Document and Entity Information
Document and Entity Information | 6 Months Ended |
Apr. 30, 2016shares | |
Document and Entity Information | |
Entity Registrant Name | DEERE & CO |
Entity Central Index Key | 315,189 |
Document Type | 10-Q |
Document Period End Date | Apr. 30, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --10-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 314,258,886 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
STATEMENT OF CONSOLIDATED INCOM
STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Net Sales and Revenues | ||||
Net sales | $ 7,106.6 | $ 7,398.5 | $ 11,875.8 | $ 13,003.6 |
Finance and interest income | 611.4 | 576.3 | 1,210.5 | 1,169.9 |
Other income | 157.4 | 195.9 | 313.6 | 380.3 |
Total | 7,875.4 | 8,170.7 | 13,399.9 | 14,553.8 |
Costs and Expenses | ||||
Cost of sales | 5,531 | 5,694.2 | 9,371.1 | 10,114.8 |
Research and development expenses | 345 | 341.1 | 664.3 | 674.3 |
Selling, administrative and general expenses | 714.8 | 740 | 1,307.7 | 1,398.9 |
Interest expense | 191 | 165.5 | 364.3 | 345.6 |
Other operating expenses | 360.3 | 212.9 | 608 | 435.5 |
Total | 7,142.1 | 7,153.7 | 12,315.4 | 12,969.1 |
Income of Consolidated Group before Income Taxes | 733.3 | 1,017 | 1,084.5 | 1,584.7 |
Provision for income taxes | 237.8 | 324 | 333.3 | 494.6 |
Income of Consolidated Group | 495.5 | 693 | 751.2 | 1,090.1 |
Equity in loss of unconsolidated affiliates | (0.8) | (2.2) | (2.7) | (12.4) |
Net Income | 494.7 | 690.8 | 748.5 | 1,077.7 |
Less: Net income (loss) attributable to noncontrolling interests | (0.7) | 0.3 | (1.3) | 0.5 |
Net Income Attributable to Deere & Company | $ 495.4 | $ 690.5 | $ 749.8 | $ 1,077.2 |
Per Share Data | ||||
Basic (in dollars per share) | $ 1.57 | $ 2.05 | $ 2.37 | $ 3.17 |
Diluted (in dollars per share) | $ 1.56 | $ 2.03 | $ 2.36 | $ 3.14 |
Average Shares Outstanding | ||||
Basic (in shares) | 315.1 | 337.1 | 315.8 | 340.2 |
Diluted (in shares) | 316.5 | 339.7 | 317.1 | 342.8 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||||
Net Income | $ 494.7 | $ 690.8 | $ 748.5 | $ 1,077.7 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||||
Retirement benefits adjustment | 19.1 | 20.9 | 57.2 | 63.2 |
Cumulative translation adjustment | 311.8 | (66.6) | 153.8 | (577) |
Unrealized gain (loss) on derivatives | 1 | 1.3 | 1 | (0.2) |
Unrealized gain (loss) on investments | 9.5 | (4.2) | (1.3) | 3.1 |
Other Comprehensive Income (Loss), Net of Income Taxes | 341.4 | (48.6) | 210.7 | (510.9) |
Comprehensive Income of Consolidated Group | 836.1 | 642.2 | 959.2 | 566.8 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (0.6) | 0.3 | (1.2) | 0.2 |
Comprehensive Income Attributable to Deere & Company | $ 836.7 | $ 641.9 | $ 960.4 | $ 566.6 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 | Oct. 31, 2014 |
ASSETS | ||||
Cash and cash equivalents | $ 4,133.2 | $ 4,162.2 | $ 4,355.4 | $ 3,787 |
Marketable securities | 475.5 | 437.4 | 392.9 | |
Receivables from unconsolidated affiliates | 81.3 | 33.3 | 46.4 | |
Trade accounts and notes receivable - net | 4,898.9 | 3,051.1 | 4,717.1 | |
Financing receivables - net | 23,415.3 | 24,809 | 24,745.8 | |
Financing receivables securitized - net | 4,734.7 | 4,834.6 | 4,741.1 | |
Other receivables | 876.2 | 991.2 | 873.4 | |
Equipment on operating leases - net | 5,455.5 | 4,970.4 | 4,195.2 | |
Inventories | 4,061 | 3,817 | 4,624.2 | |
Property and equipment - net | 5,079.7 | 5,181.5 | 5,245.1 | |
Investments in unconsolidated affiliates | 236.7 | 303.5 | 299.2 | |
Goodwill | 835 | 726 | 737 | 791 |
Other intangible assets - net | 120.5 | 63.6 | 60.4 | |
Retirement benefits | 285.4 | 215.6 | 313.9 | |
Deferred income taxes | 2,681.9 | 2,767.3 | 2,659.4 | |
Other assets | 1,812.5 | 1,583.9 | 1,587.5 | |
Total Assets | 59,183.3 | 57,947.6 | 59,594 | |
LIABILITIES | ||||
Short-term borrowings | 8,576 | 8,426.6 | 8,989 | |
Short-term securitization borrowings | 4,641.8 | 4,590 | 4,702.7 | |
Payables to unconsolidated affiliates | 109.5 | 80.6 | 130.1 | |
Accounts payable and accrued expenses | 6,980.8 | 7,311.5 | 7,260.2 | |
Deferred income taxes | 180.3 | 160.8 | 149.3 | |
Long-term borrowings | 24,648 | 23,832.8 | 23,622.8 | |
Retirement benefits and other liabilities | 6,856.2 | 6,787.7 | 6,563.9 | |
Total liabilities | $ 51,992.6 | $ 51,190 | $ 51,418 | |
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interest (Note 18) | $ 14 | |||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 30, 2016 - 536,431,204) | 3,862 | $ 3,825.6 | $ 3,745.2 | |
Common stock in treasury | (15,693.6) | (15,497.6) | (13,951.2) | |
Retained earnings | 23,514.7 | 23,144.8 | 22,673.4 | |
Accumulated other comprehensive income (loss) | (4,518.8) | (4,729.4) | (4,293.6) | |
Total Deere & Company stockholders' equity | 7,164.3 | 6,743.4 | 8,173.8 | |
Noncontrolling interests | 12.4 | 14.2 | 2.2 | |
Total stockholders' equity | 7,176.7 | 6,757.6 | 8,176 | $ 9,065.5 |
Total Liabilities and Stockholders' Equity | $ 59,183.3 | $ 57,947.6 | $ 59,594 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) | Apr. 30, 2016$ / sharesshares |
CONDENSED CONSOLIDATED BALANCE SHEET | |
Common stock, par value (in dollars per share) | $ / shares | $ 1 |
Common stock, issued shares | shares | 536,431,204 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Cash Flows from Operating Activities | ||
Net income | $ 748.5 | $ 1,077.7 |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Provision for credit losses | 35.1 | 15.1 |
Provision for depreciation and amortization | 761.8 | 682.9 |
Impairment charges | 49.7 | |
Share-based compensation expense | 32 | 28.7 |
Undistributed earnings of unconsolidated affiliates | 5.3 | 8.8 |
Provision for deferred income taxes | 93.3 | 117.8 |
Changes in assets and liabilities: | ||
Trade, notes and financing receivables related to sales | (1,311.5) | (860.8) |
Insurance receivables | 333.4 | |
Inventories | (405.8) | (932.9) |
Accounts payable and accrued expenses | (367.8) | (698.3) |
Accrued income taxes payable/receivable | 12 | (76.3) |
Retirement benefits | 91.1 | 186.6 |
Other | (56.1) | (37.4) |
Net cash used for operating activities | (312.4) | (154.7) |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 8,120.6 | 8,332.4 |
Proceeds from maturities and sales of marketable securities | 71.4 | 791.9 |
Proceeds from sales of equipment on operating leases | 630.1 | 552.3 |
Proceeds from sale of business, net of cash sold | 148.8 | |
Cost of receivables acquired (excluding receivables related to sales) | (6,872.9) | (7,426.1) |
Purchases of marketable securities | (112.2) | (33.9) |
Purchases of property and equipment | (232.6) | (324.3) |
Cost of equipment on operating leases acquired | (1,204.1) | (830.2) |
Acquisitions of businesses, net of cash acquired | (198.9) | |
Other | 8.6 | (58.9) |
Net cash provided by investing activities | 210 | 1,152 |
Cash Flows from Financing Activities | ||
Increase in total short-term borrowings | 38.3 | 1,147 |
Proceeds from long-term borrowings | 3,276.6 | 2,512.2 |
Payments of long-term borrowings | (2,686.6) | (2,453.3) |
Proceeds from issuance of common stock | 11.1 | 86.1 |
Repurchases of common stock | (205.4) | (1,173.9) |
Dividends paid | (383.2) | (415.8) |
Excess tax benefits from share-based compensation | 2.7 | 11.7 |
Other | (32.6) | (39.1) |
Net cash provided by (used for) financing activities | 20.9 | (325.1) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 52.5 | (103.8) |
Net Increase (Decrease) in Cash and Cash Equivalents | (29) | 568.4 |
Cash and Cash Equivalents at Beginning of Period | 4,162.2 | 3,787 |
Cash and Cash Equivalents at End of Period | $ 4,133.2 | $ 4,355.4 |
STATEMENT OF CHANGES IN CONSOLI
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Balance at Oct. 31, 2014 | $ 3,675.4 | $ (12,834.2) | $ 22,004.4 | $ (3,783) | $ 2.9 | $ 9,065.5 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 1,077.2 | 0.5 | 1,077.7 | |||
Other comprehensive income (loss) | (510.6) | (0.3) | (510.9) | |||
Repurchases of common stock | (1,173.9) | (1,173.9) | ||||
Treasury shares reissued | 56.9 | 56.9 | ||||
Dividends declared | (408) | (0.9) | (408.9) | |||
Stock options and other | 69.8 | (0.2) | 69.6 | |||
Balance at Apr. 30, 2015 | 3,745.2 | (13,951.2) | 22,673.4 | (4,293.6) | 2.2 | 8,176 |
Balance at Oct. 31, 2015 | 3,825.6 | (15,497.6) | 23,144.8 | (4,729.4) | 14.2 | 6,757.6 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 749.8 | (1.3) | 748.5 | |||
Other comprehensive income (loss) | 210.6 | 0.1 | 210.7 | |||
Repurchases of common stock | (205.4) | (205.4) | ||||
Treasury shares reissued | 9.4 | 9.4 | ||||
Dividends declared | (379.5) | (0.5) | (380) | |||
Stock options and other | 36.4 | (0.4) | (0.1) | 35.9 | ||
Balance at Apr. 30, 2016 | $ 3,862 | $ (15,693.6) | $ 23,514.7 | $ (4,518.8) | $ 12.4 | 7,176.7 |
Increase in Redeemable Noncontrolling Interest | ||||||
Acquisition (Note 18) | 14 | |||||
Balance at Apr. 30, 2016 | $ 14 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 6 Months Ended |
Apr. 30, 2016 | |
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. The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2016 and 2015 were May 1, 2016 and May 3, 2015, respectively. Both periods contained 13 weeks. For ease of presentation, the consolidated financial statements and notes continue to be dated April 30. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 6 Months Ended |
Apr. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) T he interim consolidated financial statements of Deere & Company 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 consolidated 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 $269 million and $276 million in the first six months of 2016 and 2015, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $33 million and $39 million at April 30, 2016 and 2015, respectively. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 6 Months Ended |
Apr. 30, 2016 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | (3) New accounting standard adopted is as follows: In September 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update, (ASU) No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which amends Accounting Standards Codification (ASC) 805, Business Combinations. This ASU requires that acquiring entities recognize measurement period adjustments in the reporting period the amounts are determined, including earnings adjustments that would have been recorded in previous periods if the adjustments were known at the acquisition date. Acquiring entities are no longer required to retrospectively adjust amounts in comparative periods. The adjustment amounts and reasons are still disclosed. The Company early adopted this ASU in the second quarter of 2016. The adoption did not have a material effect on the Company’s consolidated financial statements. New accounting standards to be adopted are as follows: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue 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. In August 2015, the FASB issued ASU No. 2015-14, Deferral of the Effective Date, which amends ASU No. 2014-09. As a result, t he effective date will be the first quarter of fiscal year 2019 with early adoption permitted in the first quarter of fiscal year 2018. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends ASU 2014-09. ASU No. 2016-08 provides additional guidance for revenue transactions that involve a third party in providing goods or services to a customer. The reporting entity must determine if the obligation to the customer is to provide the goods or services, i.e., as the principal, or to arrange for a third party to provide the goods or services, i.e., as the agent. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which amends ASU 2014-09. ASU No. 2016-10 clarifies that goods or services that are immaterial in the context of the contract are not required to be identified as separate performance obligations. In addition, the ASU provides an accounting policy election to treat shipping and handling activities as a fulfillment cost and not part of the revenue transaction. The ASU also provides guidance regarding licensing arrangements to determine whether the license grants the right to use functional or symbolic intellectual property. Revenue for licenses of functional intellectual property, such as software, is generally recognized at a point in time, while revenue for licenses of symbolic intellectual property, such as tradenames, is generally recognized over time. In May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients, which amends ASU 2014-09. This ASU clarifies the requirement to assess collectability of contract consideration, clarifies the treatment of noncash consideration and provides a policy election to exclude from revenue amounts collected from customers for sales and similar taxes. The adoption will use one of two retrospective application methods. The Company is evaluating 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 period(s) 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. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which amends ASC 835-30, Interest - Imputation of Interest. This ASU requires that debt issuance costs related to borrowings be presented in the balance sheet as a direct deduction from the carrying amount of the borrowing. This treatment is consistent with debt discounts. The ASU does not affect the amount or timing of expenses for debt issuance costs. The effective date will be the first quarter of fiscal year 2017 and will be applied retrospectively. The adoption will not have a material effect on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with licenses of other intangible assets. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. The effective date will be the first quarter of fiscal year 2017 and will be adopted prospectively. The adoption will not have a material effect on the Company’s consolidated financial statements. In May 2015, the FASB issued ASU No. 2015-09, Disclosures about Short-Duration Contracts, which amends ASC 944, Financial Services - Insurance. This ASU requires disclosure of additional information about unpaid claims and claims adjustment expenses, including a rollforward of the liability of the claims adjustment liability. The effective date will be the fourth quarter of fiscal year 2017. The adoption will not have a material effect on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which amends ASC 330, Inventory. This ASU simplifies the subsequent measurement of inventory by using only the lower of cost or net realizable value. The ASU does not apply to inventory measured using last-in, first-out method. The effective date will be the first quarter of fiscal year 2018 with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which amends ASC 835-30, Interest - Imputation of Interest. This ASU clarifies the presentation and subsequent measurement of debt issuance costs associated with lines of credit. These costs may be presented as an asset and amortized ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement. The effective date will be the first quarter of fiscal year 2017 and will be applied retrospectively. The adoption will not have a material effect on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments - Overall. This ASU changes the treatment for available for sale equity investments by recognizing unrealized fair value changes directly in net income, and no longer in other comprehensive income. In addition, the impairment assessment of equity securities without readily determinable fair values is simplified by allowing a qualitative assessment. The ASU eliminates the disclosure requirement of methods and assumptions used to estimate fair value for financial instruments measured at amortized cost on the balance sheet. Additional disclosure of financial assets and financial liabilities by measurement category and form is also required. The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the Company is not permitted. The amendment will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The Company is evaluating the potential effects on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASU does not significantly change the lessees’ recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset representing the right to use the leased asset during the term on operating lease arrangements. