 | 52.5 | 221.2 | 218.3 | ||||||||||||||||
Total | 5,450.60 | 6,332.90 | 465.3 | 452.1 | ||||||||||||||||
Income of Consolidated Group before Income Taxes | 335 | 783.3 | 232.6 | 181.5 | ||||||||||||||||
Provision for income taxes | 94.3 | 240.3 | 76.2 | 40.1 | ||||||||||||||||
Income of Consolidated Group | 240.7 | 543 | 156.4 | 141.4 | ||||||||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||||||||||||||||||
Financial Services | 156.8 | 142.2 | 0.4 | 0.8 | ||||||||||||||||
Other | -10.6 | -3.9 | ||||||||||||||||||
Total | 146.2 | 138.3 | 0.4 | 0.8 | ||||||||||||||||
Net Income | 386.9 | 681.3 | 156.8 | 142.2 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 | ||||||||||||||||||
Net Income Attributable to Deere & Company | $ | 386.8 | $ | 681.1 | $ | 156.8 | $ | 142.2 | ||||||||||||
* Deere & Company with Financial Services on the equity basis. | ||||||||||||||||||||
The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) | ||||||||||||||||||||
CONDENSED BALANCE SHEET | EQUIPMENT OPERATIONS* | FINANCIAL SERVICES | ||||||||||||||||||
(In millions of dollars) Unaudited | ||||||||||||||||||||
January 31 | October 31 | January 31 | January 31 | October 31 | January 31 | |||||||||||||||
2015 | 2014 | 2014 | 2015 | 2014 | 2014 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 2,844.40 | $ | 2,569.20 | $ | 2,659.70 | $ | 1,130.40 | $ | 1,217.80 | $ | 529 | ||||||||
Marketable securities | 100 | 700.4 | 1,008.30 | 393.8 | 514.7 | 430.2 | ||||||||||||||
Receivables from unconsolidated subsidiaries and affiliates | 2,592.90 | 3,663.90 | 3,334.40 | |||||||||||||||||
Trade accounts and notes receivable - net | 547.5 | 706 | 848.3 | 3,847.20 | 3,554.40 | 3,827.90 | ||||||||||||||
Financing receivables - net | 8.7 | 18.5 | 9.1 | 25,797.20 | 27,403.70 | 25,233.20 | ||||||||||||||
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 | |||||||||||||||||
Other receivables | 863.9 | 848 | 842 | 82.6 | 659 | 342.3 | ||||||||||||||
Equipment on operating leases - net | 3,834.60 | 4,015.50 | 3,026.00 | |||||||||||||||||
Inventories | 4,527.10 | 4,209.70 | 5,554.60 | |||||||||||||||||
Property and equipment - net | 5,293.40 | 5,522.50 | 5,294.00 | 54.1 | 55.3 | 57 | ||||||||||||||
Investments in unconsolidated subsidiaries and affiliates | 4,997.00 | 5,106.50 | 4,764.40 | 10.2 | 10.9 | 10.9 | ||||||||||||||
Goodwill | 741.3 | 791.2 | 834.6 | |||||||||||||||||
Other intangible assets - net | 62.3 | 64.8 | 70.6 | 4 | 4 | |||||||||||||||
Retirement benefits | 283.8 | 263.5 | 548.3 | 30.9 | 32.9 | 36.8 | ||||||||||||||
Deferred income taxes | 2,923.20 | 2,981.90 | 2,563.30 | 68.7 | 64.9 | 65.8 | ||||||||||||||
Other assets | 926.8 | 850.6 | 702.4 | 847.7 | 648.2 | 644.1 | ||||||||||||||
Assets held for sale | 384.9 | |||||||||||||||||||
Total Assets | $ | 26,712.30 | $ | 28,296.70 | $ | 29,034.00 | $ | 40,375.60 | $ | 42,783.60 | $ | 37,698.10 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Short-term borrowings | $ | 1,079.20 | $ | 434.1 | $ | 1,759.60 | $ | 7,543.50 | $ | 7,585.10 | $ | 6,897.70 | ||||||||
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 | |||||||||||||||||
Payables to unconsolidated subsidiaries and affiliates | 119.2 | 101 | 89.1 | 2,565.60 | 3,633.70 | 3,299.20 | ||||||||||||||
Accounts payable and accrued expenses | 6,146.20 | 7,518.40 | 6,678.60 | 1,363.20 | 2,027.00 | 1,640.00 | ||||||||||||||
Deferred income taxes | 79.7 | 87.1 | 81.3 | 474.9 | 344.1 | 379.2 | ||||||||||||||
Long-term borrowings | 4,622.00 | 4,642.50 | 4,828.20 | 19,484.70 | 19,738.20 | 17,437.00 | ||||||||||||||
Retirement benefits and other liabilities | 6,417.20 | 6,448.10 | 5,339.40 | 83.4 | 82.8 | 76.4 | ||||||||||||||
Liabilities held for sale | 266.8 | |||||||||||||||||||
Total liabilities | 18,463.50 | 19,231.20 | 18,776.20 | 35,670.00 | 37,969.40 | 33,220.30 | ||||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||||||||
Common stock, $1 par value (issued shares at January 31, 2015 — 536,431,204) | 3,714.00 | 3,675.40 | 3,571.30 | 2,030.80 | 2,023.10 | 1,992.80 | ||||||||||||||
Common stock in treasury | -13,408.20 | -12,834.20 | -10,643.10 | |||||||||||||||||
Retained earnings | 22,185.20 | 22,004.40 | 20,136.90 | 2,816.80 | 2,811.80 | 2,479.50 | ||||||||||||||
Accumulated other comprehensive income (loss) | -4,245.00 | -3,783.00 | -2,809.40 | -142 | -20.7 | 5.5 | ||||||||||||||
Total Deere & Company stockholders’ equity | 8,246.00 | 9,062.60 | 10,255.70 | 4,705.60 | 4,814.20 | 4,477.80 | ||||||||||||||
Noncontrolling interests | 2.8 | 2.9 | 2.1 | |||||||||||||||||
Total stockholders’ equity | 8,248.80 | 9,065.50 | 10,257.80 | 4,705.60 | 4,814.20 | 4,477.80 | ||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 26,712.30 | $ | 28,296.70 | $ | 29,034.00 | $ | 40,375.60 | $ | 42,783.60 | $ | 37,698.10 | ||||||||
* Deere & Company with Financial Services on the equity basis. | ||||||||||||||||||||
The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) | ||||||||||||||||||||
STATEMENT OF CASH FLOWS | ||||||||||||||||||||
For the Three Months Ended January 31, 2015 and 2014 | ||||||||||||||||||||
(In millions of dollars) Unaudited | EQUIPMENT OPERATIONS* | FINANCIAL SERVICES | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||
Net income | $ | 386.9 | $ | 681.3 | $ | 156.8 | $ | 142.2 | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||||||||||||||
Provision (credit) for credit losses | -0.4 | 0.1 | 1.4 | 2.4 | ||||||||||||||||
Provision for depreciation and amortization | 209.8 | 229.7 | 161.2 | 136.3 | ||||||||||||||||
Impairment charges | 26.3 | |||||||||||||||||||
Undistributed earnings of unconsolidated subsidiariesand affiliates | 5.3 | -138.4 | -0.4 | (.8 | ) | |||||||||||||||
Provision (credit) for deferred income taxes | 55.8 | -3.8 | 120.3 | (4.7 | ) | |||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||
Trade receivables | 109.2 | 167 | ||||||||||||||||||
Insurance receivables | 256.5 | 101.9 | ||||||||||||||||||
Inventories | -508.1 | -721.1 | ||||||||||||||||||
Accounts payable and accrued expenses | -1,082.20 | -1,169.70 | -282.9 | (117.0 | ) | |||||||||||||||
Accrued income taxes payable/receivable | -182.7 | 124.5 | -2.8 | 13 | ||||||||||||||||
Retirement benefits | 80.8 | 49.7 | 3.6 | 3.7 | ||||||||||||||||
Other | 108.5 | 36.8 | 11.8 | (9.2 | ) | |||||||||||||||
Net cash provided by (used for) operating activities | -817.1 | -717.6 | 425.5 | 267.8 | ||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||
Collections of receivables (excluding trade and wholesale) | 5,038.20 | 5,008.50 | ||||||||||||||||||
Proceeds from maturities and sales of marketable securities | 600 | 400 | 73.4 | 3.6 | ||||||||||||||||
Proceeds from sales of equipment on operating leases | 242.1 | 276.4 | ||||||||||||||||||
Proceeds from sales of businesses, net of cash sold | 303.7 | |||||||||||||||||||
Cost of receivables acquired (excluding trade and wholesale) | -3,936.70 | (4,529.1 | ) | |||||||||||||||||
Purchases of marketable securities | -203.7 | -19.3 | (18.7 | ) | ||||||||||||||||
Purchases of property and equipment | -183.6 | -250.5 | -0.4 | (.2 | ) | |||||||||||||||
Cost of equipment on operating leases acquired | -429.2 | (407.9 | ) | |||||||||||||||||
Decrease (increase) in trade and wholesale receivables | 80.9 | (149.0 | ) | |||||||||||||||||
Other | -23.1 | -44.3 | -31.8 | (48.4 | ) | |||||||||||||||
Net cash provided by investing activities | 393.3 | 205.2 | 1,017.20 | 135.2 | ||||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Increase (decrease) in total short-term borrowings | 707.2 | 703.1 | -497.4 | (1,439.8 | ) | |||||||||||||||
Change in intercompany receivables/payables | 873.6 | 79.2 | -873.6 | (79.2 | ) | |||||||||||||||
Proceeds from long-term borrowings | 1.5 | 6 | 1,226.30 | 2,235.10 | ||||||||||||||||
Payments of long-term borrowings | -16.2 | -15.9 | -1,218.10 | (1,084.1 | ) | |||||||||||||||
Proceeds from issuance of common stock | 44.7 | 54.3 | ||||||||||||||||||
Repurchases of common stock | -604.7 | -477.3 | ||||||||||||||||||
Dividends paid | -209.9 | -192.5 | -151.6 | |||||||||||||||||
Excess tax benefits from share-based compensation | 6.3 | 14.6 | ||||||||||||||||||
Other | -16.6 | -6 | 2.1 | 29.5 | ||||||||||||||||
Net cash provided by (used for) financing activities | 785.9 | 165.5 | -1,512.30 | (338.5 | ) | |||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -86.9 | -16.7 | -17.8 | (16.3 | ) | |||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 275.2 | -363.6 | -87.4 | 48.2 | ||||||||||||||||
Cash and Cash Equivalents at Beginning of Period | 2,569.20 | 3,023.30 | 1,217.80 | 480.8 | ||||||||||||||||
Cash and Cash Equivalents at End of Period | $ | 2,844.40 | $ | 2,659.70 | $ | 1,130.40 | $ | 529 | ||||||||||||
* Deere & Company with Financial Services on the equity basis. | ||||||||||||||||||||
The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. | ||||||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 3 Months Ended |
Jan. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
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. |
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, if any, 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 and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. |
Product Warranties | The Company generally determines its total 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. |
Extended Product Warranty, Policy | The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. |
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. In determining fair 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. |
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 operations 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 a cash flow hedge, a fair value hedge, or remains undesignated. 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, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement. |
OTHER_COMPREHENSIVE_INCOME_ITE1
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 3 Months Ended | ||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||
OTHER COMPREHENSIVE INCOME ITEMS | |||||||||||||||||
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow: | ||||||||||||||||
Retirement | Cumulative | Unrealized | Unrealized | Total | |||||||||||||
Benefits | Translation | Gain (Loss) | Gain (Loss) | Accumulated | |||||||||||||
Adjustment | Adjustment | On | on | Other | |||||||||||||
Derivatives | Investments | Comprehensive | |||||||||||||||
Income (Loss) | |||||||||||||||||
Balance October 31, 2014 | $ | -3,493 | $ | -303 | $ | $ | 13 | $ | -3,783 | ||||||||
Other comprehensive income (loss) items before reclassification | -510 | -3 | 9 | -504 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 42 | 2 | -2 | 42 | |||||||||||||
Net current period other comprehensive income (loss) | 42 | -510 | -1 | 7 | -462 | ||||||||||||
Balance January 31, 2015 | $ | -3,451 | $ | -813 | $ | -1 | $ | 20 | $ | -4,245 | |||||||
Retirement | Cumulative | Unrealized | Unrealized | Total | |||||||||||||
Benefits | Translation | Gain (Loss) | Gain (Loss) | Accumulated | |||||||||||||
Adjustment | Adjustment | On | on | Other | |||||||||||||
Derivatives | Investments | Comprehensive | |||||||||||||||
Income (Loss) | |||||||||||||||||
Balance October 31, 2013 | $ | -2,809 | $ | 113 | $ | -3 | $ | 6 | $ | -2,693 | |||||||
Other comprehensive income (loss) items before reclassification | 12 | -168 | -3 | -1 | -160 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | 38 | 6 | 44 | ||||||||||||||
Net current period other comprehensive income (loss) | 50 | -168 | 3 | -1 | -116 | ||||||||||||
Balance January 31, 2014 | $ | -2,759 | $ | -55 | $ | 5 | $ | -2,809 | |||||||||
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: | ||||||||||||||||
Three Months Ended January 31, 2015 | Before | Tax | After | ||||||||||||||
Tax | (Expense) | Tax | |||||||||||||||
Amount | Credit | Amount | |||||||||||||||
Cumulative translation adjustment: | $ | (508 | ) | $ | (2 | ) | $ | (510 | ) | ||||||||
Unrealized gain (loss) on derivatives: | |||||||||||||||||
Unrealized hedging (loss) | (4 | ) | 1 | (3 | ) | ||||||||||||
Reclassification of realized (gain) loss to: | |||||||||||||||||
Interest rate contracts — Interest expense | 3 | 3 | |||||||||||||||
Foreign exchange contracts — Other operating expense | (1 | ) | (1 | ) | |||||||||||||
Net unrealized (loss) on derivatives | (2 | ) | 1 | (1 | ) | ||||||||||||
Unrealized gain (loss) on investments: | |||||||||||||||||
Unrealized holding gain | 13 | (4 | ) | 9 | |||||||||||||
Reclassification of realized (gain) — Other income | (2 | ) | (2 | ) | |||||||||||||
Net unrealized gain on investments | 11 | (4 | ) | 7 | |||||||||||||
Retirement benefits adjustment: | |||||||||||||||||
Pensions | |||||||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 55 | (20 | ) | 35 | |||||||||||||
