Document and Entity Information
Document and Entity Information | 9 Months Ended |
Aug. 02, 2020shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Aug. 2, 2020 |
Entity File Number | 1-4121 |
Entity Registrant Name | DEERE & CO |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 36-2382580 |
Entity Address, Address Line One | One John Deere Place |
Entity Address, City or Town | Moline |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 61265 |
City Area Code | 309 |
Local Phone Number | 765-8000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 313,374,767 |
Current Fiscal Year End Date | --11-01 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Entity Central Index Key | 0000315189 |
Amendment Flag | false |
Common Stock | |
Document Information [Line Items] | |
Title of 12(b) Security | Common stock, $1 par value |
Trading Symbol | DE |
Security Exchange Name | NYSE |
8-1/2% Debentures Due 2022 | |
Document Information [Line Items] | |
Title of 12(b) Security | 8½% Debentures Due 2022 |
Trading Symbol | DE22 |
Security Exchange Name | NYSE |
6.55% Debentures Due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.55% Debentures Due 2028 |
Trading Symbol | DE28 |
Security Exchange Name | NYSE |
STATEMENT OF CONSOLIDATED INCOM
STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Net Sales and Revenues | ||||
Net sales and revenues | $ 8,925 | $ 10,036 | $ 25,809 | $ 29,362 |
Costs and Expenses | ||||
Research and development expenses | 370 | 431 | 1,201 | 1,295 |
Selling, administrative and general expenses | 752 | 896 | 2,467 | 2,607 |
Interest expense | 290 | 374 | 969 | 1,078 |
Total | 7,655 | 8,923 | 23,042 | 26,099 |
Income of Consolidated Group before Income Taxes | 1,270 | 1,113 | 2,767 | 3,263 |
Provision for income taxes | 457 | 221 | 752 | 748 |
Income of Consolidated Group | 813 | 892 | 2,015 | 2,515 |
Equity in income (loss) of unconsolidated affiliates | (2) | 7 | (20) | 20 |
Net Income | 811 | 899 | 1,995 | 2,535 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 2 | 3 |
Net Income Attributable to Deere & Company | $ 811 | $ 899 | $ 1,993 | $ 2,532 |
Per Share Data | ||||
Basic (in dollars per share) | $ 2.59 | $ 2.84 | $ 6.36 | $ 7.98 |
Diluted (in dollars per share) | $ 2.57 | $ 2.81 | $ 6.30 | $ 7.87 |
Average Shares Outstanding | ||||
Basic (in shares) | 313 | 315.9 | 313.3 | 317.3 |
Diluted (in shares) | 315.8 | 319.8 | 316.4 | 321.5 |
Net Sales | ||||
Net Sales and Revenues | ||||
Net sales | $ 7,859 | $ 8,969 | $ 22,612 | $ 26,182 |
Costs and Expenses | ||||
Costs and expenses | 5,835 | 6,870 | 17,206 | 20,056 |
Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 838 | 884 | 2,584 | 2,537 |
Other | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 228 | 183 | 613 | 643 |
Costs and Expenses | ||||
Costs and expenses | $ 408 | $ 352 | $ 1,199 | $ 1,063 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||||
Net income | $ 811 | $ 899 | $ 1,995 | $ 2,535 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||||
Retirement benefits adjustment | 51 | 15 | 338 | 84 |
Cumulative translation adjustment | 331 | 26 | (67) | (218) |
Unrealized gain (loss) on derivatives | 4 | (22) | (4) | (37) |
Unrealized gain on debt securities | 10 | 10 | 21 | 25 |
Other Comprehensive Income (Loss), Net of Income Taxes | 396 | 29 | 288 | (146) |
Comprehensive Income of Consolidated Group | 1,207 | 928 | 2,283 | 2,389 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 | 2 | 3 |
Comprehensive Income Attributable to Deere & Company | $ 1,207 | $ 928 | $ 2,281 | $ 2,386 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Aug. 02, 2020 | May 03, 2020 | Nov. 04, 2019 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Oct. 28, 2018 |
ASSETS | |||||||
Cash and cash equivalents | $ 8,190 | $ 3,857 | $ 3,383 | ||||
Marketable securities | 640 | 581 | 565 | ||||
Receivables from unconsolidated affiliates | 26 | 46 | 54 | ||||
Trade accounts and notes receivable - net | 5,473 | 5,230 | 6,758 | ||||
Financing receivables - net | 27,814 | 29,195 | 27,049 | ||||
Financing receivables securitized - net | 5,469 | 4,383 | 5,200 | ||||
Other receivables | 1,217 | 1,487 | 1,535 | ||||
Equipment on operating leases - net | 7,158 | 7,567 | 7,269 | ||||
Inventories | 5,650 | 5,975 | 6,747 | ||||
Property and equipment - net | 5,754 | 5,973 | 5,798 | ||||
Investments in unconsolidated affiliates | 199 | 215 | 219 | ||||
Goodwill | 2,984 | 2,917 | 3,013 | $ 3,101 | |||
Other intangible assets - net | 1,301 | $ 1,357 | 1,380 | 1,444 | |||
Retirement benefits | 1,031 | 840 | 1,431 | ||||
Deferred income taxes | 1,534 | 1,466 | 1,088 | ||||
Other assets | 2,824 | 2,301 | 1,899 | 1,977 | |||
Total Assets | 77,264 | 73,011 | 73,530 | ||||
LIABILITIES | |||||||
Short-term borrowings | 9,075 | 10,795 | 10,784 | 11,142 | |||
Short-term securitization borrowings | 5,361 | 4,321 | 5,048 | ||||
Payables to unconsolidated affiliates | 80 | 142 | 136 | ||||
Accounts payable and accrued expenses | 9,565 | 10,004 | 9,656 | 9,390 | |||
Deferred income taxes | 479 | 495 | 507 | ||||
Long-term borrowings | 34,037 | $ 30,249 | 30,229 | 29,242 | |||
Retirement benefits and other liabilities | 5,776 | 5,953 | 5,781 | ||||
Total liabilities | 64,373 | 61,580 | 61,246 | ||||
Commitments and contingencies (Note 16) | |||||||
Redeemable noncontrolling interest (Note 20) | 14 | 14 | |||||
STOCKHOLDERS' EQUITY | |||||||
Common stock, $1 par value (issued shares at August 2, 2020 - 536,431,204) | 4,750 | 4,642 | 4,599 | ||||
Common stock in treasury | (17,671) | (17,474) | (17,121) | ||||
Retained earnings | 31,128 | 29,852 | 29,369 | ||||
Accumulated other comprehensive income (loss) | (5,319) | (5,607) | (4,581) | ||||
Total Deere & Company stockholders' equity | 12,888 | 11,413 | 12,266 | ||||
Noncontrolling interests | 3 | 4 | 4 | ||||
Total stockholders' equity | 12,891 | $ 11,865 | 11,417 | 12,270 | $ 11,924 | $ 11,291 | |
Total Liabilities and Stockholders' Equity | $ 77,264 | $ 73,011 | $ 73,530 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) | Aug. 02, 2020$ / 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 | 9 Months Ended | |
Aug. 02, 2020 | Jul. 28, 2019 | |
Cash Flows from Operating Activities | ||
Net income | $ 1,995 | $ 2,535 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 123 | 58 |
Provision for depreciation and amortization | 1,614 | 1,522 |
Impairment charges | 147 | |
Share-based compensation expense | 63 | 63 |
Undistributed earnings of unconsolidated affiliates | (5) | 10 |
Credit for deferred income taxes | (160) | (332) |
Changes in assets and liabilities: | ||
Trade, notes, and financing receivables related to sales | 626 | (2,206) |
Inventories | (1) | (1,168) |
Accounts payable and accrued expenses | (572) | (306) |
Accrued income taxes payable/receivable | 4 | 253 |
Retirement benefits | 88 | 40 |
Other | 135 | (65) |
Net cash provided by operating activities | 4,057 | 404 |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 13,237 | 12,685 |
Proceeds from maturities and sales of marketable securities | 70 | 72 |
Proceeds from sales of equipment on operating leases | 1,310 | 1,171 |
Cost of receivables acquired (excluding receivables related to sales) | (14,449) | (13,662) |
Purchases of marketable securities | (91) | (110) |
Purchases of property and equipment | (594) | (756) |
Cost of equipment on operating leases acquired | (1,312) | (1,462) |
Collateral on derivatives - net | 324 | 59 |
Other | (12) | (126) |
Net cash used for investing activities | (1,517) | (2,129) |
Cash Flows from Financing Activities | ||
Increase (decrease) in total short-term borrowings | 170 | (336) |
Proceeds from long-term borrowings | 8,331 | 7,440 |
Payments of long-term borrowings | (5,797) | (4,356) |
Proceeds from issuance of common stock | 111 | 133 |
Repurchases of common stock | (263) | (880) |
Dividends paid | (718) | (703) |
Other | (110) | (82) |
Net cash provided by financing activities | 1,724 | 1,216 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 80 | (24) |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 4,344 | (533) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 3,956 | 4,015 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ 8,300 | $ 3,482 |
STATEMENT OF CHANGES IN CONSOLI
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained EarningsCumulative Effect from Adoption | Retained Earnings | Accumulated Other Comprehensive Income (Loss)Cumulative Effect from Adoption | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Balance (ASU 2016-01) at Oct. 28, 2018 | $ 8 | $ (8) | ||||||
Balance at Oct. 28, 2018 | $ 4,474 | $ (16,312) | $ 27,553 | $ (4,427) | $ 3 | $ 11,291 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 2,532 | 3 | 2,535 | |||||
Other comprehensive income (loss) | (146) | (146) | ||||||
Repurchases of common stock | (880) | (880) | ||||||
Treasury shares reissued | 71 | 71 | ||||||
Dividends declared | (725) | (2) | (727) | |||||
Stock options and other | 125 | 1 | 126 | |||||
Balance at Jul. 28, 2019 | 4,599 | (17,121) | 29,369 | (4,581) | 4 | 12,270 | ||
Redeemable Noncontrolling Interest - Balance at Oct. 28, 2018 | 14 | |||||||
Redeemable Noncontrolling Interest - Balance at Jul. 28, 2019 | 14 | |||||||
Balance at Apr. 28, 2019 | 4,559 | (16,739) | 28,709 | (4,610) | 5 | 11,924 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 899 | 899 | ||||||
Other comprehensive income (loss) | 29 | 29 | ||||||
Repurchases of common stock | (400) | (400) | ||||||
Treasury shares reissued | 18 | 18 | ||||||
Dividends declared | (240) | (1) | (241) | |||||
Stock options and other | 40 | 1 | 41 | |||||
Balance at Jul. 28, 2019 | 4,599 | (17,121) | 29,369 | (4,581) | 4 | 12,270 | ||
Redeemable Noncontrolling Interest - Balance at Apr. 28, 2019 | 14 | |||||||
Redeemable Noncontrolling Interest - Balance at Jul. 28, 2019 | 14 | |||||||
Balance at Nov. 03, 2019 | 4,642 | (17,474) | 29,852 | (5,607) | 4 | 11,417 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,993 | 1 | 1,994 | |||||
Other comprehensive income (loss) | 288 | 288 | ||||||
Repurchases of common stock | (263) | (263) | ||||||
Treasury shares reissued | 66 | 66 | ||||||
Dividends declared | (716) | (3) | (719) | |||||
Stock options and other | 108 | (1) | 1 | 108 | ||||
Balance at Aug. 02, 2020 | 4,750 | (17,671) | 31,128 | (5,319) | 3 | 12,891 | ||
Redeemable Noncontrolling Interest - Balance at Nov. 03, 2019 | 14 | |||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Net income | 1 | |||||||
Dividends declared | (1) | |||||||
Noncontrolling interest redemption (Note 20) | (14) | |||||||
Balance at May. 03, 2020 | 4,713 | (17,690) | 30,556 | (5,715) | 1 | 11,865 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 811 | 811 | ||||||
Other comprehensive income (loss) | 396 | 396 | ||||||
Treasury shares reissued | 19 | 19 | ||||||
Dividends declared | (239) | (239) | ||||||
Stock options and other | 37 | 2 | 39 | |||||
Balance at Aug. 02, 2020 | $ 4,750 | $ (17,671) | $ 31,128 | $ (5,319) | $ 3 | $ 12,891 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 9 Months Ended |
Aug. 02, 2020 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | (1) Organization and Consolidation The information in the notes and related commentary are presented in a format which includes data grouped as follows: Equipment Operations – Financial Services – Consolidated – The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2020 and 2019 were August 2, 2020 and July 28, 2019, respectively. Both periods contained 13 weeks. Variable Interest Entities The Company consolidates certain Variable Interest Entities (VIEs) related to retail note securitizations (see Note 12). The Company also has an interest in a joint venture that manufactures construction equipment in Brazil for local and overseas markets. The joint venture is a VIE; however, the Company is not the primary beneficiary. Therefore, the entity’s financial results are not fully consolidated in the Company’s consolidated financial statements, but are included on the equity basis. The maximum exposure to loss was $13 million, $22 million, and $23 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 9 Months Ended |
Aug. 02, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) Summary of Significant Accounting Policies and Cash Flow Information T 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. The COVID-19 (COVID) pandemic has resulted in uncertainties in the Company’s business, which may result in actual outcomes differing significantly 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 $388 million and $498 million in the first nine months of 2020 and 2019, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $51 million and $70 million at August 2, 2020 and July 28, 2019, respectively. The Company’s restricted cash held at August 2, 2020, November 3, 2019, July 28, 2019, and October 28, 2018 was as follows in millions of dollars: August 2 November 3 July 28 October 28 2020 2019 2019 2018 Equipment operations $ 11 $ 21 $ 9 $ 7 Financial services 99 78 90 104 Total $ 110 $ 99 $ 99 $ 111 The equipment operations’ restricted cash relates to miscellaneous operational activities. The financial services restricted cash primarily relates to securitization of financing receivables (see Note 12). The restricted cash is recorded in “Other assets” in the consolidated balance sheet. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 9 Months Ended |
Aug. 02, 2020 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | (3) New Accounting Standards New Accounting Standards Adopted In the first quarter of 2020, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02 , Leases (Topic 842), which supersedes Accounting Standards Codification (ASC) 840, Leases. This ASU was adopted using a modified-retrospective approach. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU did not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU adds new disclosures about the Company’s leasing activities. The Company elected the optional practical expedients to not reassess whether existing contracts contain leases, not reassess lease classification, and not reassess initial direct costs for existing leases. The Company did not elect the hindsight practical expedient . In addition, the Company elected to combine lease and nonlease components for all asset classes and to not recognize a right of use asset or lease liability for arrangements that qualify as short-term leases. The operating lease liabilities are recorded in “Accounts payable and accrued expenses” and the operating lease right of use assets are recorded in “Other assets.” The finance lease liabilities are recorded in “Short-term borrowings” or “Long-term borrowings” based on the remaining lease term, and the finance lease right of use assets are recorded in “Property and equipment - net.” In addition to the lease liabilities and right of use assets, land use rights were reclassified from “Other intangible assets - net” to “Other assets” and finance lease liabilities were reclassified from “Accounts payable and accrued expenses” to “Short-term borrowings” and “Long-term borrowings.” The effect of adopting the ASU on the consolidated balance sheet follows in millions of dollars: November 3, 2019 Cumulative Effect November 4, 2019 Assets Other intangible assets - net $ 1,380 $ (23) $ 1,357 Other assets 1,899 402 2,301 Liabilities Short-term borrowings $ 10,784 $ 11 $ 10,795 Accounts payable and accrued expenses 9,656 348 10,004 Long-term borrowings 30,229 20 30,249 The Company implemented a new system for lessee accounting with new processes and controls at the time of adopting the ASU. The adoption did not have a material effect on the Company’s operating results or cash flows. See Note 15 for additional information. The Company also adopted the following standards in 2020, none of which had a material effect on the Company’s consolidated financial statements: Accounting Standards Updates 2017-08 Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables – Nonrefundable Fees and Other Costs 2018-07 Improvements to Nonemployee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation 2019-04 Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The adoption was for clarifications to ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities 2020-04 Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which establishes ASC 848, Reference Rate Reform New Accounting Standards to be Adopted In June 2016, the FASB issued ASU No. 2016-13 , Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments – Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021. The ASU will be adopted using a modified-retrospective approach. The Company is testing and validating models developed to estimate expected credit losses, assessing appropriate assumptions, designing new procedures and controls, and evaluating the potential effects on the consolidated financial statements. The Company will also adopt the following standards in future periods, none of which are expected to have a material effect on the Company’s consolidated financial statements: Accounting Standards Updates 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software 2019-04 Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments 2019-12 Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Aug. 02, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | (4) Revenue Recognition The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition in millions of dollars follow: Three Months Ended August 2, 2020 Agriculture Construction Financial Total Primary geographical markets: United States $ 2,845 $ 1,048 $ 632 $ 4,525 Canada 295 194 146 635 Western Europe 1,103 376 22 1,501 Central Europe and CIS 319 178 9 506 Latin America 602 124 51 777 Asia, Africa, Australia, New Zealand, and Middle East 631 318 32 981 Total $ 5,795 $ 2,238 $ 892 $ 8,925 Major product lines: Large Agriculture $ 2,893 $ 2,893 Small Agriculture 2,021 2,021 Turf 651 651 Construction $ 817 817 Compact Construction 303 303 Roadbuilding 818 818 Forestry 241 241 Financial Products 24 5 $ 892 921 Other 206 54 260 Total $ 5,795 $ 2,238 $ 892 $ 8,925 Timing of revenue recognition: Revenue recognized at a point in time $ 5,739 $ 2,210 $ 28 $ 7,977 Revenue recognized over time 56 28 864 948 Total $ 5,795 $ 2,238 $ 892 $ 8,925 Nine Months Ended August 2, 2020 Agriculture Construction Financial Total Primary geographical markets: United States $ 8,725 $ 3,331 $ 1,880 $ 13,936 Canada 699 532 453 1,684 Western Europe 2,992 1,073 66 4,131 Central Europe and CIS 877 477 27 1,381 Latin America 1,515 418 177 2,110 Asia, Africa, Australia, New Zealand, and Middle East 1,646 825 96 2,567 Total $ 16,454 $ 6,656 $ 2,699 $ 25,809 Major product lines: Large Agriculture $ 8,106 $ 8,106 Small Agriculture 5,762 5,762 Turf 1,925 1,925 Construction $ 2,535 2,535 Compact Construction 930 930 Roadbuilding 2,146 2,146 Forestry 769 769 Financial Products 72 18 $ 2,699 2,789 Other 589 258 847 Total $ 16,454 $ 6,656 $ 2,699 $ 25,809 Timing of revenue recognition: Revenue recognized at a point in time $ 16,294 $ 6,576 $ 80 $ 22,950 Revenue recognized over time 160 80 2,619 2,859 Total $ 16,454 $ 6,656 $ 2,699 $ 25,809 Three Months Ended July 28, 2019 Agriculture Construction Financial Total Primary geographical markets: United States $ 2,870 $ 1,594 $ 632 $ 5,096 Canada 299 260 148 707 Western Europe 1,154 458 22 1,634 Central Europe and CIS 324 229 10 563 Latin America 708 171 66 945 Asia, Africa, Australia, New Zealand, and Middle East 684 375 32 1,091 Total $ 6,039 $ 3,087 $ 910 $ 10,036 Major product lines: Large Agriculture $ 2,985 $ 2,985 Small Agriculture 2,172 2,172 Turf 704 704 Construction $ 1,319 1,319 Compact Construction 320 320 Roadbuilding 1,008 1,008 Forestry 333 333 Financial Products 25 7 $ 910 942 Other 153 100 253 Total $ 6,039 $ 3,087 $ 910 $ 10,036 Timing of revenue recognition: Revenue recognized at a point in time $ 5,988 $ 3,055 $ 9,043 Revenue recognized over time 51 32 $ 910 993 Total $ 6,039 $ 3,087 $ 910 $ 10,036 Nine Months Ended July 28, 2019 Agriculture Construction Financial Total Primary geographical markets: United States $ 9,411 $ 4,495 $ 1,810 $ 15,716 Canada 784 773 458 2,015 Western Europe 3,362 1,174 63 4,599 Central Europe and CIS 865 555 28 1,448 Latin America 2,028 515 199 2,742 Asia, Africa, Australia, New Zealand, and Middle East 1,784 966 92 2,842 Total $ 18,234 $ 8,478 $ 2,650 $ 29,362 Major product lines: Large Agriculture $ 8,647 $ 8,647 Small Agriculture 6,613 6,613 Turf 2,199 2,199 Construction $ 3,806 3,806 Compact Construction 904 904 Roadbuilding 2,420 2,420 Forestry 1,023 1,023 Financial Products 69 20 $ 2,650 2,739 Other 706 305 1,011 Total $ 18,234 $ 8,478 $ 2,650 $ 29,362 Timing of revenue recognition: Revenue recognized at a point in time $ 18,088 $ 8,402 $ 26,490 Revenue recognized over time 146 76 $ 2,650 2,872 Total $ 18,234 $ 8,478 $ 2,650 $ 29,362 Following is a description of the Company’s major product lines: Large Agriculture Small Agriculture Turf Construction Compact Construction Roadbuilding Forestry Financial Products Other The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily for premiums for extended warranties, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheet. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 16, was $1,115 million, $1,010 million and $1,022 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended August 2, 2020 and July 28, 2019, $97 million and $101 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the nine months ended August 2, 2020 and July 28, 2019, $375 million and $360 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. The Company entered into contracts with customers to deliver equipment and services that have not been recognized at August 2, 2020 because the equipment or services have not been provided. These contracts primarily relate to extended warranty and certain precision guidance and telematic services. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $920 million at August 2, 2020. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2020 - $88, 2021 - $385, 2022 - $240, 2023 - $132, 2024 - $56, 2025 - $16 and later years - $3. The Company discloses unsatisfied performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and end customers for equipment, service parts, repair services, and certain telematics services. As explained in the 2019 Form 10-K, the Company’s policy on trade accounts and notes receivables is to not extend interest-free periods nor to forgive interest charged. During the second and third quarters of 2020, the Company provided short-term payment relief on trade accounts and notes receivables to independent dealers and certain other customers (customers) that are negatively affected by the economic effects of COVID. The relief was provided both in regional programs and case-by-case situations with creditworthy customers. This relief generally included payment deferrals not exceeding three months, extending interest-free periods for up to an additional three months with the total interest-free period not to exceed one year, or reducing interest rates for a maximum of three months. The trade receivable balance granted relief in the second or third quarter that remained outstanding at August 2, 2020 was $234 million or approximately 4 percent of the trade receivable portfolio. These actions were taken in response to the economic effects of COVID on customers. Outside of these actions, the Company is not modifying its normal sales terms with customers that are outlined in the 2019 Form 10-K. For customers who obtained payment relief, subsequent sales transactions are evaluated to confirm the revenue recognition criteria are met, including the sales price is determinable and collectability of the payments is probable based on the terms outlined in the contract. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 9 Months Ended |
Aug. 02, 2020 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | (5) Other Comprehensive Income Items 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 Debt Securities Income (Loss) Balance October 28, 2018 $ (3,237) $ (1,203) $ 15 $ (2) $ (4,427) ASU No. 2016-01 adoption (8) (8) Other comprehensive income (loss) items before reclassification 30 (218) (33) 26 (195) Amounts reclassified from accumulated other comprehensive income 54 (4) (1) 49 Net current period other comprehensive income (loss) 84 (218) (37) 25 (146) Balance July 28, 2019 $ (3,153) $ (1,421) $ (22) $ 15 $ (4,581) Balance November 3, 2019 $ (3,915) $ (1,651) $ (60) $ 19 $ (5,607) Other comprehensive income (loss) items before reclassification 179 (75) (14) 22 112 Amounts reclassified from accumulated other comprehensive income 159 8 10 (1) 176 Net current period other comprehensive income (loss) 338 (67) (4) 21 288 Balance August 2, 2020 $ (3,577) $ (1,718) $ (64) $ 40 $ (5,319) 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 August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ 321 $ 2 $ 323 Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment 329 2 331 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 7 (2) 5 Net unrealized gain (loss) on derivatives 6 (2) 4 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 13 (2) 11 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 12 (2) 10 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (9) 2 (7) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 62 (15) 47 Prior service (credit) cost 3 (1) 2 Settlements 6 (2) 4 OPEB Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 7 (2) 5 Prior service (credit) cost (1) 1 Net unrealized gain (loss) on retirement benefits adjustment 68 (17) 51 Total other comprehensive income (loss) $ 415 $ (19) $ 396 Before Tax After Tax (Expense) Tax Nine Months Ended August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ (77) $ 2 $ (75) Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment (69) 2 (67) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (18) 4 (14) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 13 (3) 10 Net unrealized gain (loss) on derivatives (5) 1 (4) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 27 (5) 22 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 26 (5) 21 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (36) 8 (28) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 186 (57) 129 Prior service (credit) cost 9 (2) 7 Settlements 12 (3) 9 OPEB Net actuarial gain (loss) 274 (67) 207 Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 21 (5) 16 Prior service (credit) cost (3) 1 (2) Net unrealized gain (loss) on retirement benefits adjustment 463 (125) 338 Total other comprehensive income (loss) $ 415 $ (127) $ 288 Before Tax After Tax (Expense) Tax Three Months Ended July 28, 2019 Amount Credit Amount Cumulative translation adjustment $ 27 $ (1) $ 26 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (27) 6 (21) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (1) (1) Net unrealized gain (loss) on derivatives (28) 6 (22) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 13 (2) 11 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 12 (2) 10 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (3) 1 (2) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 35 (9) 26 Prior service (credit) cost 2 2 Settlements 1 1 OPEB Reclassification to Other operating expense through amortization of: * Actuarial (gain) loss 4 (1) 3 Prior service (credit) cost (19) 4 (15) Net unrealized gain (loss) on retirement benefits adjustment 20 (5) 15 Total other comprehensive income (loss) $ 31 $ (2) $ 29 In the third quarter of 2020 2019 Before Tax After Tax (Expense) Tax Nine Months Ended July 28, 2019 Amount Credit Amount Cumulative translation adjustment $ (217) $ (1) $ (218) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (42) 9 (33) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (6) 2 (4) Net unrealized gain (loss) on derivatives (48) 11 (37) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 32 (6) 26 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 31 (6) 25 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (21) 5 (16) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 106 (26) 80 Prior service (credit) cost 8 (2) 6 Settlements 1 1 OPEB Net actuarial gain (loss) 60 (14) 46 Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 12 (3) 9 Prior service (credit) cost (55) 13 (42) Net unrealized gain (loss) on retirement benefits adjustment 111 (27) 84 Total other comprehensive income (loss) $ (123) $ (23) $ (146) * In the first nine months of 2020 2019 |
DIVIDENDS DECLARED AND PAID
DIVIDENDS DECLARED AND PAID | 9 Months Ended |
Aug. 02, 2020 | |
DIVIDENDS DECLARED AND PAID | |
DIVIDENDS DECLARED AND PAID | (6) Dividends Declared and Paid Dividends declared and paid on a per share basis were as follows: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Dividends declared $ .76 $ .76 $ 2.28 $ 2.28 Dividends paid $ .76 $ .76 $ 2.28 $ 2.21 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Aug. 02, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | (7) Earnings 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 Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Net income attributable to Deere & Company $ 811 $ 899 $ 1,993 $ 2,532 Average shares outstanding 313.0 315.9 313.3 317.3 Basic per share $ 2.59 $ 2.84 $ 6.36 $ 7.98 Average shares outstanding 313.0 315.9 313.3 317.3 Effect of dilutive share-based compensation 2.8 3.9 3.1 4.2 Total potential shares outstanding 315.8 319.8 316.4 321.5 Diluted per share $ 2.57 $ 2.81 $ 6.30 $ 7.87 During the third quarter and first nine months of 2020, 1.2 million shares and .8 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive. During the third quarter and first nine months of 2019, .9 million shares and .7 million shares, respectively, were excluded from the above per share computation. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 9 Months Ended |
Aug. 02, 2020 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | (8) Pension and Other Postretirement Benefits The Company has several defined benefit pension plans and postretirement benefit (OPEB) plans, primarily 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 Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Service cost $ 80 $ 65 $ 241 $ 197 Interest cost 86 112 260 334 Expected return on plan assets (204) (200) (613) (600) Amortization of actuarial loss 62 35 186 106 Amortization of prior service cost 3 2 9 8 Settlements 6 1 12 1 Net cost $ 33 $ 15 $ 95 $ 46 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Service cost $ 12 $ 11 $ 36 $ 31 Interest cost 34 53 106 160 Expected return on plan assets (12) (8) (36) (26) Amortization of actuarial loss 7 4 21 12 Amortization of prior service credit (1) (19) (3) (55) Curtailments 21 Net cost $ 40 $ 41 $ 145 $ 122 The components of net periodic pension and OPEB costs excluding the service cost component are included in the line item “Other operating expenses” in the statement of consolidated income. In the first quarter of 2020, the Company remeasured the U.S. OPEB health care plans. The wage plan was remeasured due to the U.S. enactment of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) that repealed the health insurance provider fee effective in 2021. The salary plans were remeasured due to the first quarter U.S. voluntary employee-separation program (see Note 20), which resulted in a $21 million curtailment loss. The combined effect of the remeasurements was to reduce the benefit obligation by $245 million. In August 2020, a committee of the Company’s Board of Directors approved a voluntary contribution to a U.S. OPEB plan for up to $700 million. During the first nine months of 2020, the Company contributed approximately $66 million to its pension plans and $87 million to its OPEB plans. The Company presently anticipates contributing an additional $26 million to its pension plans and $648 million to its OPEB plans during the remainder of fiscal year 2020. The anticipated OPEB contributions include a voluntary $600 million to a U.S. plan, which will increase plan assets. The pension and OPEB contributions exceeding the voluntary amount primarily include direct benefit payments from Company funds. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Aug. 02, 2020 | |
INCOME TAXES | |
INCOME TAXES | (9) Income Taxes The three-month effective tax rate increased from the third quarter of 2019 primarily due to unfavorable discrete adjustments related to finalizing estimated U.S. income tax on non-U.S. income from 2019, favorable discrete adjustments recorded in the third quarter of 2019, and a change in the 2020 forecasted geographic income. The nine-month effective tax rate was also higher than 2019 due to the same items, partially offset by two discrete adjustments. In January 2020, the Company changed the corporate structure of two foreign holding subsidiaries to be indirect branches of Deere & Company. The change in tax status generated a capital loss that was carried back in the Company’s U.S. income tax return resulting in a $43 million benefit. In addition, a discrete benefit of $35 million was recognized in 2020 for the excess tax benefits related to vesting or exercise of share-based compensation awards. The Company’s unrecognized tax benefits at August 2, 2020, November 3, 2019, and July 28, 2019 were $657 million, $553 million, and $630 million. The liability at August 2, 2020, November 3, 2019, and July 28, 2019 consisted of approximately $141 million, $153 million, and $274 million, respectively, which would affect the effective tax rate if the tax benefits were 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 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 | 9 Months Ended |
Aug. 02, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | (10) Segment Reporting Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow: Three Months Ended Nine Months Ended August 2 July 28 % August 2 July 28 % 2020 2019 Change 2020 2019 Change Net sales and revenues: Agriculture and turf $ 5,672 $ 5,946 -5 $ 16,127 $ 17,909 -10 Construction and forestry 2,187 3,023 -28 6,485 8,273 -22 Total net sales 7,859 8,969 -12 22,612 26,182 -14 Financial services 892 910 -2 2,699 2,650 +2 Other revenues 174 157 +11 498 530 -6 Total net sales and revenues $ 8,925 $ 10,036 -11 $ 25,809 $ 29,362 -12 Operating profit: * Agriculture and turf $ 942 $ 612 +54 $ 2,109 $ 1,978 +7 Construction and forestry 205 378 -46 394 954 -59 Financial services 243 204 +19 498 566 -12 Total operating profit 1,390 1,194 +16 3,001 3,498 -14 Reconciling items ** (122) (74) +65 (256) (218) +17 Income taxes (457) (221) +107 (752) (748) +1 Net income attributable to Deere & Company $ 811 $ 899 -10 $ 1,993 $ 2,532 -21 Intersegment sales and revenues: Agriculture and turf net sales $ 5 $ 9 -44 $ 20 $ 27 -26 Construction and forestry net sales 1 Financial services 59 93 -37 218 261 -16 Equipment operations outside the U.S. and Canada: Net sales $ 3,557 $ 4,026 -12 $ 9,563 $ 10,985 -13 Operating profit 524 430 +22 932 1,088 -14 August 2 November 3 2020 2019 Identifiable assets: Agriculture and turf $ 10,124 $ 10,379 -2 Construction and forestry 9,105 9,387 -3 Financial services 48,869 48,483 +1 Corporate 9,166 4,762 +92 Total assets $ 77,264 $ 73,011 +6 * ** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 9 Months Ended |
Aug. 02, 2020 | |
FINANCING RECEIVABLES | |