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. In addition, the ASU expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323 Investments - Equity Method and Joint Ventures. This ASU eliminates the requirement to retroactively restate the investment, results of operations and retained earnings on a step by step basis when an investment qualifies for use of the equity method as a result of an increase in ownership or degree of influence. The ASU requires that the equity method investor add the cost of acquiring the additional ownership interest to the current basis of the entity’s previously held interest and adopt the equity method of accounting as of that date. The effective date will be the first quarter of fiscal year 2018, with early adoption permitted, and will be adopted prospectively. The adoption will not have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation - Stock Compensation. This ASU simplifies the treatment of share based payment transactions by recognizing the impact of excess tax benefits or deficiencies related to exercised or vested awards in income tax expense in the period of exercise or vesting. The ASU also modifies the diluted earnings per share calculation using the treasury stock method by eliminating the excess tax benefits or deficiencies from the calculation. These changes will be recognized prospectively. The presentation of excess tax benefits in the statement of consolidated cash flows is also modified to be included with other income tax cash flows as an operating activity. The change can be adopted using a prospective or retrospective transition method. The ASU also provides an accounting policy election to account for award forfeitures in compensation cost when the forfeitures occur. The requirement for an award to qualify for equity classification was also modified by the ASU to permit withholding up to maximum statutory tax rates in the applicable jurisdictions. The modification regarding award forfeitures and withholding rates are adopted by a cumulative effect adjustment to equity at the beginning of the period adopted. The ASU clarifies that cash paid by an employer when directly withholding shares for tax withholding purposes should be presented as a financing activity in the statement of consolidated cash flows and should be applied retrospectively. The effective date will be the first quarter of fiscal year 2018, with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 6 Months Ended |
Apr. 30, 2016 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | (4) The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) Balance October 31, 2014 $ $ $ $ Other comprehensive income (loss) items before reclassification $ Amounts reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) Balance April 30, 2015 $ $ $ $ Balance October 31, 2015 $ $ $ $ $ Other comprehensive income (loss) items before reclassification Amounts reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) Balance April 30, 2016 $ $ $ $ $ Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Three Months Ended April 30, 2016 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Six Months Ended April 30, 2016 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Three Months Ended April 30, 2015 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense $ Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. In the second quarter of 2016 and 2015, the noncontrolling interests’ comprehensive income (loss) was $(.6) million and $.3 million, respectively, which consisted of net income (loss) of $(.7) million and $.3 million and cumulative translation adjustments of $.1 million and none , respectively. Before Tax After Tax (Expense) Tax Six Months Ended April 30, 2015 Amount Credit Amount Cumulative translation adjustment $ $ $ Unrealized gain (loss) on derivatives: Unrealized hedging (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. In the first six months of 2016 and 2015, the noncontrolling interests’ comprehensive income (loss) was $(1.2) million and $.2 million, respectively, which consisted of net income (loss) of $(1.3) million and $.5 million and cumulative translation adjustments of $.1 million and $(.3) million, respectively. |
DIVIDENDS DECLARED AND PAID
DIVIDENDS DECLARED AND PAID | 6 Months Ended |
Apr. 30, 2016 | |
DIVIDENDS DECLARED AND PAID | |
DIVIDENDS DECLARED AND PAID | (5) Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended April 30 April 30 2016 2015 2016 2015 Dividends declared $ .60 $ .60 $ $ Dividends paid $ .60 $ .60 $ $ |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Apr. 30, 2016 | |
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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Net income attributable to Deere & Company $ $ $ $ Less income allocable to participating securities .2 .3 .3 .4 Income allocable to common stock $ $ $ $ Average shares outstanding Basic per share $ $ $ $ Average shares outstanding Effect of dilutive share-based compensation Total potential shares outstanding Diluted per share $ $ $ $ During the second quarter and first six months of 2016 and 2015, 11.9 million shares and 3.0 million shares, respectively, in both periods were excluded from the computation because the incremental shares under the treasury stock method would have been antidilutive. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 6 Months Ended |
Apr. 30, 2016 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | (7) The Company has several defined benefit pension plans and defined 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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service cost Settlements/curtailments Net cost $ $ $ $ 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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service credit Net cost $ $ $ $ During the first six months of 2016, the Company contributed approximately $48 million to its pension plans and $23 million to its other postretirement benefit plans. The Company presently anticipates contributing an additional $31 million to its pension plans and $3 million to its other postretirement benefit plans during the remainder of fiscal year 2016. These contributions include payments from Company funds to either increase plan assets or make direct payments to plan participants. Beginning in 2016, the Company changed the method used to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs. The new method uses the spot yield curve approach to estimate the service and interest costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows. Previously, those costs were determined using a single weighted-average discount rate. The change does not affect the measurement of the total benefit obligations as the change in service and interest costs offsets in the actuarial gains and losses recorded in other comprehensive income. The new method provides a more precise measure of interest and service costs by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company accounted for this change as a change in estimate prospectively beginning in the first quarter of 2016. The discount rates used to measure the 2016 service costs are 4.3 percent and 5.0 percent for pension and OPEB, respectively. The discount rates used to measure the 2016 interest costs are 3.4 percent and 3.5 percent for pension and OPEB, respectively. The previous method would have used a discount rate for both service and interest costs of 4.1 percent for pension and 4.3 percent for OPEB. The decrease in the fiscal year 2016 service and interest costs is approximately $175 million compared to the previous method. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Apr. 30, 2016 | |
INCOME TAXES | |
INCOME TAXES | (8) The Company’s unrecognized tax benefits at April 30, 2016 were $211 million, compared to $229 million at October 31, 2015. The liability at April 30, 2016 consisted of approximately $75 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 six months of 2016 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 | 6 Months Ended |
Apr. 30, 2016 | |
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 April 30 Six Months Ended April 30 % % 2016 2015 Change 2016 2015 Change Net sales and revenues: Agriculture and turf $ $ $ $ -5 Construction and forestry -16 -20 Total net sales -4 -9 Financial services -1 Other revenues -2 -5 Total net sales and revenues $ $ -4 $ $ -8 Operating profit: * Agriculture and turf $ $ -4 $ $ -16 Construction and forestry -61 -57 Financial services -40 -29 Total operating profit -22 -28 Reconciling items ** +46 +3 Income taxes -27 -33 Net income attributable to Deere & Company $ $ -28 $ $ -30 Intersegment sales and revenues: Agriculture and turf net sales $ $ -25 $ $ -36 Construction and forestry net sales Financial services +43 +20 Equipment operations outside the U.S. and Canada: Net sales $ $ -1 $ $ -4 Operating profit -18 April 30 October 31 2016 2015 Identifiable assets: Agriculture and turf $ $ +7 Construction and forestry -3 Financial services +3 Corporate -8 Total assets $ $ +2 * 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 | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30, 2016 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ October 31, 2015 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ April 30, 2015 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Three Months Ended April 30, 2016 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Six Months Ended April 30, 2016 Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Financing receivables: End of period balance $ $ $ $ Balance individually evaluated ** $ $ $ $ Three Months Ended April 30, 2015 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Six Months Ended April 30, 2015 Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Financing receivables: End of period balance $ $ $ $ Balance individually evaluated ** $ $ * 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: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment April 30, 2016* Receivables with specific allowance ** $ $ $ $ Receivables without a specific allowance *** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ October 31, 2015* Receivables with specific allowance ** $ $ $ $ Receivables without a specific allowance *** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ April 30, 2015* Receivables with specific allowance ** $ $ $ $ Receivables without a specific allowance ** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first six months of 2016, the Company identified 46 financing receivable contracts, primarily wholesale receivables, as troubled debt restructurings with aggregate balances of $17.6 million pre-modification and $17.1 million post-modification. During the first six months of 2015, there were 50 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $1.5 million pre-modification and $1.1 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At April 30, 2016, the Company had no significant commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 6 Months Ended |
Apr. 30, 2016 | |
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 $2,782 million, $3,006 million and $3,083 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,712 million, $2,743 million and $3,007 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. In the fourth quarter of 2015, as part of a receivable transfer, the company retained $228 million of securitization borrowings, with a balance of $22 million and $189 million at April 30, 2016 and October 31, 2015, respectively. This amount is not shown as a liability above as the borrowing is not outstanding to a third party. 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 $271 million, $249 million and $228 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $254 million, $238 million and $218 million at April 30, 2016, October 31, 2015 and April 30, 2015, 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 $1,787 million, $1,689 million and $1,545 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,678 million, $1,611 million and $1,480 million at April 30, 2016, October 31, 2015 and April 30, 2015, 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: April 30, 2016 Carrying value of liabilities $ Maximum exposure to loss The total assets of unconsolidated VIEs related to securitizations were approximately $59 billion at April 30, 2016. The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: April 30 October 31 April 30 2016 2015 2015 Financing receivables securitized (retail notes) $ $ $ Allowance for credit losses Other assets Total restricted securitized assets $ $ $ The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: April 30 October 31 April 30 2016 2015 2015 Short-term securitization borrowings $ $ $ Accrued interest on borrowings Total liabilities related to restricted securitized assets $ $ $ The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a restricted collection account until immediately prior to the time payment is required to the secured creditors. At April 30, 2016, the maximum remaining term of all restricted securitized retail notes was approximately seven years. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30 October 31 April 30 2016 2015 2015 Raw materials and supplies $ $ $ Work-in-process Finished goods and parts Total FIFO value Less adjustment to LIFO value Inventories $ $ $ |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 6 Months Ended |
Apr. 30, 2016 | |
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 and Turf and Forestry Total Goodwill at October 31, 2014 $ $ $ Translation adjustments Goodwill at April 30, 2015 $ $ $ Goodwill at October 31, 2015 $ $ $ Acquisitions* Translation adjustments Goodwill at April 30, 2016 $ $ $ * See Note 18. There were no accumulated impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: Useful Lives * April 30 October 31 April 30 (Years) 2016 2015 2015 Amortized intangible assets: Customer lists and relationships 11 $ $ $ Technology, patents, trademarks and other 14 Total at cost Less accumulated amortization ** Other intangible assets-net $ $ $ * Weighted - averages ** Accumulated amortization at April 30, 2016, October 31, 2015 and April 30, 2015 for customer lists and relationships totaled $10 million for each period and technology, patents, trademarks and other totaled $51 million, $45 million and $39 million, respectively. The amortization of other intangible assets in the second quarter and the first six months of 2016 was $3 million and $6 million and for 2015 was $2 million and $5 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2016 - $10 , 2017 - $21 , 2018 - $21 , 2019 - $17 and 2020 - $13 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Apr. 30, 2016 | |