Prior service cost | 6 | (2 | ) | 4 | |||||||||||||
Settlements/curtailments | 1 | 1 | |||||||||||||||
Health care and life insurance | |||||||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 23 | (9 | ) | 14 | |||||||||||||
Prior service (credit) | (19 | ) | 7 | (12 | ) | ||||||||||||
Net unrealized gain on retirement benefits adjustments | 66 | (24 | ) | 42 | |||||||||||||
Total other comprehensive income (loss) | $ | (433 | ) | $ | (29 | ) | $ | (462 | ) | ||||||||
* These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. | |||||||||||||||||
Three Months Ended January 31, 2014 | Before | Tax | After | ||||||||||||||
Tax | (Expense) | Tax | |||||||||||||||
Amount | Credit | Amount | |||||||||||||||
Cumulative translation adjustment: | $ | (169 | ) | $ | 1 | $ | (168 | ) | |||||||||
Unrealized gain (loss) on derivatives: | |||||||||||||||||
Unrealized hedging (loss) | (5 | ) | 2 | (3 | ) | ||||||||||||
Reclassification of realized loss to: | |||||||||||||||||
Interest rate contracts — Interest expense | 4 | (1 | ) | 3 | |||||||||||||
Foreign exchange contracts — Other operating expense | 5 | (2 | ) | 3 | |||||||||||||
Net unrealized gain on derivatives | 4 | (1 | ) | 3 | |||||||||||||
Unrealized gain (loss) on investments: | |||||||||||||||||
Unrealized holding (loss) | (2 | ) | 1 | (1 | ) | ||||||||||||
Net unrealized (loss) on investments | (2 | ) | 1 | (1 | ) | ||||||||||||
Retirement benefits adjustment: | |||||||||||||||||
Pensions | |||||||||||||||||
Net actuarial gain | 19 | (7 | ) | 12 | |||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 43 | (15 | ) | 28 | |||||||||||||
Prior service cost | 6 | (2 | ) | 4 | |||||||||||||
Settlements/curtailments | 2 | (1 | ) | 1 | |||||||||||||
Health care and life insurance | |||||||||||||||||
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * | |||||||||||||||||
Actuarial loss | 9 | (3 | ) | 6 | |||||||||||||
Prior service (credit) | (1 | ) | (1 | ) | |||||||||||||
Net unrealized gain on retirement benefits adjustments | 78 | (28 | ) | 50 | |||||||||||||
Total other comprehensive income (loss) | $ | (89 | ) | $ | (27 | ) | $ | (116 | ) | ||||||||
* These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. |
DIVIDENDS_DECLARED_AND_PAID_Ta
DIVIDENDS DECLARED AND PAID (Tables) | 3 Months Ended | |||||||
Jan. 31, 2015 | ||||||||
DIVIDENDS DECLARED AND PAID | ||||||||
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: | |||||||
Three Months Ended | ||||||||
January 31 | ||||||||
2015 | 2014 | |||||||
Dividends declared | $ | 0.6 | $ | 0.51 | ||||
Dividends paid | $ | 0.6 | $ | 0.51 | ||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | |||||||||
Jan. 31, 2015 | ||||||||||
EARNINGS PER SHARE | ||||||||||
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: | |||||||||
Three Months Ended | ||||||||||
January 31 | ||||||||||
2015 | 2014 | |||||||||
Net income attributable to Deere & Company | $ | 386.8 | $ | 681.1 | ||||||
Less income allocable to participating securities | 0.1 | 0.2 | ||||||||
Income allocable to common stock | $ | 386.7 | $ | 680.9 | ||||||
Average shares outstanding | 343.1 | 371.9 | ||||||||
Basic per share | $ | 1.13 | $ | 1.83 | ||||||
Average shares outstanding | 343.1 | 371.9 | ||||||||
Effect of dilutive share-based compensation | 2.6 | 3.5 | ||||||||
Total potential shares outstanding | 345.7 | 375.4 | ||||||||
Diluted per share | $ | 1.12 | $ | 1.81 | ||||||
PENSION_AND_OTHER_POSTRETIREME1
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended | |||||||
Jan. 31, 2015 | ||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | ||||||||
Components of Pension and Postretirement Benefit Costs | The worldwide components of net periodic pension cost consisted of the following in millions of dollars: | |||||||
Three Months Ended | ||||||||
January 31 | ||||||||
2015 | 2014 | |||||||
Service cost | $ | 73 | $ | 61 | ||||
Interest cost | 119 | 119 | ||||||
Expected return on plan assets | -193 | -193 | ||||||
Amortization of actuarial loss | 55 | 43 | ||||||
Amortization of prior service cost | 6 | 6 | ||||||
Settlements/curtailments | 1 | 2 | ||||||
Net cost | $ | 61 | $ | 38 | ||||
The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars: | ||||||||
Three Months Ended | ||||||||
January 31 | ||||||||
2015 | 2014 | |||||||
Service cost | $ | 11 | $ | 11 | ||||
Interest cost | 65 | 66 | ||||||
Expected return on plan assets | -14 | -18 | ||||||
Amortization of actuarial loss | 23 | 9 | ||||||
Amortization of prior service credit | -19 | -1 | ||||||
Net cost | $ | 66 | $ | 67 | ||||
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 3 Months Ended | |||||||||
Jan. 31, 2015 | ||||||||||
SEGMENT REPORTING | ||||||||||
Schedule of Segment Reporting Information by Segment | Worldwide net sales and revenues, operating profit and identifiable assets by segment in millions of dollars follow: | |||||||||
Three Months Ended January 31 | ||||||||||
% | ||||||||||
2015 | 2014 | Change | ||||||||
Net sales and revenues: | ||||||||||
Agriculture and turf | $ | 4,081 | $ | 5,596 | -27 | |||||
Construction and forestry | 1,524 | 1,353 | 13 | |||||||
Total net sales | 5,605 | 6,949 | -19 | |||||||
Financial services | 648 | 587 | 10 | |||||||
Other revenues | 130 | 118 | 10 | |||||||
Total net sales and revenues | $ | 6,383 | $ | 7,654 | -17 | |||||
Operating profit: * | ||||||||||
Agriculture and turf | $ | 268 | $ | 797 | -66 | |||||
Construction and forestry | 146 | 94 | 55 | |||||||
Financial services | 233 | 182 | 28 | |||||||
Total operating profit | 647 | 1,073 | -40 | |||||||
Reconciling items ** | -89 | -112 | -21 | |||||||
Income taxes | -171 | -280 | -39 | |||||||
Net income attributable to Deere & Company | $ | 387 | $ | 681 | -43 | |||||
Intersegment sales and revenues: | ||||||||||
Agriculture and turf net sales | $ | 13 | $ | 20 | -35 | |||||
Construction and forestry net sales | 1 | |||||||||
Financial services | 50 | 46 | 9 | |||||||
Equipment operations outside the U.S. and Canada: | ||||||||||
Net sales | $ | 1,873 | $ | 2,608 | -28 | |||||
Operating profit | 77 | 211 | -64 | |||||||
January 31 | October 31 | |||||||||
2015 | 2014 | |||||||||
Identifiable assets: | ||||||||||
Agriculture and turf | $ | 9,354 | $ | 9,442 | -1 | |||||
Construction and forestry | 3,332 | 3,405 | -2 | |||||||
Financial services | 40,376 | 42,784 | -6 | |||||||
Corporate | 5,228 | 5,705 | -8 | |||||||
Total assets | $ | 58,290 | $ | 61,336 | -5 | |||||
* Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. | ||||||||||
** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses and net income attributable to noncontrolling interests. | ||||||||||
FINANCING_RECEIVABLES_Tables
FINANCING RECEIVABLES (Tables) | 3 Months Ended | |||||||||||||||||
Jan. 31, 2015 | ||||||||||||||||||
Financing Receivables | ||||||||||||||||||
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 in millions of dollars follows: | |||||||||||||||||
January 31, 2015 | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days | Total | |||||||||||||||
Past Due | Past Due | or Greater | Past Due | |||||||||||||||
Past Due | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 122 | $ | 41 | $ | 40 | $ | 203 | ||||||||||
Construction and forestry | 59 | 25 | 11 | 95 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 32 | 10 | 3 | 45 | ||||||||||||||
Construction and forestry | 16 | 6 | 3 | 25 | ||||||||||||||
Total | $ | 229 | $ | 82 | $ | 57 | $ | 368 | ||||||||||
Total | Total | Current | Total | |||||||||||||||
Past Due | Non- | Financing | ||||||||||||||||
Performing | Receivables | |||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 203 | $ | 102 | $ | 19,027 | $ | 19,332 | ||||||||||
Construction and forestry | 95 | 12 | 2,529 | 2,636 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 45 | 17 | 6,791 | 6,853 | ||||||||||||||
Construction and forestry | 25 | 5 | 1,016 | 1,046 | ||||||||||||||
Total | $ | 368 | $ | 136 | $ | 29,363 | 29,867 | |||||||||||
Less allowance for credit losses | 168 | |||||||||||||||||
Total financing receivables - net | $ | 29,699 | ||||||||||||||||
October 31, 2014 | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days | Total | |||||||||||||||
Past Due | Past Due | or Greater | Past Due | |||||||||||||||
Past Due | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 93 | $ | 34 | $ | 28 | $ | 155 | ||||||||||
Construction and forestry | 54 | 16 | 7 | 77 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 23 | 12 | 2 | 37 | ||||||||||||||
Construction and forestry | 12 | 3 | 4 | 19 | ||||||||||||||
Total | $ | 182 | $ | 65 | $ | 41 | $ | 288 | ||||||||||
Total | Total | Current | Total | |||||||||||||||
Past Due | Non- | Financing | ||||||||||||||||
Performing | Receivables | |||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 155 | $ | 107 | $ | 19,966 | $ | 20,228 | ||||||||||
Construction and forestry | 77 | 17 | 2,462 | 2,556 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 37 | 15 | 8,208 | 8,260 | ||||||||||||||
Construction and forestry | 19 | 2 | 1,134 | 1,155 | ||||||||||||||
Total | $ | 288 | $ | 141 | $ | 31,770 | 32,199 | |||||||||||
Less allowance for credit losses | 175 | |||||||||||||||||
Total financing receivables - net | $ | 32,024 | ||||||||||||||||
January 31, 2014 | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days | Total | |||||||||||||||
Past Due | Past Due | or Greater | Past Due | |||||||||||||||
Past Due | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 103 | $ | 39 | $ | 26 | $ | 168 | ||||||||||
Construction and forestry | 51 | 19 | 10 | 80 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 28 | 10 | 4 | 42 | ||||||||||||||
Construction and forestry | 12 | 4 | 3 | 19 | ||||||||||||||
Total | $ | 194 | $ | 72 | $ | 43 | $ | 309 | ||||||||||
Total | Total | Current | Total | |||||||||||||||
Past Due | Non-Performing | Financing | ||||||||||||||||
Receivables | ||||||||||||||||||
Retail Notes: | ||||||||||||||||||
Agriculture and turf | $ | 168 | $ | 106 | $ | 18,802 | $ | 19,076 | ||||||||||
Construction and forestry | 80 | 14 | 2,017 | 2,111 | ||||||||||||||
Other: | ||||||||||||||||||
Agriculture and turf | 42 | 13 | 6,614 | 6,669 | ||||||||||||||
Construction and forestry | 19 | 3 | 1,022 | 1,044 | ||||||||||||||
Total | $ | 309 | $ | 136 | $ | 28,455 | 28,900 | |||||||||||
Less allowance for credit losses | 167 | |||||||||||||||||
Total financing receivables - net | $ | 28,733 | ||||||||||||||||
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 in millions of dollars during the periods follows: | |||||||||||||||||
Three Months Ended | ||||||||||||||||||
January 31, 2015 | ||||||||||||||||||
Retail | Revolving | Other | Total | |||||||||||||||
Notes | Charge | |||||||||||||||||
Accounts | ||||||||||||||||||
Allowance: | ||||||||||||||||||
Beginning of period balance | $ | 109 | $ | 41 | $ | 25 | $ | 175 | ||||||||||
Provision | 1 | 1 | ||||||||||||||||
Write-offs | -3 | -4 | -7 | |||||||||||||||
Recoveries | 2 | 4 | 6 | |||||||||||||||
Translation adjustments | -5 | -2 | -7 | |||||||||||||||
End of period balance * | $ | 104 | $ | 41 | $ | 23 | $ | 168 | ||||||||||
Financing receivables: | ||||||||||||||||||
End of period balance | $ | 21,968 | $ | 1,882 | $ | 6,017 | $ | 29,867 | ||||||||||
Balance individually evaluated ** | $ | 23 | $ | 1 | $ | 1 | $ | 25 | ||||||||||
Three Months Ended | ||||||||||||||||||
January 31, 2014 | ||||||||||||||||||
Allowance: | ||||||||||||||||||
Beginning of period balance | $ | 101 | $ | 41 | $ | 31 | $ | 173 | ||||||||||
Provision | 1 | 1 | 2 | |||||||||||||||
Write-offs | -3 | -5 | -8 | |||||||||||||||
Recoveries | 2 | 3 | 5 | |||||||||||||||
Translation adjustments | -4 | -1 | -5 | |||||||||||||||
End of period balance * | $ | 97 | $ | 40 | $ | 30 | $ | 167 | ||||||||||
Financing receivables: | ||||||||||||||||||
End of period balance | $ | 21,187 | $ | 1,801 | $ | 5,912 | $ | 28,900 | ||||||||||
Balance individually evaluated ** | $ | 14 | $ | 26 | $ | 40 | ||||||||||||
* Individual allowances were not significant. | ||||||||||||||||||
** Remainder is collectively evaluated. | ||||||||||||||||||
Analysis of the Impaired Financing Receivables | An analysis of the impaired financing receivables in millions of dollars follows: | |||||||||||||||||
Recorded | Unpaid | Specific | Average | |||||||||||||||
Investment | Principal | Allowance | Recorded | |||||||||||||||
Balance | Investment | |||||||||||||||||
January 31, 2015 * | ||||||||||||||||||
Receivables with specific allowance ** | $ | 6 | $ | 6 | $ | 2 | $ | 7 | ||||||||||
Receivables without a specific allowance ** | 6 | 5 | 6 | |||||||||||||||
Total | $ | 12 | $ | 11 | $ | 2 | $ | 13 | ||||||||||
Agriculture and turf | $ | 10 | $ | 10 | $ | 2 | $ | 11 | ||||||||||
Construction and forestry | $ | 2 | $ | 1 | $ | 2 | ||||||||||||
October 31, 2014 * | ||||||||||||||||||
Receivables with specific allowance ** | $ | 9 | $ | 9 | $ | 2 | $ | 10 | ||||||||||