FINANCING RECEIVABLES | (11) Financing Receivables 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. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is 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. Due to the significant, negative effects of COVID on dealers and retail customers, the Company provided short-term payment relief to dealers and retail customers on financing receivables, which includes retail notes, wholesale notes, revolving charge accounts, and sales-type and direct financing leases. The relief was provided in regional programs and case-by-case situations with customers that were generally current in their payment obligations. This relief generally included payment deferrals or reduced financing rates of three months or less. The balance of financing receivables granted relief was approximately 5 percent of the total financing receivable balance at August 2, 2020. The delinquency status of receivables granted relief is based on the modified payment schedule. An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows: August 2, 2020 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 131 $ 63 $ 2 $ 196 Construction and forestry 65 22 12 99 Other: Agriculture and turf 37 17 2 56 Construction and forestry 28 19 47 Total $ 261 $ 121 $ 16 $ 398 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 196 $ 306 $ 19,255 $ 19,757 Construction and forestry 99 102 3,748 3,949 Other: Agriculture and turf 56 81 8,161 8,298 Construction and forestry 47 40 1,392 1,479 Total $ 398 $ 529 $ 32,556 33,483 Less allowance for credit losses 200 Total financing receivables – net $ 33,283 November 3, 2019 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 138 $ 73 $ 1 $ 212 Construction and forestry 79 29 4 112 Other: Agriculture and turf 39 19 1 59 Construction and forestry 26 7 33 Total $ 282 $ 128 $ 6 $ 416 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 212 $ 268 $ 18,931 $ 19,411 Construction and forestry 112 127 3,450 3,689 Other: Agriculture and turf 59 28 8,986 9,073 Construction and forestry 33 26 1,496 1,555 Total $ 416 $ 449 $ 32,863 33,728 Less allowance for credit losses 150 Total financing receivables – net $ 33,578 July 28, 2019 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 136 $ 63 $ 3 $ 202 Construction and forestry 87 35 2 124 Other: Agriculture and turf 38 22 60 Construction and forestry 17 7 24 Total $ 278 $ 127 $ 5 $ 410 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 202 $ 301 $ 18,038 $ 18,541 Construction and forestry 124 135 3,249 3,508 Other: Agriculture and turf 60 37 8,833 8,930 Construction and forestry 24 14 1,417 1,455 Total $ 410 $ 487 $ 31,537 32,434 Less allowance for credit losses 185 Total financing receivables – net $ 32,249 An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Revolving Retail Charge Notes Accounts Other Total Three Months Ended August 2, 2020 Allowance: Beginning of period balance $ 119 $ 43 $ 33 $ 195 Provision (credit) 5 14 (1) 18 Write-offs (7) (22) (2) (31) Recoveries 6 8 1 15 Translation adjustments 2 1 3 End of period balance * $ 125 $ 43 $ 32 $ 200 Nine Months Ended August 2, 2020 Allowance: Beginning of period balance $ 89 $ 40 $ 21 $ 150 Provision 79 32 13 124 Write-offs (47) (51) (6) (104) Recoveries 10 22 2 34 Translation adjustments (6) 2 (4) End of period balance * $ 125 $ 43 $ 32 $ 200 Financing receivables: End of period balance $ 23,706 $ 3,997 $ 5,780 $ 33,483 Balance individually evaluated ** $ 160 $ 1 $ 67 $ 228 * Individual allowances were not significant. ** Remainder is collectively evaluated. The negative economic effects related to COVID and other macroeconomic issues have significantly affected certain retail borrowers, particularly of construction equipment. As a result, the allowance for credit losses increased $50 million in the first nine months of 2020 reflecting estimated credit losses inherent in the financing receivables. Revolving Retail Charge Notes Accounts Other Total Three Months Ended July 28, 2019 Allowance: Beginning of period balance $ 115 $ 43 $ 24 $ 182 Provision 7 18 1 26 Write-offs (9) (26) (1) (36) Recoveries 5 8 13 Translation adjustments 2 (2) End of period balance * $ 120 $ 43 $ 22 $ 185 Nine Months Ended July 28, 2019 Allowance: Beginning of period balance $ 113 $ 43 $ 22 $ 178 Provision 21 34 7 62 Write-offs (29) (51) (5) (85) Recoveries 15 17 1 33 Translation adjustments (3) (3) End of period balance * $ 120 $ 43 $ 22 $ 185 Financing receivables: End of period balance $ 22,049 $ 3,877 $ 6,508 $ 32,434 Balance individually evaluated ** $ 145 $ 10 $ 155 * ** 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 August 2, 2020* Receivables with specific allowance *** $ 92 $ 91 $ 23 $ 106 Receivables without a specific allowance ** 36 33 38 Total $ 128 $ 124 $ 23 $ 144 Agriculture and turf $ 106 $ 103 $ 17 $ 117 Construction and forestry $ 22 $ 21 $ 6 $ 27 November 3, 2019* Receivables with specific allowance ** $ 40 $ 39 $ 13 $ 40 Receivables without a specific allowance ** 32 31 37 Total $ 72 $ 70 $ 13 $ 77 Agriculture and turf $ 49 $ 48 $ 8 $ 52 Construction and forestry $ 23 $ 22 $ 5 $ 25 July 28, 2019* Receivables with specific allowance ** $ 37 $ 36 $ 13 $ 37 Receivables without a specific allowance ** 35 33 39 Total $ 72 $ 69 $ 13 $ 76 Agriculture and turf $ 51 $ 50 $ 9 $ 52 Construction and forestry $ 21 $ 19 $ 4 $ 24 * ** *** 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 nine months of 2020, the Company identified 413 receivable contracts, primarily wholesale receivables in Argentina, as troubled debt restructurings with aggregate balances of $99 million pre-modification and $88 million post-modification. The short-term payment relief related to COVID, mentioned earlier, did not meet the definition of a troubled debt restructuring. During the first nine months of 2019, there were 416 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $34 million pre-modification and $33 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At August 2, 2020, the Company had commitments to lend approximately $16 million to borrowers whose accounts were modified in troubled debt restructurings. |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 9 Months Ended |
Aug. 02, 2020 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | (12) Securitization of Financing Receivables The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into VIEs that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which 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 consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the financing receivables securitized or a fixed percentage of the outstanding balance of the securitized financing receivables. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. 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 $3,342 million, $2,895 million, and $3,425 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $3,259 million, $2,847 million, and $3,316 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit. In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $680 million, $491 million, and $587 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $643 million, $465 million, and $546 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,551 million, $1,079 million, and $1,286 million at August 2, 2020, November 3, 2019, and July 28, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,463 million, $1,015 million, and $1,190 million at August 2, 2020, November 3, 2019, and July 28, 2019, 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: August 2 2020 Carrying value of liabilities $ 1,463 Maximum exposure to loss 1,551 The total assets of unconsolidated VIEs related to securitizations were approximately $41 billion at August 2, 2020. The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: August 2 November 3 July 28 2020 2019 2019 Financing receivables securitized (retail notes) $ 5,484 $ 4,395 $ 5,214 Allowance for credit losses (15) (12) (14) Other assets 104 82 98 Total restricted securitized assets $ 5,573 $ 4,465 $ 5,298 The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: August 2 November 3 July 28 2020 2019 2019 Short-term securitization borrowings $ 5,361 $ 4,321 $ 5,048 Accrued interest on borrowings 4 6 4 Total liabilities related to restricted securitized assets $ 5,365 $ 4,327 $ 5,052 The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At August 2, 2020, the maximum remaining term of all securitized retail notes was approximately seven years. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Aug. 02, 2020 | |
INVENTORIES | |
INVENTORIES | (13) 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: August 2 November 3 July 28 2020 2019 2019 Raw materials and supplies $ 2,101 $ 2,285 $ 2,365 Work-in-process 696 747 815 Finished goods and parts 4,427 4,613 5,345 Total FIFO value 7,224 7,645 8,525 Less adjustment to LIFO value 1,574 1,670 1,778 Inventories $ 5,650 $ 5,975 $ 6,747 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 9 Months Ended |
Aug. 02, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | (14) Goodwill and Other Intangible Assets – Net The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and Turf and Forestry Total Goodwill at October 28, 2018 $ 583 $ 2,518 $ 3,101 Translation adjustments and other (1) (87) (88) Goodwill at July 28, 2019 $ 582 $ 2,431 $ 3,013 Goodwill at November 3, 2019 $ 574 $ 2,343 $ 2,917 Translation adjustments and other 2 65 67 Goodwill at August 2, 2020 $ 576 $ 2,408 $ 2,984 There were no accumulated impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: August 2 November 3 July 28 2020 2019 2019 Amortized intangible assets: Customer lists and relationships $ 515 $ 511 $ 525 Technology, patents, trademarks, and other 1,021 1,028 1,057 Total at cost 1,536 1,539 1,582 Less accumulated amortization * 358 282 261 Total 1,178 1,257 1,321 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,301 $ 1,380 $ 1,444 * The amortization of other intangible assets in the third quarter and the first nine months of 2020 was $26 million and $76 million and for 2019 was $27 million and $82 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2020 – $25, 2021 – $101, 2022 – $100, 2023 – $99, 2024 – $96, and 2025 –$95. As outlined in the 2019 Form 10-K, goodwill is tested for impairment annually and when events or circumstances change such that it is more likely than not that the fair value of a reporting unit is reduced below its carrying value. The annual measurement date is the end of the third quarter. In the second and third quarters of 2020, for each significant reporting unit the Company reviewed previous fair value analyses considering the uncertain and unknown economic effects of COVID. The Company concluded that an impairment was not required. The intangible assets subject to amortization were also considered to determine if the carrying amount may not be recoverable. Except as identified in Note 20, the Company concluded the carrying amount would be recovered based on current estimates. These positions will be evaluated in future quarters, as necessary. |
LEASES
LEASES | 9 Months Ended |
Aug. 02, 2020 | |
LEASES | |
LEASES | (15) Leases The Company is both a lessee and a lessor. The Company leases for its own use, under leases with expected use periods generally ranging from less than one year to 20 years, primarily warehouse facilities, office space, production equipment, information technology equipment, and vehicles. The Company’s financial services segment leases to users equipment produced or sold by the Company, and a limited amount of other equipment. These leases are usually written for periods of less than one year to seven years. The Company determines if an arrangement is or contains a lease at the contract inception. Lessee The Company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than 12 months for both operating and finance leases. The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the Company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than 12 months and that do not meet the finance lease criteria are classified as operating leases. Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from one The Company has elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. Leases with an initial term of 12 months or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. Variable lease expense primarily includes warehouse facilities leases with payments based on utilization exceeding contractual minimum amounts and leases with payments indexed to inflation when the index changes after lease commencement. The lease expense by type consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 2, 2020 August 2, 2020 Operating lease expense $ 29 $ 92 Short-term lease expense 8 18 Variable lease expense 8 28 Finance lease: Depreciation expense 3 10 Interest on lease liabilities 1 2 Total lease expense $ 49 $ 150 Operating and finance lease right of use assets and liabilities follow in millions of dollars: August 2, 2020 Operating leases: Other assets $ 341 Accounts payable and accrued expenses 318 Finance leases: Property and equipment - net $ 56 Short-term borrowings $ 18 Long-term borrowings 33 Total finance lease liabilities $ 51 The weighted-average remaining lease term in years and discount rates follows: August 2, 2020 Weighted-average remaining lease terms: Operating leases 7 Finance leases 3 Weighted-average discount rate: Operating leases 2.2% Finance leases 2.4% Lease payment amounts in each of the next five years at August 2, 2020 follow in millions of dollars: Operating Finance Due in: Leases Leases Remainder of 2020 $ 30 $ 5 2021 83 18 2022 71 15 2023 50 10 2024 39 3 2025 22 1 Later years 43 2 Total lease payments 338 54 Less imputed interest 20 3 Total lease liabilities $ 318 $ 51 Future minimum lease payments under the previous lease standard for operating and capital leases at November 3, 2019 follow in millions of dollars: Operating Capital Due in: Leases Leases 2020 $ 111 $ 12 2021 77 10 2022 56 6 2023 39 2 2024 28 1 Later years 26 1 Total minimum lease payments $ 337 $ 32 Cash paid for amounts included in the measurement of lease liabilities: Nine Months Ended August 2, 2020 Operating cash flows from operating leases $ 92 Operating cash flows from finance leases 2 Financing cash flows from finance leases 16 Right of use assets obtained in exchange for lease liabilities: Nine Months Ended August 2, 2020 Operating leases $ 27 Finance leases 37 Lessor The Company leases equipment manufactured or sold by the Company and a limited amount of non-Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in “Financing receivables - net” on the consolidated balance sheet. Operating leases are reported in “Equipment on operating leases - net” on the consolidated balance sheet. Leases offered by the Company may include early termination and renewal options. At the end of a lease, the lessee generally has the option to purchase the underlying equipment for a fixed price or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to the Company for remarketing. The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates decline. Lease agreements include usage limits and specifications on machine condition, which allow the Company to assess lessees for excess use or damages to the underlying equipment. In the second quarter of 2020, the Company recorded impairment losses on operating leases of $22 million due to higher expected equipment return rates and lower estimated values of used construction equipment. Operating lease impairments are recorded in “Other operating expenses.” The Company has elected to combine lease and nonlease components. The nonlease components primarily relate to preventative maintenance and extended warranty agreements financed by the retail customer. The Company has also elected to report consideration related to sales and value added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in “Finance and interest income” and “Other operating expenses” on the statement of consolidated income. Variable lease revenues primarily relate to property taxes on leased assets in certain markets and late fees. Due to the significant, negative effects of COVID, the Company provided short-term relief to lessees during the second and third quarters of 2020. The relief, which included payment deferrals of three months or less, was provided in regional programs and on a case-by-case basis and primarily related to construction accounts. The operating leases granted relief represented approximately 4 percent of the Company’s operating lease portfolio at August 2, 2020. See Note 11 for sales-type and direct financing leases provided payment relief. Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Nine Months Ended August 2, 2020 August 2, 2020 Sales-type and direct financing lease revenues $ 33 $ 101 Operating lease revenues 361 1,104 Variable lease revenues 6 17 Total lease revenues $ 400 $ 1,222 At the time of accepting a lease that qualifies as a sales-type or direct financing lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method. Sales-type and direct financing lease receivables by product category were as follows in millions of dollars: August 2 November 3 2020 2019 Agriculture and turf $ 902 $ 897 Construction and forestry 979 1,033 Total 1,881 1,930 Guaranteed residual values 238 232 Unguaranteed residual values 80 101 Less unearned finance income 223 212 Financing leases receivables $ 1,976 $ 2,051 Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at August 2, 2020 follow in millions of dollars: August 2 Due in: 2020 Remainder of 2020 $ 296 2021 850 2022 488 2023 281 2024 146 2025 46 Later years 12 Total $ 2,119 Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 follow in millions of dollars: November 3 Due in: 2019 2020 $ 833 2021 557 2022 321 2023 153 2024 53 Later years 13 Total $ 1,930 Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The cost of equipment on operating leases by product category was as follows in millions of dollars: August 2 November 3 2020 2019 Agriculture and turf $ 7,162 $ 7,257 Construction and forestry 2,013 2,165 Total 9,175 9,422 Less accumulated depreciation 2,017 1,855 Equipment on operating leases - net $ 7,158 $ 7,567 The total operating lease residual values at August 2, 2020 and November 3, 2019 were $5,167 million and $5,259 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $691 million and $647 million at August 2, 2020 and November 3, 2019, respectively. Lease payments for equipment on operating leases at August 2, 2020 were scheduled as follows in millions of dollars: August 2 Due in: 2020 Remainder of 2020 $ 300 2021 993 2022 633 2023 324 2024 140 2025 15 Total $ 2,405 Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows in millions of dollars: November 3 Due in: 2019 2020 $ 1,086 2021 759 2022 419 2023 193 2024 41 Total $ 2,498 The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at August 2, 2020 and November 3, 2019 were $106 million and $163 million, respectively. In the second quarter of 2020, the Company recorded impairment losses on matured operating lease inventory of $10 million due to lower estimated values of used construction equipment. Impairment losses on matured operating lease inventory are included in “Other operating expenses.” |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Aug. 02, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (16) 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 $621 million and $542 million at August 2, 2020 and July 28, 2019, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Beginning of period balance $ 1,767 $ 1,714 $ 1,800 $ 1,652 Payments (250) (252) (703) (714) Amortization of premiums received (58) (57) (168) (168) Accruals for warranties 177 263 609 772 Premiums received 68 75 202 209 Foreign exchange 27 3 (9) (5) End of period balance $ 1,731 $ 1,746 $ 1,731 $ 1,746 At August 2, 2020, the Company had approximately $343 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 August 2, 2020, the Company had accrued losses of approximately $14 million under these agreements. The maximum remaining term of the receivables guaranteed at August 2, 2020 was approximately six years. At August 2, 2020, the Company had commitments of approximately $257 million for the construction and acquisition of property and equipment. Also, at August 2, 2020, the Company had restricted assets of $67 million, primarily as collateral for borrowings and restricted other assets. See Note 12 for additional restricted assets associated with borrowings related to securitizations. The Company also had other miscellaneous contingent liabilities totaling approximately $50 million at August 2, 2020. The accrued liability for these contingencies was not material at August 2, 2020. The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Aug. 02, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | (17) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow: August 2, 2020 November 3, 2019 July 28, 2019 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 111 $ 102 $ 65 $ 61 $ 100 $ 93 Financial services 27,703 27,929 29,130 29,106 26,949 26,921 Total $ 27,814 $ 28,031 $ 29,195 $ 29,167 $ 27,049 $ 27,014 Financing receivables securitized – net: Equipment operations $ 37 $ 34 $ 44 $ 43 $ 54 $ 52 Financial services 5,432 5,544 4,339 4,362 5,146 5,154 Total $ 5,469 $ 5,578 $ 4,383 $ 4,405 $ 5,200 $ 5,206 Short-term Equipment operations $ 37 $ 37 $ 44 $ 45 $ 53 $ 54 Financial services 5,324 5,381 4,277 4,302 4,995 5,017 Total $ 5,361 $ 5,418 $ 4,321 $ 4,347 $ 5,048 $ 5,071 Long-term borrowings due within one year: ** Equipment operations $ 507 $ 504 $ 642 $ 645 $ 1,009 $ 1,013 Financial services 6,114 6,168 6,786 6,788 6,922 6,914 Total $ 6,621 $ 6,672 $ 7,428 $ 7,433 $ 7,931 $ 7,927 Long-term borrowings: ** Equipment operations $ 10,184 $ 12,163 $ 5,415 $ 6,138 $ 5,364 $ 6,017 Financial services 23,820 24,464 24,814 25,122 23,878 24,143 Total $ 34,004 $ 36,627 $ 30,229 $ 31,260 $ 29,242 $ 30,160 * ** Carrying values exclude finance lease liabilities that are presented as borrowings beginning in 2020 (see Notes 3 and 15). Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow*: August 2 November 3 July 28 2020 2019 2019 Level 1: Marketable securities International equity securities *** $ 2 Equity fund *** 68 $ 59 $ 59 U.S. government debt securities 50 50 49 Total Level 1 marketable securities 120 109 108 Level 2: Marketable securities U.S. government debt securities 105 81 73 Municipal debt securities 64 60 57 Corporate debt securities 185 165 156 International debt securities 2 5 9 Mortgage-backed securities ** 159 160 158 Total Level 2 marketable securities 515 471 453 Other assets Derivatives: Interest rate contracts 895 363 265 Foreign exchange contracts 57 20 53 Cross-currency interest rate contracts 9 1 2 Total Level 2 other assets 961 384 320 Accounts payable and accrued expenses Derivatives: Interest rate contracts 115 65 99 Foreign exchange contracts 55 71 45 Cross-currency interest rate contracts 3 2 Total Level 2 accounts payable and accrued expenses 170 139 146 Level 3: Marketable securities International debt securities 5 1 4 * ** ***During the third quarter of 2020 and 2019, net unrealized gains on equity securities of $10 million and $1 million, respectively, were recorded in “Other income.” During the first nine months of 2020 and 2019, net unrealized gains on equity securities were $8 million and $7 million, respectively. The contractual maturities of debt securities at August 2, 2020 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 $ 27 $ 24 Due after one through five years 89 95 Due after five through 10 years 102 114 Due after 10 years 160 178 Mortgage-backed securities 150 159 Debt securities $ 528 $ 570 Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Beginning of period balance $ 1 $ 4 $ 1 $ 8 Purchases 5 5 Principal payments (1) (1) (5) Other 1 End of period balance $ 5 $ 4 $ 5 $ 4 Fair value, nonrecurring measurements from impairments in millions of dollars follow: Fair Value * Losses * Three Months Ended Nine Months Ended August 2 November 3 July 28 August 2 July 28 August 2 July 28 2020 2019 2019 2020 2019 2020 2019 Other receivables $ 1 $ 2 $ 2 Equipment on operating leases – net $ 855 $ 22 Property and equipment – net $ 8 $ 5 $ 67 Investments in unconsolidated affiliates $ 20 Other intangible assets – net $ 2 $ 2 Other assets $ 19 $ 142 $ 24 $ 34 * 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 – Derivatives – Financing Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. Other Receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation (see Note 20). Equipment on Operating Leases – Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus estimates of return rates and equipment sale price at lease maturity. Inputs include historic return rates and realized sales values (see Note 20). Property and Equipment – Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on a cost approach. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence (see Note 20). Investment in Unconsolidated Affiliates – Other than temporary impairments for investments measured as the difference between the implied fair value and the carrying value of the investments. The fair value for publicly traded entities is the share price multiplied by the shares owned (see Note 20). Other Intangible Assets – Net – The impairment was measured at the remaining net book value of customer relationships related to a closed factory operation (see Note 20). Other Assets – The impairments of matured operating lease inventory are measured at the fair value of that inventory. The valuations were based on a market approach. The inputs include sales of comparable assets (see Note 20). The impairment of the German lawn mower business recorded in other assets was measured at the realizable value. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 20). |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Aug. 02, 2020 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | (18) Derivative 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. In addition, the Company has interest rate exposure at certain equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods. 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, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Cash Flow Hedges Certain 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 August 2, 2020, November 3, 2019, and July 28, 2019 were $1,900 million, $3,150 million, and $2,750 million, respectively. Fair value gains or losses on cash flow hedges were recorded in OCI and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate changes on the related borrowings. 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 August 2, 2020 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 $14 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at August 2, 2020, November 3, 2019, and July 28, 2019 were $8,850 million, $8,717 million, and $9,245 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense. The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued Hedged Item Relationships Relationships Total August 2, 2020 Long-term borrowings due within one year* $ 480 $ 6 $ 2 $ 8 Long-term borrowings 9,140 754 40 794 November 3, 2019 Long-term borrowings due within one year* $ 412 $ (1) $ (4) $ (5) Long-term borrowings 8,532 295 (32) 263 July 28, 2019 Long-term borrowings due within one year* $ 187 $ 1 $ (5) $ (4) Long-term borrowings 9,154 184 (50) 134 * Derivatives not designated as hedging instruments The Company has certain interest rate contracts (swaps), 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, purchases or sales of inventory, and below market retail financing programs. The total notional amounts of these interest rate swaps at August 2, 2020, November 3, 2019, and July 28, 2019 were $7,522 million, $9,166 million, and $7,607 million, the foreign exchange contracts were $4,790 million, $4,962 million, and $6,362 million, and the cross-currency interest rate contracts were $125 million, $92 million, and $90 million, respectively. 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: August 2 November 3 July 28 Other Assets 2020 2019 2019 Designated as hedging instruments: Interest rate contracts $ 806 $ 332 $ 232 Total designated 806 332 232 Not designated as hedging instruments: Interest rate contracts 89 31 33 Foreign exchange contracts 57 20 53 Cross-currency interest rate contracts 9 1 2 Total not designated 155 52 88 Total derivative assets $ 961 $ 384 $ 320 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 24 $ 28 $ 55 Total designated 24 28 55 Not designated as hedging instruments: Interest rate contracts 91 37 44 Foreign exchange contracts 55 71 45 Cross-currency interest rate contracts 3 2 Total not designated 146 111 91 Total derivative liabilities $ 170 $ 139 $ 146 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: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Fair Value Hedges: Interest rate contracts - Interest expense $ 78 $ 193 $ 589 $ 468 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (1) (27) (18) (42) Reclassified from OCI Interest rate contracts - Interest expense (7) 1 (13) 6 Not Designated as Hedges: Interest rate contracts - Net sales $ (2) $ (6) $ (26) $ (23) Interest rate contracts - Interest expense * (1) (7) 2 (25) Foreign exchange contracts - Cost of sales (28) (8) 64 (1) Foreign exchange contracts - Other operating * (49) (12) 125 88 Total not designated $ (80) $ (33) $ 165 $ 39 * Counterparty Risk and Collateral 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. Certain of the Company’s derivative agreements contain credit support provisions that may require the Company to post or receive collateral based on the size of the net liability or net asset positions, credit ratings, and market conventions. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at August 2, 2020, November 3, 2019, and July 28, 2019, was $115 million, $68 million, and $101 million, respectively. Based on net asset positions and in accordance with the limits established in these agreements, the Company received $332 million in cash collateral at August 2, 2020. No cash collateral was posted or received at November 3, 2019 or July 28, 2019 . In addition, the Company paid $8 million of collateral that was outstanding at August 2, 2020 to participate in an international futures market to hedge currency exposure, which is not included in the table below. 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 August 2, 2020 Recognized Arrangements Received Net Amount Assets $ 961 $ (120) $ (332) $ 509 Liabilities 170 (120) 50 Gross Amounts Netting Collateral November 3, 2019 Recognized Arrangements Received Net Amount Assets $ 384 $ (70) $ 314 Liabilities 139 (70) 69 Gross Amounts Netting Collateral July 28, 2019 Recognized Arrangements Received Net Amount Assets $ 320 $ (70) $ 250 Liabilities 146 (70) 76 |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 9 Months Ended |
Aug. 02, 2020 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (19) Stock Option and Restricted Stock Awards In December 2019, the Company granted stock options to employees for the purchase of 495 thousand shares of common stock at an exercise price of $169.70 per share and a binomial lattice model fair value of $35.83 per share at the grant date. At August 2, 2020, options for 6.1 million shares were outstanding with a weighted-average exercise price of $100.84 per share. The Company also granted 362 thousand restricted stock units to employees and nonemployee directors in the first nine months of 2020, of which 295 thousand are subject to service based only conditions and 67 thousand are subject to performance/service based conditions. The weighted-average fair value of the service based only units at the grant date was $168.73 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 $160.81 per unit based on the market price of a share of underlying common stock excluding dividends. At August 2, 2020, the Company was authorized to grant an additional 18.5 million shares related to stock option and restricted stock awards. |
SPECIAL ITEMS
SPECIAL ITEMS | 9 Months Ended |
Aug. 02, 2020 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | (20) S pecial Items Employee-Separation Programs During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continues the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The program’s total pretax expenses were approximately $138 million with the final $2 million recorded in the third quarter. The payments for the program were also substantially made in the first quarter of 2020. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “ Other operating expense. ” The first nine months of 2020 expenses that are included in operating profit of $115 million are allocated 36 percent “Cost of sales,” 16 percent “Research and development,” and 48 percent “Selling, administrative and general.” In addition, the expenses are allocated 74 percent to the agriculture and turf operations, 23 percent to the construction and forestry operations, and 3 percent to the financial services operations. Annual savings from these programs are estimated to be approximately $85 million with about $65 million in 2020. During the third and early fourth quarter of 2020, the Company announced additional employee-separation programs as part of an initiative to improve organizational efficiency. The programs will provide for cash payments based on years of service. The expenses will generally be recorded in the period the employees irrevocably accept the separation offer, which is expected to be primarily in the fourth quarter of 2020. The programs’ total pretax expenses are estimated to be about $175 million with annual savings of about $175 million. Impairments and Other Charges In the second quarter of 2020, the Company recorded non-cash impairment charges as outlined below. The fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax The equipment on operating leases and matured operating lease inventory recorded in “Other assets” were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows will not cover the carrying amount of the net assets. The assets are included in the financial services operations with the impairments recorded in “Other operating expenses.” A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax In the third quarter of 2020, the Company recorded impairment and other charges as outlined below. The Company reached a definitive agreement to sell its German walk-behind lawn mower business in the third quarter of 2020, which is expected to close in the fourth quarter. As a result, a non-cash charge of $24 million pretax and after-tax The Company closed a factory producing small agricultural equipment in China at the end of the third quarter. In connection with this closure, a non-cash impairment of other receivables, property, and intangible assets of $9 million pretax and after-tax after-tax Redeemable Noncontrolling Interest In the second quarter of 2020, the minority interest holder in Hagie Manufacturing Company, LLC exercised its right to sell the remaining 20 percent interest to the Company for $14 million. The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statement of consolidated income. This operation is included in the Company’s agriculture and turf segment. |
SUPPLEMENTAL CONSOLIDATING DATA
SUPPLEMENTAL CONSOLIDATING DATA | 9 Months Ended |
Aug. 02, 2020 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
SUPPLEMENTAL CONSOLIDATING DATA | (21) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME For the Three Months Ended August 2, 2020 and July 28, 2019 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2020 2019 2020 2019 Net Sales and Revenues Net sales $ 7,859 $ 8,969 Finance and interest income 25 30 $ 878 $ 952 Other income 206 185 73 51 Total 8,090 9,184 951 1,003 Costs and Expenses Cost of sales 5,836 6,871 Research and development expenses 370 431 Selling, administrative and general expenses 616 751 137 147 Interest expense 91 67 206 311 Interest compensation to Financial Services 58 93 Other operating expenses 94 64 363 339 Total 7,065 8,277 706 797 Income of Consolidated Group before Income Taxes 1,025 907 245 206 Provision for income taxes 395 190 62 31 Income of Consolidated Group 630 717 183 175 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services 183 175 Other (2) 7 Total 181 182 Net Income 811 899 183 175 Less: Net income attributable to noncontrolling interests Net Income Attributable to Deere & Company $ 811 $ 899 $ 183 $ 175 * 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 Nine Months Ended August 2, 2020 and July 28, 2019 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2020 2019 2020 2019 Net Sales and Revenues Net sales $ 22,612 $ 26,182 Finance and interest income 75 79 $ 2,720 $ 2,727 Other income 597 614 196 184 Total 23,284 26,875 2,916 2,911 Costs and Expenses Cost of sales 17,208 20,058 Research and development expenses 1,201 1,295 Selling, administrative and general expenses 1,989 2,191 483 422 Interest expense 237 182 747 910 Interest compensation to Financial Services 195 254 Other operating expenses 186 203 1,187 1,008 Total 21,016 24,183 2,417 2,340 Income of Consolidated Group before Income Taxes 2,268 2,692 499 571 Provision for income taxes 632 625 120 123 Income of Consolidated Group 1,636 2,067 379 448 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services 381 450 2 2 Other (22) 18 Total 359 468 2 2 Net Income 1,995 2,535 381 450 Less: Net income attributable to noncontrolling interests 2 3 Net Income Attributable to Deere & Company $ 1,993 $ 2,532 $ 381 $ 450 * 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 August 2 November 3 July 28 August 2 November 3 July 28 2020 2019 2019 2020 2019 2019 Assets Cash and cash equivalents $ 7,440 $ 3,175 $ 2,694 $ 750 $ 682 $ 689 Marketable securities 8 1 5 632 580 560 Receivables from unconsolidated subsidiaries and affiliates 3,619 2,017 2,395 Trade accounts and notes receivable – net 1,251 1,482 1,606 5,595 5,153 6,807 Financing receivables – net 111 65 100 27,703 29,130 26,949 Financing receivables securitized – net 37 44 54 5,432 4,339 5,146 Other receivables 1,083 1,376 1,428 162 116 126 Equipment on operating leases – net 7,158 7,567 7,269 Inventories 5,650 5,975 6,747 Property and equipment – net 5,711 5,929 5,753 43 44 45 Investments in unconsolidated subsidiaries and affiliates 5,383 5,326 5,309 19 16 16 Goodwill 2,984 2,917 3,013 Other intangible assets – net 1,301 1,380 1,444 Retirement benefits 972 836 1,374 59 58 57 Deferred income taxes 1,865 1,896 1,579 56 57 72 Other assets 1,566 1,158 1,269 1,260 741 708 Total Assets $ 38,981 $ 33,577 $ 34,770 $ 48,869 $ 48,483 $ 48,444 Liabilities and Stockholders’ Equity Liabilities Short-term borrowings $ 853 $ 987 $ 1,372 $ 8,222 $ 9,797 $ 9,770 Short-term securitization borrowings 37 44 53 5,324 4,277 4,995 Payables to unconsolidated subsidiaries and affiliates 80 142 136 3,593 1,970 2,341 Accounts payable and accrued expenses 8,834 9,232 9,422 2,134 1,836 1,641 Deferred income taxes 398 414 454 468 568 616 Long-term borrowings 10,217 5,415 5,364 23,820 24,814 23,878 Retirement benefits and other liabilities 5,671 5,912 5,685 105 94 97 Total liabilities 26,090 22,146 22,486 43,666 43,356 43,338 Commitments and contingencies (Note 16) Redeemable noncontrolling interest (Note 20) 14 14 Stockholders’ Equity Common stock, $1 par value (issued shares at August 2, 2020 – 536,431,204) 4,750 4,642 4,599 2,121 2,107 2,107 Common stock in treasury (17,671) (17,474) (17,121) Retained earnings 31,128 29,852 29,369 3,498 3,378 3,338 Accumulated other comprehensive income (loss) (5,319) (5,607) (4,581) (416) (358) (339) Total Deere & Company stockholders’ equity 12,888 11,413 12,266 5,203 5,127 5,106 Noncontrolling interests 3 4 4 Total stockholders’ equity 12,891 11,417 12,270 5,203 5,127 5,106 Total Liabilities and Stockholders’ Equity $ 38,981 $ 33,577 $ 34,770 $ 48,869 $ 48,483 $ 48,444 * 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 Nine Months Ended August 2, 2020 and July 28, 2019 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2020 2019 2020 2019 Cash Flows from Operating Activities Net income $ 1,995 $ 2,535 $ 381 $ 450 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 6 1 117 57 Provision for depreciation and amortization 787 782 925 836 Impairment charges 115 32 Undistributed earnings of unconsolidated subsidiaries and affiliates (124) (62) (1) (1) Credit for deferred income taxes (57) (123) (103) (209) Changes in assets and liabilities: Trade receivables and Equipment Operations' financing receivables 116 (248) Inventories 387 (670) Accounts payable and accrued expenses (567) 50 (38) 23 Accrued income taxes payable/receivable (25) (282) 29 535 Retirement benefits 77 35 11 5 Other 145 (59) 89 140 Net cash provided by operating activities 2,855 1,959 1,442 1,836 Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) 14,352 13,807 Proceeds from maturities and sales of marketable securities 9 70 63 Proceeds from sales of equipment on operating leases 1,310 1,171 Cost of receivables acquired (excluding trade and wholesale) (15,367) (14,597) Purchases of marketable securities (3) (91) (107) Purchases of property and equipment (591) (754) (3) (2) Cost of equipment on operating leases acquired (1,836) (2,135) Decrease (increase) in trade and wholesale receivables 423 (2,551) Collateral on derivatives – net (6) 330 59 Other (55) (64) (46) (47) Net cash used for investing activities (652) (812) (858) (4,339) Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings (32) (119) 202 (217) Change in intercompany receivables/payables (1,468) (683) 1,468 683 Proceeds from long-term borrowings 4,592 868 3,739 6,572 Payments of long-term borrowings (179) (194) (5,618) (4,162) Proceeds from issuance of common stock 111 133 Repurchases of common stock (263) (880) Dividends paid (718) (703) (260) (377) Other (86) (52) (11) (22) Net cash provided by (used for) financing activities 1,957 (1,630) (480) 2,477 Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash 95 (16) (15) (8) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 4,255 (499) 89 (34) Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 3,196 3,202 760 813 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 7,451 $ 2,703 $ 849 $ 779 * 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 ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 9 Months Ended |