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 $467 million and $428 million at April 30, 2016 and 2015, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Three Months Ended Six Months Ended April 30 April 30 2016 2015 2016 2015 Beginning of period balance $ $ $ $ Payments Amortization of premiums received Accruals for warranties Premiums received Foreign exchange End of period balance $ $ $ $ At April 30, 2016, the Company had approximately $172 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 April 30, 2016, the Company had accrued losses of approximately $4 million under these agreements. The maximum remaining term of the receivables guaranteed at April 30, 2016 was approximately five years. At April 30, 2016, the Company had commitments of approximately $218 million for the construction and acquisition of property and equipment. Also, at April 30, 2016, the Company had restricted assets of $113 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 $30 million at April 30, 2016, for which it believes the probability for payment is substantially remote. The accrued liability for these contingencies was not material at April 30, 2016. 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 | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30, 2016 October 31, 2015 April 30, 2015 Carrying Value Fair Value * Carrying Value Fair Value * Carrying Value Fair Value * Financing receivables - net $ $ $ $ $ $ Financing receivables securitized - net Short-term securitization borrowings Long-term borrowings due within one year: Equipment operations $ $ $ $ $ $ Financial services Total $ $ $ $ $ $ Long-term borrowings: Equipment operations $ $ $ $ $ $ Financial services Total $ $ $ $ $ $ * 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: April 30 October 31 April 30 2016* 2015* 2015* Marketable securities Equity fund $ $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities Mortgage-backed securities ** Total marketable securities Other assets Derivatives: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total assets *** $ $ $ Accounts payable and accrued expenses Derivatives: Interest rate contracts $ $ $ Foreign exchange contracts Cross-currency interest rate contracts Total liabilities $ $ $ * M easurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $44 million, $43 million and $47 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively; the fixed income fund of $3 million at April 30, 2016; and the U.S. government debt securities of $38 million, $37 million and $28 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. In addition, $40 million and $29 million of the international debt securities were Level 3 measurements at April 30, 2016 and October 31, 2015. There were no transfers between Level 1 and Level 2 during the first six months of 2016 or 2015. ** 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 April 30, 2016 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 $ $ Due after one through five years Due after five through 10 years Due after 10 years Mortgage-backed securities Debt securities $ $ Fair value, recurring, Level 3 measurements from available for sale marketable securities in millions of dollars follow: Three Months Ended Six Months Ended April 30 April 30 2016 2016 Beginning of period balance $ $ Purchases Principal payments Change in unrealized gain (loss) End of period balance $ $ Fair value , nonrecurring , Level 3 measurements from impairments in millions of dollars follow: Fair Value * Losses Three Months Ended Six Months Ended April 30 October 31 April 30 April 30 April 30 2016 2015 2015 2016 2015 2016 2015 Equipment on operating leases – net $ $ $ $ Property and equipment – net $ Other assets $ $ $ $ * See financing receivables with specific allowances in Note 10. Losses were not significant. 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, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data. Derivatives – The Company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency futures, forwards and swaps, and cross-currency interest rate swaps. The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Financing Receivables – Specific reserve impairments are based on the fair value of collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. Equipment on Operating Leases -Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of equipment sale price at lease maturity. Inputs include realized sales values. Property and Equipment-Net – The impairments were 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 included 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 | 6 Months Ended |
Apr. 30, 2016 | |
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 April 30, 2016 , October 31, 2015 and April 30, 2015 were $1,600 million, $2,800 million and $2,550 million, respectively . The notional amounts of cross-currency interest rate contracts at April 30, 2016 , October 31, 2015 and April 30, 2015 were $51 million, $60 million and $65 million, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense or other operating expenses (foreign exchange) in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate or foreign currency 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 statement of consolidated cash flows. The amount of loss recorded in OCI at April 30, 2016 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $2 million after-tax. These contracts mature in up to 29 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 April 30, 2016, October 31, 2015 and April 30, 2015 were $9,923 million, $8,618 million and $8,507 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings ). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were losses of $1 million and $2 million during the second quarter of 2016 and 2015, respectively, and were a loss of $1 million and a gain of $1 million during the first six months of 2016 and 2015, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars: Three Months Ended Six Months Ended April 30 April 30 2016 2015 2016 2015 Interest rate contracts * $ $ $ $ Borrowings ** * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $39 million and $44 million during the second quarter of 2016 and 2015, respectively, and $78 million and $89 million during the first six months of 2016 and 2015, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $75 million and $69 million during the second quarter of 2016 and 2015, respectively, and $142 million and $139 million during the first six months of 2016 and 2015, respectively. Derivatives not designated as hedging instruments The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards and swaps) and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings and purchases or sales of inventory. The total notional amounts of these interest rate swaps at April 30, 2016, October 31, 2015 and April 30, 2015 were $6,524 million, $6,333 million and $6,342 million, the foreign exchange contracts were $3,894 million, $3,160 million and $3,750 million and the cross-currency interest rate contracts were $74 million, $76 million and $94 million, respectively. At April 30, 2016, October 31, 2015 and April 30, 2015, there were also $762 million, $1,069 million and $1,320 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: April 30 October 31 April 30 Other Assets 2016 2015 2015 Designated as hedging instruments: Interest rate contracts $ $ $ Cross-currency interest rate contracts Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivatives $ $ $ Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ $ $ Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivatives $ $ $ 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 Six Months Ended OCI April 30 April 30 Classification 2016 2015 2016 2015 Fair Value Hedges: Interest rate contracts Interest $ $ $ $ Cash Flow Hedges : Recognized in OCI (Effective Portion): Interest rate contracts OCI (pretax) * Foreign exchange contracts OCI (pretax) * Reclassified from OCI (Effective Portion): Interest rate contracts Interest * Foreign exchange contracts Other operating * Recognized Directly in Income (Ineffective Portion) ** ** ** ** Not Designated as Hedges: Interest rate contracts Interest * $ $ $ $ Foreign exchange contracts Cost of sales Foreign exchange contracts Other operating * Total not designated $ $ $ $ * 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 April 30, 2016, October 31, 2015 and April 30, 2015, was $32 million, $41 million and $51 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 in millions of dollars follows: Gross Amounts Netting Collateral April 30, 2016 Recognized Arrangements Received Net Amount Assets $ $ $ $ Liabilities Gross Amounts Netting Collateral October 31, 2015 Recognized Arrangements Received Net Amount Assets $ $ $ Liabilities Gross Amounts Netting Collateral April 30, 2015 Recognized Arrangements Received Net Amount Assets $ $ $ $ Liabilities |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 6 Months Ended |
Apr. 30, 2016 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (17) In December 2015, the Company granted stock options to employees for the purchase of 3.5 million shares of common stock at an exercise price of $79.24 per share and a binomial lattice model fair value of $16.88 per share at the grant date. At April 30, 2016, options for 18.0 million shares were outstanding with a weighted-average exercise price of $78.11 per share. The Company also granted 248 thousand restricted stock units to employees and non-employee directors in the first six months of 2016, of which 106 thousand are subject to service based only conditions, 71 thousand are subject to performance/service based conditions and 71 thousand are subject to market/service based conditions. The fair value of the service based only units at the grant date was $79.50 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 $72.93 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 $103.66 per unit based on a lattice valuation model excluding dividends. At April 30, 2016, the Company was authorized to grant an additional 13.1 million shares related to stock option and restricted stock awards. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Apr. 30, 2016 | |
ACQUISITIONS | |
ACQUISITIONS | (18) In February 2016, the Company acquired Monosem for a cost of approximately $146 million, net of cash acquired of $20 million. Monosem, with four facilities in France and two in the U.S., is the European market leader in precision planters. The preliminary fair values assigned to the assets and liabilities related to the acquired entity in millions of dollars follow: Trade accounts and notes receivable – net $ Other receivables Inventories Property and equipment – net Goodwill Other intangible assets – net Other assets Total assets $ Accounts payable and accrued expenses $ Deferred tax liabilities Total liabilities $ The identifiable intangibles were primarily related to trade name, customer relationships and technology, which have a weighted average amortization period of 9 years. The goodwill is not expected to be deducted for tax purposes. In March 2016, the Company acquired an 80 percent interest in Hagie Manufacturing Company, LLC, the U.S. market leader in high-clearance sprayers located in Clarion, Iowa, for a cost of approximately $53 million, net of cash acquired of $3 million. The preliminary fair values assigned to the assets and liabilities related to the acquired entity in millions of dollars follow: Trade accounts and notes receivable – net $ Inventories Property and equipment – net Goodwill Other intangible assets – net Other assets Total assets $ Accounts payable and accrued expenses, and Total liabilities $ Redeemable noncontrolling interest $ The identifiable intangibles were primarily related to technology, trade name and customer relationships, which have a weighted average amortization period of 8 years. The goodwill is expected to be deducted for tax purposes. If certain events occur, the minority interest holder has the right to exercise a put option that would require the Company to purchase the holder’s membership interest. The Company also has a call option exercisable after a certain period of time. The put and call options cannot be separated from the noncontrolling interest. Due to the redemption features, the minority interest holder’s value is classified as a redeemable noncontrolling interest in the Company’s consolidated balance sheet. The goodwill in both transactions was the result of future cash flows and related fair values of the entities exceeding the fair value of the identified assets and liabilities. The results of both entities were included in the Company’s consolidated financial statements in the agriculture and turf segment since the dates of acquisition. The pro forma results of operations as if the acquisitions had occurred at the beginning of the current fiscal year would not differ significantly from the reported results . |
DISPOSITION - CROP INSURANCE OP
DISPOSITION - CROP INSURANCE OPERATIONS | 6 Months Ended |
Apr. 30, 2016 | |
Crop Insurance Operations | |
Dispositions | |
DISPOSITION | (19) In March 2015, the Company closed the sale of all of the stock of its wholly-owned subsidiaries, John Deere Insurance Company and John Deere Risk Protection, Inc. (collectively the Crop Insurance operations) to Farmers Mutual Hail Insurance Company of Iowa. These operations were included in the Company’s financial services operating segment. The total amount of proceeds from the sale was approximately $154 million, including $5 million of cash and cash equivalents sold, with a gain recorded in other income of $41 million pretax and $38 million after-tax. The tax expense was partially offset by a change in a valuation allowance on a capital loss carryforward. The Company provided certain business services for a fee during a transition period. |
SUPPLEMENTAL CONSOLIDATING DATA
SUPPLEMENTAL CONSOLIDATING DATA | 6 Months Ended |
Apr. 30, 2016 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
SUPPLEMENTAL CONSOLIDATING DATA | (20) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME For the Three Months Ended April 30, 2016 and 2015 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2016 2015 2016 2015 Net Sales and Revenues Net sales $ $ Finance and interest income $ $ Other income Total Costs and Expenses Cost of sales Research and development expenses Selling, administrative and general expenses Interest expense Interest compensation to Financial Services Other operating expenses Total Income of Consolidated Group before Income Taxes Provision for income taxes Income of Consolidated Group Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services .2 .4 Other Total .2 .4 Net Income Less: Net income (loss) attributable to noncontrolling interests (.7) .3 Net Income Attributable to Deere & Company $ $ $ $ * 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 INCOME For the Six Months Ended April 30, 2016 and 2015 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2016 2015 2016 2015 Net Sales and Revenues Net sales $ $ Finance and interest income $ $ Other income Total Costs and Expenses Cost of sales Research and development expenses Selling, administrative and general expenses Interest expense Interest compensation to Financial Services Other operating expenses Total Income of Consolidated Group before Income Taxes Provision for income taxes Income of Consolidated Group Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services .8 Other Total .8 Net Income Less: Net income (loss) attributable to noncontrolling interests .5 Net Income Attributable to Deere & Company $ $ $ $ * 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 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES April 30 October 31 April 30 April 30 October 31 April 30 2016 2015 2015 2016 2015 2015 Assets Cash and cash equivalents $ $ $ $ $ $ Marketable securities Receivables from unconsolidated subsidiaries and affiliates Trade accounts and notes receivable - net Financing receivables - net .7 .9 Financing receivables securitized - net Other receivables Equipment on operating leases - net Inventories Property and equipment - net Investments in unconsolidated subsidiaries and affiliates Goodwill Other intangible assets - net Retirement benefits Deferred income taxes Other assets Total Assets $ $ $ $ $ $ Liabilities and Stockholders’ Equity Liabilities Short-term borrowings $ $ $ $ $ $ Short-term securitization borrowings Payables to unconsolidated subsidiaries and affiliates Accounts payable and accrued expenses Deferred income taxes Long-term borrowings Retirement benefits and other liabilities Total liabilities Commitments and contingencies (Note 14) Redeemable noncontrolling interest (Note 18) Stockholders’ Equity Common stock, $1 par value (issued shares at April 30, 2016 – 536,431,204) Common stock in treasury Retained earnings Accumulated other comprehensive income (loss) Total Deere & Company stockholders' equity Noncontrolling interests Total stockholders’ equity Total Liabilities and Stockholders’ Equity $ $ $ $ $ $ * 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 Six Months Ended April 30, 2016 and 2015 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2016 2015 2016 2015 Cash Flows from Operating Activities Net income $ $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses .3 Provision for depreciation and amortization Impairment charges Undistributed earnings of unconsolidated subsidiaries and affiliates (.8) Provision (credit) for deferred income taxes Changes in assets and liabilities: Trade receivables Insurance receivables Inventories Accounts payable and accrued expenses Accrued income taxes payable/receivable .2 Retirement benefits Other Net cash provided by operating activities Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) Proceeds from maturities and sales of marketable securities Proceeds from sales of equipment on operating leases Proceeds from sale of business, net of cash sold Cost of receivables acquired (excluding trade and wholesale) Purchases of marketable securities Purchases of property and equipment (.9) Cost of equipment on operating leases acquired Increase in trade and wholesale receivables Acquisitions of businesses, net of cash acquired Other Net cash provided by (used for) investing activities Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings Change in intercompany receivables/payables Proceeds from long-term borrowings Payments of long-term borrowings Proceeds from issuance of common stock Repurchases of common stock Dividends paid Excess tax benefits from share-based compensation Other Net cash provided by (used for) financing activities Effect of Exchange Rate Changes on Cash and Cash Equivalents Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period $ $ $ $ * 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 ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 6 Months Ended |