Receivables without a specific allowance ** | 6 | 6 | 7 | |||||||||||||||
Total | $ | 15 | $ | 15 | $ | 2 | $ | 17 | ||||||||||
Agriculture and turf | $ | 12 | $ | 12 | $ | 2 | $ | 13 | ||||||||||
Construction and forestry | $ | 3 | $ | 3 | $ | 4 | ||||||||||||
January 31, 2014 * | ||||||||||||||||||
Receivables with specific allowance *** | $ | 18 | $ | 18 | $ | 4 | $ | 18 | ||||||||||
Receivables without a specific allowance ** | 7 | 6 | 7 | |||||||||||||||
Total | $ | 25 | $ | 24 | $ | 4 | $ | 25 | ||||||||||
Agriculture and turf | $ | 22 | $ | 22 | $ | 4 | $ | 23 | ||||||||||
Construction and forestry | $ | 3 | $ | 2 | $ | 2 | ||||||||||||
* | Finance income recognized was not material. | |||||||||||||||||
** | Primarily retail notes. | |||||||||||||||||
*** | Primarily operating loans. | |||||||||||||||||
SECURITIZATION_OF_FINANCING_RE1
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 3 Months Ended | |||||||||||||
Jan. 31, 2015 | ||||||||||||||
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 in millions of dollars: | |||||||||||||
January 31, 2015 | ||||||||||||||
Carrying value of liabilities | $ | 1,211 | ||||||||||||
Maximum exposure to loss | 1,246 | |||||||||||||
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 follow in millions of dollars: | |||||||||||||
January 31 | October 31 | January 31 | ||||||||||||
2015 | 2014 | 2014 | ||||||||||||
Financing receivables securitized (retail notes) | $ | 3,905 | $ | 4,616 | $ | 3,502 | ||||||||
Allowance for credit losses | (12 | ) | (14 | ) | (11 | ) | ||||||||
Other assets | 100 | 108 | 97 | |||||||||||
Total restricted securitized assets | $ | 3,993 | $ | 4,710 | $ | 3,588 | ||||||||
The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: | ||||||||||||||
January 31 | October 31 | January 31 | ||||||||||||
2015 | 2014 | 2014 | ||||||||||||
Short-term securitization borrowings | $ | 3,888 | $ | 4,559 | $ | 3,491 | ||||||||
Accrued interest on borrowings | 2 | 1 | 1 | |||||||||||
Total liabilities related to restricted securitized assets | $ | 3,890 | $ | 4,560 | $ | 3,492 | ||||||||
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||||||||
Jan. 31, 2015 | ||||||||||||||
INVENTORIES | ||||||||||||||
Major Classification of Inventories | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows: | |||||||||||||
January 31 | October 31 | January 31 | ||||||||||||
2015 | 2014 | 2014 | ||||||||||||
Raw materials and supplies | $ | 1,723 | $ | 1,724 | $ | 2,108 | ||||||||
Work-in-process | 697 | 654 | 847 | |||||||||||
Finished goods and parts | 3,622 | 3,360 | 4,151 | |||||||||||
Total FIFO value | 6,042 | 5,738 | 7,106 | |||||||||||
Less adjustment to LIFO value | 1,515 | 1,528 | 1,551 | |||||||||||
Inventories | $ | 4,527 | $ | 4,210 | $ | 5,555 |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 3 Months Ended | |||||||||||||||
Jan. 31, 2015 | ||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | ||||||||||||||||
Changes in Goodwill by Operating Segment | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: | |||||||||||||||
Agriculture | Construction | Total | ||||||||||||||
and Turf | and Forestry | |||||||||||||||
Balance October 31, 2013: | ||||||||||||||||
Goodwill | $ | 302 | $ | 603 | $ | 905 | ||||||||||
Less accumulated impairment losses | 60 | 60 | ||||||||||||||
Goodwill - net | 242 | 603 | 845 | |||||||||||||
Translation adjustments | (3 | ) | (7 | ) | (10 | ) | ||||||||||
Balance January 31, 2014: | ||||||||||||||||
Goodwill | 299 | 596 | 895 | |||||||||||||
Less accumulated impairment losses | 60 | 60 | ||||||||||||||
Goodwill - net | $ | 239 | $ | 596 | $ | 835 | ||||||||||
Balance October 31, 2014: | ||||||||||||||||
Goodwill | $ | 235 | $ | 556 | $ | 791 | ||||||||||
Less accumulated impairment losses * | ||||||||||||||||
Goodwill - net | 235 | 556 | 791 | |||||||||||||
Translation adjustments | (8 | ) | (42 | ) | (50 | ) | ||||||||||
Balance January 31, 2015: | ||||||||||||||||
Goodwill - net | $ | 227 | $ | 514 | $ | 741 | ||||||||||
* Accumulated impairment losses were reduced by $60 million related to the divestiture of the Water operations, which occurred in May 2014. | ||||||||||||||||
Components of Other Intangible Assets | The components of other intangible assets were as follows in millions of dollars: | |||||||||||||||
Useful Lives * | January 31 | October 31 | January 31 | |||||||||||||
Years | 2015 | 2014 | 2014 | |||||||||||||
Amortized intangible assets: | ||||||||||||||||
Customer lists and relationships | 15 | $ | 20 | $ | 20 | $ | 20 | |||||||||
Technology, patents, trademarks and other | 18 | 90 | 90 | 88 | ||||||||||||
Total at cost | 110 | 110 | 108 | |||||||||||||
Less accumulated amortization ** | 48 | 45 | 37 | |||||||||||||
Total | 62 | 65 | 71 | |||||||||||||
Unamortized intangible assets: | ||||||||||||||||
Licenses *** | 4 | 4 | ||||||||||||||
Other intangible assets - net | $ | 62 | $ | 69 | $ | 75 | ||||||||||
* Weighted-averages | ||||||||||||||||
** Accumulated amortization at January 31, 2015, October 31, 2014 and January 31, 2014 for customer lists and relationships totaled $10 million, $9 million and $8 million and technology, patents, trademarks and other totaled $38 million, $36 million and $29 million, respectively. | ||||||||||||||||
*** Licenses were reduced by $4 million related to the Crop Insurance operations reclassification to assets held for sale (see Note 18). | ||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | |||||||||
Jan. 31, 2015 | ||||||||||
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: | |||||||||
Three Months Ended | ||||||||||
January 31 | ||||||||||
2015 | 2014 | |||||||||
Beginning of period balance | $ | 1,234 | $ | 1,164 | ||||||
Payments | (178 | ) | (189 | ) | ||||||
Amortization of premiums received | (41 | ) | (28 | ) | ||||||
Accruals for warranties | 181 | 185 | ||||||||
Premiums received | 45 | 46 | ||||||||
Foreign exchange | (24 | ) | (6 | ) | ||||||
End of period balance | $ | 1,217 | $ | 1,172 | ||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | ||||||||||||||||||
Jan. 31, 2015 | |||||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||||
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow: | ||||||||||||||||||
January 31, 2015 | October 31, 2014 | January 31, 2014 | |||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | ||||||||||||||
Value | Value * | Value | Value * | Value | Value * | ||||||||||||||
Financing receivables - net | $ | 25,806 | $ | 25,733 | $ | 27,422 | $ | 27,337 | $ | 25,242 | $ | 25,129 | |||||||
Financing receivables securitized - net | 3,893 | 3,868 | 4,602 | 4,573 | 3,491 | 3,463 | |||||||||||||
Short-term securitization borrowings | 3,888 | 3,891 | 4,559 | 4,562 | 3,491 | 3,492 | |||||||||||||
Long-term borrowings due within one year: | |||||||||||||||||||
Equipment operations | $ | 216 | $ | 207 | $ | 243 | $ | 233 | $ | 815 | $ | 821 | |||||||
Financial services | 4,660 | 4,669 | 4,730 | 4,743 | 4,501 | 4,511 | |||||||||||||
Total | $ | 4,876 | $ | 4,876 | $ | 4,973 | $ | 4,976 | $ | 5,316 | $ | 5,332 | |||||||
Long-term borrowings: | |||||||||||||||||||
Equipment operations | $ | 4,622 | $ | 5,344 | $ | 4,643 | $ | 5,095 | $ | 4,828 | $ | 5,102 | |||||||
Financial services | 19,485 | 19,687 | 19,738 | 19,886 | 17,437 | 17,619 | |||||||||||||
Total | $ | 24,107 | $ | 25,031 | $ | 24,381 | $ | 24,981 | $ | 22,265 | $ | 22,721 | |||||||
* 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 fair value on a recurring basis in millions of dollars follow: | ||||||||||||||||||
January 31 | October 31 | January 31 | |||||||||||||||||
2015 * | 2014 * | 2014 * | |||||||||||||||||
Marketable securities | |||||||||||||||||||
Equity fund | $ | 45 | $ | 45 | $ | 20 | |||||||||||||
Fixed income fund | 10 | ||||||||||||||||||
U.S. government debt securities | 179 | 808 | 1,113 | ||||||||||||||||
Municipal debt securities | 29 | 34 | 36 | ||||||||||||||||
Corporate debt securities | 134 | 172 | 147 | ||||||||||||||||
Mortgage-backed securities ** | 107 | 146 | 122 | ||||||||||||||||
Total marketable securities | 494 | 1,215 | 1,438 | ||||||||||||||||
Other assets | |||||||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate contracts | 478 | 319 | 329 | ||||||||||||||||
Foreign exchange contracts | 125 | 18 | 70 | ||||||||||||||||
Cross-currency interest rate contracts | 22 | 16 | 19 | ||||||||||||||||
Total assets *** | $ | 1,119 | $ | 1,568 | $ | 1,856 | |||||||||||||
Accounts payable and accrued expenses | |||||||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate contracts | $ | 80 | $ | 81 | $ | 144 | |||||||||||||
Foreign exchange contracts | 49 | 29 | 24 | ||||||||||||||||
Total liabilities | $ | 129 | $ | 110 | $ | 168 | |||||||||||||
* | All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $129 million, $741 million and $1,046 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively, and the equity fund of $45 million, $45 million and $20 million at January 31, 2015, October 31, 2014 and January 31, 2014, respectively, and the fixed income fund of $10 million at October 31, 2014. There were no transfers between Level 1 and Level 2 during the first three months of 2015 or 2014. | ||||||||||||||||||
** | Primarily issued by U.S. government sponsored enterprises. | ||||||||||||||||||
*** | Excluded from this table are the Company’s 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. | ||||||||||||||||||
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at January 31, 2015 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. | ||||||||||||||||||
Amortized | Fair | ||||||||||||||||||
Cost | Value | ||||||||||||||||||
Due in one year or less | $ | 113 | $ | 113 | |||||||||||||||
Due after one through five years | 70 | 73 | |||||||||||||||||
Due after five through 10 years | 110 | 117 | |||||||||||||||||
Due after 10 years | 34 | 39 | |||||||||||||||||
Mortgage-backed securities | 103 | 107 | |||||||||||||||||
Debt securities | $ | 430 | $ | 449 | |||||||||||||||
Fair Value, Nonrecurring, Level 3 Measurements | Fair value, nonrecurring, Level 3 measurements from impairments in millions of dollars follow: | ||||||||||||||||||
Fair Value * | Losses | ||||||||||||||||||
Three Months Ended | |||||||||||||||||||
January 31 | October 31 | January 31 | January 31 | ||||||||||||||||
2015 | 2014 | 2014 | 2015 | 2014 | |||||||||||||||
Property and equipment - net | $ | 53 | $ | 26 | |||||||||||||||
Other assets | $ | 15 | |||||||||||||||||
* See financing receivables with specific allowances in Note 10 that were not significant. | |||||||||||||||||||
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended | |||||||||||||
Jan. 31, 2015 | ||||||||||||||
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 were as follows in millions of dollars: | |||||||||||||
Three Months Ended | ||||||||||||||
January 31 | ||||||||||||||
2015 | 2014 | |||||||||||||
Interest rate contracts * | $ | 176 | $ | -69 | ||||||||||
Borrowings ** | -173 | 67 | ||||||||||||
* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $45 million and $36 million during the first three months of 2015 and 2014, respectively. | ||||||||||||||
** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $70 million and $59 million during the first three months of 2015 and 2014, respectively. | ||||||||||||||
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow: | |||||||||||||
Other Assets | January 31 | October 31 | January 31 | |||||||||||
2015 | 2014 | 2014 | ||||||||||||
Designated as hedging instruments: | ||||||||||||||
Interest rate contracts | $ | 410 | $ | 266 | $ | 283 | ||||||||
Cross-currency interest rate contracts | 12 | 13 | 15 | |||||||||||
Total designated | 422 | 279 | 298 | |||||||||||
Not designated as hedging instruments: | ||||||||||||||
Interest rate contracts | 68 | 53 | 46 | |||||||||||
Foreign exchange contracts | 125 | 18 | 70 | |||||||||||
Cross-currency interest rate contracts | 10 | 3 | 4 | |||||||||||
Total not designated | 203 | 74 | 120 | |||||||||||
Total derivatives | $ | 625 | $ | 353 | $ | 418 | ||||||||
Accounts Payable and Accrued Expenses | ||||||||||||||
Designated as hedging instruments: | ||||||||||||||
Interest rate contracts | $ | 7 | $ | 35 | $ | 95 | ||||||||
Total designated | 7 | 35 | 95 | |||||||||||
Not designated as hedging instruments: | ||||||||||||||
Interest rate contracts | 73 | 46 | 49 | |||||||||||
Foreign exchange contracts | 49 | 29 | 24 | |||||||||||
Total not designated | 122 | 75 | 73 | |||||||||||
Total derivatives | $ | 129 | $ | 110 | $ | 168 | ||||||||
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: | |||||||||||||
Expense or | Three Months Ended | |||||||||||||
OCI | January 31 | |||||||||||||
Classification | 2015 | 2014 | ||||||||||||
Fair Value Hedges: | ||||||||||||||
Interest rate contracts | Interest | $ | 221 | $ | -33 | |||||||||