Aug. 02, 2020 | |
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 third quarter ends for fiscal year 2020 and 2019 were August 2, 2020 and July 28, 2019, respectively. Both periods contained 13 weeks. |
Use of Estimates in Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID-19 (COVID) pandemic has resulted in uncertainties in the Company’s business, which may result in actual outcomes differing significantly 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. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is 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. |
Lessee Lease, Policy | The Company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than 12 months for both operating and finance leases. The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the Company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than 12 months and that do not meet the finance lease criteria are classified as operating leases. Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from one |
Lease and Non-lease Components, Policy | The Company has elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. |
Short-term lease, Policy | Leases with an initial term of 12 months or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. |
Lessor Leases, Policy | The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates decline. Lease agreements include usage limits and specifications on machine condition, which allow the Company to assess lessees for excess use or damages to the underlying equipment. |
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. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments. |
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. To determine 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. In addition, the Company has interest rate exposure at certain equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods. 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, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
CASH FLOW INFORMATION | |
Restricted Cash Held | The Company’s restricted cash held at August 2, 2020, November 3, 2019, July 28, 2019, and October 28, 2018 was as follows in millions of dollars: August 2 November 3 July 28 October 28 2020 2019 2019 2018 Equipment operations $ 11 $ 21 $ 9 $ 7 Financial services 99 78 90 104 Total $ 110 $ 99 $ 99 $ 111 |
NEW ACCOUNTING STANDARDS (Table
NEW ACCOUNTING STANDARDS (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
NEW ACCOUNTING STANDARDS | |
Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Lease Guidance | In addition to the lease liabilities and right of use assets, land use rights were reclassified from “Other intangible assets - net” to “Other assets” and finance lease liabilities were reclassified from “Accounts payable and accrued expenses” to “Short-term borrowings” and “Long-term borrowings.” The effect of adopting the ASU on the consolidated balance sheet follows in millions of dollars: November 3, 2019 Cumulative Effect November 4, 2019 Assets Other intangible assets - net $ 1,380 $ (23) $ 1,357 Other assets 1,899 402 2,301 Liabilities Short-term borrowings $ 10,784 $ 11 $ 10,795 Accounts payable and accrued expenses 9,656 348 10,004 Long-term borrowings 30,229 20 30,249 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
REVENUE RECOGNITION | |
Schedule of Revenue Recognition | The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition in millions of dollars follow: Three Months Ended August 2, 2020 Agriculture Construction Financial Total Primary geographical markets: United States $ 2,845 $ 1,048 $ 632 $ 4,525 Canada 295 194 146 635 Western Europe 1,103 376 22 1,501 Central Europe and CIS 319 178 9 506 Latin America 602 124 51 777 Asia, Africa, Australia, New Zealand, and Middle East 631 318 32 981 Total $ 5,795 $ 2,238 $ 892 $ 8,925 Major product lines: Large Agriculture $ 2,893 $ 2,893 Small Agriculture 2,021 2,021 Turf 651 651 Construction $ 817 817 Compact Construction 303 303 Roadbuilding 818 818 Forestry 241 241 Financial Products 24 5 $ 892 921 Other 206 54 260 Total $ 5,795 $ 2,238 $ 892 $ 8,925 Timing of revenue recognition: Revenue recognized at a point in time $ 5,739 $ 2,210 $ 28 $ 7,977 Revenue recognized over time 56 28 864 948 Total $ 5,795 $ 2,238 $ 892 $ 8,925 Nine Months Ended August 2, 2020 Agriculture Construction Financial Total Primary geographical markets: United States $ 8,725 $ 3,331 $ 1,880 $ 13,936 Canada 699 532 453 1,684 Western Europe 2,992 1,073 66 4,131 Central Europe and CIS 877 477 27 1,381 Latin America 1,515 418 177 2,110 Asia, Africa, Australia, New Zealand, and Middle East 1,646 825 96 2,567 Total $ 16,454 $ 6,656 $ 2,699 $ 25,809 Major product lines: Large Agriculture $ 8,106 $ 8,106 Small Agriculture 5,762 5,762 Turf 1,925 1,925 Construction $ 2,535 2,535 Compact Construction 930 930 Roadbuilding 2,146 2,146 Forestry 769 769 Financial Products 72 18 $ 2,699 2,789 Other 589 258 847 Total $ 16,454 $ 6,656 $ 2,699 $ 25,809 Timing of revenue recognition: Revenue recognized at a point in time $ 16,294 $ 6,576 $ 80 $ 22,950 Revenue recognized over time 160 80 2,619 2,859 Total $ 16,454 $ 6,656 $ 2,699 $ 25,809 Three Months Ended July 28, 2019 Agriculture Construction Financial Total Primary geographical markets: United States $ 2,870 $ 1,594 $ 632 $ 5,096 Canada 299 260 148 707 Western Europe 1,154 458 22 1,634 Central Europe and CIS 324 229 10 563 Latin America 708 171 66 945 Asia, Africa, Australia, New Zealand, and Middle East 684 375 32 1,091 Total $ 6,039 $ 3,087 $ 910 $ 10,036 Major product lines: Large Agriculture $ 2,985 $ 2,985 Small Agriculture 2,172 2,172 Turf 704 704 Construction $ 1,319 1,319 Compact Construction 320 320 Roadbuilding 1,008 1,008 Forestry 333 333 Financial Products 25 7 $ 910 942 Other 153 100 253 Total $ 6,039 $ 3,087 $ 910 $ 10,036 Timing of revenue recognition: Revenue recognized at a point in time $ 5,988 $ 3,055 $ 9,043 Revenue recognized over time 51 32 $ 910 993 Total $ 6,039 $ 3,087 $ 910 $ 10,036 Nine Months Ended July 28, 2019 Agriculture Construction Financial Total Primary geographical markets: United States $ 9,411 $ 4,495 $ 1,810 $ 15,716 Canada 784 773 458 2,015 Western Europe 3,362 1,174 63 4,599 Central Europe and CIS 865 555 28 1,448 Latin America 2,028 515 199 2,742 Asia, Africa, Australia, New Zealand, and Middle East 1,784 966 92 2,842 Total $ 18,234 $ 8,478 $ 2,650 $ 29,362 Major product lines: Large Agriculture $ 8,647 $ 8,647 Small Agriculture 6,613 6,613 Turf 2,199 2,199 Construction $ 3,806 3,806 Compact Construction 904 904 Roadbuilding 2,420 2,420 Forestry 1,023 1,023 Financial Products 69 20 $ 2,650 2,739 Other 706 305 1,011 Total $ 18,234 $ 8,478 $ 2,650 $ 29,362 Timing of revenue recognition: Revenue recognized at a point in time $ 18,088 $ 8,402 $ 26,490 Revenue recognized over time 146 76 $ 2,650 2,872 Total $ 18,234 $ 8,478 $ 2,650 $ 29,362 |
OTHER COMPREHENSIVE INCOME IT_2
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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 Debt Securities Income (Loss) Balance October 28, 2018 $ (3,237) $ (1,203) $ 15 $ (2) $ (4,427) ASU No. 2016-01 adoption (8) (8) Other comprehensive income (loss) items before reclassification 30 (218) (33) 26 (195) Amounts reclassified from accumulated other comprehensive income 54 (4) (1) 49 Net current period other comprehensive income (loss) 84 (218) (37) 25 (146) Balance July 28, 2019 $ (3,153) $ (1,421) $ (22) $ 15 $ (4,581) Balance November 3, 2019 $ (3,915) $ (1,651) $ (60) $ 19 $ (5,607) Other comprehensive income (loss) items before reclassification 179 (75) (14) 22 112 Amounts reclassified from accumulated other comprehensive income 159 8 10 (1) 176 Net current period other comprehensive income (loss) 338 (67) (4) 21 288 Balance August 2, 2020 $ (3,577) $ (1,718) $ (64) $ 40 $ (5,319) |
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 August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ 321 $ 2 $ 323 Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment 329 2 331 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 7 (2) 5 Net unrealized gain (loss) on derivatives 6 (2) 4 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 13 (2) 11 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 12 (2) 10 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (9) 2 (7) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 62 (15) 47 Prior service (credit) cost 3 (1) 2 Settlements 6 (2) 4 OPEB Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 7 (2) 5 Prior service (credit) cost (1) 1 Net unrealized gain (loss) on retirement benefits adjustment 68 (17) 51 Total other comprehensive income (loss) $ 415 $ (19) $ 396 Before Tax After Tax (Expense) Tax Nine Months Ended August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ (77) $ 2 $ (75) Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment (69) 2 (67) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (18) 4 (14) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 13 (3) 10 Net unrealized gain (loss) on derivatives (5) 1 (4) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 27 (5) 22 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 26 (5) 21 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (36) 8 (28) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 186 (57) 129 Prior service (credit) cost 9 (2) 7 Settlements 12 (3) 9 OPEB Net actuarial gain (loss) 274 (67) 207 Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 21 (5) 16 Prior service (credit) cost (3) 1 (2) Net unrealized gain (loss) on retirement benefits adjustment 463 (125) 338 Total other comprehensive income (loss) $ 415 $ (127) $ 288 Before Tax After Tax (Expense) Tax Three Months Ended July 28, 2019 Amount Credit Amount Cumulative translation adjustment $ 27 $ (1) $ 26 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (27) 6 (21) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (1) (1) Net unrealized gain (loss) on derivatives (28) 6 (22) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 13 (2) 11 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 12 (2) 10 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (3) 1 (2) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 35 (9) 26 Prior service (credit) cost 2 2 Settlements 1 1 OPEB Reclassification to Other operating expense through amortization of: * Actuarial (gain) loss 4 (1) 3 Prior service (credit) cost (19) 4 (15) Net unrealized gain (loss) on retirement benefits adjustment 20 (5) 15 Total other comprehensive income (loss) $ 31 $ (2) $ 29 In the third quarter of 2020 2019 Before Tax After Tax (Expense) Tax Nine Months Ended July 28, 2019 Amount Credit Amount Cumulative translation adjustment $ (217) $ (1) $ (218) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (42) 9 (33) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (6) 2 (4) Net unrealized gain (loss) on derivatives (48) 11 (37) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 32 (6) 26 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 31 (6) 25 Retirement benefits adjustment: Pensions Net actuarial gain (loss) (21) 5 (16) Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 106 (26) 80 Prior service (credit) cost 8 (2) 6 Settlements 1 1 OPEB Net actuarial gain (loss) 60 (14) 46 Reclassification to Other operating expenses through amortization of: * Actuarial (gain) loss 12 (3) 9 Prior service (credit) cost (55) 13 (42) Net unrealized gain (loss) on retirement benefits adjustment 111 (27) 84 Total other comprehensive income (loss) $ (123) $ (23) $ (146) * In the first nine months of 2020 2019 |
DIVIDENDS DECLARED AND PAID (Ta
DIVIDENDS DECLARED AND PAID (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
DIVIDENDS DECLARED AND PAID | |
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Dividends declared $ .76 $ .76 $ 2.28 $ 2.28 Dividends paid $ .76 $ .76 $ 2.28 $ 2.21 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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 Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Net income attributable to Deere & Company $ 811 $ 899 $ 1,993 $ 2,532 Average shares outstanding 313.0 315.9 313.3 317.3 Basic per share $ 2.59 $ 2.84 $ 6.36 $ 7.98 Average shares outstanding 313.0 315.9 313.3 317.3 Effect of dilutive share-based compensation 2.8 3.9 3.1 4.2 Total potential shares outstanding 315.8 319.8 316.4 321.5 Diluted per share $ 2.57 $ 2.81 $ 6.30 $ 7.87 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
Schedule of Components of Net Periodic Pension and OPEB Cost | The worldwide components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Service cost $ 80 $ 65 $ 241 $ 197 Interest cost 86 112 260 334 Expected return on plan assets (204) (200) (613) (600) Amortization of actuarial loss 62 35 186 106 Amortization of prior service cost 3 2 9 8 Settlements 6 1 12 1 Net cost $ 33 $ 15 $ 95 $ 46 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Service cost $ 12 $ 11 $ 36 $ 31 Interest cost 34 53 106 160 Expected return on plan assets (12) (8) (36) (26) Amortization of actuarial loss 7 4 21 12 Amortization of prior service credit (1) (19) (3) (55) Curtailments 21 Net cost $ 40 $ 41 $ 145 $ 122 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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 Nine Months Ended August 2 July 28 % August 2 July 28 % 2020 2019 Change 2020 2019 Change Net sales and revenues: Agriculture and turf $ 5,672 $ 5,946 -5 $ 16,127 $ 17,909 -10 Construction and forestry 2,187 3,023 -28 6,485 8,273 -22 Total net sales 7,859 8,969 -12 22,612 26,182 -14 Financial services 892 910 -2 2,699 2,650 +2 Other revenues 174 157 +11 498 530 -6 Total net sales and revenues $ 8,925 $ 10,036 -11 $ 25,809 $ 29,362 -12 Operating profit: * Agriculture and turf $ 942 $ 612 +54 $ 2,109 $ 1,978 +7 Construction and forestry 205 378 -46 394 954 -59 Financial services 243 204 +19 498 566 -12 Total operating profit 1,390 1,194 +16 3,001 3,498 -14 Reconciling items ** (122) (74) +65 (256) (218) +17 Income taxes (457) (221) +107 (752) (748) +1 Net income attributable to Deere & Company $ 811 $ 899 -10 $ 1,993 $ 2,532 -21 Intersegment sales and revenues: Agriculture and turf net sales $ 5 $ 9 -44 $ 20 $ 27 -26 Construction and forestry net sales 1 Financial services 59 93 -37 218 261 -16 Equipment operations outside the U.S. and Canada: Net sales $ 3,557 $ 4,026 -12 $ 9,563 $ 10,985 -13 Operating profit 524 430 +22 932 1,088 -14 August 2 November 3 2020 2019 Identifiable assets: Agriculture and turf $ 10,124 $ 10,379 -2 Construction and forestry 9,105 9,387 -3 Financial services 48,869 48,483 +1 Corporate 9,166 4,762 +92 Total assets $ 77,264 $ 73,011 +6 * ** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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: August 2, 2020 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 131 $ 63 $ 2 $ 196 Construction and forestry 65 22 12 99 Other: Agriculture and turf 37 17 2 56 Construction and forestry 28 19 47 Total $ 261 $ 121 $ 16 $ 398 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 196 $ 306 $ 19,255 $ 19,757 Construction and forestry 99 102 3,748 3,949 Other: Agriculture and turf 56 81 8,161 8,298 Construction and forestry 47 40 1,392 1,479 Total $ 398 $ 529 $ 32,556 33,483 Less allowance for credit losses 200 Total financing receivables – net $ 33,283 November 3, 2019 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 138 $ 73 $ 1 $ 212 Construction and forestry 79 29 4 112 Other: Agriculture and turf 39 19 1 59 Construction and forestry 26 7 33 Total $ 282 $ 128 $ 6 $ 416 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 212 $ 268 $ 18,931 $ 19,411 Construction and forestry 112 127 3,450 3,689 Other: Agriculture and turf 59 28 8,986 9,073 Construction and forestry 33 26 1,496 1,555 Total $ 416 $ 449 $ 32,863 33,728 Less allowance for credit losses 150 Total financing receivables – net $ 33,578 July 28, 2019 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 136 $ 63 $ 3 $ 202 Construction and forestry 87 35 2 124 Other: Agriculture and turf 38 22 60 Construction and forestry 17 7 24 Total $ 278 $ 127 $ 5 $ 410 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 202 $ 301 $ 18,038 $ 18,541 Construction and forestry 124 135 3,249 3,508 Other: Agriculture and turf 60 37 8,833 8,930 Construction and forestry 24 14 1,417 1,455 Total $ 410 $ 487 $ 31,537 32,434 Less allowance for credit losses 185 Total financing receivables – net $ 32,249 |