Apr. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
Fiscal Period, Policy | The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2016 and 2015 were May 1, 2016 and May 3, 2015, respectively. Both periods contained 13 weeks. For ease of presentation, the consolidated financial statements and notes continue to be dated April 30. |
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 IT29
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) Balance October 31, 2014 $ $ $ $ Other comprehensive income (loss) items before reclassification $ Amounts reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) Balance April 30, 2015 $ $ $ $ Balance October 31, 2015 $ $ $ $ $ Other comprehensive income (loss) items before reclassification Amounts reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) Balance April 30, 2016 $ $ $ $ $ |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Three Months Ended April 30, 2016 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Six Months Ended April 30, 2016 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Three Months Ended April 30, 2015 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense $ Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. In the second quarter of 2016 and 2015, the noncontrolling interests’ comprehensive income (loss) was $(.6) million and $.3 million, respectively, which consisted of net income (loss) of $(.7) million and $.3 million and cumulative translation adjustments of $.1 million and none , respectively. Before Tax After Tax (Expense) Tax Six Months Ended April 30, 2015 Amount Credit Amount Cumulative translation adjustment $ $ $ Unrealized gain (loss) on derivatives: Unrealized hedging (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. In the first six months of 2016 and 2015, the noncontrolling interests’ comprehensive income (loss) was $(1.2) million and $.2 million, respectively, which consisted of net income (loss) of $(1.3) million and $.5 million and cumulative translation adjustments of $.1 million and $(.3) million, respectively. |
DIVIDENDS DECLARED AND PAID (Ta
DIVIDENDS DECLARED AND PAID (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
DIVIDENDS DECLARED AND PAID | |
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended April 30 April 30 2016 2015 2016 2015 Dividends declared $ .60 $ .60 $ $ Dividends paid $ .60 $ .60 $ $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Net income attributable to Deere & Company $ $ $ $ Less income allocable to participating securities .2 .3 .3 .4 Income allocable to common stock $ $ $ $ Average shares outstanding Basic per share $ $ $ $ Average shares outstanding Effect of dilutive share-based compensation Total potential shares outstanding Diluted per share $ $ $ $ |
PENSION AND OTHER POSTRETIREM32
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service cost Settlements/curtailments Net cost $ $ $ $ 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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service credit Net cost $ $ $ $ |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
SEGMENT REPORTING | |
Schedule of Segment Reporting Information | Worldwide net sales and revenues, operating profit and identifiable assets by segment in millions of dollars follow: Three Months Ended April 30 Six Months Ended April 30 % % 2016 2015 Change 2016 2015 Change Net sales and revenues: Agriculture and turf $ $ $ $ -5 Construction and forestry -16 -20 Total net sales -4 -9 Financial services -1 Other revenues -2 -5 Total net sales and revenues $ $ -4 $ $ -8 Operating profit: * Agriculture and turf $ $ -4 $ $ -16 Construction and forestry -61 -57 Financial services -40 -29 Total operating profit -22 -28 Reconciling items ** +46 +3 Income taxes -27 -33 Net income attributable to Deere & Company $ $ -28 $ $ -30 Intersegment sales and revenues: Agriculture and turf net sales $ $ -25 $ $ -36 Construction and forestry net sales Financial services +43 +20 Equipment operations outside the U.S. and Canada: Net sales $ $ -1 $ $ -4 Operating profit -18 April 30 October 31 2016 2015 Identifiable assets: Agriculture and turf $ $ +7 Construction and forestry -3 Financial services +3 Corporate -8 Total assets $ $ +2 * 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) | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30, 2016 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ October 31, 2015 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ April 30, 2015 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ |
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 April 30, 2016 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Six Months Ended April 30, 2016 Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Financing receivables: End of period balance $ $ $ $ Balance individually evaluated ** $ $ $ $ Three Months Ended April 30, 2015 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Six Months Ended April 30, 2015 Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of period balance * $ $ $ $ Financing receivables: End of period balance $ $ $ $ Balance individually evaluated ** $ $ * 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: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment April 30, 2016* Receivables with specific allowance ** $ $ $ $ Receivables without a specific allowance *** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ October 31, 2015* Receivables with specific allowance ** $ $ $ $ Receivables without a specific allowance *** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ April 30, 2015* Receivables with specific allowance ** $ $ $ $ Receivables without a specific allowance ** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. |
SECURITIZATION OF FINANCING R35
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30, 2016 Carrying value of liabilities $ Maximum exposure to loss |
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: April 30 October 31 April 30 2016 2015 2015 Financing receivables securitized (retail notes) $ $ $ Allowance for credit losses Other assets Total restricted securitized assets $ $ $ The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: April 30 October 31 April 30 2016 2015 2015 Short-term securitization borrowings $ $ $ Accrued interest on borrowings Total liabilities related to restricted securitized assets $ $ $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30 October 31 April 30 2016 2015 2015 Raw materials and supplies $ $ $ Work-in-process Finished goods and parts Total FIFO value Less adjustment to LIFO value Inventories $ $ $ |
GOODWILL AND OTHER INTANGIBLE37
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and Turf and Forestry Total Goodwill at October 31, 2014 $ $ $ Translation adjustments Goodwill at April 30, 2015 $ $ $ Goodwill at October 31, 2015 $ $ $ Acquisitions* Translation adjustments Goodwill at April 30, 2016 $ $ $ * See Note 18. |
Components of Other Intangible Assets | The components of other intangible assets were as follows in millions of dollars: Useful Lives * April 30 October 31 April 30 (Years) 2016 2015 2015 Amortized intangible assets: Customer lists and relationships 11 $ $ $ Technology, patents, trademarks and other 14 Total at cost Less accumulated amortization ** Other intangible assets-net $ $ $ * Weighted - averages ** Accumulated amortization at April 30, 2016, October 31, 2015 and April 30, 2015 for customer lists and relationships totaled $10 million for each period and technology, patents, trademarks and other totaled $51 million, $45 million and $39 million, respectively. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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 Six Months Ended April 30 April 30 2016 2015 2016 2015 Beginning of period balance $ $ $ $ Payments Amortization of premiums received Accruals for warranties Premiums received Foreign exchange End of period balance $ $ $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
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: April 30, 2016 October 31, 2015 April 30, 2015 Carrying Value Fair Value * Carrying Value Fair Value * Carrying Value Fair Value * Financing receivables - net $ $ $ $ $ $ Financing receivables securitized - net Short-term securitization borrowings Long-term borrowings due within one year: Equipment operations $ $ $ $ $ $ Financial services Total $ $ $ $ $ $ Long-term borrowings: Equipment operations $ $ $ $ $ $ Financial services Total $ $ $ $ $ $ * 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: April 30 October 31 April 30 2016* 2015* 2015* Marketable securities Equity fund $ $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities Mortgage-backed securities ** Total marketable securities Other assets Derivatives: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total assets *** $ $ $ Accounts payable and accrued expenses Derivatives: Interest rate contracts $ $ $ Foreign exchange contracts Cross-currency interest rate contracts Total liabilities $ $ $ * M easurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $44 million, $43 million and $47 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively; the fixed income fund of $3 million at April 30, 2016; and the U.S. government debt securities of $38 million, $37 million and $28 million at April 30, 2016, October 31, 2015 and April 30, 2015, respectively. In addition, $40 million and $29 million of the international debt securities were Level 3 measurements at April 30, 2016 and October 31, 2015. There were no transfers between Level 1 and Level 2 during the first six months of 2016 or 2015. ** 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 April 30, 2016 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 $ $ Due after one through five years Due after five through 10 years Due after 10 years Mortgage-backed securities Debt securities $ $ |
Fair Value, Recurring, Level 3 Measurements | Fair value, recurring, Level 3 measurements from available for sale marketable securities in millions of dollars follow: Three Months Ended Six Months Ended April 30 April 30 2016 2016 Beginning of period balance $ $ Purchases Principal payments Change in unrealized gain (loss) End of period balance $ $ |
Fair Value, Nonrecurring, Level 3 Measurements | Fair value , nonrecurring , Level 3 measurements from impairments in millions of dollars follow: Fair Value * Losses Three Months Ended Six Months Ended April 30 October 31 April 30 April 30 April 30 2016 2015 2015 2016 2015 2016 2015 Equipment on operating leases – net $ $ $ $ Property and equipment – net $ Other assets $ $ $ $ * See financing receivables with specific allowances in Note 10. Losses were not significant. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
DERIVATIVE INSTRUMENTS | |
Fair Value Hedge Interest Rate Contracts and Underlying Borrowings | The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars: Three Months Ended Six Months Ended April 30 April 30 2016 2015 2016 2015 Interest rate contracts * $ $ $ $ Borrowings ** * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $39 million and $44 million during the second quarter of 2016 and 2015, respectively, and $78 million and $89 million during the first six months of 2016 and 2015, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $75 million and $69 million during the second quarter of 2016 and 2015, respectively, and $142 million and $139 million during the first six months of 2016 and 2015, 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: April 30 October 31 April 30 Other Assets 2016 2015 2015 Designated as hedging instruments: Interest rate contracts $ $ $ Cross-currency interest rate contracts Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivatives $ $ $ Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ $ $ Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivatives $ $ $ |
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 Six Months Ended OCI April 30 April 30 Classification 2016 2015 2016 2015 Fair Value Hedges: Interest rate contracts Interest $ $ $ $ Cash Flow Hedges : Recognized in OCI (Effective Portion): Interest rate contracts OCI (pretax) * Foreign exchange contracts OCI (pretax) * Reclassified from OCI (Effective Portion): Interest rate contracts Interest * Foreign exchange contracts Other operating * Recognized Directly in Income (Ineffective Portion) ** ** ** ** Not Designated as Hedges: Interest rate contracts Interest * $ $ $ $ Foreign exchange contracts Cost of sales Foreign exchange contracts Other operating * Total not designated $ $ $ $ * 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 in millions of dollars follows: Gross Amounts Netting Collateral April 30, 2016 Recognized Arrangements Received Net Amount Assets $ $ $ $ Liabilities Gross Amounts Netting Collateral October 31, 2015 Recognized Arrangements Received Net Amount Assets $ $ $ Liabilities Gross Amounts Netting Collateral April 30, 2015 Recognized Arrangements Received Net Amount Assets $ $ $ $ Liabilities |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
Monosem | |
Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | The preliminary fair values assigned to the assets and liabilities related to the acquired entity in millions of dollars follow: Trade accounts and notes receivable – net $ Other receivables Inventories Property and equipment – net Goodwill Other intangible assets – net Other assets Total assets $ Accounts payable and accrued expenses $ Deferred tax liabilities Total liabilities $ |
Hagie Manufacturing Company, LLC | |
Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | The preliminary fair values assigned to the assets and liabilities related to the acquired entity in millions of dollars follow: Trade accounts and notes receivable – net $ Inventories Property and equipment – net Goodwill Other intangible assets – net Other assets Total assets $ Accounts payable and accrued expenses, and Total liabilities $ Redeemable noncontrolling interest $ |
SUPPLEMENTAL CONSOLIDATING DA42
SUPPLEMENTAL CONSOLIDATING DATA (Tables) | 6 Months Ended |
Apr. 30, 2016 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
Supplemental Consolidating Data Income Statement | (20) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME For the Three Months Ended April 30, 2016 and 2015 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2016 2015 2016 2015 Net Sales and Revenues Net sales $ $ Finance and interest income $ $ Other income Total Costs and Expenses Cost of sales Research and development expenses Selling, administrative and general expenses Interest expense Interest compensation to Financial Services Other operating expenses Total Income of Consolidated Group before Income Taxes Provision for income taxes Income of Consolidated Group Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services .2 .4 Other Total .2 .4 Net Income Less: Net income (loss) attributable to noncontrolling interests (.7) .3 Net Income Attributable to Deere & Company $ $ $ $ * 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 INCOME For the Six Months Ended April 30, 2016 and 2015 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2016 2015 2016 2015 Net Sales and Revenues Net sales $ $ Finance and interest income $ $ Other income Total Costs and Expenses Cost of sales Research and development expenses Selling, administrative and general expenses Interest expense Interest compensation to Financial Services Other operating expenses Total Income of Consolidated Group before Income Taxes Provision for income taxes Income of Consolidated Group Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services .8 Other Total .8 Net Income Less: Net income (loss) attributable to noncontrolling interests .5 Net Income Attributable to Deere & Company $ $ $ $ * 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 (Continued) CONDENSED BALANCE SHEET (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES April 30 October 31 April 30 April 30 October 31 April 30 2016 2015 2015 2016 2015 2015 Assets Cash and cash equivalents $ $ $ $ $ $ Marketable securities Receivables from unconsolidated subsidiaries and affiliates Trade accounts and notes receivable - net Financing receivables - net .7 .9 Financing receivables securitized - net Other receivables Equipment on operating leases - net Inventories Property and equipment - net Investments in unconsolidated subsidiaries and affiliates Goodwill Other intangible assets - net Retirement benefits Deferred income taxes Other assets Total Assets $ $ $ $ $ $ Liabilities and Stockholders’ Equity Liabilities Short-term borrowings $ $ $ $ $ $ Short-term securitization borrowings Payables to unconsolidated subsidiaries and affiliates Accounts payable and accrued expenses Deferred income taxes Long-term borrowings Retirement benefits and other liabilities Total liabilities Commitments and contingencies (Note 14) Redeemable noncontrolling interest (Note 18) Stockholders’ Equity Common stock, $1 par value (issued shares at April 30, 2016 – 536,431,204) Common stock in treasury Retained earnings Accumulated other comprehensive income (loss) Total Deere & Company stockholders' equity Noncontrolling interests Total stockholders’ equity Total Liabilities and Stockholders’ Equity $ $ $ $ $ $ * 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 (Continued) STATEMENT OF CASH FLOWS For the Six Months Ended April 30, 2016 and 2015 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2016 2015 2016 2015 Cash Flows from Operating Activities Net income $ $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses .3 Provision for depreciation and amortization Impairment charges Undistributed earnings of unconsolidated subsidiaries and affiliates (.8) Provision (credit) for deferred income taxes Changes in assets and liabilities: Trade receivables Insurance receivables Inventories Accounts payable and accrued expenses Accrued income taxes payable/receivable .2 Retirement benefits Other Net cash provided by operating activities Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) Proceeds from maturities and sales of marketable securities Proceeds from sales of equipment on operating leases Proceeds from sale of business, net of cash sold Cost of receivables acquired (excluding trade and wholesale) Purchases of marketable securities Purchases of property and equipment (.9) Cost of equipment on operating leases acquired Increase in trade and wholesale receivables Acquisitions of businesses, net of cash acquired Other Net cash provided by (used for) investing activities Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings Change in intercompany receivables/payables Proceeds from long-term borrowings Payments of long-term borrowings Proceeds from issuance of common stock Repurchases of common stock Dividends paid Excess tax benefits from share-based compensation Other Net cash provided by (used for) financing activities Effect of Exchange Rate Changes on Cash and Cash Equivalents Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period $ $ $ $ * 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 ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | ||
Transfer of inventory to equipment on operating leases | $ 269 | $ 276 |
Accounts payable related to purchases of property and equipment | $ 33 | $ 39 |
OTHER COMPREHENSIVE INCOME IT44
OTHER COMPREHENSIVE INCOME ITEMS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Accumulated other comprehensive income (loss) | ||||
Balance | $ 6,757.6 | $ 9,065.5 | ||
Net current period other comprehensive income (loss) | $ 341.4 | $ (48.6) | 210.7 | (510.9) |
Balance | 7,176.7 | 8,176 | 7,176.7 | 8,176 |
Total Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (4,729) | (3,783) | ||
Other comprehensive income (loss) items before reclassification | 134 | (594) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 76 | 83 | ||
Net current period other comprehensive income (loss) | 210 | (511) | ||
Balance | (4,519) | (4,294) | (4,519) | (4,294) |
Retirement Benefits Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (3,501) | (3,493) | ||
Other comprehensive income (loss) items before reclassification | (18) | (20) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 75 | 83 | ||
Net current period other comprehensive income (loss) | 19 | 21 | 57 | 63 |
Balance | (3,444) | (3,430) | (3,444) | (3,430) |
Cumulative Translation Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (1,238) | (303) | ||
Other comprehensive income (loss) items before reclassification | 154 | (577) | ||
Net current period other comprehensive income (loss) | 312 | (67) | 154 | (577) |
Balance | (1,084) | (880) | (1,084) | (880) |
Unrealized Gain (Loss) on Derivatives | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (2) | |||
Other comprehensive income (loss) items before reclassification | (1) | (2) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 2 | 2 | ||
Net current period other comprehensive income (loss) | 1 | 1 | 1 | |
Balance | (1) | (1) | ||
Unrealized Gain (Loss) on Investments | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | 12 | 13 | ||
Other comprehensive income (loss) items before reclassification | 9 | (3) | (1) | 5 |
Amounts reclassified from accumulated other comprehensive income (loss) | (1) | (2) | ||
Net current period other comprehensive income (loss) | 9 | (4) | (2) | 3 |
Balance | $ 10 | $ 16 | $ 10 | $ 16 |
OTHER COMPREHENSIVE INCOME IT45
OTHER COMPREHENSIVE INCOME ITEMS (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | $ (191) | $ (165.5) | $ (364.3) | $ (345.6) |
Other operating expense | (360.3) | (212.9) | (608) | (435.5) |
Other income | 157.4 | 195.9 | 313.6 | 380.3 |
Total other comprehensive income (loss), before tax | 353 | (36) | 244 | (469) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (12) | (13) | (34) | (42) |
Other Comprehensive Income (Loss), After Tax | ||||
Other Comprehensive Income (Loss), Net of Income Taxes | 341.4 | (48.6) | 210.7 | (510.9) |
Cumulative Translation Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | 312 | (67) | 154 | (575) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (2) | |||
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 154 | (577) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 312 | (67) | 154 | (577) |
Unrealized Gain (Loss) on Derivatives | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (1) | (2) | (4) | |
Total other comprehensive income (loss), before tax | 2 | 2 | 2 | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 1 | 1 | 2 | |
Total other comprehensive income (loss), tax (expense) credit | (1) | (1) | (1) | |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (1) | (2) | ||
Reclassification from accumulated other comprehensive income, after tax | 2 | 2 | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 1 | 1 | 1 | |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | 2 | 3 | 5 | 6 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (2) | (2) | (2) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 1 | 1 | 3 | 4 |
Unrealized Gain (Loss) on Derivatives | Foreign Exchange Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expense | 1 | (1) | (1) | (2) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | 1 | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (1) | (2) | ||
Unrealized Gain (Loss) on Investments | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 9 | (5) | (1) | 8 |
Total other comprehensive income (loss), before tax | 8 | (7) | (3) | 4 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 2 | (3) | ||
Total other comprehensive income (loss), tax (expense) credit | 1 | 3 | 1 | (1) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 9 | (3) | (1) | 5 |
Reclassification from accumulated other comprehensive income, after tax | (1) | (2) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 9 | (4) | (2) | 3 |
Unrealized Gain (Loss) on Investments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other income | (1) | (2) | (2) | (4) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 1 | 1 | 1 | 2 |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (1) | (1) | (2) | |
Retirement Benefits Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | 31 | 36 | 91 | 102 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (12) | (15) | (34) | (39) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (18) | (20) | ||
Reclassification from accumulated other comprehensive income, after tax | 75 | 83 | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 19 | 21 | 57 | 63 |
Retirement Benefits Adjustment | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (14) | (17) | (17) | (17) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 5 | 6 | 6 | 6 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (9) | (11) | (11) | (11) |
Retirement Benefits Adjustment | Health Care and Life Insurance | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (11) | (12) | (11) | (12) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 4 | 3 | 4 | 3 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (7) | (9) | (7) | (9) |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Reclassification from accumulated other comprehensive income, before tax | 52 | 55 | 104 | 110 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (19) | (20) | (38) | (40) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 33 | 35 | 66 | 70 |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Health Care and Life Insurance | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Reclassification from accumulated other comprehensive income, before tax | 18 | 23 | 37 | 46 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (7) | (8) | (14) | (17) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 11 | 15 | 23 | 29 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Reclassification from accumulated other comprehensive income, before tax | 4 | 6 | 8 | 12 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (3) | (3) | (5) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 3 | 3 | 5 | 7 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Health Care and Life Insurance | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Reclassification from accumulated other comprehensive income, before tax | (20) | (19) | (39) | (38) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 7 | 7 | 14 | 14 |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (13) | $ (12) | (25) | (24) |
Settlements/Curtailments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Reclassification from accumulated other comprehensive income, before tax | 2 | 9 | 1 | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (3) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 1 | $ 6 | $ 1 |
OTHER COMPREHENSIVE INCOME IT46
OTHER COMPREHENSIVE INCOME ITEMS (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | ||||
Comprehensive income (loss) attributable to noncontrolling interests | $ (0.6) | $ 0.3 | $ (1.2) | $ 0.2 |
Net income (loss) attributable to noncontrolling interests | (0.7) | 0.3 | (1.3) | 0.5 |
Cumulative translation adjustments attributable to noncontrolling interests | $ 0.1 | $ 0 | $ 0.1 | $ (0.3) |
DIVIDENDS DECLARED AND PAID (De
DIVIDENDS DECLARED AND PAID (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
DIVIDENDS DECLARED AND PAID | ||||
Dividends declared (in dollars per share) | $ 0.60 | $ 0.60 | $ 1.20 | $ 1.20 |
Dividends paid (in dollars per share) | $ 0.60 | $ 0.60 | $ 1.20 | $ 1.20 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
EARNINGS PER SHARE | ||||
Net income attributable to Deere & Company | $ 495.4 | $ 690.5 | $ 749.8 | $ 1,077.2 |
Less income allocable to participating securities (in dollars) | 0.2 | 0.3 | 0.3 | 0.4 |
Income allocable to common stock (in dollars) | $ 495.2 | $ 690.2 | $ 749.5 | $ 1,076.8 |
Average shares outstanding | 315.1 | 337.1 | 315.8 | 340.2 |
Basic (in dollars per share) | $ 1.57 | $ 2.05 | $ 2.37 | $ 3.17 |
Diluted Earnings Per Share | ||||
Average shares outstanding | 315.1 | 337.1 | 315.8 | 340.2 |
Effect of dilutive share-based compensation (in shares) | 1.4 | 2.6 | 1.3 | 2.6 |
Total potential shares outstanding | 316.5 | 339.7 | 317.1 | 342.8 |
Diluted (in dollars per share) | $ 1.56 | $ 2.03 | $ 2.36 | $ 3.14 |
Antidilutive incremental shares excluded from computation of earnings per share | 11.9 | 3 | 11.9 | 3 |
PENSION AND OTHER POSTRETIREM49
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | Nov. 01, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | Oct. 31, 2016 |
Forecasted | ||||||
Net Periodic Cost | ||||||
Decrease in service and interest costs compared to previous method | $ 175 | |||||
Pensions | ||||||
Net Periodic Cost | ||||||
Service cost | $ 62 | $ 69 | $ 126 | $ 142 | ||
Interest cost | 97 | 119 | 195 | 238 | ||
Expected return on plan assets | (194) | (192) | (387) | (385) | ||
Amortization of actuarial (gain) loss | 52 | 55 | 104 | 110 | ||
Amortization of prior service (credit) cost | 4 | 6 | 8 | 12 | ||
Settlements/curtailments | 2 | 9 | 1 | |||
Net cost | 23 | 57 | 55 | 118 | ||
Defined benefit plan employer contributions | 48 | |||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 31 | |||||
Service cost discount rates (as a percent) | 4.30% | |||||
Interest cost discount rates (as a percent) | 3.40% | |||||
Discount rates (as a percent) | 4.10% | |||||
Health Care and Life Insurance | ||||||
Net Periodic Cost | ||||||
Service cost | 10 | 12 | 19 | 23 | ||
Interest cost | 51 | 64 | 102 | 129 | ||
Expected return on plan assets | (9) | (14) | (18) | (28) | ||
Amortization of actuarial (gain) loss | 18 | 23 | 37 | 46 | ||
Amortization of prior service (credit) cost | (20) | (19) | (39) | (38) | ||
Net cost | $ 50 | $ 66 | 101 | $ 132 | ||