Cash Flow Hedges: | ||||||||||||||
Recognized in OCI | ||||||||||||||
(Effective Portion): | ||||||||||||||
Interest rate contracts | OCI (pretax) * | -5 | -2 | |||||||||||
Foreign exchange contracts | OCI (pretax) * | 1 | -3 | |||||||||||
Reclassified from OCI | ||||||||||||||
(Effective Portion): | ||||||||||||||
Interest rate contracts | Interest * | -3 | -4 | |||||||||||
Foreign exchange contracts | Other operating* | 1 | -5 | |||||||||||
Recognized Directly in Income | ||||||||||||||
(Ineffective Portion) | ** | ** | ||||||||||||
Not Designated as Hedges: | ||||||||||||||
Interest rate contracts | Interest * | $ | -13 | $ | 2 | |||||||||
Foreign exchange contracts | Cost of sales | 45 | 56 | |||||||||||
Foreign exchange contracts | Other operating* | 234 | 87 | |||||||||||
Total not designated | $ | 266 | $ | 145 | ||||||||||
* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. | ||||||||||||||
** The amount is not significant. | ||||||||||||||
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | 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 follows: | |||||||||||||
January 31, 2015 | Gross Amounts | Netting | Collateral | Net Amount | ||||||||||
Recognized | Arrangements | Received | ||||||||||||
Derivatives: | ||||||||||||||
Assets | $ | 625 | $ | -82 | $ | -1 | $ | 542 | ||||||
Liabilities | 129 | -82 | 47 | |||||||||||
October 31, 2014 | Gross Amounts | Netting | Collateral | Net Amount | ||||||||||
Recognized | Arrangements | Received | ||||||||||||
Derivatives: | ||||||||||||||
Assets | $ | 353 | $ | -76 | $ | -5 | $ | 272 | ||||||
Liabilities | 110 | -76 | 34 | |||||||||||
January 31, 2014 | Gross Amounts | Netting | Collateral | Net Amount | ||||||||||
Recognized | Arrangements | Received | ||||||||||||
Derivatives: | ||||||||||||||
Assets | $ | 418 | $ | -113 | $ | -9 | $ | 296 | ||||||
Liabilities | 168 | -113 | 55 | |||||||||||
DISPOSITION_Tables
DISPOSITION (Tables) | 3 Months Ended | ||||
Jan. 31, 2015 | |||||
DISPOSITION | |||||
Amounts of the Major Classes of Assets and Liabilities | The carrying amounts of the major classes of assets and liabilities of the Crop Insurance operations that were classified as held for sale on the consolidated balance sheet in millions of dollars follow: | ||||
January 31, 2015 | |||||
Cash and cash equivalents | $ | 13 | |||
Marketable securities | 79 | ||||
Other receivables | 265 | ||||
Other intangible assets - net | 4 | ||||
Deferred income taxes | 4 | ||||
Other assets | 20 | ||||
Total assets held for sale | $ | 385 | |||
Account payable and accrued expenses, and Total liabilities held for sale | $ | 267 | |||
SUPPLEMENTAL_CONSOLIDATING_DAT1
SUPPLEMENTAL CONSOLIDATING DATA (Tables) | 3 Months Ended | |||||||||||||||||||
Jan. 31, 2015 | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME | SUPPLEMENTAL CONSOLIDATING DATA | |||||||||||||||||||
STATEMENT OF INCOME | ||||||||||||||||||||
For the Three Months Ended January 31, 2015 and 2014 | ||||||||||||||||||||
(In millions of dollars) Unaudited | EQUIPMENT OPERATIONS* | FINANCIAL SERVICES | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Net Sales and Revenues | ||||||||||||||||||||
Net sales | $ | 5,605.10 | $ | 6,948.50 | ||||||||||||||||
Finance and interest income | 20.5 | 17.2 | $ | 633 | $ | 569.2 | ||||||||||||||
Other income | 160 | 150.5 | 64.9 | 64.4 | ||||||||||||||||
Total | 5,785.60 | 7,116.20 | 697.9 | 633.6 | ||||||||||||||||
Costs and Expenses | ||||||||||||||||||||
Cost of sales | 4,421.10 | 5,195.90 | ||||||||||||||||||
Research and development expenses | 333.2 | 323.7 | ||||||||||||||||||
Selling, administrative and general expenses | 540.2 | 643.2 | 121.2 | 126 | ||||||||||||||||
Interest expense | 71 | 75.3 | 122.9 | 107.8 | ||||||||||||||||
Interest compensation to Financial Services | 46 | 42.3 | ||||||||||||||||||
Other operating expenses | 39.1 | 52.5 | 221.2 | 218.3 | ||||||||||||||||
Total | 5,450.60 | 6,332.90 | 465.3 | 452.1 | ||||||||||||||||
Income of Consolidated Group before Income Taxes | 335 | 783.3 | 232.6 | 181.5 | ||||||||||||||||
Provision for income taxes | 94.3 | 240.3 | 76.2 | 40.1 | ||||||||||||||||
Income of Consolidated Group | 240.7 | 543 | 156.4 | 141.4 | ||||||||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||||||||||||||||||
Financial Services | 156.8 | 142.2 | 0.4 | 0.8 | ||||||||||||||||
Other | -10.6 | -3.9 | ||||||||||||||||||
Total | 146.2 | 138.3 | 0.4 | 0.8 | ||||||||||||||||
Net Income | 386.9 | 681.3 | 156.8 | 142.2 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 | ||||||||||||||||||
Net Income Attributable to Deere & Company | $ | 386.8 | $ | 681.1 | $ | 156.8 | $ | 142.2 | ||||||||||||
* Deere & Company with Financial Services on the equity basis. | ||||||||||||||||||||
The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. | ||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA CONDENSED BALANCE SHEET | SUPPLEMENTAL CONSOLIDATING DATA | |||||||||||||||||||
CONDENSED BALANCE SHEET | EQUIPMENT OPERATIONS* | FINANCIAL SERVICES | ||||||||||||||||||
(In millions of dollars) Unaudited | ||||||||||||||||||||
January 31 | October 31 | January 31 | January 31 | October 31 | January 31 | |||||||||||||||
2015 | 2014 | 2014 | 2015 | 2014 | 2014 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 2,844.40 | $ | 2,569.20 | $ | 2,659.70 | $ | 1,130.40 | $ | 1,217.80 | $ | 529 | ||||||||
Marketable securities | 100 | 700.4 | 1,008.30 | 393.8 | 514.7 | 430.2 | ||||||||||||||
Receivables from unconsolidated subsidiaries and affiliates | 2,592.90 | 3,663.90 | 3,334.40 | |||||||||||||||||
Trade accounts and notes receivable - net | 547.5 | 706 | 848.3 | 3,847.20 | 3,554.40 | 3,827.90 | ||||||||||||||
Financing receivables - net | 8.7 | 18.5 | 9.1 | 25,797.20 | 27,403.70 | 25,233.20 | ||||||||||||||
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 | |||||||||||||||||
Other receivables | 863.9 | 848 | 842 | 82.6 | 659 | 342.3 | ||||||||||||||
Equipment on operating leases - net | 3,834.60 | 4,015.50 | 3,026.00 | |||||||||||||||||
Inventories | 4,527.10 | 4,209.70 | 5,554.60 | |||||||||||||||||
Property and equipment - net | 5,293.40 | 5,522.50 | 5,294.00 | 54.1 | 55.3 | 57 | ||||||||||||||
Investments in unconsolidated subsidiaries and affiliates | 4,997.00 | 5,106.50 | 4,764.40 | 10.2 | 10.9 | 10.9 | ||||||||||||||
Goodwill | 741.3 | 791.2 | 834.6 | |||||||||||||||||
Other intangible assets - net | 62.3 | 64.8 | 70.6 | 4 | 4 | |||||||||||||||
Retirement benefits | 283.8 | 263.5 | 548.3 | 30.9 | 32.9 | 36.8 | ||||||||||||||
Deferred income taxes | 2,923.20 | 2,981.90 | 2,563.30 | 68.7 | 64.9 | 65.8 | ||||||||||||||
Other assets | 926.8 | 850.6 | 702.4 | 847.7 | 648.2 | 644.1 | ||||||||||||||
Assets held for sale | 384.9 | |||||||||||||||||||
Total Assets | $ | 26,712.30 | $ | 28,296.70 | $ | 29,034.00 | $ | 40,375.60 | $ | 42,783.60 | $ | 37,698.10 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Short-term borrowings | $ | 1,079.20 | $ | 434.1 | $ | 1,759.60 | $ | 7,543.50 | $ | 7,585.10 | $ | 6,897.70 | ||||||||
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 | |||||||||||||||||
Payables to unconsolidated subsidiaries and affiliates | 119.2 | 101 | 89.1 | 2,565.60 | 3,633.70 | 3,299.20 | ||||||||||||||
Accounts payable and accrued expenses | 6,146.20 | 7,518.40 | 6,678.60 | 1,363.20 | 2,027.00 | 1,640.00 | ||||||||||||||
Deferred income taxes | 79.7 | 87.1 | 81.3 | 474.9 | 344.1 | 379.2 | ||||||||||||||
Long-term borrowings | 4,622.00 | 4,642.50 | 4,828.20 | 19,484.70 | 19,738.20 | 17,437.00 | ||||||||||||||
Retirement benefits and other liabilities | 6,417.20 | 6,448.10 | 5,339.40 | 83.4 | 82.8 | 76.4 | ||||||||||||||
Liabilities held for sale | 266.8 | |||||||||||||||||||
Total liabilities | 18,463.50 | 19,231.20 | 18,776.20 | 35,670.00 | 37,969.40 | 33,220.30 | ||||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||||||||
Common stock, $1 par value (issued shares at January 31, 2015 — 536,431,204) | 3,714.00 | 3,675.40 | 3,571.30 | 2,030.80 | 2,023.10 | 1,992.80 | ||||||||||||||
Common stock in treasury | -13,408.20 | -12,834.20 | -10,643.10 | |||||||||||||||||
Retained earnings | 22,185.20 | 22,004.40 | 20,136.90 | 2,816.80 | 2,811.80 | 2,479.50 | ||||||||||||||
Accumulated other comprehensive income (loss) | -4,245.00 | -3,783.00 | -2,809.40 | -142 | -20.7 | 5.5 | ||||||||||||||
Total Deere & Company stockholders’ equity | 8,246.00 | 9,062.60 | 10,255.70 | 4,705.60 | 4,814.20 | 4,477.80 | ||||||||||||||
Noncontrolling interests | 2.8 | 2.9 | 2.1 | |||||||||||||||||
Total stockholders’ equity | 8,248.80 | 9,065.50 | 10,257.80 | 4,705.60 | 4,814.20 | 4,477.80 | ||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 26,712.30 | $ | 28,296.70 | $ | 29,034.00 | $ | 40,375.60 | $ | 42,783.60 | $ | 37,698.10 | ||||||||
* Deere & Company with Financial Services on the equity basis. | ||||||||||||||||||||
The supplemental consolidating data is presented for informational purposes. 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 | SUPPLEMENTAL CONSOLIDATING DATA | |||||||||||||||||||
STATEMENT OF CASH FLOWS | ||||||||||||||||||||
For the Three Months Ended January 31, 2015 and 2014 | ||||||||||||||||||||
(In millions of dollars) Unaudited | EQUIPMENT OPERATIONS* | FINANCIAL SERVICES | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||
Net income | $ | 386.9 | $ | 681.3 | $ | 156.8 | $ | 142.2 | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||||||||||||||
Provision (credit) for credit losses | -0.4 | 0.1 | 1.4 | 2.4 | ||||||||||||||||
Provision for depreciation and amortization | 209.8 | 229.7 | 161.2 | 136.3 | ||||||||||||||||
Impairment charges | 26.3 | |||||||||||||||||||
Undistributed earnings of unconsolidated subsidiariesand affiliates | 5.3 | -138.4 | -0.4 | (.8 | ) | |||||||||||||||
Provision (credit) for deferred income taxes | 55.8 | -3.8 | 120.3 | (4.7 | ) | |||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||
Trade receivables | 109.2 | 167 | ||||||||||||||||||
Insurance receivables | 256.5 | 101.9 | ||||||||||||||||||
Inventories | -508.1 | -721.1 | ||||||||||||||||||
Accounts payable and accrued expenses | -1,082.20 | -1,169.70 | -282.9 | (117.0 | ) | |||||||||||||||
Accrued income taxes payable/receivable | -182.7 | 124.5 | -2.8 | 13 | ||||||||||||||||
Retirement benefits | 80.8 | 49.7 | 3.6 | 3.7 | ||||||||||||||||
Other | 108.5 | 36.8 | 11.8 | (9.2 | ) | |||||||||||||||
Net cash provided by (used for) operating activities | -817.1 | -717.6 | 425.5 | 267.8 | ||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||
Collections of receivables (excluding trade and wholesale) | 5,038.20 | 5,008.50 | ||||||||||||||||||
Proceeds from maturities and sales of marketable securities | 600 | 400 | 73.4 | 3.6 | ||||||||||||||||
Proceeds from sales of equipment on operating leases | 242.1 | 276.4 | ||||||||||||||||||
Proceeds from sales of businesses, net of cash sold | 303.7 | |||||||||||||||||||
Cost of receivables acquired (excluding trade and wholesale) | -3,936.70 | (4,529.1 | ) | |||||||||||||||||
Purchases of marketable securities | -203.7 | -19.3 | (18.7 | ) | ||||||||||||||||
Purchases of property and equipment | -183.6 | -250.5 | -0.4 | (.2 | ) | |||||||||||||||
Cost of equipment on operating leases acquired | -429.2 | (407.9 | ) | |||||||||||||||||
Decrease (increase) in trade and wholesale receivables | 80.9 | (149.0 | ) | |||||||||||||||||
Other | -23.1 | -44.3 | -31.8 | (48.4 | ) | |||||||||||||||
Net cash provided by investing activities | 393.3 | 205.2 | 1,017.20 | 135.2 | ||||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Increase (decrease) in total short-term borrowings | 707.2 | 703.1 | -497.4 | (1,439.8 | ) | |||||||||||||||
Change in intercompany receivables/payables | 873.6 | 79.2 | -873.6 | (79.2 | ) | |||||||||||||||
Proceeds from long-term borrowings | 1.5 | 6 | 1,226.30 | 2,235.10 | ||||||||||||||||
Payments of long-term borrowings | -16.2 | -15.9 | -1,218.10 | (1,084.1 | ) | |||||||||||||||
Proceeds from issuance of common stock | 44.7 | 54.3 | ||||||||||||||||||
Repurchases of common stock | -604.7 | -477.3 | ||||||||||||||||||
Dividends paid | -209.9 | -192.5 | -151.6 | |||||||||||||||||
Excess tax benefits from share-based compensation | 6.3 | 14.6 | ||||||||||||||||||
Other | -16.6 | -6 | 2.1 | 29.5 | ||||||||||||||||
Net cash provided by (used for) financing activities | 785.9 | 165.5 | -1,512.30 | (338.5 | ) | |||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -86.9 | -16.7 | -17.8 | (16.3 | ) | |||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 275.2 | -363.6 | -87.4 | 48.2 | ||||||||||||||||
Cash and Cash Equivalents at Beginning of Period | 2,569.20 | 3,023.30 | 1,217.80 | 480.8 | ||||||||||||||||
Cash and Cash Equivalents at End of Period | $ | 2,844.40 | $ | 2,659.70 | $ | 1,130.40 | $ | 529 | ||||||||||||
* Deere & Company with Financial Services on the equity basis. | ||||||||||||||||||||