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: Revolving Retail Charge Notes Accounts Other Total Three Months Ended August 2, 2020 Allowance: Beginning of period balance $ 119 $ 43 $ 33 $ 195 Provision (credit) 5 14 (1) 18 Write-offs (7) (22) (2) (31) Recoveries 6 8 1 15 Translation adjustments 2 1 3 End of period balance * $ 125 $ 43 $ 32 $ 200 Nine Months Ended August 2, 2020 Allowance: Beginning of period balance $ 89 $ 40 $ 21 $ 150 Provision 79 32 13 124 Write-offs (47) (51) (6) (104) Recoveries 10 22 2 34 Translation adjustments (6) 2 (4) End of period balance * $ 125 $ 43 $ 32 $ 200 Financing receivables: End of period balance $ 23,706 $ 3,997 $ 5,780 $ 33,483 Balance individually evaluated ** $ 160 $ 1 $ 67 $ 228 * Individual allowances were not significant. ** Remainder is collectively evaluated. The negative economic effects related to COVID and other macroeconomic issues have significantly affected certain retail borrowers, particularly of construction equipment. As a result, the allowance for credit losses increased $50 million in the first nine months of 2020 reflecting estimated credit losses inherent in the financing receivables. Revolving Retail Charge Notes Accounts Other Total Three Months Ended July 28, 2019 Allowance: Beginning of period balance $ 115 $ 43 $ 24 $ 182 Provision 7 18 1 26 Write-offs (9) (26) (1) (36) Recoveries 5 8 13 Translation adjustments 2 (2) End of period balance * $ 120 $ 43 $ 22 $ 185 Nine Months Ended July 28, 2019 Allowance: Beginning of period balance $ 113 $ 43 $ 22 $ 178 Provision 21 34 7 62 Write-offs (29) (51) (5) (85) Recoveries 15 17 1 33 Translation adjustments (3) (3) End of period balance * $ 120 $ 43 $ 22 $ 185 Financing receivables: End of period balance $ 22,049 $ 3,877 $ 6,508 $ 32,434 Balance individually evaluated ** $ 145 $ 10 $ 155 * ** 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 August 2, 2020* Receivables with specific allowance *** $ 92 $ 91 $ 23 $ 106 Receivables without a specific allowance ** 36 33 38 Total $ 128 $ 124 $ 23 $ 144 Agriculture and turf $ 106 $ 103 $ 17 $ 117 Construction and forestry $ 22 $ 21 $ 6 $ 27 November 3, 2019* Receivables with specific allowance ** $ 40 $ 39 $ 13 $ 40 Receivables without a specific allowance ** 32 31 37 Total $ 72 $ 70 $ 13 $ 77 Agriculture and turf $ 49 $ 48 $ 8 $ 52 Construction and forestry $ 23 $ 22 $ 5 $ 25 July 28, 2019* Receivables with specific allowance ** $ 37 $ 36 $ 13 $ 37 Receivables without a specific allowance ** 35 33 39 Total $ 72 $ 69 $ 13 $ 76 Agriculture and turf $ 51 $ 50 $ 9 $ 52 Construction and forestry $ 21 $ 19 $ 4 $ 24 * ** *** Primarily retail notes and wholesale receivables. |
SECURITIZATION OF FINANCING R_2
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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: August 2 2020 Carrying value of liabilities $ 1,463 Maximum exposure to loss 1,551 |
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: August 2 November 3 July 28 2020 2019 2019 Financing receivables securitized (retail notes) $ 5,484 $ 4,395 $ 5,214 Allowance for credit losses (15) (12) (14) Other assets 104 82 98 Total restricted securitized assets $ 5,573 $ 4,465 $ 5,298 The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: August 2 November 3 July 28 2020 2019 2019 Short-term securitization borrowings $ 5,361 $ 4,321 $ 5,048 Accrued interest on borrowings 4 6 4 Total liabilities related to restricted securitized assets $ 5,365 $ 4,327 $ 5,052 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
INVENTORIES | |
Major Classification of Inventories | 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: August 2 November 3 July 28 2020 2019 2019 Raw materials and supplies $ 2,101 $ 2,285 $ 2,365 Work-in-process 696 747 815 Finished goods and parts 4,427 4,613 5,345 Total FIFO value 7,224 7,645 8,525 Less adjustment to LIFO value 1,574 1,670 1,778 Inventories $ 5,650 $ 5,975 $ 6,747 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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 28, 2018 $ 583 $ 2,518 $ 3,101 Translation adjustments and other (1) (87) (88) Goodwill at July 28, 2019 $ 582 $ 2,431 $ 3,013 Goodwill at November 3, 2019 $ 574 $ 2,343 $ 2,917 Translation adjustments and other 2 65 67 Goodwill at August 2, 2020 $ 576 $ 2,408 $ 2,984 There were no accumulated impairment losses in the reported periods. |
Components of Other Intangible Assets | The components of other intangible assets were as follows in millions of dollars: August 2 November 3 July 28 2020 2019 2019 Amortized intangible assets: Customer lists and relationships $ 515 $ 511 $ 525 Technology, patents, trademarks, and other 1,021 1,028 1,057 Total at cost 1,536 1,539 1,582 Less accumulated amortization * 358 282 261 Total 1,178 1,257 1,321 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,301 $ 1,380 $ 1,444 * |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
LEASES | |
Summary of Lease Expense by Type | The lease expense by type consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 2, 2020 August 2, 2020 Operating lease expense $ 29 $ 92 Short-term lease expense 8 18 Variable lease expense 8 28 Finance lease: Depreciation expense 3 10 Interest on lease liabilities 1 2 Total lease expense $ 49 $ 150 |
Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Condensed Consolidated Balance Sheet | Operating and finance lease right of use assets and liabilities follow in millions of dollars: August 2, 2020 Operating leases: Other assets $ 341 Accounts payable and accrued expenses 318 Finance leases: Property and equipment - net $ 56 Short-term borrowings $ 18 Long-term borrowings 33 Total finance lease liabilities $ 51 |
Schedule of Weighted-Average Remaining Lease Term in Years and Discount Rates | The weighted-average remaining lease term in years and discount rates follows: August 2, 2020 Weighted-average remaining lease terms: Operating leases 7 Finance leases 3 Weighted-average discount rate: Operating leases 2.2% Finance leases 2.4% |
Schedule of Operating Lease Payment Amounts | Lease payment amounts in each of the next five years at August 2, 2020 follow in millions of dollars: Operating Finance Due in: Leases Leases Remainder of 2020 $ 30 $ 5 2021 83 18 2022 71 15 2023 50 10 2024 39 3 2025 22 1 Later years 43 2 Total lease payments 338 54 Less imputed interest 20 3 Total lease liabilities $ 318 $ 51 |
Schedule of Finance Lease Payment Amounts | Lease payment amounts in each of the next five years at August 2, 2020 follow in millions of dollars: Operating Finance Due in: Leases Leases Remainder of 2020 $ 30 $ 5 2021 83 18 2022 71 15 2023 50 10 2024 39 3 2025 22 1 Later years 43 2 Total lease payments 338 54 Less imputed interest 20 3 Total lease liabilities $ 318 $ 51 |
Schedule of Future Minimum Payments under Previous Lease Standard for Operating Leases | Future minimum lease payments under the previous lease standard for operating and capital leases at November 3, 2019 follow in millions of dollars: Operating Capital Due in: Leases Leases 2020 $ 111 $ 12 2021 77 10 2022 56 6 2023 39 2 2024 28 1 Later years 26 1 Total minimum lease payments $ 337 $ 32 |
Schedule of Future Minimum Payments under Previous Lease Standard for Capital Leases | Future minimum lease payments under the previous lease standard for operating and capital leases at November 3, 2019 follow in millions of dollars: Operating Capital Due in: Leases Leases 2020 $ 111 $ 12 2021 77 10 2022 56 6 2023 39 2 2024 28 1 Later years 26 1 Total minimum lease payments $ 337 $ 32 |
Schedule of Cash Paid for Amounts Included in the Measurement of Lease Liabilities and Right of Use Assets Obtained in Exchange for Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities: Nine Months Ended August 2, 2020 Operating cash flows from operating leases $ 92 Operating cash flows from finance leases 2 Financing cash flows from finance leases 16 Right of use assets obtained in exchange for lease liabilities: Nine Months Ended August 2, 2020 Operating leases $ 27 Finance leases 37 |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Nine Months Ended August 2, 2020 August 2, 2020 Sales-type and direct financing lease revenues $ 33 $ 101 Operating lease revenues 361 1,104 Variable lease revenues 6 17 Total lease revenues $ 400 $ 1,222 |
Schedule of Sales-type and Direct Financing Lease Receivables by Product Category | Sales-type and direct financing lease receivables by product category were as follows in millions of dollars: August 2 November 3 2020 2019 Agriculture and turf $ 902 $ 897 Construction and forestry 979 1,033 Total 1,881 1,930 Guaranteed residual values 238 232 Unguaranteed residual values 80 101 Less unearned finance income 223 212 Financing leases receivables $ 1,976 $ 2,051 |
Schedule of Scheduled Payments, Including Guaranteed Residual Values, on Sales-type and Direct Financing Leases Receivables | Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at August 2, 2020 follow in millions of dollars: August 2 Due in: 2020 Remainder of 2020 $ 296 2021 850 2022 488 2023 281 2024 146 2025 46 Later years 12 Total $ 2,119 |
Schedule of Financing Lease Receivables Scheduled Payments under the Previous Lease Standard | Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 follow in millions of dollars: November 3 Due in: 2019 2020 $ 833 2021 557 2022 321 2023 153 2024 53 Later years 13 Total $ 1,930 |
Schedule of Cost of Equipment on Operating Leases by Product Category | The cost of equipment on operating leases by product category was as follows in millions of dollars: August 2 November 3 2020 2019 Agriculture and turf $ 7,162 $ 7,257 Construction and forestry 2,013 2,165 Total 9,175 9,422 Less accumulated depreciation 2,017 1,855 Equipment on operating leases - net $ 7,158 $ 7,567 |
Schedule of Lease Payments for Equipment on Operating Leases | Lease payments for equipment on operating leases at August 2, 2020 were scheduled as follows in millions of dollars: August 2 Due in: 2020 Remainder of 2020 $ 300 2021 993 2022 633 2023 324 2024 140 2025 15 Total $ 2,405 |
Schedule of Rental Payments for Equipment on Operating Leases under the Previous Lease Standard | Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows in millions of dollars: November 3 Due in: 2019 2020 $ 1,086 2021 759 2022 419 2023 193 2024 41 Total $ 2,498 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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 Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Beginning of period balance $ 1,767 $ 1,714 $ 1,800 $ 1,652 Payments (250) (252) (703) (714) Amortization of premiums received (58) (57) (168) (168) Accruals for warranties 177 263 609 772 Premiums received 68 75 202 209 Foreign exchange 27 3 (9) (5) End of period balance $ 1,731 $ 1,746 $ 1,731 $ 1,746 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
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: August 2, 2020 November 3, 2019 July 28, 2019 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 111 $ 102 $ 65 $ 61 $ 100 $ 93 Financial services 27,703 27,929 29,130 29,106 26,949 26,921 Total $ 27,814 $ 28,031 $ 29,195 $ 29,167 $ 27,049 $ 27,014 Financing receivables securitized – net: Equipment operations $ 37 $ 34 $ 44 $ 43 $ 54 $ 52 Financial services 5,432 5,544 4,339 4,362 5,146 5,154 Total $ 5,469 $ 5,578 $ 4,383 $ 4,405 $ 5,200 $ 5,206 Short-term Equipment operations $ 37 $ 37 $ 44 $ 45 $ 53 $ 54 Financial services 5,324 5,381 4,277 4,302 4,995 5,017 Total $ 5,361 $ 5,418 $ 4,321 $ 4,347 $ 5,048 $ 5,071 Long-term borrowings due within one year: ** Equipment operations $ 507 $ 504 $ 642 $ 645 $ 1,009 $ 1,013 Financial services 6,114 6,168 6,786 6,788 6,922 6,914 Total $ 6,621 $ 6,672 $ 7,428 $ 7,433 $ 7,931 $ 7,927 Long-term borrowings: ** Equipment operations $ 10,184 $ 12,163 $ 5,415 $ 6,138 $ 5,364 $ 6,017 Financial services 23,820 24,464 24,814 25,122 23,878 24,143 Total $ 34,004 $ 36,627 $ 30,229 $ 31,260 $ 29,242 $ 30,160 * ** Carrying values exclude finance lease liabilities that are presented as borrowings beginning in 2020 (see Notes 3 and 15). |
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*: August 2 November 3 July 28 2020 2019 2019 Level 1: Marketable securities International equity securities *** $ 2 Equity fund *** 68 $ 59 $ 59 U.S. government debt securities 50 50 49 Total Level 1 marketable securities 120 109 108 Level 2: Marketable securities U.S. government debt securities 105 81 73 Municipal debt securities 64 60 57 Corporate debt securities 185 165 156 International debt securities 2 5 9 Mortgage-backed securities ** 159 160 158 Total Level 2 marketable securities 515 471 453 Other assets Derivatives: Interest rate contracts 895 363 265 Foreign exchange contracts 57 20 53 Cross-currency interest rate contracts 9 1 2 Total Level 2 other assets 961 384 320 Accounts payable and accrued expenses Derivatives: Interest rate contracts 115 65 99 Foreign exchange contracts 55 71 45 Cross-currency interest rate contracts 3 2 Total Level 2 accounts payable and accrued expenses 170 139 146 Level 3: Marketable securities International debt securities 5 1 4 * ** ***During the third quarter of 2020 and 2019, net unrealized gains on equity securities of $10 million and $1 million, respectively, were recorded in “Other income.” During the first nine months of 2020 and 2019, net unrealized gains on equity securities were $8 million and $7 million, respectively. |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at August 2, 2020 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 $ 27 $ 24 Due after one through five years 89 95 Due after five through 10 years 102 114 Due after 10 years 160 178 Mortgage-backed securities 150 159 Debt securities $ 528 $ 570 |
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 Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Beginning of period balance $ 1 $ 4 $ 1 $ 8 Purchases 5 5 Principal payments (1) (1) (5) Other 1 End of period balance $ 5 $ 4 $ 5 $ 4 |
Fair Value, Nonrecurring Measurements from Impairments | Fair value, nonrecurring measurements from impairments in millions of dollars follow: Fair Value * Losses * Three Months Ended Nine Months Ended August 2 November 3 July 28 August 2 July 28 August 2 July 28 2020 2019 2019 2020 2019 2020 2019 Other receivables $ 1 $ 2 $ 2 Equipment on operating leases – net $ 855 $ 22 Property and equipment – net $ 8 $ 5 $ 67 Investments in unconsolidated affiliates $ 20 Other intangible assets – net $ 2 $ 2 Other assets $ 19 $ 142 $ 24 $ 34 * |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
DERIVATIVE INSTRUMENTS | |
Amounts Recorded in the Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships | The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued Hedged Item Relationships Relationships Total August 2, 2020 Long-term borrowings due within one year* $ 480 $ 6 $ 2 $ 8 Long-term borrowings 9,140 754 40 794 November 3, 2019 Long-term borrowings due within one year* $ 412 $ (1) $ (4) $ (5) Long-term borrowings 8,532 295 (32) 263 July 28, 2019 Long-term borrowings due within one year* $ 187 $ 1 $ (5) $ (4) Long-term borrowings 9,154 184 (50) 134 * |
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: August 2 November 3 July 28 Other Assets 2020 2019 2019 Designated as hedging instruments: Interest rate contracts $ 806 $ 332 $ 232 Total designated 806 332 232 Not designated as hedging instruments: Interest rate contracts 89 31 33 Foreign exchange contracts 57 20 53 Cross-currency interest rate contracts 9 1 2 Total not designated 155 52 88 Total derivative assets $ 961 $ 384 $ 320 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 24 $ 28 $ 55 Total designated 24 28 55 Not designated as hedging instruments: Interest rate contracts 91 37 44 Foreign exchange contracts 55 71 45 Cross-currency interest rate contracts 3 2 Total not designated 146 111 91 Total derivative liabilities $ 170 $ 139 $ 146 |
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: Three Months Ended Nine Months Ended August 2 July 28 August 2 July 28 2020 2019 2020 2019 Fair Value Hedges: Interest rate contracts - Interest expense $ 78 $ 193 $ 589 $ 468 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (1) (27) (18) (42) Reclassified from OCI Interest rate contracts - Interest expense (7) 1 (13) 6 Not Designated as Hedges: Interest rate contracts - Net sales $ (2) $ (6) $ (26) $ (23) Interest rate contracts - Interest expense * (1) (7) 2 (25) Foreign exchange contracts - Cost of sales (28) (8) 64 (1) Foreign exchange contracts - Other operating * (49) (12) 125 88 Total not designated $ (80) $ (33) $ 165 $ 39 * |
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 August 2, 2020 Recognized Arrangements Received Net Amount Assets $ 961 $ (120) $ (332) $ 509 Liabilities 170 (120) 50 Gross Amounts Netting Collateral November 3, 2019 Recognized Arrangements Received Net Amount Assets $ 384 $ (70) $ 314 Liabilities 139 (70) 69 Gross Amounts Netting Collateral July 28, 2019 Recognized Arrangements Received Net Amount Assets $ 320 $ (70) $ 250 Liabilities 146 (70) 76 |
SUPPLEMENTAL CONSOLIDATING DA_2
SUPPLEMENTAL CONSOLIDATING DATA (Tables) | 9 Months Ended |
Aug. 02, 2020 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