Defined benefit plan employer contributions | 23 | |||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $ 3 | |||||
Service cost discount rates (as a percent) | 5.00% | |||||
Interest cost discount rates (as a percent) | 3.50% | |||||
Discount rates (as a percent) | 4.30% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 |
UNRECOGNIZED TAX BENEFITS | ||
Unrecognized tax benefits | $ 211 | $ 229 |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 75 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | Oct. 31, 2015 | |
Net Sales and Revenues | |||||
Total net sales | $ 7,106.6 | $ 7,398.5 | $ 11,875.8 | $ 13,003.6 | |
% Change - Net sales | (4.00%) | (9.00%) | |||
Total net sales and revenues | $ 7,875.4 | 8,170.7 | $ 13,399.9 | 14,553.8 | |
% Change - Net sales and revenues | (4.00%) | (8.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 848 | 1,093 | $ 1,256 | 1,740 | |
% Change - Operating profit (loss) | (22.00%) | (28.00%) | |||
Net income attributable to Deere & Company | $ 495.4 | 690.5 | $ 749.8 | 1,077.2 | |
% Change - Net income (loss) attributable to Deere & Company | (28.00%) | (30.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 59,183.3 | 59,594 | $ 59,183.3 | 59,594 | $ 57,947.6 |
% Change - Identifiable assets | 2.00% | ||||
Operating Segments (Other) | |||||
Reconciling items | $ (115) | (79) | $ (173) | (168) | |
% Change - Reconciling items | 46.00% | 3.00% | |||
Income taxes | $ (237.8) | (324) | $ (333.3) | (494.6) | |
% Change - Income taxes | (27.00%) | (33.00%) | |||
Equipment Operations | |||||
Net Sales and Revenues | |||||
Total net sales | $ 7,106.6 | 7,398.5 | $ 11,875.8 | 13,003.6 | |
Total net sales and revenues | 7,259.4 | 7,566.3 | 12,186.6 | 13,352 | |
Operating Profit (Loss) | |||||
Net income attributable to Deere & Company | 495.4 | 690.5 | 749.8 | 1,077.2 | |
Identifiable Assets | |||||
Total Assets | 25,665.3 | 26,895.8 | 25,665.3 | 26,895.8 | 25,373.6 |
Operating Segments (Other) | |||||
Income taxes | (180.4) | (228.6) | (211.5) | (323) | |
Equipment Operations | Outside U.S. and Canada: | |||||
Net Sales and Revenues | |||||
Total net sales | $ 2,598 | 2,628 | $ 4,306 | 4,502 | |
% Change - Net sales | (1.00%) | (4.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 231 | 231 | $ 252 | 308 | |
% Change - Operating profit (loss) | (18.00%) | ||||
Corporate | |||||
Identifiable Assets | |||||
Total Assets | 4,958 | $ 4,958 | 5,412 | ||
% Change - Identifiable assets | (8.00%) | ||||
Agriculture and Turf | |||||
Net Sales and Revenues | |||||
Total net sales | 5,742 | 5,766 | $ 9,341 | 9,847 | |
% Change - Net sales | (5.00%) | ||||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 614 | 639 | $ 759 | 907 | |
% Change - Operating profit (loss) | (4.00%) | (16.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 8,937 | $ 8,937 | 8,332 | ||
% Change - Identifiable assets | 7.00% | ||||
Agriculture and Turf | Intersegment Sales and Revenue | |||||
Net Sales and Revenues | |||||
Total net sales and revenues | $ 9 | 12 | $ 16 | 25 | |
% Change - Net sales and revenues | (25.00%) | (36.00%) | |||
Construction and Forestry | |||||
Net Sales and Revenues | |||||
Total net sales | $ 1,365 | 1,633 | $ 2,535 | 3,157 | |
% Change - Net sales | (16.00%) | (20.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 74 | 189 | $ 143 | 335 | |
% Change - Operating profit (loss) | (61.00%) | (57.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 3,185 | $ 3,185 | 3,295 | ||
% Change - Identifiable assets | (3.00%) | ||||
Financial Services | |||||
Net Sales and Revenues | |||||
Total net sales and revenues | 651 | 653 | $ 1,287 | 1,301 | |
% Change - Net sales and revenues | (1.00%) | ||||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 160 | 265 | $ 354 | 498 | |
% Change - Operating profit (loss) | (40.00%) | (29.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 42,103 | $ 42,103 | $ 40,909 | ||
% Change - Identifiable assets | 3.00% | ||||
Financial Services | Intersegment Sales and Revenue | |||||
Net Sales and Revenues | |||||
Total net sales and revenues | $ 80 | 56 | $ 127 | 106 | |
% Change - Net sales and revenues | 43.00% | 20.00% | |||
Other | |||||
Net Sales and Revenues | |||||
Total net sales and revenues | $ 117 | $ 119 | $ 237 | $ 249 | |
% Change - Net sales and revenues | (2.00%) | (5.00%) |
FINANCING RECEIVABLES (Details)
FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 6 Months Ended | |||||
Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | |
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 | ||||||
Total Past Due | $ 505 | $ 381 | $ 392 | |||
Total Non-Performing | 196 | 142 | 137 | |||
Current | 27,614 | 29,278 | 29,121 | |||
Total Financing Receivables | 28,315 | 29,801 | 29,650 | |||
Less allowance for credit losses | 165 | $ 155 | 157 | 163 | $ 168 | $ 175 |
Total financing receivables - net | 28,150 | 29,644 | 29,487 | |||
30-59 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 254 | 215 | 211 | |||
60-89 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 117 | 100 | 98 | |||
90 Days or Greater Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 134 | 66 | 83 | |||
Retail Notes | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Financing Receivables | 20,567 | 21,473 | ||||
Less allowance for credit losses | 102 | $ 93 | 95 | 99 | $ 104 | $ 109 |
Retail Notes | Agriculture and Turf | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 278 | 213 | 212 | |||
Total Non-Performing | 129 | 98 | 96 | |||
Current | 17,436 | 18,574 | 18,543 | |||
Total Financing Receivables | 17,843 | 18,885 | 18,851 | |||
Retail Notes | Agriculture and Turf | 30-59 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 137 | 112 | 108 | |||
Retail Notes | Agriculture and Turf | 60-89 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 70 | 54 | 55 | |||
Retail Notes | Agriculture and Turf | 90 Days or Greater Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 71 | 47 | 49 | |||
Retail Notes | Construction and Forestry | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 136 | 105 | 93 | |||
Total Non-Performing | 32 | 21 | 18 | |||
Current | 2,556 | 2,556 | 2,511 | |||
Total Financing Receivables | 2,724 | 2,682 | 2,622 | |||
Retail Notes | Construction and Forestry | 30-59 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 79 | 64 | 57 | |||
Retail Notes | Construction and Forestry | 60-89 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 29 | 29 | 24 | |||
Retail Notes | Construction and Forestry | 90 Days or Greater Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 28 | 12 | 12 | |||
Other Financing Receivables | Agriculture and Turf | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 73 | 42 | 65 | |||
Total Non-Performing | 12 | 13 | 16 | |||
Current | 6,671 | 7,175 | 7,051 | |||
Total Financing Receivables | 6,756 | 7,230 | 7,132 | |||
Other Financing Receivables | Agriculture and Turf | 30-59 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 28 | 26 | 32 | |||
Other Financing Receivables | Agriculture and Turf | 60-89 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 12 | 12 | 13 | |||
Other Financing Receivables | Agriculture and Turf | 90 Days or Greater Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 33 | 4 | 20 | |||
Other Financing Receivables | Construction and Forestry | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 18 | 21 | 22 | |||
Total Non-Performing | 23 | 10 | 7 | |||
Current | 951 | 973 | 1,016 | |||
Total Financing Receivables | 992 | 1,004 | 1,045 | |||
Other Financing Receivables | Construction and Forestry | 30-59 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 10 | 13 | 14 | |||
Other Financing Receivables | Construction and Forestry | 60-89 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 6 | 5 | 6 | |||
Other Financing Receivables | Construction and Forestry | 90 Days or Greater Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | $ 2 | $ 3 | $ 2 |
FINANCING RECEIVABLES (Details
FINANCING RECEIVABLES (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | Oct. 31, 2015 | |
Allowance: | |||||
Beginning of period balance | $ 155 | $ 168 | $ 157 | $ 175 | |
Provision (credit) | 24 | 14 | 32 | 15 | |
Write-offs | (28) | (19) | (42) | (26) | |
Recoveries | 7 | 6 | 14 | 11 | |
Translation adjustments | 7 | (6) | 4 | (12) | |
End of period balance | 165 | 163 | 165 | 163 | |
Financing receivables: | |||||
End of period balance | 28,315 | 29,650 | 28,315 | 29,650 | $ 29,801 |
Balance individually evaluated | 101 | 19 | 101 | 19 | |
Retail Notes | |||||
Allowance: | |||||
Beginning of period balance | 93 | 104 | 95 | 109 | |
Provision (credit) | 12 | 5 | 17 | 5 | |
Write-offs | (12) | (6) | (19) | (9) | |
Recoveries | 3 | 2 | 5 | 4 | |
Translation adjustments | 6 | (6) | 4 | (10) | |
End of period balance | 102 | 99 | 102 | 99 | |
Financing receivables: | |||||
End of period balance | 20,567 | 21,473 | 20,567 | 21,473 | |
Balance individually evaluated | 73 | 19 | 73 | 19 | |
Revolving Charge Accounts | |||||
Allowance: | |||||
Beginning of period balance | 40 | 41 | 40 | 41 | |
Provision (credit) | 11 | 8 | 13 | 8 | |
Write-offs | (15) | (11) | (22) | (15) | |
Recoveries | 4 | 3 | 9 | 7 | |
End of period balance | 40 | 41 | 40 | 41 | |
Financing receivables: | |||||
End of period balance | 2,636 | 2,345 | 2,636 | 2,345 | |
Balance individually evaluated | 2 | 2 | |||
Other Financing Receivables | |||||
Allowance: | |||||
Beginning of period balance | 22 | 23 | 22 | 25 | |
Provision (credit) | 1 | 1 | 2 | 2 | |
Write-offs | (1) | (2) | (1) | (2) | |
Recoveries | 1 | ||||
Translation adjustments | 1 | (2) | |||
End of period balance | 23 | 23 | 23 | 23 | |
Financing receivables: | |||||
End of period balance | 5,112 | $ 5,832 | 5,112 | $ 5,832 | |
Balance individually evaluated | $ 26 | $ 26 |
FINANCING RECEIVABLES (Detail54
FINANCING RECEIVABLES (Details 3) $ in Millions | 6 Months Ended | 12 Months Ended | |
Apr. 30, 2016USD ($)item | Apr. 30, 2015USD ($)item | Oct. 31, 2015USD ($) | |
Analysis of Impaired Financing Receivables | |||
Recorded investment, with specific allowance | $ 27 | $ 3 | $ 14 |
Recorded investment, without specific allowance | 36 | 12 | 14 |
Recorded Investment | 63 | 15 | 28 |
Unpaid principal balance, with specific allowance | 26 | 3 | 13 |
Unpaid principal balance, without specific allowance | 35 | 11 | 14 |
Unpaid Principal Balance | 61 | 14 | 27 |
Specific allowance, with allowance | 5 | 2 | 2 |
Specific Allowance | 5 | 2 | 2 |
Average recorded investment, with specific allowance | 23 | 6 | 13 |
Average recorded investment, without specific allowance | 31 | 12 | 20 |
Average Recorded Investment | $ 54 | $ 18 | 33 |
Financing Receivables Related to Troubled Debt Restructurings | |||
Financing receivable contracts in troubled debt restructuring, number | item | 46 | 50 | |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 17.6 | $ 1.5 | |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | $ 17.1 | $ 1.1 | |
Number of troubled debt restructurings that subsequently defaulted | item | 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 | 32 | $ 9 | 19 |
Unpaid Principal Balance | 31 | 8 | 18 |
Specific Allowance | 5 | 2 | 2 |
Average Recorded Investment | 28 | 12 | 20 |
Construction and Forestry | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 31 | 6 | 9 |
Unpaid Principal Balance | 30 | 6 | 9 |
Average Recorded Investment | $ 26 | $ 6 | $ 13 |
SECURITIZATION OF FINANCING R55
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Apr. 30, 2016 | Oct. 31, 2015 | Aug. 31, 2015 | Apr. 30, 2015 | |
Securitization Transactions | ||||
Unconsolidated conduits, carrying value of liabilities | $ 1,678 | |||
Unconsolidated conduits, maximum exposure to loss | 1,787 | |||
Total Assets | 59,183.3 | $ 57,947.6 | $ 59,594 | |
Financing receivables securitized (retail notes) | 4,749 | 4,848 | 4,755 | |
Allowance for credit losses - securitization transactions | (14) | (13) | (14) | |
Other assets - securitization transactions | 105 | 109 | 115 | |
Total restricted securitized assets - securitization transactions | 4,840 | 4,944 | 4,856 | |
Short-term securitization borrowings | 4,641.8 | 4,590 | 4,702.7 | |
Accrued interest on borrowings - securitization transactions | 2 | 2 | 2 | |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,644 | 4,592 | 4,705 | |
Maximum remaining term of all restricted securitized retail notes | 7 years | |||
VIE-Primary Beneficiary | ||||
Securitization Transactions | ||||
Total restricted securitized assets - securitization transactions | $ 2,782 | 3,006 | 3,083 | |
Total liabilities related to restricted securitized assets - securitization transactions | 2,712 | 2,743 | 3,007 | |
Restricted securitized assets - securitization transaction retained | 22 | 189 | $ 228 | |
Non-VIE Banking Operation | ||||
Securitization Transactions | ||||
Total restricted securitized assets - securitization transactions | 271 | 249 | 228 | |
Total liabilities related to restricted securitized assets - securitization transactions | 254 | 238 | 218 | |
VIE-Not Primary Beneficiary | ||||
Securitization Transactions | ||||
Total Assets | 59,000 | |||
Total restricted securitized assets - securitization transactions | 1,787 | 1,689 | 1,545 | |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,678 | $ 1,611 | $ 1,480 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 |
INVENTORIES | |||
Raw materials and supplies | $ 1,485 | $ 1,559 | $ 1,675 |
Work-in-process | 507 | 450 | 630 |
Finished goods and parts | 3,473 | 3,234 | 3,831 |
Total FIFO value | 5,465 | 5,243 | 6,136 |
Less adjustment to LIFO value | 1,404 | 1,426 | 1,512 |
Inventories | $ 4,061 | $ 3,817 | $ 4,624.2 |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 726 | $ 791 |
Acquisitions | 92 | |
Translation adjustments | 17 | (54) |
Goodwill - net, ending balance | 835 | 737 |
Accumulated impairment loss | 0 | 0 |
Agriculture and Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 227 | 235 |
Acquisitions | 92 | |
Translation adjustments | 3 | (13) |
Goodwill - net, ending balance | 322 | 222 |
Construction and Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 499 | 556 |
Translation adjustments | 14 | (41) |
Goodwill - net, ending balance | $ 513 | $ 515 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details 2) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 | |
Amortized Intangible Assets: | |||
Total at cost | $ 182 | $ 119 | $ 109 |
Less accumulated amortization | 61 | 55 | 49 |
Intangible assets - net (excluding goodwill) | |||
Other intangible assets - net | 120.5 | 63.6 | 60.4 |
Customer Lists and Relationships | |||
Amortized Intangible Assets: | |||
Total at cost | 42 | 23 | 19 |
Less accumulated amortization | $ 10 | 10 | 10 |
Useful Lives (weighted averages) | 11 years | ||
Technology, Patents, Trademarks and Other | |||
Amortized Intangible Assets: | |||
Total at cost | $ 140 | 96 | 90 |
Less accumulated amortization | $ 51 | $ 45 | $ 39 |
Useful Lives (weighted averages) | 14 years |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Amortized Intangible Assets: | ||||
Amortization expense of other intangible assets | $ 3 | $ 2 | $ 6 | $ 5 |
Amortization expense of other intangible assets - remainder of 2016 | 10 | 10 | ||
Amortization expense of other intangible assets - 2017 | 21 | 21 | ||
Amortization expense of other intangible assets - 2018 | 21 | 21 | ||
Amortization expense of other intangible assets - 2019 | 17 | 17 | ||
Amortization expense of other intangible assets - 2020 | $ 13 | $ 13 |
COMMITMENTS AND CONTINGENCIES60
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES | ||||
Historical claims rate, review period | 5 years | |||
Unamortized extended warranty premiums (deferred revenue) | $ 467 | $ 428 | $ 467 | $ 428 |
Change in Warranty Liability and Unearned Premiums | ||||
Beginning of period balance | 1,239 | 1,217 | 1,261 | 1,234 |
Payments | (199) | (165) | (395) | (343) |
Amortization of premiums received | (57) | (41) | (104) | (82) |