The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | ||
Transfer of inventory to equipment on operating leases | $96 | $116 |
Accounts payable related to purchases of property and equipment | $43 | $50 |
OTHER_COMPREHENSIVE_INCOME_ITE2
OTHER COMPREHENSIVE INCOME ITEMS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | ($3,783) | ($2,693) |
Other comprehensive income (loss) items before reclassification | -504 | -160 |
Amounts reclassified from accumulated other comprehensive income (loss) | 42 | 44 |
Net current period other comprehensive income (loss) | -462.3 | -116.3 |
Balance at the end of the period | -4,245 | -2,809.40 |
Retirement Benefits Adjustment | ||
Accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | -3,493 | -2,809 |
Other comprehensive income (loss) items before reclassification | 12 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 42 | 38 |
Net current period other comprehensive income (loss) | 42 | 50 |
Balance at the end of the period | -3,451 | -2,759 |
Cumulative Translation Adjustment | ||
Accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | -303 | 113 |
Other comprehensive income (loss) items before reclassification | -510 | -168 |
Net current period other comprehensive income (loss) | -510 | -168 |
Balance at the end of the period | -813 | -55 |
Unrealized Gain (Loss) on Derivatives | ||
Accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | -3 | |
Other comprehensive income (loss) items before reclassification | -3 | -3 |
Amounts reclassified from accumulated other comprehensive income (loss) | 2 | 6 |
Net current period other comprehensive income (loss) | -1 | 3 |
Balance at the end of the period | -1 | |
Unrealized Gain (Loss) on Investments | ||
Accumulated other comprehensive income (loss) | ||
Balance at the beginning of the period | 13 | 6 |
Other comprehensive income (loss) items before reclassification | 9 | -1 |
Amounts reclassified from accumulated other comprehensive income (loss) | -2 | |
Net current period other comprehensive income (loss) | 7 | -1 |
Balance at the end of the period | $20 | $5 |
OTHER_COMPREHENSIVE_INCOME_ITE3
OTHER COMPREHENSIVE INCOME ITEMS (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Other Comprehensive Income (Loss), Before Tax | ||
Cumulative translation adjustment, before tax | ($508) | ($169) |
Unrealized Gain (Loss) on Derivatives, Before Tax | ||
Unrealized hedging gain (loss), before tax | -4 | -5 |
Net unrealized gain (loss) on derivatives, before tax | -2 | 4 |
Unrealized Gain (Loss) on Investments, Before Tax | ||
Unrealized holding gain (loss), before tax | 13 | -2 |
Reclassification of realized (gain) - Other income, before tax | -2 | |
Net unrealized gain (loss) on investments, before tax | 11 | -2 |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Net unrealized gain (loss) on retirement benefits adjustments, before tax | 66 | 78 |
Total other comprehensive income (loss), before tax | -433 | -89 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Cumulative translation adjustment, tax (expense) credit | -2 | 1 |
Unrealized Gain (Loss) on Derivatives, Tax (Expense) Credit | ||
Unrealized hedging gain (loss), tax (expense) credit | 1 | 2 |
Net unrealized gain (loss) on derivatives, tax (expense) credit | 1 | -1 |
Unrealized Gain (Loss) on Investments, Tax (Expense) Credit | ||
Unrealized holding gain (loss), tax (expense) credit | -4 | 1 |
Net unrealized gain (loss) on investments, tax (expense) credit | -4 | 1 |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Net unrealized gain (loss) on retirement benefits adjustments, tax (expense) credit | -24 | -28 |
Total other comprehensive income (loss), tax (expense) credit | -29 | -27 |
Other Comprehensive Income (Loss), After Tax | ||
Cumulative translation adjustment, after tax | -510.4 | -168 |
Unrealized Gain (Loss) on Derivatives, After Tax | ||
Unrealized hedging gain (loss), after tax | -3 | -3 |
Net unrealized gain (loss) on derivatives, after tax | -1.5 | 2.9 |
Unrealized Gain (Loss) on Investments, After Tax | ||
Unrealized holding gain (loss), after tax | 9 | -1 |
Reclassification of realized (gain) - Other income, after tax | -2 | |
Net unrealized gain (loss) on investments, after tax | 7.3 | -1.3 |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Net unrealized gain (loss) on retirement benefits adjustments, after tax | 42.3 | 50.1 |
Other Comprehensive Income (Loss), Net of Income Taxes | -462.3 | -116.3 |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | ||
Comprehensive income (loss) attributable to noncontrolling interests | -0.2 | 0.2 |
Net income (loss) attributable to noncontrolling interests | 0.1 | 0.2 |
Cumulative translation adjustments attributable to noncontrolling interests | -0.3 | |
Pensions | ||
Retirement Benefits Adjustment, Before Tax | ||
Net actuarial gain (loss), before tax | 19 | |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Actuarial (gain) loss, before tax | 55 | 43 |
Prior service (credit) cost, before tax | 6 | 6 |
Settlements/curtailments, before tax | 1 | 2 |
Retirement Benefits Adjustment, Tax (Expense) Credit | ||
Net actuarial gain (loss), tax (expense) credit | -7 | |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Actuarial (gain) loss, tax (expense) credit | -20 | -15 |
Prior service (credit) cost, tax (expense) credit | -2 | -2 |
Settlements/curtailments, tax (expense) credit | -1 | |
Retirement Benefits Adjustment, After Tax | ||
Net actuarial gain (loss), after tax | 12 | |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Actuarial (gain) loss, after tax | 35 | 28 |
Prior service (credit) cost, after tax | 4 | 4 |
Settlements/curtailments, after tax | 1 | 1 |
Health Care and Life Insurance | ||
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Actuarial (gain) loss, before tax | 23 | 9 |
Prior service (credit) cost, before tax | -19 | -1 |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Actuarial (gain) loss, tax (expense) credit | -9 | -3 |
Prior service (credit) cost, tax (expense) credit | 7 | |
Reclassification Through Amortization of Actuarial (Gain) Loss and Prior Service (Credit) Cost to Net Income | ||
Actuarial (gain) loss, after tax | 14 | 6 |
Prior service (credit) cost, after tax | -12 | -1 |
Interest Rate Contracts | Interest Expense | ||
Unrealized Gain (Loss) on Derivatives, Before Tax | ||
Reclassification of realized (gain) loss, before tax | 3 | 4 |
Unrealized Gain (Loss) on Derivatives, Tax (Expense) Credit | ||
Reclassification of realized (gain) loss, tax (expense) credit | -1 | |
Unrealized Gain (Loss) on Derivatives, After Tax | ||
Reclassification of realized (gain) loss, after tax | 3 | 3 |
Foreign Exchange Contracts | Other Operating Expense | ||
Unrealized Gain (Loss) on Derivatives, Before Tax | ||
Reclassification of realized (gain) loss, before tax | -1 | 5 |
Unrealized Gain (Loss) on Derivatives, Tax (Expense) Credit | ||
Reclassification of realized (gain) loss, tax (expense) credit | -2 | |
Unrealized Gain (Loss) on Derivatives, After Tax | ||
Reclassification of realized (gain) loss, after tax | ($1) | $3 |
DIVIDENDS_DECLARED_AND_PAID_De
DIVIDENDS DECLARED AND PAID (Details) (USD $) | 3 Months Ended | |
Jan. 31, 2015 | Jan. 31, 2014 | |
DIVIDENDS DECLARED AND PAID | ||
Dividends declared (in dollars per share) | $0.60 | $0.51 |
Dividends paid (in dollars per share) | $0.60 | $0.51 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
EARNINGS PER SHARE | ||
Net income attributable to Deere & Company | $386.80 | $681.10 |
Less income allocable to participating securities (in dollars) | 0.1 | 0.2 |
Income allocable to common stock (in dollars) | $386.70 | $680.90 |
Average shares outstanding | 343.1 | 371.9 |
Basic (in dollars per share) | $1.13 | $1.83 |
Diluted Earnings Per Share | ||
Average shares outstanding | 343.1 | 371.9 |
Effect of dilutive share-based compensation (in shares) | 2.6 | 3.5 |
Total potential shares outstanding | 345.7 | 375.4 |
Diluted (in dollars per share) | $1.12 | $1.81 |
Antidilutive incremental shares excluded from computation of earnings per share | 3 | 2.4 |
PENSION_AND_OTHER_POSTRETIREME2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Pensions | ||
Defined Benefit Plan Disclosure | ||
Service cost | $73 | $61 |
Interest cost | 119 | 119 |
Expected return on plan assets | -193 | -193 |
Amortization of actuarial (gain) loss | 55 | 43 |
Amortization of prior service (credit) cost | 6 | 6 |
Settlements/curtailments | 1 | 2 |
Net cost | 61 | 38 |
Defined benefit plan employer contributions | 21 | |
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 54 | |
Health Care and Life Insurance | ||
Defined Benefit Plan Disclosure | ||
Service cost | 11 | 11 |
Interest cost | 65 | 66 |
Expected return on plan assets | -14 | -18 |
Amortization of actuarial (gain) loss | 23 | 9 |
Amortization of prior service (credit) cost | -19 | -1 |
Net cost | 66 | 67 |
Defined benefit plan employer contributions | 15 | |
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $11 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 |
In Millions, unless otherwise specified | ||
UNRECOGNIZED TAX BENEFITS | ||
Unrecognized tax benefits | $210 | $213 |
Unrecognized tax benefits affecting effective tax rate if recognized | $76 |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 | Oct. 31, 2014 |
Net Sales and Revenues | |||
Total net sales | $5,605.10 | $6,948.50 | |
% Change - Net sales | -19.00% | ||
Total net sales and revenues | 6,383.10 | 7,654 | |
% Change - Net sales and revenues | -17.00% | ||
Operating Profit (Loss) | |||
Total operating profit (loss) | 647 | 1,073 | |
% Change - Operating profit (loss) | -40.00% | ||
Net income attributable to Deere & Company | 386.8 | 681.1 | |
% Change - Net income (loss) attributable to Deere & Company | -43.00% | ||
Identifiable Assets | |||
Total Assets | 58,290.10 | 57,659.20 | 61,336.40 |
% Change - Identifiable assets | -5.00% | ||
Operating Segments (Other) | |||
Reconciling items | -89 | -112 | |
% Change - Reconciling items | -21.00% | ||
Income taxes | -170.5 | -280.5 | |
% Change - Income taxes | -39.00% | ||
Equipment Operations | |||
Net Sales and Revenues | |||
Total net sales | 5,605.10 | 6,948.50 | |
Total net sales and revenues | 5,785.60 | 7,116.20 | |
Operating Profit (Loss) | |||
Net income attributable to Deere & Company | 386.8 | 681.1 | |
Identifiable Assets | |||
Total Assets | 26,712.30 | 29,034 | 28,296.70 |
Operating Segments (Other) | |||
Income taxes | -94.3 | -240.3 | |
Equipment Operations | Outside U.S. and Canada: | |||
Net Sales and Revenues | |||
Total net sales | 1,873 | 2,608 | |
% Change - Net sales | -28.00% | ||
Operating Profit (Loss) | |||
Total operating profit (loss) | 77 | 211 | |
% Change - Operating profit (loss) | -64.00% | ||
Corporate | |||
Identifiable Assets | |||
Total Assets | 5,228 | 5,705 | |
% Change - Identifiable assets | -8.00% | ||
Agriculture and Turf | |||
Net Sales and Revenues | |||
Total net sales | 4,081 | 5,596 | |
% Change - Net sales | -27.00% | ||
Operating Profit (Loss) | |||
Total operating profit (loss) | 268 | 797 | |
% Change - Operating profit (loss) | -66.00% | ||
Identifiable Assets | |||
Total Assets | 9,354 | 9,442 | |
% Change - Identifiable assets | -1.00% | ||
Agriculture and Turf | Intersegment Sales and Revenue | |||
Net Sales and Revenues | |||
Total net sales and revenues | 13 | 20 | |
% Change - Net sales and revenues | -35.00% | ||
Construction and Forestry | |||
Net Sales and Revenues | |||
Total net sales | 1,524 | 1,353 | |
% Change - Net sales | 13.00% | ||
Operating Profit (Loss) | |||
Total operating profit (loss) | 146 | 94 | |
% Change - Operating profit (loss) | 55.00% | ||
Identifiable Assets | |||
Total Assets | 3,332 | 3,405 | |
% Change - Identifiable assets | -2.00% | ||
Construction and Forestry | Intersegment Sales and Revenue | |||
Net Sales and Revenues | |||
Total net sales and revenues | 1 | ||
Financial Services | |||
Net Sales and Revenues | |||
Total net sales and revenues | 648 | 587 | |
% Change - Net sales and revenues | 10.00% | ||
Operating Profit (Loss) | |||
Total operating profit (loss) | 233 | 182 | |
% Change - Operating profit (loss) | 28.00% | ||
Identifiable Assets | |||
Total Assets | 40,376 | 42,784 | |
% Change - Identifiable assets | -6.00% | ||
Financial Services | Intersegment Sales and Revenue | |||
Net Sales and Revenues | |||
Total net sales and revenues | 50 | 46 | |
% Change - Net sales and revenues | 9.00% | ||
Other | |||
Net Sales and Revenues | |||
Total net sales and revenues | $130 | $118 | |
% Change - Net sales and revenues | 10.00% |
FINANCING_RECEIVABLES_Details
FINANCING RECEIVABLES (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2013 |
FINANCING RECEIVABLES | ||||