Supplemental Consolidating Data Income Statement | (21) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME For the Three Months Ended August 2, 2020 and July 28, 2019 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2020 2019 2020 2019 Net Sales and Revenues Net sales $ 7,859 $ 8,969 Finance and interest income 25 30 $ 878 $ 952 Other income 206 185 73 51 Total 8,090 9,184 951 1,003 Costs and Expenses Cost of sales 5,836 6,871 Research and development expenses 370 431 Selling, administrative and general expenses 616 751 137 147 Interest expense 91 67 206 311 Interest compensation to Financial Services 58 93 Other operating expenses 94 64 363 339 Total 7,065 8,277 706 797 Income of Consolidated Group before Income Taxes 1,025 907 245 206 Provision for income taxes 395 190 62 31 Income of Consolidated Group 630 717 183 175 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services 183 175 Other (2) 7 Total 181 182 Net Income 811 899 183 175 Less: Net income attributable to noncontrolling interests Net Income Attributable to Deere & Company $ 811 $ 899 $ 183 $ 175 * 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 Nine Months Ended August 2, 2020 and July 28, 2019 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2020 2019 2020 2019 Net Sales and Revenues Net sales $ 22,612 $ 26,182 Finance and interest income 75 79 $ 2,720 $ 2,727 Other income 597 614 196 184 Total 23,284 26,875 2,916 2,911 Costs and Expenses Cost of sales 17,208 20,058 Research and development expenses 1,201 1,295 Selling, administrative and general expenses 1,989 2,191 483 422 Interest expense 237 182 747 910 Interest compensation to Financial Services 195 254 Other operating expenses 186 203 1,187 1,008 Total 21,016 24,183 2,417 2,340 Income of Consolidated Group before Income Taxes 2,268 2,692 499 571 Provision for income taxes 632 625 120 123 Income of Consolidated Group 1,636 2,067 379 448 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services 381 450 2 2 Other (22) 18 Total 359 468 2 2 Net Income 1,995 2,535 381 450 Less: Net income attributable to noncontrolling interests 2 3 Net Income Attributable to Deere & Company $ 1,993 $ 2,532 $ 381 $ 450 * 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 August 2 November 3 July 28 August 2 November 3 July 28 2020 2019 2019 2020 2019 2019 Assets Cash and cash equivalents $ 7,440 $ 3,175 $ 2,694 $ 750 $ 682 $ 689 Marketable securities 8 1 5 632 580 560 Receivables from unconsolidated subsidiaries and affiliates 3,619 2,017 2,395 Trade accounts and notes receivable – net 1,251 1,482 1,606 5,595 5,153 6,807 Financing receivables – net 111 65 100 27,703 29,130 26,949 Financing receivables securitized – net 37 44 54 5,432 4,339 5,146 Other receivables 1,083 1,376 1,428 162 116 126 Equipment on operating leases – net 7,158 7,567 7,269 Inventories 5,650 5,975 6,747 Property and equipment – net 5,711 5,929 5,753 43 44 45 Investments in unconsolidated subsidiaries and affiliates 5,383 5,326 5,309 19 16 16 Goodwill 2,984 2,917 3,013 Other intangible assets – net 1,301 1,380 1,444 Retirement benefits 972 836 1,374 59 58 57 Deferred income taxes 1,865 1,896 1,579 56 57 72 Other assets 1,566 1,158 1,269 1,260 741 708 Total Assets $ 38,981 $ 33,577 $ 34,770 $ 48,869 $ 48,483 $ 48,444 Liabilities and Stockholders’ Equity Liabilities Short-term borrowings $ 853 $ 987 $ 1,372 $ 8,222 $ 9,797 $ 9,770 Short-term securitization borrowings 37 44 53 5,324 4,277 4,995 Payables to unconsolidated subsidiaries and affiliates 80 142 136 3,593 1,970 2,341 Accounts payable and accrued expenses 8,834 9,232 9,422 2,134 1,836 1,641 Deferred income taxes 398 414 454 468 568 616 Long-term borrowings 10,217 5,415 5,364 23,820 24,814 23,878 Retirement benefits and other liabilities 5,671 5,912 5,685 105 94 97 Total liabilities 26,090 22,146 22,486 43,666 43,356 43,338 Commitments and contingencies (Note 16) Redeemable noncontrolling interest (Note 20) 14 14 Stockholders’ Equity Common stock, $1 par value (issued shares at August 2, 2020 – 536,431,204) 4,750 4,642 4,599 2,121 2,107 2,107 Common stock in treasury (17,671) (17,474) (17,121) Retained earnings 31,128 29,852 29,369 3,498 3,378 3,338 Accumulated other comprehensive income (loss) (5,319) (5,607) (4,581) (416) (358) (339) Total Deere & Company stockholders’ equity 12,888 11,413 12,266 5,203 5,127 5,106 Noncontrolling interests 3 4 4 Total stockholders’ equity 12,891 11,417 12,270 5,203 5,127 5,106 Total Liabilities and Stockholders’ Equity $ 38,981 $ 33,577 $ 34,770 $ 48,869 $ 48,483 $ 48,444 * 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 Nine Months Ended August 2, 2020 and July 28, 2019 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2020 2019 2020 2019 Cash Flows from Operating Activities Net income $ 1,995 $ 2,535 $ 381 $ 450 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 6 1 117 57 Provision for depreciation and amortization 787 782 925 836 Impairment charges 115 32 Undistributed earnings of unconsolidated subsidiaries and affiliates (124) (62) (1) (1) Credit for deferred income taxes (57) (123) (103) (209) Changes in assets and liabilities: Trade receivables and Equipment Operations' financing receivables 116 (248) Inventories 387 (670) Accounts payable and accrued expenses (567) 50 (38) 23 Accrued income taxes payable/receivable (25) (282) 29 535 Retirement benefits 77 35 11 5 Other 145 (59) 89 140 Net cash provided by operating activities 2,855 1,959 1,442 1,836 Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) 14,352 13,807 Proceeds from maturities and sales of marketable securities 9 70 63 Proceeds from sales of equipment on operating leases 1,310 1,171 Cost of receivables acquired (excluding trade and wholesale) (15,367) (14,597) Purchases of marketable securities (3) (91) (107) Purchases of property and equipment (591) (754) (3) (2) Cost of equipment on operating leases acquired (1,836) (2,135) Decrease (increase) in trade and wholesale receivables 423 (2,551) Collateral on derivatives – net (6) 330 59 Other (55) (64) (46) (47) Net cash used for investing activities (652) (812) (858) (4,339) Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings (32) (119) 202 (217) Change in intercompany receivables/payables (1,468) (683) 1,468 683 Proceeds from long-term borrowings 4,592 868 3,739 6,572 Payments of long-term borrowings (179) (194) (5,618) (4,162) Proceeds from issuance of common stock 111 133 Repurchases of common stock (263) (880) Dividends paid (718) (703) (260) (377) Other (86) (52) (11) (22) Net cash provided by (used for) financing activities 1,957 (1,630) (480) 2,477 Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash 95 (16) (15) (8) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 4,255 (499) 89 (34) Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 3,196 3,202 760 813 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 7,451 $ 2,703 $ 849 $ 779 * 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. |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | |
Fiscal period duration | 91 days | 91 days | |
VIE-Not Primary Beneficiary | |||
Maximum Exposure to Losses | |||
Maximum exposure to loss | $ 1,551 | ||
VIE-Not Primary Beneficiary | Brazilian Construction Equipment Manufacturer Joint Venture | |||
Maximum Exposure to Losses | |||
Maximum exposure to loss | $ 13 | $ 23 | $ 22 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | Oct. 28, 2018 | |
Transfer of inventory to equipment on operating leases | $ 388 | $ 498 | ||
Accounts payable related to purchases of property and equipment | 51 | 70 | ||
Restricted cash | 110 | 99 | $ 99 | $ 111 |
Equipment Operations | ||||
Restricted cash | 11 | 9 | 21 | 7 |
Financial Services | ||||
Restricted cash | $ 99 | $ 90 | $ 78 | $ 104 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Aug. 02, 2020 | Nov. 04, 2019 | Nov. 03, 2019 | Jul. 28, 2019 | |
New accounting standards | ||||
Other intangible assets - net | $ 1,301 | $ 1,357 | $ 1,380 | $ 1,444 |
Other assets | 2,824 | 2,301 | 1,899 | 1,977 |
Short-term borrowings | 9,075 | 10,795 | 10,784 | 11,142 |
Accounts payable and accrued expenses | 9,565 | 10,004 | 9,656 | 9,390 |
Long-term borrowings | $ 34,037 | $ 30,249 | 30,229 | $ 29,242 |
ASU 2016-02 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Extensible List] | us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember | |||
Lease, Practical Expedients, Package [true false] | true | |||
Lease, Practical Expedient, Use of Hindsight [true false] | false | |||
ASU 2016-02 | Cumulative Effect from Adoption | ||||
New accounting standards | ||||
Other intangible assets - net | (23) | |||
Other assets | 402 | |||
Short-term borrowings | 11 | |||
Accounts payable and accrued expenses | 348 | |||
Long-term borrowings | $ 20 | |||
ASU 2017-08 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2018-07 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2020-04 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2016-13 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |||
ASU 2018-15 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |||
ASU 2019-12 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false |
REVENUE RECOGNITION - Primary G
REVENUE RECOGNITION - Primary Geograhical Market, Major Product Lines, and Timing (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Revenue Recognition | ||||
Net sales and revenues | $ 8,925 | $ 10,036 | $ 25,809 | $ 29,362 |
Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 7,977 | 9,043 | 22,950 | 26,490 |
Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 948 | 993 | 2,859 | 2,872 |
Large Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,893 | 2,985 | 8,106 | 8,647 |
Small Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,021 | 2,172 | 5,762 | 6,613 |
Turf | ||||
Revenue Recognition | ||||
Net sales | 651 | 704 | 1,925 | 2,199 |
Construction | ||||
Revenue Recognition | ||||
Net sales | 817 | 1,319 | 2,535 | 3,806 |
Compact Construction | ||||
Revenue Recognition | ||||
Net sales | 303 | 320 | 930 | 904 |
Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 818 | 1,008 | 2,146 | 2,420 |
Forestry | ||||
Revenue Recognition | ||||
Net sales | 241 | 333 | 769 | 1,023 |
Financial Products | ||||
Revenue Recognition | ||||
Net sales and revenues | 921 | 942 | 2,789 | 2,739 |
Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 260 | 253 | 847 | 1,011 |
United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 4,525 | 5,096 | 13,936 | 15,716 |
Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 635 | 707 | 1,684 | 2,015 |
Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,501 | 1,634 | 4,131 | 4,599 |
Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 506 | 563 | 1,381 | 1,448 |
Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 777 | 945 | 2,110 | 2,742 |
Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 981 | 1,091 | 2,567 | 2,842 |
Agriculture and Turf | ||||
Revenue Recognition | ||||
Net sales and revenues | 5,795 | 6,039 | 16,454 | 18,234 |
Agriculture and Turf | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 5,739 | 5,988 | 16,294 | 18,088 |
Agriculture and Turf | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 56 | 51 | 160 | 146 |
Agriculture and Turf | Large Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,893 | 2,985 | 8,106 | 8,647 |
Agriculture and Turf | Small Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,021 | 2,172 | 5,762 | 6,613 |
Agriculture and Turf | Turf | ||||
Revenue Recognition | ||||
Net sales | 651 | 704 | 1,925 | 2,199 |
Agriculture and Turf | Financial Products | ||||
Revenue Recognition | ||||
Net sales and revenues | 24 | 25 | 72 | 69 |
Agriculture and Turf | Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 206 | 153 | 589 | 706 |
Agriculture and Turf | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,845 | 2,870 | 8,725 | 9,411 |
Agriculture and Turf | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 295 | 299 | 699 | 784 |
Agriculture and Turf | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,103 | 1,154 | 2,992 | 3,362 |
Agriculture and Turf | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 319 | 324 | 877 | 865 |
Agriculture and Turf | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 602 | 708 | 1,515 | 2,028 |
Agriculture and Turf | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 631 | 684 | 1,646 | 1,784 |
Construction and Forestry | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,238 | 3,087 | 6,656 | 8,478 |
Construction and Forestry | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,210 | 3,055 | 6,576 | 8,402 |
Construction and Forestry | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 28 | 32 | 80 | 76 |
Construction and Forestry | Construction | ||||
Revenue Recognition | ||||
Net sales | 817 | 1,319 | 2,535 | 3,806 |
Construction and Forestry | Compact Construction | ||||
Revenue Recognition | ||||
Net sales | 303 | 320 | 930 | 904 |
Construction and Forestry | Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 818 | 1,008 | 2,146 | 2,420 |
Construction and Forestry | Forestry | ||||
Revenue Recognition | ||||
Net sales | 241 | 333 | 769 | 1,023 |
Construction and Forestry | Financial Products | ||||
Revenue Recognition | ||||
Net sales and revenues | 5 | 7 | 18 | 20 |
Construction and Forestry | Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 54 | 100 | 258 | 305 |
Construction and Forestry | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,048 | 1,594 | 3,331 | 4,495 |
Construction and Forestry | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 194 | 260 | 532 | 773 |
Construction and Forestry | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 376 | 458 | 1,073 | 1,174 |
Construction and Forestry | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 178 | 229 | 477 | 555 |
Construction and Forestry | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 124 | 171 | 418 | 515 |
Construction and Forestry | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 318 | 375 | 825 | 966 |
Financial Services | ||||
Revenue Recognition | ||||
Net sales and revenues | 892 | 910 | 2,699 | 2,650 |
Financial Services | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 28 | 80 | ||
Financial Services | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 864 | 910 | 2,619 | 2,650 |
Financial Services | Financial Products | ||||
Revenue Recognition | ||||
Net sales and revenues | 892 | 910 | 2,699 | 2,650 |
Financial Services | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 632 | 632 | 1,880 | 1,810 |
Financial Services | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 146 | 148 | 453 | 458 |
Financial Services | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 22 | 22 | 66 | 63 |
Financial Services | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 9 | 10 | 27 | 28 |
Financial Services | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 51 | 66 | 177 | 199 |
Financial Services | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | $ 32 | $ 32 | $ 96 | $ 92 |
REVENUE RECOGNITION - Advanced
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | |
Advanced customer payments | |||||
Deferred revenue received | $ 1,115 | $ 1,022 | $ 1,115 | $ 1,022 | $ 1,010 |
Revenue recognized from deferred revenue | $ 97 | $ 101 | $ 375 | $ 360 |
REVENUE RECOGNITION - Unsatisfi
REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions | Aug. 02, 2020USD ($) |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 920 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-08-03 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 88 |
Period estimated revenue to be recognized | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-02 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 385 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-11-01 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 240 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-31 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 132 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-30 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 56 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-28 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 16 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-27 | |
Unsatisfied performance obligations | |
Performance obligations for contracts with an original duration greater than one year | $ 3 |
Period estimated revenue to be recognized | 24 months |
REVENUE RECOGNITION - Short-ter
REVENUE RECOGNITION - Short-term Payment Relief (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | |
Short-term Payment Relief | |||
Trade accounts and notes receivable - net | $ 5,473 | $ 5,230 | $ 6,758 |
COVID | |||
Short-term Payment Relief | |||
Trade accounts and notes receivable - net | $ 234 | ||
Outstanding trade receivable balance granted relief (as a percent) | 4.00% | ||
COVID | Maximum | |||
Short-term Payment Relief | |||
Payment deferral period | 3 months | ||
Extension of interest-free period | 3 months | ||
Total interest-free period | 1 year | ||
Interest rate reduction period | 3 months |
OTHER COMPREHENSIVE INCOME IT_3
OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Changes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Accumulated other comprehensive income (loss) | ||||
Balance | $ 11,413 | |||
Net current period other comprehensive income (loss) | $ 396 | $ 29 | 288 | $ (146) |
Balance | 12,888 | 12,266 | 12,888 | 12,266 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (5,607) | (4,427) | ||
Other comprehensive income (loss) items before reclassification | 112 | (195) | ||
Amounts reclassified from accumulated other comprehensive income | 176 | 49 | ||
Net current period other comprehensive income (loss) | 396 | 29 | 288 | (146) |
Balance | (5,319) | (4,581) | (5,319) | (4,581) |
Accumulated Other Comprehensive Income (Loss) | Cumulative Effect from Adoption | ASU 2016-01 | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (8) | |||
Retirement Benefits Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (3,915) | (3,237) | ||
Other comprehensive income (loss) items before reclassification | 179 | 30 | ||
Amounts reclassified from accumulated other comprehensive income | 159 | 54 | ||
Net current period other comprehensive income (loss) | 338 | 84 | ||
Balance | (3,577) | (3,153) | (3,577) | (3,153) |
Cumulative Translation Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (1,651) | (1,203) | ||
Other comprehensive income (loss) items before reclassification | (75) | (218) | ||
Amounts reclassified from accumulated other comprehensive income | 8 | |||
Net current period other comprehensive income (loss) | (67) | (218) | ||
Balance | (1,718) | (1,421) | (1,718) | (1,421) |
Unrealized Gain (Loss) on Derivatives | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (60) | 15 | ||
Other comprehensive income (loss) items before reclassification | (14) | (33) | ||
Amounts reclassified from accumulated other comprehensive income | 10 | (4) | ||
Net current period other comprehensive income (loss) | (4) | (37) | ||
Balance | (64) | (22) | (64) | (22) |
Unrealized Gain (Loss) on Debt Securities | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | 19 | |||
Other comprehensive income (loss) items before reclassification | 22 | 26 | ||
Amounts reclassified from accumulated other comprehensive income | (1) | (1) | ||
Net current period other comprehensive income (loss) | 21 | 25 | ||
Balance | $ 40 | $ 15 | $ 40 | 15 |
Unrealized Gain (Loss) on Debt Securities | Cumulative Effect from Adoption | ASU 2016-01 | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (8) | |||
Unrealized Gain (Loss) on Investments | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | $ (2) |
OTHER COMPREHENSIVE INCOME IT_4
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | $ (290) | $ (374) | $ (969) | $ (1,078) |
Total other comprehensive income (loss), before tax | 415 | 31 | 415 | (123) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (19) | (2) | (127) | (23) |
Other Comprehensive Income (Loss), After Tax | ||||
Other Comprehensive Income (Loss), Net of Income Taxes | 396 | 29 | 288 | (146) |
Cumulative Translation Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 321 | (77) | ||
Total other comprehensive income (loss), before tax | 329 | 27 | (69) | (217) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 2 | 2 | ||
Total other comprehensive income (loss), tax (expense) credit | 2 | (1) | 2 | (1) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 323 | (75) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 331 | 26 | (67) | (218) |
Cumulative Translation Adjustment | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 8 | 8 | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 8 | 8 | ||