Accruals for warranties | 192 | 189 | 374 | 370 |
Premiums received | 45 | 47 | 89 | 92 |
Foreign exchange | 15 | (5) | 10 | (29) |
End of period balance | $ 1,235 | $ 1,242 | $ 1,235 | $ 1,242 |
COMMITMENTS AND CONTINGENCIES61
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Millions | 6 Months Ended |
Apr. 30, 2016USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Commitments for the construction and acquisition of property and equipment | $ 218 |
Other restricted assets | 113 |
Miscellaneous contingent liabilities | 30 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 172 |
Guarantee obligations accrued losses | $ 4 |
Guarantee obligations term | P5Y |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 |
Fair Values of Financial Instruments | |||
Financing receivables - net | $ 23,415.3 | $ 24,809 | $ 24,745.8 |
Financing receivables securitized - net | 4,734.7 | 4,834.6 | 4,741.1 |
Short-term securitization borrowings | 4,641.8 | 4,590 | 4,702.7 |
Long-term borrowings | 24,648 | 23,832.8 | 23,622.8 |
Level 2 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,642 | 4,590 | 4,707 |
Long-term borrowings due within one year | 5,359 | 5,245 | 5,135 |
Long-term borrowings | 25,330 | 24,183 | 24,259 |
Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 23,300 | 24,719 | 24,632 |
Financing receivables securitized - net | 4,723 | 4,820 | 4,716 |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 23,415 | 24,809 | 24,746 |
Financing receivables securitized - net | 4,735 | 4,835 | 4,741 |
Short-term securitization borrowings | 4,642 | 4,590 | 4,703 |
Long-term borrowings due within one year | 5,350 | 5,253 | 5,164 |
Long-term borrowings | 24,648 | 23,833 | 23,623 |
Equipment Operations | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 0.7 | 0.9 | 8.7 |
Long-term borrowings | 4,584 | 4,460.6 | 4,488.9 |
Equipment Operations | Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 38 | 78 | 264 |
Long-term borrowings | 5,148 | 4,835 | 4,994 |
Equipment Operations | Carrying Value | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 41 | 86 | 280 |
Long-term borrowings | 4,584 | 4,461 | 4,489 |
Financial Services | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 23,414.6 | 24,808.1 | 24,737.1 |
Financing receivables securitized - net | 4,734.7 | 4,834.6 | 4,741.1 |
Short-term securitization borrowings | 4,641.8 | 4,590 | 4,702.7 |
Long-term borrowings | 20,064 | 19,372.2 | 19,133.9 |
Financial Services | Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 5,321 | 5,167 | 4,871 |
Long-term borrowings | 20,182 | 19,348 | 19,265 |
Financial Services | Carrying Value | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 5,309 | 5,167 | 4,884 |
Long-term borrowings | $ 20,064 | $ 19,372 | $ 19,134 |
FAIR VALUE MEASUREMENTS (Deta63
FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $ 475.5 | $ 437.4 | $ 392.9 |
Derivative assets | 479 | 428 | 404 |
Derivative liabilities | 145 | 78 | 153 |
Transfer from Level 1 to Level 2, assets | 0 | 0 | |
Transfer from Level 2 to Level 1, assets | 0 | 0 | |
Transfer from Level 1 to Level 2, liabilities | 0 | 0 | |
Transfer from Level 2 to Level 1, liabilities | 0 | 0 | |
Other Assets | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Derivative assets | 479 | 428 | 404 |
Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Derivative liabilities | 145 | 78 | 153 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Total Estimated Fair Value | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 475 | 437 | 393 |
Total assets | 954 | 865 | 797 |
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 | 79 | 82 | 75 |
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 | 44 | 43 | 47 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Fixed Income Funds | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 3 | ||
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 | 38 | 37 | 28 |
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 | 145 | 78 | 153 |
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 | 419 | 353 | 340 |
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 | 48 | 60 | 72 |
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 | 38 | 50 | 38 |
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 | 96 | 18 | 81 |
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 | 25 | 26 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Derivative liabilities | 1 | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 41 | 31 | 28 |
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 | 113 | 124 | 128 |
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 | 124 | 110 | $ 115 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 and 3 | International Debt Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | 71 | 47 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $ 40 | $ 29 |
FAIR VALUE MEASUREMENTS (Deta64
FAIR VALUE MEASUREMENTS (Details 3) $ in Millions | Apr. 30, 2016USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 61 |
Amortized cost, due after one through five years | 107 |
Amortized cost, due after five through 10 years | 90 |
Amortized cost, due after 10 years | 43 |
Amortized cost, mortgage-backed securities | 120 |
Amortized cost, debt securities | 421 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 61 |
Fair value, due after one through five years | 103 |
Fair value, due after five through 10 years | 94 |
Fair value, due after 10 years | 46 |
Fair value, mortgage-backed securities | 124 |
Fair value, debt securities | $ 428 |
FAIR VALUE MEASUREMENTS (Deta65
FAIR VALUE MEASUREMENTS (Details 4) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Apr. 30, 2016 | Apr. 30, 2016 | |
Fair Value, Recurring, Level 3 Measurements from Available for Sale Marketable Securities | ||
Beginning of period balance | $ 44 | $ 29 |
Purchases | 25 | |
Principal payments | (6) | (8) |
Change in unrealized gain (loss) | 2 | (6) |
End of period balance | $ 40 | $ 40 |
FAIR VALUE MEASUREMENTS (Deta66
FAIR VALUE MEASUREMENTS (Details 5) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 | |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||||
Equipment on operating leases - net | $ 5,455.5 | $ 5,455.5 | $ 4,970.4 | $ 4,195.2 |
Fair Value, Nonrecurring Measurements | Level 3 | ||||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||||
Equipment on operating leases - net | 725 | 725 | 479 | |
Losses, Equipment on operating leases - net | 26 | 30 | ||
Property and equipment - net | 33 | |||
Other assets | 166 | 166 | $ 112 | |
Losses, Other assets | $ 11 | $ 20 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 | |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ 2 | ||
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 29 months | ||
Gains or losses reclassified from OCI to earnings | $ 0 | ||
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | 1,600 | $ 2,800 | $ 2,550 |
Cross-Currency Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | $ 51 | $ 60 | $ 65 |
DERIVATIVE INSTRUMENTS (Detai68
DERIVATIVE INSTRUMENTS (Details 2) - Interest Rate Contracts - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | Oct. 31, 2015 | |
Fair Value Hedges | |||||
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives | $ (1) | $ (2) | $ (1) | $ 1 | |
Gain (Loss) on Fair Value Hedges | |||||
Gains (losses) on interest rate contracts | (9) | (121) | 66 | 55 | |
Net accrued interest income on interest rate contracts | 39 | 44 | 78 | 89 | |
Gains (losses) on borrowings | 8 | 119 | (67) | (54) | |
Accrued interest expense on borrowings | 75 | 69 | 142 | 139 | |
Fair Value Hedges | Designated as Hedging Instruments | |||||
Fair Value Hedges | |||||
Notional amount of interest rate fair value hedge derivatives | $ 9,923 | $ 8,507 | $ 9,923 | $ 8,507 | $ 8,618 |
DERIVATIVE INSTRUMENTS (Detai69
DERIVATIVE INSTRUMENTS (Details 3) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 |
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 6,524 | $ 6,333 | $ 6,342 |
Interest Rate Contracts | Purchased | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 762 | 1,069 | 1,320 |
Interest Rate Contracts | Sold | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 762 | 1,069 | 1,320 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 3,894 | 3,160 | 3,750 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 74 | $ 76 | $ 94 |
DERIVATIVE INSTRUMENTS (Detai70
DERIVATIVE INSTRUMENTS (Details 4) - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 479 | $ 428 | $ 404 |
Total derivative liabilities | 145 | 78 | 153 |
Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 479 | 428 | 404 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 145 | 78 | 153 |
Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 381 | 313 | 296 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 8 | 8 | 14 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 368 | 299 | 282 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 8 | 8 | 14 |
Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 13 | 14 | 14 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 98 | 115 | 108 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 137 | 70 | 139 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 51 | 54 | 58 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 40 | 52 | 58 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 38 | 50 | 38 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 96 | 18 | 81 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 9 | $ 11 | $ 12 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 1 |
DERIVATIVE INSTRUMENTS (Detai71
DERIVATIVE INSTRUMENTS (Details 5) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (243) | $ (52) | $ (87) | $ 214 |
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) | (1) | (3) | (6) | |
Interest Rate Contracts | Interest Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | 30 | (77) | 144 | 144 |
Not designated as hedges, gains (losses) | 5 | 1 | 3 | (12) |
Interest Rate Contracts | Interest Expense | Cash Flow Hedges Member | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | (2) | (3) | (5) | (6) |
Foreign Exchange Contracts | OCI | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | (1) | 1 | 1 | 2 |
Foreign Exchange Contracts | Cost of Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (62) | (19) | (29) | 26 |
Foreign Exchange Contracts | Other Operating Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (186) | (34) | (61) | 200 |
Foreign Exchange Contracts | Other Operating Expense | Cash Flow Hedges Member | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | $ (1) | $ 1 | $ 1 | $ 2 |
DERIVATIVE INSTRUMENTS (Detai72
DERIVATIVE INSTRUMENTS (Details 6) - USD ($) $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 |
DERIVATIVE INSTRUMENTS | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 32 | $ 41 | $ 51 |
Derivative Assets | |||
Gross amounts recognized | 479 | 428 | 404 |
Netting arrangements | (53) | (62) | (76) |
Collateral received | (20) | (1) | |
Net amount | 406 | 366 | 327 |
Derivative Liabilities | |||
Gross amounts recognized | 145 | 78 | 153 |
Netting arrangements | (53) | (62) | (76) |
Net amount | $ 92 | $ 16 | $ 77 |
STOCK OPTION AND RESTRICTED S73
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands | 1 Months Ended | 6 Months Ended |
Dec. 31, 2015 | Apr. 30, 2016 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant related to stock option and restricted stock awards | 13,100 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 3,500 | |
Options granted, weighted-average exercise price (in dollars per share) | $ 79.24 | |
Options granted, weighted-average fair value (in dollars per share) | $ 16.88 | |
Options outstanding (in shares) | 18,000 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 78.11 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 248 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 106 | |
Restricted stock units granted, fair value (in dollars per unit) | $ 79.50 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 71 | |
Restricted stock units granted, fair value (in dollars per unit) | $ 72.93 | |
Restricted Stock Units Subject to Market/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Fair value assumptions method used | lattice valuation model | |
Restricted stock units granted (in shares) | 71 | |
Restricted stock units granted, fair value (in dollars per unit) | $ 103.66 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Mar. 31, 2016USD ($) | Feb. 29, 2016USD ($)location | Apr. 30, 2016USD ($) | Oct. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Oct. 31, 2014USD ($) | |
Acquisitions | ||||||
Acquisitions of businesses, net of cash acquired | $ 198.9 | |||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Goodwill | 835 | $ 726 | $ 737 | $ 791 | ||
Redeemable noncontrolling interest | $ 14 | |||||
Monosem | ||||||
Acquisitions | ||||||
Acquisitions of businesses, net of cash acquired | $ 146 | |||||
Cash acquired | 20 | |||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Trade accounts and notes receivable – net | 5 | |||||
Other receivables | 2 | |||||
Inventories | 29 | |||||
Property and equipment – net | 24 | |||||
Goodwill | 61 | |||||
Other intangible assets – net | 42 | |||||
Other assets | 23 | |||||
Total assets | 186 | |||||
Accounts payable and accrued expenses | 21 | |||||
Deferred tax liabilities | 19 | |||||
Total liabilities | $ 40 | |||||
Weighted average amortization period (in years) | 9 years | |||||
Monosem | FRANCE | ||||||
Acquisitions | ||||||
Facilities | location | 4 | |||||
Monosem | U.S. | ||||||
Acquisitions | ||||||
Facilities | location | 2 | |||||
Hagie Manufacturing Company, LLC | ||||||
Acquisitions | ||||||
Percentage of business interest acquired | 80.00% | |||||
Acquisitions of businesses, net of cash acquired | $ 53 | |||||
Cash acquired | 3 | |||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | ||||||
Trade accounts and notes receivable – net | 2 | |||||
Inventories | 33 | |||||
Property and equipment – net | 18 | |||||
Goodwill | 31 | |||||
Other intangible assets – net | 22 | |||||
Other assets | 3 | |||||
Total assets | 109 | |||||
Total liabilities | 42 | |||||
Redeemable noncontrolling interest | $ 14 | |||||
Weighted average amortization period (in years) | 8 years |
DISPOSITION - CROP INSURANCE 75
DISPOSITION - CROP INSURANCE OPERATIONS (Details) - Crop Insurance Operations - Disposal Group $ in Millions | 1 Months Ended |
Mar. 31, 2015USD ($) | |
Dispositions | |
Proceeds from sale of Crop Insurance Operations | $ 154 |
Cash and cash equivalents sold | 5 |
Gain from sale of Crop Insurance Operations, pretax, recorded in Other Income | 41 |
Gain from sale of Crop Insurance Operations, after-tax, recorded in Other Income | $ 38 |
SUPPLEMENTAL CONSOLIDATING DA76
SUPPLEMENTAL CONSOLIDATING DATA (Income Statement) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Net Sales and Revenues | ||||
Net sales | $ 7,106.6 | $ 7,398.5 | $ 11,875.8 | $ 13,003.6 |
Finance and interest income | 611.4 | 576.3 | 1,210.5 | 1,169.9 |
Other income | 157.4 | 195.9 | 313.6 | 380.3 |
Total | 7,875.4 | 8,170.7 | 13,399.9 | 14,553.8 |
Costs and Expenses | ||||
Cost of sales | 5,531 | 5,694.2 | 9,371.1 | 10,114.8 |
Research and development expenses | 345 | 341.1 | 664.3 | 674.3 |
Selling, administrative and general expenses | 714.8 | 740 | 1,307.7 | 1,398.9 |
Interest expense | 191 | 165.5 | 364.3 | 345.6 |
Other operating expenses | 360.3 | 212.9 | 608 | 435.5 |
Total | 7,142.1 | 7,153.7 | 12,315.4 | 12,969.1 |
Income of Consolidated Group before Income Taxes | 733.3 | 1,017 | 1,084.5 | 1,584.7 |
Provision for income taxes | 237.8 | 324 | 333.3 | 494.6 |
Income of Consolidated Group | 495.5 | 693 | 751.2 | 1,090.1 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Net Income | 494.7 | 690.8 | 748.5 | 1,077.7 |
Less: Net income (loss) attributable to noncontrolling interests | (0.7) | 0.3 | (1.3) | 0.5 |
Net Income Attributable to Deere & Company | 495.4 | 690.5 | 749.8 | 1,077.2 |