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 suspended and the estimated uncollectible amount is written off | 120 days | |||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
30-59 Days Past Due | $229 | $182 | $194 | |
60-89 Days Past Due | 82 | 65 | 72 | |
90 Days or Greater Past Due | 57 | 41 | 43 | |
Total Past Due | 368 | 288 | 309 | |
Total Non-Performing | 136 | 141 | 136 | |
Current | 29,363 | 31,770 | 28,455 | |
Total Financing Receivables | 29,867 | 32,199 | 28,900 | |
Less allowance for credit losses | 168 | 175 | 167 | 173 |
Total financing receivables - net | 29,699 | 32,024 | 28,733 | |
Retail Notes | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Financing Receivables | 21,968 | 21,187 | ||
Less allowance for credit losses | 104 | 109 | 97 | 101 |
Retail Notes | Agriculture and Turf | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
30-59 Days Past Due | 122 | 93 | 103 | |
60-89 Days Past Due | 41 | 34 | 39 | |
90 Days or Greater Past Due | 40 | 28 | 26 | |
Total Past Due | 203 | 155 | 168 | |
Total Non-Performing | 102 | 107 | 106 | |
Current | 19,027 | 19,966 | 18,802 | |
Total Financing Receivables | 19,332 | 20,228 | 19,076 | |
Retail Notes | Construction and Forestry | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
30-59 Days Past Due | 59 | 54 | 51 | |
60-89 Days Past Due | 25 | 16 | 19 | |
90 Days or Greater Past Due | 11 | 7 | 10 | |
Total Past Due | 95 | 77 | 80 | |
Total Non-Performing | 12 | 17 | 14 | |
Current | 2,529 | 2,462 | 2,017 | |
Total Financing Receivables | 2,636 | 2,556 | 2,111 | |
Other Financing Receivables | Agriculture and Turf | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
30-59 Days Past Due | 32 | 23 | 28 | |
60-89 Days Past Due | 10 | 12 | 10 | |
90 Days or Greater Past Due | 3 | 2 | 4 | |
Total Past Due | 45 | 37 | 42 | |
Total Non-Performing | 17 | 15 | 13 | |
Current | 6,791 | 8,208 | 6,614 | |
Total Financing Receivables | 6,853 | 8,260 | 6,669 | |
Other Financing Receivables | Construction and Forestry | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
30-59 Days Past Due | 16 | 12 | 12 | |
60-89 Days Past Due | 6 | 3 | 4 | |
90 Days or Greater Past Due | 3 | 4 | 3 | |
Total Past Due | 25 | 19 | 19 | |
Total Non-Performing | 5 | 2 | 3 | |
Current | 1,016 | 1,134 | 1,022 | |
Total Financing Receivables | $1,046 | $1,155 | $1,044 |
FINANCING_RECEIVABLES_Details_
FINANCING RECEIVABLES (Details 2) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 | Oct. 31, 2014 |
Allowance: | |||
Beginning of period balance | $175 | $173 | |
Provision (credit) | 1 | 2 | |
Write-offs | -7 | -8 | |
Recoveries | 6 | 5 | |
Translation adjustments | -7 | -5 | |
End of period balance | 168 | 167 | |
Financing receivables: | |||
End of period balance | 29,867 | 28,900 | 32,199 |
Balance individually evaluated | 25 | 40 | |
Retail Notes | |||
Allowance: | |||
Beginning of period balance | 109 | 101 | |
Provision (credit) | 1 | 1 | |
Write-offs | -3 | -3 | |
Recoveries | 2 | 2 | |
Translation adjustments | -5 | -4 | |
End of period balance | 104 | 97 | |
Financing receivables: | |||
End of period balance | 21,968 | 21,187 | |
Balance individually evaluated | 23 | 14 | |
Revolving Charge Accounts | |||
Allowance: | |||
Beginning of period balance | 41 | 41 | |
Provision (credit) | 1 | ||
Write-offs | -4 | -5 | |
Recoveries | 4 | 3 | |
End of period balance | 41 | 40 | |
Financing receivables: | |||
End of period balance | 1,882 | 1,801 | |
Balance individually evaluated | 1 | ||
Other Financing Receivables | |||
Allowance: | |||
Beginning of period balance | 25 | 31 | |
Translation adjustments | -2 | -1 | |
End of period balance | 23 | 30 | |
Financing receivables: | |||
End of period balance | 6,017 | 5,912 | |
Balance individually evaluated | $1 | $26 |
FINANCING_RECEIVABLES_Details_1
FINANCING RECEIVABLES (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 | Oct. 31, 2014 |
item | item | ||
Analysis of Impaired Financing Receivables | |||
Recorded investment, with specific allowance | $6 | $18 | $9 |
Recorded investment, without specific allowance | 6 | 7 | 6 |
Recorded Investment | 12 | 25 | 15 |
Unpaid principal balance, with specific allowance | 6 | 18 | 9 |
Unpaid principal balance, without specific allowance | 5 | 6 | 6 |
Unpaid Principal Balance | 11 | 24 | 15 |
Specific allowance, with allowance | 2 | 4 | 2 |
Specific Allowance | 2 | 4 | 2 |
Average recorded investment, with specific allowance | 7 | 18 | 10 |
Average recorded investment, without specific allowance | 6 | 7 | 7 |
Average Recorded Investment | 13 | 25 | 17 |
Financing Receivables Related to Troubled Debt Restructurings | |||
Financing receivable contracts in troubled debt restructuring, number | 9 | 6 | |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | 0.1 | 0.2 | |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 0.1 | 0.2 | |
Number of troubled debt restructurings that subsequently defaulted | 0 | 0 | |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | 0 | ||
Agriculture and Turf | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 10 | 22 | 12 |
Unpaid Principal Balance | 10 | 22 | 12 |
Specific Allowance | 2 | 4 | 2 |
Average Recorded Investment | 11 | 23 | 13 |
Construction and Forestry | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 2 | 3 | 3 |
Unpaid Principal Balance | 1 | 2 | 3 |
Average Recorded Investment | $2 | $2 | $4 |
SECURITIZATION_OF_FINANCING_RE2
SECURITIZATION OF FINANCING RECEIVABLES (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | $1,211 | ||
Unconsolidated conduits, maximum exposure to loss | 1,246 | ||
Total Assets | 58,290.10 | 61,336.40 | 57,659.20 |
Financing receivables securitized (retail notes) | 3,905 | 4,616 | 3,502 |
Allowance for credit losses - securitization transactions | -12 | -14 | -11 |
Other assets - securitization transactions | 100 | 108 | 97 |
Total restricted securitized assets - securitization transactions | 3,993 | 4,710 | 3,588 |
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 |
Accrued interest on borrowings - securitization transactions | 2 | 1 | 1 |
Total liabilities related to restricted securitized assets - securitization transactions | 3,890 | 4,560 | 3,492 |
Maximum remaining term of all restricted securitized retail notes | 6 years | ||
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 2,563 | 3,011 | 2,223 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,500 | 2,942 | 2,159 |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 184 | 368 | 296 |
Total liabilities related to restricted securitized assets - securitization transactions | 179 | 351 | 289 |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Total Assets | 53,000 | ||
Total restricted securitized assets - securitization transactions | 1,246 | 1,331 | 1,069 |
Total liabilities related to restricted securitized assets - securitization transactions | $1,211 | $1,267 | $1,044 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
In Millions, unless otherwise specified | |||
INVENTORIES | |||
Raw materials and supplies | $1,723 | $1,724 | $2,108 |
Work-in-process | 697 | 654 | 847 |
Finished goods and parts | 3,622 | 3,360 | 4,151 |
Total FIFO value | 6,042 | 5,738 | 7,106 |
Less adjustment to LIFO value | 1,515 | 1,528 | 1,551 |
Inventories | $4,527.10 | $4,209.70 | $5,554.60 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Changes in Amounts of Goodwill | ||
Goodwill - gross, beginning balance | $791 | $905 |
Less accumulated impairment losses, beginning balance | 60 | |
Goodwill - net, beginning balance | 791.2 | 845 |
Translation adjustments | -50 | -10 |
Goodwill - gross, ending balance | 895 | |
Less accumulated impairment losses, ending balance | 60 | |
Goodwill - net, ending balance | 741.3 | 834.6 |
John Deere Water Operations | ||
Changes in Amounts of Goodwill | ||
Decrease in accumulated impairment losses | 60 | |
Agriculture and Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - gross, beginning balance | 235 | 302 |
Less accumulated impairment losses, beginning balance | 60 | |
Goodwill - net, beginning balance | 235 | 242 |
Translation adjustments | -8 | -3 |
Goodwill - gross, ending balance | 299 | |
Less accumulated impairment losses, ending balance | 60 | |
Goodwill - net, ending balance | 227 | 239 |
Construction and Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - gross, beginning balance | 556 | 603 |
Goodwill - net, beginning balance | 556 | 603 |
Translation adjustments | -42 | -7 |
Goodwill - gross, ending balance | 596 | |
Goodwill - net, ending balance | $514 | $596 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details 2) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
Amortized Intangible Assets: | |||
Total at cost | $110 | $110 | $108 |
Less accumulated amortization | 48 | 45 | 37 |
Total amortized intangible assets - net | 62 | 65 | 71 |
Unamortized intangible assets: | |||
Licenses | 4 | 4 | |
Intangible assets - net (excluding goodwill) | |||
Other intangible assets - net | 62.3 | 68.8 | 74.6 |
Reclassification of licenses to assets held for sale | 4 | ||
Customer Lists and Relationships | |||
Amortized Intangible Assets: | |||
Total at cost | 20 | 20 | 20 |
Less accumulated amortization | 10 | 9 | 8 |
Useful Lives (weighted averages) | 15 years | ||
Technology, Patents, Trademarks and Other | |||
Amortized Intangible Assets: | |||
Total at cost | 90 | 90 | 88 |
Less accumulated amortization | $38 | $36 | $29 |
Useful Lives (weighted averages) | 18 years |
GOODWILL_AND_OTHER_INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Amortized Intangible Assets: | ||
Amortization expense of other intangible assets | $3 | $2 |
Amortization expense of other intangible assets - remainder of 2015 | 8 | |
Amortization expense of other intangible assets - 2016 | 10 | |
Amortization expense of other intangible assets - 2017 | 9 | |
Amortization expense of other intangible assets - 2018 | 6 | |
Amortization expense of other intangible assets - 2019 | $5 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
COMMITMENTS AND CONTINGENCIES | ||
Historical claims rate, review period | 5 years | |
Unamortized extended warranty premiums (deferred revenue) | $422 | $360 |
Change in Warranty Liability and Unearned Premiums | ||
Beginning of period balance | 1,234 | 1,164 |
Payments | -178 | -189 |
Amortization of premiums received | -41 | -28 |
Accruals for warranties | 181 | 185 |
Premiums received | 45 | 46 |
Foreign exchange | -24 | -6 |
End of period balance | $1,217 | $1,172 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Jan. 31, 2015 |
COMMITMENTS AND CONTINGENCIES | |
Commitments for the construction and acquisition of property and equipment | $236 |
Other restricted assets | 115 |
Miscellaneous contingent liabilities | 40 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 220 |
Guarantee obligations accrued losses | $7 |
Guarantee obligations term | P5Y |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
In Millions, unless otherwise specified | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | $25,805.90 | $27,422.20 | $25,242.30 |
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 |
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 |
Long-term borrowings | 24,106.70 | 24,380.70 | 22,265.20 |
Fair Value, Level 2 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 3,891 | 4,562 | 3,492 |
Long-term borrowings due within one year | 4,876 | 4,976 | 5,332 |
Long-term borrowings | 25,031 | 24,981 | 22,721 |
Fair Value, Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 25,733 | 27,337 | 25,129 |
Financing receivables securitized - net | 3,868 | 4,573 | 3,463 |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 25,806 | 27,422 | 25,242 |
Financing receivables securitized - net | 3,893 | 4,602 | 3,491 |
Short-term securitization borrowings | 3,888 | 4,559 | 3,491 |
Long-term borrowings due within one year | 4,876 | 4,973 | 5,316 |
Long-term borrowings | 24,107 | 24,381 | 22,265 |
Equipment Operations | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 8.7 | 18.5 | 9.1 |
Long-term borrowings | 4,622 | 4,642.50 | 4,828.20 |
Equipment Operations | Fair Value, Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 207 | 233 | 821 |
Long-term borrowings | 5,344 | 5,095 | 5,102 |
Equipment Operations | Carrying Value | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 216 | 243 | 815 |
Long-term borrowings | 4,622 | 4,643 | 4,828 |
Financial Services | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 25,797.20 | 27,403.70 | 25,233.20 |
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 |
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 |
Long-term borrowings | 19,484.70 | 19,738.20 | 17,437 |
Financial Services | Fair Value, Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 4,669 | 4,743 | 4,511 |
Long-term borrowings | 19,687 | 19,886 | 17,619 |
Financial Services | Carrying Value | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 4,660 | 4,730 | 4,501 |
Long-term borrowings | $19,485 | $19,738 | $17,437 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 2) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
In Millions, unless otherwise specified | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $493.80 | $1,215.10 | $1,438.40 |
Derivative assets | 625 | 353 | 418 |
Derivative liabilities | 129 | 110 | 168 |
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 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 and 2 | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 494 | 1,215 | 1,438 |
Total assets | 1,119 | 1,568 | 1,856 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 and 2 | U.S. Government Debt Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 179 | 808 | 1,113 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 45 | 45 | 20 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Fixed Income Fund | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 10 | ||
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 Recurring and Nonrecurring Basis | |||
Marketable securities | 129 | 741 | 1,046 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Total liabilities | 129 | 110 | 168 |
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 Recurring and Nonrecurring Basis | |||
Derivative assets | 478 | 319 | 329 |
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 Recurring and Nonrecurring Basis | |||
Derivative liabilities | 80 | 81 | 144 |
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 Recurring and Nonrecurring Basis | |||
Derivative assets | 125 | 18 | 70 |
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 Recurring and Nonrecurring Basis | |||
Derivative liabilities | 49 | 29 | 24 |
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 Recurring and Nonrecurring Basis | |||
Derivative assets | 22 | 16 | 19 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 29 | 34 | 36 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 134 | 172 | 147 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-Backed Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $107 | $146 | $122 |
FAIR_VALUE_MEASUREMENTS_Detail2
FAIR VALUE MEASUREMENTS (Details 3) (USD $) | Jan. 31, 2015 |
In Millions, unless otherwise specified | |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $113 |
Amortized cost, due after one through five years | 70 |
Amortized cost, due after five through 10 years | 110 |
Amortized cost, due after 10 years | 34 |
Amortized cost, mortgage-backed securities | 103 |
Amortized cost, debt securities | 430 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 113 |
Fair value, due after one through five years | 73 |
Fair value, due after five through 10 years | 117 |
Fair value, due after 10 years | 39 |
Fair value, mortgage-backed securities | 107 |
Fair value, debt securities | $449 |
FAIR_VALUE_MEASUREMENTS_Detail3
FAIR VALUE MEASUREMENTS (Details 4) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2014 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Losses, Property and equipment - net | $26.30 | |
Fair Value, Nonrecurring Measurements | Level 3 | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Property and equipment - net | 53 | |
Losses, Property and equipment - net | 26 | |
Other assets | 15 | |
Fair Value, Nonrecurring Measurements | Level 3 | Water Operations | Cost of Sales | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Non-cash charge for impairment of long-lived assets, pretax | 26 | |
Non-cash charge for impairment of long-lived assets, after-tax | $26 |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $5 | ||
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 44 months | ||
Gains or losses reclassified from OCI to earnings | 0 | ||
Interest Rate Contracts | Cash Flow Hedges Member | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | 2,550 | 3,050 | 3,600 |
Cross-Currency Interest Rate Contracts | Cash Flow Hedges Member | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | $70 | $70 | $70 |
DERIVATIVE_INSTRUMENTS_Details1
DERIVATIVE INSTRUMENTS (Details 2) (Interest Rate Contracts, USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 | Oct. 31, 2014 |
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 | 176 | -69 | |
Net accrued interest income on interest rate contracts | 45 | 36 | |
Gains (losses) on borrowings | -173 | 67 | |
Accrued interest expense on borrowings | 70 | 59 | |
Fair Value Hedges Member | |||
Fair Value Hedges | |||
Notional amount of interest rate fair value hedge derivatives | $8,408 | $8,185 | $8,798 |
DERIVATIVE_INSTRUMENTS_Details2
DERIVATIVE INSTRUMENTS (Details 3) (Not Designated as Hedging Instruments, USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
In Millions, unless otherwise specified | |||
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $6,252 | $6,317 | $5,636 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 3,939 | 3,524 | 4,274 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 97 | 98 | 86 |
Interest Rate Caps Purchased | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 1,502 | 1,703 | 1,458 |
Interest Rate Caps Sold | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $1,502 | $1,703 | $1,458 |
DERIVATIVE_INSTRUMENTS_Details3
DERIVATIVE INSTRUMENTS (Details 4) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
In Millions, unless otherwise specified | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | $625 | $353 | $418 |
Total derivative liabilities | 129 | 110 | 168 |
Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 422 | 279 | 298 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 7 | 35 | 95 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 410 | 266 | 283 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 7 | 35 | 95 |
Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 12 | 13 | 15 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 203 | 74 | 120 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 122 | 75 | 73 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 68 | 53 | 46 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 73 | 46 | 49 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 125 | 18 | 70 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 49 | 29 | 24 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | $10 | $3 | $4 |
DERIVATIVE_INSTRUMENTS_Details4
DERIVATIVE INSTRUMENTS (Details 5) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | $266 | $145 |
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) | -5 | -2 |
Interest Rate Contracts | Interest Expense | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Fair value hedges, gains (losses) | 221 | -33 |
Not designated as hedges, gains (losses) | -13 | 2 |
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) | -3 | -4 |
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 | -3 |
Foreign Exchange Contracts | Cost of Sales | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | 45 | 56 |
Foreign Exchange Contracts | Other Operating Expense | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | 234 | 87 |
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 | ($5) |
DERIVATIVE_INSTRUMENTS_Details5
DERIVATIVE INSTRUMENTS (Details 6) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 |
In Millions, unless otherwise specified | |||
DERIVATIVE INSTRUMENTS | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $53 | $57 | $114 |
Derivative Assets | |||
Gross amounts recognized | 625 | 353 | 418 |
Netting arrangements | -82 | -76 | -113 |
Collateral received | -1 | -5 | -9 |
Net amount | 542 | 272 | 296 |
Derivative Liabilities | |||
Gross amounts recognized | 129 | 110 | 168 |
Netting arrangements | -82 | -76 | -113 |
Net amount | $47 | $34 | $55 |
STOCK_OPTION_AND_RESTRICTED_ST1
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) (USD $) | 3 Months Ended | 1 Months Ended |
Jan. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant related to stock option and restricted stock awards | 3,800,000 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 3,000,000 | |
Options granted, weighted-average exercise price (in dollars per share) | $88.19 | |
Options granted, weighted-average fair value (in dollars per share) | $19.67 | |
Options outstanding (in shares) | 17,100,000 | |
Options outstanding, weighted-average exercise price (in dollars per share) | 75.35 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 209,000 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 83,000 | |
Restricted stock units granted, fair value (in dollars per unit) | 88.04 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 63,000 | |
Restricted stock units granted, fair value (in dollars per unit) | 81.78 | |
Restricted Stock Units Subject to Market/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Fair value assumptions method used | lattice model | |
Restricted stock units granted (in shares) | 63,000 | |
Restricted stock units granted, fair value (in dollars per unit) | 113.97 |
DISPOSITION_Details
DISPOSITION (Details) (USD $) | Jan. 31, 2015 |
In Millions, unless otherwise specified | |
Major Classes of Assets and Liabilities of the Crop Insurance operations | |
Other intangible assets - net | $4 |
Total assets held for sale | 384.9 |
Account payable and accrued expenses, and Total Liabilities held for sale | 266.8 |
Crop Insurance Operations | |
Major Classes of Assets and Liabilities of the Crop Insurance operations | |
Cash and cash equivalents | 13 |
Marketable securities | 79 |
Other receivables | 265 |
Other intangible assets - net | 4 |
Deferred income taxes | 4 |
Other assets | 20 |
Total assets held for sale | 385 |
Account payable and accrued expenses, and Total Liabilities held for sale | $267 |
SUPPLEMENTAL_CONSOLIDATING_DAT2
SUPPLEMENTAL CONSOLIDATING DATA (Income Statement) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Net Sales and Revenues | ||
Net sales | $5,605.10 | $6,948.50 |
Finance and interest income | 593.6 | 531.5 |
Other income | 184.4 | 174 |
Total | 6,383.10 | 7,654 |
Costs and Expenses | ||
Cost of sales | 4,420.60 | 5,195.50 |
Research and development expenses | 333.2 | 323.7 |
Selling, administrative and general expenses | 659 | 765.9 |
Interest expense | 180.1 | 171.7 |
Other operating expenses | 222.6 | 232.3 |
Total | 5,815.50 | 6,689.10 |
Income of Consolidated Group before Income Taxes | 567.6 | 964.9 |
Provision for income taxes | 170.5 | 280.5 |
Income of Consolidated Group | 397.1 | 684.4 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||
Net Income | 386.9 | 681.3 |
Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 |
Net Income Attributable to Deere & Company | 386.8 | 681.1 |
Equipment Operations | ||
Net Sales and Revenues | ||
Net sales | 5,605.10 | 6,948.50 |
Finance and interest income | 20.5 | 17.2 |
Other income | 160 | 150.5 |
Total | 5,785.60 | 7,116.20 |
Costs and Expenses | ||
Cost of sales | 4,421.10 | 5,195.90 |
Research and development expenses | 333.2 | 323.7 |
Selling, administrative and general expenses | 540.2 | 643.2 |
Interest expense | 71 | 75.3 |
Interest compensation to Financial Services | 46 | 42.3 |
Other operating expenses | 39.1 | 52.5 |
Total | 5,450.60 | 6,332.90 |
Income of Consolidated Group before Income Taxes | 335 | 783.3 |
Provision for income taxes | 94.3 | 240.3 |
Income of Consolidated Group | 240.7 | 543 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 146.2 | 138.3 |
Net Income | 386.9 | 681.3 |
Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 |
Net Income Attributable to Deere & Company | 386.8 | 681.1 |
Equipment Operations | Financial Services | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 156.8 | 142.2 |
Equipment Operations | Other | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | -10.6 | -3.9 |
Financial Services | ||
Net Sales and Revenues | ||
Finance and interest income | 633 | 569.2 |
Other income | 64.9 | 64.4 |
Total | 697.9 | 633.6 |
Costs and Expenses | ||
Selling, administrative and general expenses | 121.2 | 126 |
Interest expense | 122.9 | 107.8 |
Other operating expenses | 221.2 | 218.3 |
Total | 465.3 | 452.1 |
Income of Consolidated Group before Income Taxes | 232.6 | 181.5 |
Provision for income taxes | 76.2 | 40.1 |
Income of Consolidated Group | 156.4 | 141.4 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 0.4 | 0.8 |
Net Income | 156.8 | 142.2 |
Net Income Attributable to Deere & Company | 156.8 | 142.2 |
Financial Services | Financial Services | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | $0.40 | $0.80 |
SUPPLEMENTAL_CONSOLIDATING_DAT3
SUPPLEMENTAL CONSOLIDATING DATA (Balance Sheet) (Details 2) (USD $) | Jan. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $3,974.80 | $3,787 | $3,188.60 | $3,504 |
Marketable securities | 493.8 | 1,215.10 | 1,438.40 | |
Receivables from unconsolidated subsidiaries and affiliates | 27.4 | 30.2 | 35.2 | |