Equipment Operations | ||||
Net Sales and Revenues | ||||
Net sales | 7,106.6 | 7,398.5 | 11,875.8 | 13,003.6 |
Finance and interest income | 12.9 | 17.5 | 30.8 | 38 |
Other income | 139.9 | 150.3 | 280 | 310.4 |
Total | 7,259.4 | 7,566.3 | 12,186.6 | 13,352 |
Costs and Expenses | ||||
Cost of sales | 5,531.5 | 5,694.7 | 9,372.1 | 10,115.8 |
Research and development expenses | 345 | 341.1 | 664.3 | 674.3 |
Selling, administrative and general expenses | 588.5 | 620.4 | 1,069.6 | 1,160.6 |
Interest expense | 67.7 | 67.3 | 129.8 | 138.4 |
Interest compensation to Financial Services | 61.8 | 53.4 | 106.6 | 99.4 |
Other operating expenses | 91.4 | 37.2 | 112.5 | 76.2 |
Total | 6,685.9 | 6,814.1 | 11,454.9 | 12,264.7 |
Income of Consolidated Group before Income Taxes | 573.5 | 752.2 | 731.7 | 1,087.3 |
Provision for income taxes | 180.4 | 228.6 | 211.5 | 323 |
Income of Consolidated Group | 393.1 | 523.6 | 520.2 | 764.3 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 101.6 | 167.2 | 228.3 | 313.4 |
Net Income | 494.7 | 690.8 | 748.5 | 1,077.7 |
Less: Net income (loss) attributable to noncontrolling interests | (0.7) | 0.3 | (1.3) | 0.5 |
Net Income Attributable to Deere & Company | 495.4 | 690.5 | 749.8 | 1,077.2 |
Equipment Operations | Financial Services | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 102.6 | 169.8 | 232 | 326.6 |
Equipment Operations | Other | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | (1) | (2.6) | (3.7) | (13.2) |
Financial Services | ||||
Net Sales and Revenues | ||||
Finance and interest income | 662.9 | 623.6 | 1,297.9 | 1,256.6 |
Other income | 68.2 | 85.3 | 116.3 | 150.2 |
Total | 731.1 | 708.9 | 1,414.2 | 1,406.8 |
Costs and Expenses | ||||
Selling, administrative and general expenses | 128 | 121.8 | 242 | 243 |
Interest expense | 125.9 | 109.5 | 245.9 | 232.4 |
Other operating expenses | 317.4 | 212.8 | 573.5 | 434 |
Total | 571.3 | 444.1 | 1,061.4 | 909.4 |
Income of Consolidated Group before Income Taxes | 159.8 | 264.8 | 352.8 | 497.4 |
Provision for income taxes | 57.4 | 95.4 | 121.8 | 171.6 |
Income of Consolidated Group | 102.4 | 169.4 | 231 | 325.8 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 0.2 | 0.4 | 1 | 0.8 |
Net Income | 102.6 | 169.8 | 232 | 326.6 |
Net Income Attributable to Deere & Company | 102.6 | 169.8 | 232 | 326.6 |
Financial Services | Financial Services | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | $ 0.2 | $ 0.4 | $ 1 | $ 0.8 |
SUPPLEMENTAL CONSOLIDATING DA77
SUPPLEMENTAL CONSOLIDATING DATA (Condensed Balance Sheet) (Details 2) - USD ($) $ / shares in Units, $ in Millions | Apr. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2015 | Oct. 31, 2014 |
ASSETS | ||||
Cash and cash equivalents | $ 4,133.2 | $ 4,162.2 | $ 4,355.4 | $ 3,787 |
Marketable securities | 475.5 | 437.4 | 392.9 | |
Receivables from unconsolidated subsidiaries and affiliates | 81.3 | 33.3 | 46.4 | |
Trade accounts and notes receivable - net | 4,898.9 | 3,051.1 | 4,717.1 | |
Financing receivables - net | 23,415.3 | 24,809 | 24,745.8 | |
Financing receivables securitized - net | 4,734.7 | 4,834.6 | 4,741.1 | |
Other receivables | 876.2 | 991.2 | 873.4 | |
Equipment on operating leases - net | 5,455.5 | 4,970.4 | 4,195.2 | |
Inventories | 4,061 | 3,817 | 4,624.2 | |
Property and equipment - net | 5,079.7 | 5,181.5 | 5,245.1 | |
Investments in unconsolidated subsidiaries and affiliates | 236.7 | 303.5 | 299.2 | |
Goodwill | 835 | 726 | 737 | 791 |
Other intangible assets - net | 120.5 | 63.6 | 60.4 | |
Retirement benefits | 285.4 | 215.6 | 313.9 | |
Deferred income taxes | 2,681.9 | 2,767.3 | 2,659.4 | |
Other assets | 1,812.5 | 1,583.9 | 1,587.5 | |
Total Assets | 59,183.3 | 57,947.6 | 59,594 | |
LIABILITIES | ||||
Short-term borrowings | 8,576 | 8,426.6 | 8,989 | |
Short-term securitization borrowings | 4,641.8 | 4,590 | 4,702.7 | |
Payables to unconsolidated subsidiaries and affiliates | 109.5 | 80.6 | 130.1 | |
Accounts payable and accrued expenses | 6,980.8 | 7,311.5 | 7,260.2 | |
Deferred income taxes | 180.3 | 160.8 | 149.3 | |
Long-term borrowings | 24,648 | 23,832.8 | 23,622.8 | |
Retirement benefits and other liabilities | 6,856.2 | 6,787.7 | 6,563.9 | |
Total liabilities | $ 51,992.6 | $ 51,190 | $ 51,418 | |
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interest (Note 18) | $ 14 | |||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 30, 2016 - 536,431,204) | $ 3,862 | $ 3,825.6 | $ 3,745.2 | |
Common stock, par value (in dollars per share) | $ 1 | |||
Common stock, issued shares | 536,431,204 | |||
Common stock in treasury | $ (15,693.6) | (15,497.6) | (13,951.2) | |
Retained earnings | 23,514.7 | 23,144.8 | 22,673.4 | |
Accumulated other comprehensive income (loss) | (4,518.8) | (4,729.4) | (4,293.6) | |
Total Deere & Company stockholders' equity | 7,164.3 | 6,743.4 | 8,173.8 | |
Noncontrolling interests | 12.4 | 14.2 | 2.2 | |
Total stockholders' equity | 7,176.7 | 6,757.6 | 8,176 | 9,065.5 |
Total Liabilities and Stockholders' Equity | 59,183.3 | 57,947.6 | 59,594 | |
Equipment Operations | ||||
ASSETS | ||||
Cash and cash equivalents | 2,790.8 | 2,900 | 3,162.9 | 2,569.2 |
Marketable securities | 71.2 | 47.7 | ||
Receivables from unconsolidated subsidiaries and affiliates | 2,226.2 | 2,428.7 | 2,558 | |
Trade accounts and notes receivable - net | 631.2 | 485.2 | 681.3 | |
Financing receivables - net | 0.7 | 0.9 | 8.7 | |
Other receivables | 778.2 | 849.5 | 780.7 | |
Inventories | 4,061 | 3,817 | 4,624.2 | |
Property and equipment - net | 5,026.2 | 5,126.2 | 5,191.7 | |
Investments in unconsolidated subsidiaries and affiliates | 4,774.7 | 4,817.6 | 4,895.5 | |
Goodwill | 835 | 726 | 737 | |
Other intangible assets - net | 120.5 | 63.6 | 60.4 | |
Retirement benefits | 280.9 | 211.9 | 314.3 | |
Deferred income taxes | 3,185.7 | 3,092 | 2,991.2 | |
Other assets | 883 | 807.3 | 889.9 | |
Total Assets | 25,665.3 | 25,373.6 | 26,895.8 | |
LIABILITIES | ||||
Short-term borrowings | 218.7 | 464.3 | 549.6 | |
Payables to unconsolidated subsidiaries and affiliates | 109.5 | 80.6 | 130.1 | |
Accounts payable and accrued expenses | 6,674.5 | 6,801.2 | 6,964 | |
Deferred income taxes | 102.7 | 86.8 | 79.3 | |
Long-term borrowings | 4,584 | 4,460.6 | 4,488.9 | |
Retirement benefits and other liabilities | 6,785.2 | 6,722.5 | 6,507.9 | |
Total liabilities | $ 18,474.6 | $ 18,616 | $ 18,719.8 | |
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interest (Note 18) | $ 14 | |||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 30, 2016 - 536,431,204) | $ 3,862 | $ 3,825.6 | $ 3,745.2 | |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | |
Common stock, issued shares | 536,431,204 | |||
Common stock in treasury | $ (15,693.6) | $ (15,497.6) | $ (13,951.2) | |
Retained earnings | 23,514.7 | 23,144.8 | 22,673.4 | |
Accumulated other comprehensive income (loss) | (4,518.8) | (4,729.4) | (4,293.6) | |
Total Deere & Company stockholders' equity | 7,164.3 | 6,743.4 | 8,173.8 | |
Noncontrolling interests | 12.4 | 14.2 | 2.2 | |
Total stockholders' equity | 7,176.7 | 6,757.6 | 8,176 | |
Total Liabilities and Stockholders' Equity | 25,665.3 | 25,373.6 | 26,895.8 | |
Financial Services | ||||
ASSETS | ||||
Cash and cash equivalents | 1,342.4 | 1,262.2 | 1,192.5 | $ 1,217.8 |
Marketable securities | 404.3 | 389.7 | 392.9 | |
Trade accounts and notes receivable - net | 5,529.4 | 3,553.1 | 5,160.8 | |
Financing receivables - net | 23,414.6 | 24,808.1 | 24,737.1 | |
Financing receivables securitized - net | 4,734.7 | 4,834.6 | 4,741.1 | |
Other receivables | 130.8 | 152.9 | 122.5 | |
Equipment on operating leases - net | 5,455.5 | 4,970.4 | 4,195.2 | |
Property and equipment - net | 53.5 | 55.3 | 53.4 | |
Investments in unconsolidated subsidiaries and affiliates | 11.9 | 10.5 | 10.5 | |
Retirement benefits | 23.2 | 25 | 29 | |
Deferred income taxes | 70.4 | 67.9 | 62.9 | |
Other assets | 932.3 | 779.1 | 700.2 | |
Total Assets | 42,103 | 40,908.8 | 41,398.1 | |
LIABILITIES | ||||
Short-term borrowings | 8,357.3 | 7,962.3 | 8,439.4 | |
Short-term securitization borrowings | 4,641.8 | 4,590 | 4,702.7 | |
Payables to unconsolidated subsidiaries and affiliates | 2,144.9 | 2,395.4 | 2,511.6 | |
Accounts payable and accrued expenses | 1,603.7 | 1,511.2 | 1,453.5 | |
Deferred income taxes | 651.8 | 466.6 | 464.8 | |
Long-term borrowings | 20,064 | 19,372.2 | 19,133.9 | |
Retirement benefits and other liabilities | 89.6 | 86.4 | 85.5 | |
Total liabilities | $ 37,553.1 | $ 36,384.1 | $ 36,791.4 | |
Commitments and contingencies (Note 14) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 30, 2016 - 536,431,204) | $ 2,071.9 | $ 2,050.8 | $ 2,051.3 | |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | |
Common stock, issued shares | 536,431,204 | |||
Retained earnings | $ 2,719.7 | $ 2,764.8 | $ 2,718.8 | |
Accumulated other comprehensive income (loss) | (241.7) | (290.9) | (163.4) | |
Total Deere & Company stockholders' equity | 4,549.9 | 4,524.7 | 4,606.7 | |
Total stockholders' equity | 4,549.9 | 4,524.7 | 4,606.7 | |
Total Liabilities and Stockholders' Equity | $ 42,103 | $ 40,908.8 | $ 41,398.1 |
SUPPLEMENTAL CONSOLIDATING DA78
SUPPLEMENTAL CONSOLIDATING DATA (Statement of Cash Flows) (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Cash Flows from Operating Activities | ||||
Net income (loss) | $ 494.7 | $ 690.8 | $ 748.5 | $ 1,077.7 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
Provision (credit) for credit losses | 35.1 | 15.1 | ||
Provision for depreciation and amortization | 761.8 | 682.9 | ||
Impairment charges | 49.7 | |||
Undistributed earnings of unconsolidated subsidiaries and affiliates | 5.3 | 8.8 | ||
Provision (credit) for deferred income taxes | 93.3 | 117.8 | ||
Changes in assets and liabilities: | ||||
Trade receivables | (1,311.5) | (860.8) | ||
Insurance receivables | 333.4 | |||
Inventories | (405.8) | (932.9) | ||
Accounts payable and accrued expenses | (367.8) | (698.3) | ||
Accrued income taxes payable/receivable | 12 | (76.3) | ||
Retirement benefits | 91.1 | 186.6 | ||
Other | (56.1) | (37.4) | ||
Net cash provided by (used for) operating activities | (312.4) | (154.7) | ||
Cash Flows from Investing Activities | ||||
Proceeds from maturities and sales of marketable securities | 71.4 | 791.9 | ||
Proceeds from sales of equipment on operating leases | 630.1 | 552.3 | ||
Proceeds from sale of business, net of cash sold | 148.8 | |||
Purchases of marketable securities | (112.2) | (33.9) | ||
Purchases of property and equipment | (232.6) | (324.3) | ||
Cost of equipment on operating leases acquired | (1,204.1) | (830.2) | ||
Acquisitions of businesses, net of cash acquired | (198.9) | |||
Other | 8.6 | (58.9) | ||
Net cash provided by (used for) investing activities | 210 | 1,152 | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | 38.3 | 1,147 | ||
Proceeds from long-term borrowings | 3,276.6 | 2,512.2 | ||
Payments of long-term borrowings | (2,686.6) | (2,453.3) | ||
Proceeds from issuance of common stock | 11.1 | 86.1 | ||
Repurchases of common stock | (205.4) | (1,173.9) | ||
Dividends paid | (383.2) | (415.8) | ||
Excess tax benefits from share-based compensation | 2.7 | 11.7 | ||
Other | (32.6) | (39.1) | ||
Net cash provided by (used for) financing activities | 20.9 | (325.1) | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 52.5 | (103.8) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | (29) | 568.4 | ||
Cash and Cash Equivalents at Beginning of Period | 4,162.2 | 3,787 | ||
Cash and Cash Equivalents at End of Period | 4,133.2 | 4,355.4 | 4,133.2 | 4,355.4 |
Equipment Operations | ||||
Cash Flows from Operating Activities | ||||
Net income (loss) | 494.7 | 690.8 | 748.5 | 1,077.7 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
Provision (credit) for credit losses | 4 | 0.3 | ||
Provision for depreciation and amortization | 410.2 | 409.8 | ||
Undistributed earnings of unconsolidated subsidiaries and affiliates | 51.5 | 102.6 | ||
Provision (credit) for deferred income taxes | (87.3) | (3) | ||
Changes in assets and liabilities: | ||||
Trade receivables | (142.2) | (33.2) | ||
Inventories | (136.7) | (656.8) | ||
Accounts payable and accrued expenses | (107.9) | (219.2) | ||
Accrued income taxes payable/receivable | 0.2 | (82.1) | ||
Retirement benefits | 86.8 | 179.3 | ||
Other | (18.2) | 75.8 | ||
Net cash provided by (used for) operating activities | 808.9 | 851.2 | ||
Cash Flows from Investing Activities | ||||
Proceeds from maturities and sales of marketable securities | 31.3 | 700 | ||
Purchases of marketable securities | (63.1) | |||
Purchases of property and equipment | (231.7) | (323.2) | ||
Acquisitions of businesses, net of cash acquired | (198.9) | |||
Other | (70.9) | (51.1) | ||
Net cash provided by (used for) investing activities | (533.3) | 325.7 | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | (193.4) | 84.6 | ||
Change in intercompany receivables/payables | 290.8 | 960.7 | ||
Proceeds from long-term borrowings | 133.5 | 7 | ||
Payments of long-term borrowings | (67.7) | (39.8) | ||
Proceeds from issuance of common stock | 11.1 | 86.1 | ||
Repurchases of common stock | (205.4) | (1,173.9) | ||
Dividends paid | (383.2) | (415.8) | ||
Excess tax benefits from share-based compensation | 2.7 | 11.7 | ||
Other | (14.4) | (24.1) | ||
Net cash provided by (used for) financing activities | (426) | (503.5) | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 41.2 | (79.7) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | (109.2) | 593.7 | ||
Cash and Cash Equivalents at Beginning of Period | 2,900 | 2,569.2 | ||
Cash and Cash Equivalents at End of Period | 2,790.8 | 3,162.9 | 2,790.8 | 3,162.9 |
Financial Services | ||||
Cash Flows from Operating Activities | ||||
Net income (loss) | 102.6 | 169.8 | 232 | 326.6 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
Provision (credit) for credit losses | 31.1 | 14.8 | ||
Provision for depreciation and amortization | 399.4 | 328.4 | ||
Impairment charges | 49.7 | |||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (1) | (0.8) | ||
Provision (credit) for deferred income taxes | 180.6 | 120.8 | ||
Changes in assets and liabilities: | ||||
Insurance receivables | 333.4 | |||
Accounts payable and accrued expenses | 14.7 | (336.8) | ||
Accrued income taxes payable/receivable | 11.8 | 5.8 | ||
Retirement benefits | 4.3 | 7.3 | ||
Other | 40.7 | (42.7) | ||
Net cash provided by (used for) operating activities | 963.3 | 756.8 | ||
Cash Flows from Investing Activities | ||||
Collections of receivables (excluding trade and wholesale) | 8,699.2 | 8,998.2 | ||
Proceeds from maturities and sales of marketable securities | 40.1 | 91.9 | ||
Proceeds from sales of equipment on operating leases | 630.1 | 552.3 | ||
Proceeds from sale of business, net of cash sold | 148.8 | |||
Cost of receivables acquired (excluding trade and wholesale) | (7,343.6) | (7,977.1) | ||
Purchases of marketable securities | (49.1) | (33.9) | ||
Purchases of property and equipment | (0.9) | (1.1) | ||
Cost of equipment on operating leases acquired | (1,567.7) | (1,203.4) | ||
Decrease (increase) in trade and wholesale receivables | (1,547) | (1,084.7) | ||
Other | 53.6 | (36) | ||
Net cash provided by (used for) investing activities | (1,085.3) | (545) | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | 231.7 | 1,062.4 | ||
Change in intercompany receivables/payables | (290.8) | (960.7) | ||
Proceeds from long-term borrowings | 3,143.1 | 2,505.2 | ||
Payments of long-term borrowings | (2,618.9) | (2,413.5) | ||
Dividends paid | (277.1) | (419.6) | ||
Other | 2.9 | 13.2 | ||
Net cash provided by (used for) financing activities | 190.9 | (213) | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 11.3 | (24.1) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | 80.2 | (25.3) | ||
Cash and Cash Equivalents at Beginning of Period | 1,262.2 | 1,217.8 | ||
Cash and Cash Equivalents at End of Period | $ 1,342.4 | $ 1,192.5 | $ 1,342.4 | $ 1,192.5 |