Trade accounts and notes receivable - net | 3,334.60 | 3,277.60 | 3,716.80 | |
Financing receivables - net | 25,805.90 | 27,422.20 | 25,242.30 | |
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 | |
Other receivables | 921.1 | 1,500.30 | 1,157.60 | |
Equipment on operating leases - net | 3,834.60 | 4,015.50 | 3,026 | |
Inventories | 4,527.10 | 4,209.70 | 5,554.60 | |
Property and equipment - net | 5,347.50 | 5,577.80 | 5,351 | |
Investments in unconsolidated subsidiaries and affiliates | 301.6 | 303.2 | 297.5 | |
Goodwill | 741.3 | 791.2 | 834.6 | 845 |
Other intangible assets - net | 62.3 | 68.8 | 74.6 | |
Retirement benefits | 283.5 | 262 | 583.5 | |
Deferred income taxes | 2,584.10 | 2,776.60 | 2,323.40 | |
Other assets | 1,772.30 | 1,496.90 | 1,344.20 | |
Assets held for sale | 384.9 | |||
Total Assets | 58,290.10 | 61,336.40 | 57,659.20 | |
Liabilities and Stockholders' Equity | ||||
Short-term borrowings | 8,622.70 | 8,019.20 | 8,657.30 | |
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 | |
Payables to unconsolidated subsidiaries and affiliates | 119.2 | 101 | 89.1 | |
Accounts payable and accrued expenses | 6,421.90 | 8,554.10 | 7,330 | |
Deferred income taxes | 146.7 | 160.9 | 154.8 | |
Long-term borrowings | 24,106.70 | 24,380.70 | 22,265.20 | |
Retirement benefits and other liabilities | 6,469.40 | 6,496.50 | 5,414.20 | |
Liabilities held for sale | 266.8 | |||
Total liabilities | 50,041.30 | 52,270.90 | 47,401.40 | |
Commitments and contingencies (Note 14) | ||||
Common stock, $1 par value (issued shares at January 31, 2015 - 536,431,204) | 3,714 | 3,675.40 | 3,571.30 | |
Common stock, par value (in dollars per share) | $1 | |||
Common stock, issued shares | 536,431,204 | |||
Common stock in treasury | -13,408.20 | -12,834.20 | -10,643.10 | |
Retained earnings | 22,185.20 | 22,004.40 | 20,136.90 | |
Accumulated other comprehensive income (loss) | -4,245 | -3,783 | -2,809.40 | -2,693 |
Total Deere & Company stockholders' equity | 8,246 | 9,062.60 | 10,255.70 | |
Noncontrolling interests | 2.8 | 2.9 | 2.1 | |
Total stockholders' equity | 8,248.80 | 9,065.50 | 10,257.80 | 10,267.70 |
Total Liabilities and Stockholders' Equity | 58,290.10 | 61,336.40 | 57,659.20 | |
Equipment Operations | ||||
Assets | ||||
Cash and cash equivalents | 2,844.40 | 2,569.20 | 2,659.70 | 3,023.30 |
Marketable securities | 100 | 700.4 | 1,008.30 | |
Receivables from unconsolidated subsidiaries and affiliates | 2,592.90 | 3,663.90 | 3,334.40 | |
Trade accounts and notes receivable - net | 547.5 | 706 | 848.3 | |
Financing receivables - net | 8.7 | 18.5 | 9.1 | |
Other receivables | 863.9 | 848 | 842 | |
Inventories | 4,527.10 | 4,209.70 | 5,554.60 | |
Property and equipment - net | 5,293.40 | 5,522.50 | 5,294 | |
Investments in unconsolidated subsidiaries and affiliates | 4,997 | 5,106.50 | 4,764.40 | |
Goodwill | 741.3 | 791.2 | 834.6 | |
Other intangible assets - net | 62.3 | 64.8 | 70.6 | |
Retirement benefits | 283.8 | 263.5 | 548.3 | |
Deferred income taxes | 2,923.20 | 2,981.90 | 2,563.30 | |
Other assets | 926.8 | 850.6 | 702.4 | |
Total Assets | 26,712.30 | 28,296.70 | 29,034 | |
Liabilities and Stockholders' Equity | ||||
Short-term borrowings | 1,079.20 | 434.1 | 1,759.60 | |
Payables to unconsolidated subsidiaries and affiliates | 119.2 | 101 | 89.1 | |
Accounts payable and accrued expenses | 6,146.20 | 7,518.40 | 6,678.60 | |
Deferred income taxes | 79.7 | 87.1 | 81.3 | |
Long-term borrowings | 4,622 | 4,642.50 | 4,828.20 | |
Retirement benefits and other liabilities | 6,417.20 | 6,448.10 | 5,339.40 | |
Total liabilities | 18,463.50 | 19,231.20 | 18,776.20 | |
Commitments and contingencies (Note 14) | ||||
Common stock, $1 par value (issued shares at January 31, 2015 - 536,431,204) | 3,714 | 3,675.40 | 3,571.30 | |
Common stock, par value (in dollars per share) | $1 | $1 | $1 | |
Common stock, issued shares | 536,431,204 | |||
Common stock in treasury | -13,408.20 | -12,834.20 | -10,643.10 | |
Retained earnings | 22,185.20 | 22,004.40 | 20,136.90 | |
Accumulated other comprehensive income (loss) | -4,245 | -3,783 | -2,809.40 | |
Total Deere & Company stockholders' equity | 8,246 | 9,062.60 | 10,255.70 | |
Noncontrolling interests | 2.8 | 2.9 | 2.1 | |
Total stockholders' equity | 8,248.80 | 9,065.50 | 10,257.80 | |
Total Liabilities and Stockholders' Equity | 26,712.30 | 28,296.70 | 29,034 | |
Financial Services | ||||
Assets | ||||
Cash and cash equivalents | 1,130.40 | 1,217.80 | 529 | 480.8 |
Marketable securities | 393.8 | 514.7 | 430.2 | |
Trade accounts and notes receivable - net | 3,847.20 | 3,554.40 | 3,827.90 | |
Financing receivables - net | 25,797.20 | 27,403.70 | 25,233.20 | |
Financing receivables securitized - net | 3,893.30 | 4,602.30 | 3,490.90 | |
Other receivables | 82.6 | 659 | 342.3 | |
Equipment on operating leases - net | 3,834.60 | 4,015.50 | 3,026 | |
Property and equipment - net | 54.1 | 55.3 | 57 | |
Investments in unconsolidated subsidiaries and affiliates | 10.2 | 10.9 | 10.9 | |
Other intangible assets - net | 4 | 4 | ||
Retirement benefits | 30.9 | 32.9 | 36.8 | |
Deferred income taxes | 68.7 | 64.9 | 65.8 | |
Other assets | 847.7 | 648.2 | 644.1 | |
Assets held for sale | 384.9 | |||
Total Assets | 40,375.60 | 42,783.60 | 37,698.10 | |
Liabilities and Stockholders' Equity | ||||
Short-term borrowings | 7,543.50 | 7,585.10 | 6,897.70 | |
Short-term securitization borrowings | 3,887.90 | 4,558.50 | 3,490.80 | |
Payables to unconsolidated subsidiaries and affiliates | 2,565.60 | 3,633.70 | 3,299.20 | |
Accounts payable and accrued expenses | 1,363.20 | 2,027 | 1,640 | |
Deferred income taxes | 474.9 | 344.1 | 379.2 | |
Long-term borrowings | 19,484.70 | 19,738.20 | 17,437 | |
Retirement benefits and other liabilities | 83.4 | 82.8 | 76.4 | |
Liabilities held for sale | 266.8 | |||
Total liabilities | 35,670 | 37,969.40 | 33,220.30 | |
Commitments and contingencies (Note 14) | ||||
Common stock, $1 par value (issued shares at January 31, 2015 - 536,431,204) | 2,030.80 | 2,023.10 | 1,992.80 | |
Common stock, par value (in dollars per share) | $1 | $1 | $1 | |
Common stock, issued shares | 536,431,204 | |||
Retained earnings | 2,816.80 | 2,811.80 | 2,479.50 | |
Accumulated other comprehensive income (loss) | -142 | -20.7 | 5.5 | |
Total Deere & Company stockholders' equity | 4,705.60 | 4,814.20 | 4,477.80 | |
Total stockholders' equity | 4,705.60 | 4,814.20 | 4,477.80 | |
Total Liabilities and Stockholders' Equity | $40,375.60 | $42,783.60 | $37,698.10 |
SUPPLEMENTAL_CONSOLIDATING_DAT4
SUPPLEMENTAL CONSOLIDATING DATA (Statement of Cash Flows) (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2015 | Jan. 31, 2014 |
Cash Flows from Operating Activities | ||
Net income | $386.90 | $681.30 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Provision (credit) for credit losses | 1 | 2.4 |
Provision for depreciation and amortization | 342.9 | 343.1 |
Impairment charges | 26.3 | |
Undistributed earnings of unconsolidated subsidiaries and affiliates | 10.1 | 3 |
Provision (credit) for deferred income taxes | 176.1 | -8.6 |
Changes in assets and liabilities: | ||
Trade receivables | 349.1 | 126.7 |
Insurance receivables | 256.5 | 101.9 |
Inventories | -603.9 | -836.8 |
Accounts payable and accrued expenses | -1,442.50 | -1,387.10 |
Accrued income taxes payable/receivable | -185.5 | 137.5 |
Retirement benefits | 84.4 | 53.4 |
Other | 96.7 | -12.5 |
Net cash provided by (used for) operating activities | -510.1 | -746.2 |
Cash Flows from Investing Activities | ||
Proceeds from maturities and sales of marketable securities | 673.4 | 403.6 |
Proceeds from sales of equipment on operating leases | 242.1 | 276.4 |
Proceeds from sales of businesses, net of cash sold | 303.7 | |
Purchases of marketable securities | -19.3 | -222.4 |
Purchases of property and equipment | -184 | -250.7 |
Cost of equipment on operating leases acquired | -299.7 | -251.6 |
Other | -47.2 | -56.3 |
Net cash provided by investing activities | 1,385.10 | 673.3 |
Cash Flows from Financing Activities | ||
Increase (decrease) in total short-term borrowings | 209.8 | -736.7 |
Proceeds from long-term borrowings | 1,227.80 | 2,241.10 |
Payments of long-term borrowings | -1,234.30 | -1,100 |
Proceeds from issuance of common stock | 44.7 | 54.3 |
Repurchases of common stock | -604.7 | -477.3 |
Dividends paid | -209.9 | -192.5 |
Excess tax benefits from share-based compensation | 6.3 | 14.6 |
Other | -22.2 | -13 |
Net cash provided by (used for) financing activities | -582.5 | -209.5 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -104.7 | -33 |
Net Increase (Decrease) in Cash and Cash Equivalents | 187.8 | -315.4 |
Cash and Cash Equivalents at Beginning of Period | 3,787 | 3,504 |
Cash and Cash Equivalents at End of Period | 3,974.80 | 3,188.60 |
Equipment Operations | ||
Cash Flows from Operating Activities | ||
Net income | 386.9 | 681.3 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Provision (credit) for credit losses | -0.4 | 0.1 |
Provision for depreciation and amortization | 209.8 | 229.7 |
Impairment charges | 26.3 | |
Undistributed earnings of unconsolidated subsidiaries and affiliates | 5.3 | -138.4 |
Provision (credit) for deferred income taxes | 55.8 | -3.8 |
Changes in assets and liabilities: | ||
Trade receivables | 109.2 | 167 |
Inventories | -508.1 | -721.1 |
Accounts payable and accrued expenses | -1,082.20 | -1,169.70 |
Accrued income taxes payable/receivable | -182.7 | 124.5 |
Retirement benefits | 80.8 | 49.7 |
Other | 108.5 | 36.8 |
Net cash provided by (used for) operating activities | -817.1 | -717.6 |
Cash Flows from Investing Activities | ||
Proceeds from maturities and sales of marketable securities | 600 | 400 |
Proceeds from sales of businesses, net of cash sold | 303.7 | |
Purchases of marketable securities | -203.7 | |
Purchases of property and equipment | -183.6 | -250.5 |
Other | -23.1 | -44.3 |
Net cash provided by investing activities | 393.3 | 205.2 |
Cash Flows from Financing Activities | ||
Increase (decrease) in total short-term borrowings | 707.2 | 703.1 |
Change in intercompany receivables/payables | 873.6 | 79.2 |
Proceeds from long-term borrowings | 1.5 | 6 |
Payments of long-term borrowings | -16.2 | -15.9 |
Proceeds from issuance of common stock | 44.7 | 54.3 |
Repurchases of common stock | -604.7 | -477.3 |
Dividends paid | -209.9 | -192.5 |
Excess tax benefits from share-based compensation | 6.3 | 14.6 |
Other | -16.6 | -6 |
Net cash provided by (used for) financing activities | 785.9 | 165.5 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -86.9 | -16.7 |
Net Increase (Decrease) in Cash and Cash Equivalents | 275.2 | -363.6 |
Cash and Cash Equivalents at Beginning of Period | 2,569.20 | 3,023.30 |
Cash and Cash Equivalents at End of Period | 2,844.40 | 2,659.70 |
Financial Services | ||
Cash Flows from Operating Activities | ||
Net income | 156.8 | 142.2 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Provision (credit) for credit losses | 1.4 | 2.4 |
Provision for depreciation and amortization | 161.2 | 136.3 |
Undistributed earnings of unconsolidated subsidiaries and affiliates | -0.4 | -0.8 |
Provision (credit) for deferred income taxes | 120.3 | -4.7 |
Changes in assets and liabilities: | ||
Insurance receivables | 256.5 | 101.9 |
Accounts payable and accrued expenses | -282.9 | -117 |
Accrued income taxes payable/receivable | -2.8 | 13 |
Retirement benefits | 3.6 | 3.7 |
Other | 11.8 | -9.2 |
Net cash provided by (used for) operating activities | 425.5 | 267.8 |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding trade and wholesale) | 5,038.20 | 5,008.50 |
Proceeds from maturities and sales of marketable securities | 73.4 | 3.6 |
Proceeds from sales of equipment on operating leases | 242.1 | 276.4 |
Cost of receivables acquired (excluding trade and wholesale) | -3,936.70 | -4,529.10 |
Purchases of marketable securities | -19.3 | -18.7 |
Purchases of property and equipment | -0.4 | -0.2 |
Cost of equipment on operating leases acquired | -429.2 | -407.9 |
Decrease (increase) in trade and wholesale receivables | 80.9 | -149 |
Other | -31.8 | -48.4 |
Net cash provided by investing activities | 1,017.20 | 135.2 |
Cash Flows from Financing Activities | ||
Increase (decrease) in total short-term borrowings | -497.4 | -1,439.80 |
Change in intercompany receivables/payables | -873.6 | -79.2 |
Proceeds from long-term borrowings | 1,226.30 | 2,235.10 |
Payments of long-term borrowings | -1,218.10 | -1,084.10 |
Dividends paid | -151.6 | |
Other | 2.1 | 29.5 |
Net cash provided by (used for) financing activities | -1,512.30 | -338.5 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -17.8 | -16.3 |
Net Increase (Decrease) in Cash and Cash Equivalents | -87.4 | 48.2 |
Cash and Cash Equivalents at Beginning of Period | 1,217.80 | 480.8 |
Cash and Cash Equivalents at End of Period | $1,130.40 | $529 |