Unrealized Gain (Loss) on Derivatives | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (1) | (27) | (18) | (42) |
Total other comprehensive income (loss), before tax | 6 | (28) | (5) | (48) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 6 | 4 | 9 | |
Total other comprehensive income (loss), tax (expense) credit | (2) | 6 | 1 | 11 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (1) | (21) | (14) | (33) |
Other Comprehensive Income (Loss), Net of Income Taxes | 4 | (22) | (4) | (37) |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | 7 | (1) | 13 | (6) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (2) | (3) | 2 | |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 5 | (1) | 10 | (4) |
Unrealized Gain (Loss) on Debt Securities | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 13 | 13 | 27 | 32 |
Total other comprehensive income (loss), before tax | 12 | 12 | 26 | 31 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (2) | (2) | (5) | (6) |
Total other comprehensive income (loss), tax (expense) credit | (2) | (2) | (5) | (6) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 11 | 11 | 22 | 26 |
Other Comprehensive Income (Loss), Net of Income Taxes | 10 | 10 | 21 | 25 |
Unrealized Gain (Loss) on Debt Securities | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other income | (1) | (1) | (1) | (1) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (1) | (1) | (1) | (1) |
Retirement Benefits Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | 68 | 20 | 463 | 111 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (17) | (5) | (125) | (27) |
Other Comprehensive Income (Loss), After Tax | ||||
Other Comprehensive Income (Loss), Net of Income Taxes | 51 | 15 | 338 | 84 |
Retirement Benefits Adjustment | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (9) | (3) | (36) | (21) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 2 | 1 | 8 | 5 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (7) | (2) | (28) | (16) |
Retirement Benefits Adjustment | OPEB | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 274 | 60 | ||
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (67) | (14) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 207 | 46 | ||
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 62 | 35 | 186 | 106 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (15) | (9) | (57) | (26) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 47 | 26 | 129 | 80 |
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | OPEB | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 7 | 4 | 21 | 12 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (2) | (1) | (5) | (3) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 5 | 3 | 16 | 9 |
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 3 | 2 | 9 | 8 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (2) | (2) | |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 2 | 2 | 7 | 6 |
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | OPEB | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | (1) | (19) | (3) | (55) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 1 | 4 | 1 | 13 |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (15) | (2) | (42) | |
Settlements | Reclassification out of accumulated other comprehensive income (loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 6 | 1 | 12 | 1 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (2) | (3) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 4 | $ 1 | $ 9 | $ 1 |
OTHER COMPREHENSIVE INCOME IT_5
OTHER COMPREHENSIVE INCOME ITEMS - Noncontrolling Interests' (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | ||||
Comprehensive income (loss) attributable to noncontrolling interests | $ 0 | $ 0 | $ 2 | $ 3 |
Net income attributable to noncontrolling interests | $ 0 | $ 0 | $ 2 | $ 3 |
DIVIDENDS DECLARED AND PAID (De
DIVIDENDS DECLARED AND PAID (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
DIVIDENDS DECLARED AND PAID | ||||
Dividends declared (in dollars per share) | $ 0.76 | $ 0.76 | $ 2.28 | $ 2.28 |
Dividends paid (in dollars per share) | $ 0.76 | $ 0.76 | $ 2.28 | $ 2.21 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
EARNINGS PER SHARE | ||||
Net income attributable to Deere & Company | $ 811 | $ 899 | $ 1,993 | $ 2,532 |
Average shares outstanding | 313 | 315.9 | 313.3 | 317.3 |
Basic (in dollars per share) | $ 2.59 | $ 2.84 | $ 6.36 | $ 7.98 |
Diluted Earnings Per Share | ||||
Average shares outstanding | 313 | 315.9 | 313.3 | 317.3 |
Effect of dilutive share-based compensation (in shares) | 2.8 | 3.9 | 3.1 | 4.2 |
Total potential shares outstanding | 315.8 | 319.8 | 316.4 | 321.5 |
Diluted (in dollars per share) | $ 2.57 | $ 2.81 | $ 6.30 | $ 7.87 |
Antidilutive incremental shares excluded from computation of earnings per share | 1.2 | 0.9 | 0.8 | 0.7 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Aug. 02, 2020 | Feb. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | Aug. 30, 2020 | |
Net Periodic Cost | ||||||
Location of costs excluding the service component | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | ||
Pensions | ||||||
Net Periodic Cost | ||||||
Service cost | $ 80 | $ 65 | $ 241 | $ 197 | ||
Interest cost | 86 | 112 | 260 | 334 | ||
Expected return on plan assets | (204) | (200) | (613) | (600) | ||
Amortization of actuarial loss | 62 | 35 | 186 | 106 | ||
Amortization of prior service (credit) cost | 3 | 2 | 9 | 8 | ||
Settlements | 6 | 1 | 12 | 1 | ||
Net cost | 33 | 15 | 95 | 46 | ||
Employer Contributions | ||||||
Defined benefit plan employer contributions | 66 | |||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 26 | 26 | ||||
OPEB | ||||||
Net Periodic Cost | ||||||
Service cost | 12 | 11 | 36 | 31 | ||
Interest cost | 34 | 53 | 106 | 160 | ||
Expected return on plan assets | (12) | (8) | (36) | (26) | ||
Amortization of actuarial loss | 7 | 4 | 21 | 12 | ||
Amortization of prior service (credit) cost | (1) | (19) | (3) | (55) | ||
Curtailments | 21 | |||||
Net cost | 40 | $ 41 | 145 | $ 122 | ||
Benefit obligation reduction | $ (245) | |||||
Employer Contributions | ||||||
Defined benefit plan employer contributions | 87 | |||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 648 | 648 | ||||
OPEB | United States | ||||||
Employer Contributions | ||||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $ 600 | $ 600 | ||||
OPEB | United States | Subsequent Event | ||||||
Approved Employer Contributions | ||||||
Defined benefit plan approved voluntary employer contributions | $ 700 | |||||
OPEB | First Quarter of 2020 Voluntary Employee-Separation Program | United States | ||||||
Net Periodic Cost | ||||||
Curtailments | $ 21 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | |
INCOME TAXES | |||
Capital loss carryback | $ 43 | ||
Excess tax benefits on equity compensation | (35) | ||
UNRECOGNIZED TAX BENEFITS | |||
Unrecognized tax benefits | 657 | $ 553 | $ 630 |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 141 | $ 153 | $ 274 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | |
Net Sales and Revenues | |||||
Net sales and revenues | $ 8,925 | $ 10,036 | $ 25,809 | $ 29,362 | |
% Change - Net sales and revenues | (11.00%) | (12.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 1,390 | 1,194 | $ 3,001 | 3,498 | |
% Change - Operating profit | 16.00% | (14.00%) | |||
Net income attributable to Deere & Company | $ 811 | 899 | $ 1,993 | 2,532 | |
% Change - Net income attributable to Deere & Company | (10.00%) | (21.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 77,264 | 73,530 | $ 77,264 | 73,530 | $ 73,011 |
% Change - Identifiable assets | 6.00% | ||||
Operating Segments (Other) | |||||
Reconciling items | $ (122) | (74) | $ (256) | (218) | |
% Change - Reconciling items | 65.00% | 17.00% | |||
Income taxes | $ (457) | (221) | $ (752) | (748) | |
% Change - Income taxes | 107.00% | 1.00% | |||
Equipment Operations | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 8,090 | 9,184 | $ 23,284 | 26,875 | |
Operating Profit (Loss) | |||||
Net income attributable to Deere & Company | 811 | 899 | 1,993 | 2,532 | |
Identifiable Assets | |||||
Total Assets | 38,981 | 34,770 | 38,981 | 34,770 | 33,577 |
Operating Segments (Other) | |||||
Income taxes | (395) | (190) | (632) | (625) | |
Equipment Operations | Outside U.S. and Canada: | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 3,557 | 4,026 | $ 9,563 | 10,985 | |
% Change - Net sales and revenues | (12.00%) | (13.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 524 | 430 | $ 932 | 1,088 | |
% Change - Operating profit | 22.00% | (14.00%) | |||
Corporate | |||||
Identifiable Assets | |||||
Total Assets | $ 9,166 | $ 9,166 | 4,762 | ||
% Change - Identifiable assets | 92.00% | ||||
Other Revenues | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 174 | 157 | $ 498 | 530 | |
% Change - Net sales and revenues | 11.00% | (6.00%) | |||
Agriculture and Turf | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 5,795 | 6,039 | $ 16,454 | 18,234 | |
Intersegment sales and revenues | $ 5 | 9 | $ 20 | 27 | |
% Change - Intersegment sales and revenues | (44.00%) | (26.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 942 | 612 | $ 2,109 | 1,978 | |
% Change - Operating profit | 54.00% | 7.00% | |||
Identifiable Assets | |||||
Total Assets | $ 10,124 | $ 10,124 | 10,379 | ||
% Change - Identifiable assets | (2.00%) | ||||
Construction and Forestry | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 2,238 | 3,087 | $ 6,656 | 8,478 | |
Intersegment sales and revenues | 1 | ||||
Operating Profit (Loss) | |||||
Total operating profit | $ 205 | 378 | $ 394 | 954 | |
% Change - Operating profit | (46.00%) | (59.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 9,105 | $ 9,105 | 9,387 | ||
% Change - Identifiable assets | (3.00%) | ||||
Financial Services | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 892 | 910 | $ 2,699 | 2,650 | |
% Change - Net sales and revenues | (2.00%) | 2.00% | |||
Intersegment sales and revenues | $ 59 | 93 | $ 218 | 261 | |
% Change - Intersegment sales and revenues | (37.00%) | (16.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 243 | 204 | $ 498 | 566 | |
% Change - Operating profit | 19.00% | (12.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 48,869 | $ 48,869 | $ 48,483 | ||
% Change - Identifiable assets | 1.00% | ||||
Net Sales | |||||
Net Sales and Revenues | |||||
Net sales | $ 7,859 | 8,969 | $ 22,612 | 26,182 | |
% Change - Net sales | (12.00%) | (14.00%) | |||
Net Sales | Equipment Operations | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 7,859 | 8,969 | $ 22,612 | 26,182 | |
Net Sales | Agriculture and Turf | |||||
Net Sales and Revenues | |||||
Net sales | $ 5,672 | 5,946 | $ 16,127 | 17,909 | |
% Change - Net sales | (5.00%) | (10.00%) | |||
Net Sales | Construction and Forestry | |||||
Net Sales and Revenues | |||||
Net sales | $ 2,187 | $ 3,023 | $ 6,485 | $ 8,273 | |
% Change - Net sales | (28.00%) | (22.00%) |
FINANCING RECEIVABLES - Past Du
FINANCING RECEIVABLES - Past Due Age Analysis (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | |||||
Aug. 02, 2020 | Aug. 02, 2020 | May 03, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Oct. 28, 2018 | |
Financing Receivable, Past Due | |||||||
Minimum number of days for a financing receivable to be considered past due | 30 days | ||||||
Generally the number of days for a financing receivable to be considered non-performing | 90 days | ||||||
Generally the number of days before a receivable is delinquent 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 | $ 398 | $ 398 | $ 416 | $ 410 | |||
Total Non-Performing | 529 | 529 | 449 | 487 | |||
Current | 32,556 | 32,556 | 32,863 | 31,537 | |||
Total Financing Receivables | 33,483 | 33,483 | 33,728 | 32,434 | |||
Less allowance for credit losses | 200 | 200 | $ 195 | 150 | 185 | $ 182 | $ 178 |
Total financing receivables - net | $ 33,283 | $ 33,283 | 33,578 | 32,249 | |||
COVID | |||||||
Financing Receivable, Past Due | |||||||
Financing receivables balance granted relief (as a percent) | 5.00% | 5.00% | |||||
COVID | Maximum | |||||||
Financing Receivable, Past Due | |||||||
Payment deferral or reduced financing rates period | 3 months | ||||||
30-59 Days Past Due | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | $ 261 | $ 261 | 282 | 278 | |||
60-89 Days Past Due | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | 121 | 121 | 128 | 127 | |||
90 Days or Greater Past Due | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | 16 | 16 | 6 | 5 | |||
Retail Notes | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Financing Receivables | 23,706 | 23,706 | 22,049 | ||||
Less allowance for credit losses | 125 | 125 | $ 119 | 89 | 120 | $ 115 | $ 113 |
Retail Notes | Agriculture and Turf | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | 196 | 196 | 212 | 202 | |||
Total Non-Performing | 306 | 306 | 268 | 301 | |||
Current | 19,255 | 19,255 | 18,931 | 18,038 | |||
Total Financing Receivables | 19,757 | 19,757 | 19,411 | 18,541 | |||
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 | 131 | 131 | 138 | 136 | |||
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 | 63 | 63 | 73 | 63 | |||
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 | 2 | 2 | 1 | 3 | |||
Retail Notes | Construction and Forestry | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | 99 | 99 | 112 | 124 | |||
Total Non-Performing | 102 | 102 | 127 | 135 | |||
Current | 3,748 | 3,748 | 3,450 | 3,249 | |||
Total Financing Receivables | 3,949 | 3,949 | 3,689 | 3,508 | |||
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 | 65 | 65 | 79 | 87 | |||
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 | 22 | 22 | 29 | 35 | |||
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 | 12 | 12 | 4 | 2 | |||
Other Financing Receivables | Agriculture and Turf | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | 56 | 56 | 59 | 60 | |||
Total Non-Performing | 81 | 81 | 28 | 37 | |||
Current | 8,161 | 8,161 | 8,986 | 8,833 | |||
Total Financing Receivables | 8,298 | 8,298 | 9,073 | 8,930 | |||
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 | 37 | 37 | 39 | 38 | |||
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 | 17 | 17 | 19 | 22 | |||
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 | 2 | 2 | 1 | ||||
Other Financing Receivables | Construction and Forestry | |||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | |||||||
Total Past Due | 47 | 47 | 33 | 24 | |||
Total Non-Performing | 40 | 40 | 26 | 14 | |||
Current | 1,392 | 1,392 | 1,496 | 1,417 | |||
Total Financing Receivables | 1,479 | 1,479 | 1,555 | 1,455 | |||
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 | 28 | 28 | 26 | 17 | |||
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 | $ 19 | $ 19 | $ 7 | $ 7 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | |
Allowance: | |||||
Beginning of period balance | $ 195 | $ 182 | $ 150 | $ 178 | |
Provision (credit) | 18 | 26 | 124 | 62 | |
Write-offs | (31) | (36) | (104) | (85) | |
Recoveries | 15 | 13 | 34 | 33 | |
Translation adjustments | 3 | (4) | (3) | ||
End of period balance | 200 | 185 | 200 | 185 | |
Allowance for credit losses increase | 50 | ||||
Financing receivables: | |||||
End of period balance | 33,483 | 32,434 | 33,483 | 32,434 | $ 33,728 |
Balance individually evaluated | 228 | 155 | 228 | 155 | |
Retail Notes | |||||
Allowance: | |||||
Beginning of period balance | 119 | 115 | 89 | 113 | |
Provision (credit) | 5 | 7 | 79 | 21 | |
Write-offs | (7) | (9) | (47) | (29) | |
Recoveries | 6 | 5 | 10 | 15 | |
Translation adjustments | 2 | 2 | (6) | ||
End of period balance | 125 | 120 | 125 | 120 | |
Financing receivables: | |||||
End of period balance | 23,706 | 22,049 | 23,706 | 22,049 | |
Balance individually evaluated | 160 | 145 | 160 | 145 | |
Revolving Charge Accounts | |||||
Allowance: | |||||
Beginning of period balance | 43 | 43 | 40 | 43 | |
Provision (credit) | 14 | 18 | 32 | 34 | |
Write-offs | (22) | (26) | (51) | (51) | |
Recoveries | 8 | 8 | 22 | 17 | |
End of period balance | 43 | 43 | 43 | 43 | |
Financing receivables: | |||||
End of period balance | 3,997 | 3,877 | 3,997 | 3,877 | |
Balance individually evaluated | 1 | 1 | |||
Other Financing Receivables | |||||
Allowance: | |||||
Beginning of period balance | 33 | 24 | 21 | 22 | |
Provision (credit) | (1) | 1 | 13 | 7 | |
Write-offs | (2) | (1) | (6) | (5) | |
Recoveries | 1 | 2 | 1 | ||
Translation adjustments | 1 | (2) | 2 | (3) | |
End of period balance | 32 | 22 | 32 | 22 | |
Financing receivables: | |||||
End of period balance | 5,780 | 6,508 | 5,780 | 6,508 | |
Balance individually evaluated | $ 67 | $ 10 | $ 67 | $ 10 |
FINANCING RECEIVABLES - Impaire
FINANCING RECEIVABLES - Impaired (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | |
Analysis of Impaired Financing Receivables | |||
Recorded investment, with specific allowance | $ 92 | $ 37 | $ 40 |
Recorded investment, without specific allowance | 36 | 35 | 32 |
Recorded Investment | 128 | 72 | 72 |
Unpaid principal balance, with specific allowance | 91 | 36 | 39 |
Unpaid principal balance, without specific allowance | 33 | 33 | 31 |
Unpaid Principal Balance | 124 | 69 | 70 |
Specific Allowance | 23 | 13 | 13 |
Average recorded investment, with specific allowance | 106 | 37 | 40 |
Average recorded investment, without specific allowance | 38 | 39 | 37 |
Average Recorded Investment | 144 | 76 | 77 |
Agriculture and Turf | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 106 | 51 | 49 |
Unpaid Principal Balance | 103 | 50 | 48 |
Specific Allowance | 17 | 9 | 8 |
Average Recorded Investment | 117 | 52 | 52 |
Construction and Forestry | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 22 | 21 | 23 |
Unpaid Principal Balance | 21 | 19 | 22 |
Specific Allowance | 6 | 4 | 5 |
Average Recorded Investment | $ 27 | $ 24 | $ 25 |
FINANCING RECEIVABLES - Trouble
FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 9 Months Ended | |
Aug. 02, 2020USD ($)item | Jul. 28, 2019USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | ||
Financing receivable contracts in troubled debt restructuring, number | item | 413 | 416 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 99 | $ 34 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 88 | $ 33 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 16 |
SECURITIZATION OF FINANCING R_3
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | |
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | $ 64,373 | $ 61,580 | $ 61,246 |
Short-term securitization borrowings | 5,361 | 4,321 | 5,048 |
Accrued interest on borrowings - securitization transactions | 4 | 6 | 4 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 5,365 | 4,327 | 5,052 |
Maximum remaining term of all restricted securitized retail notes | 7 years | ||
Securitized | |||
Securitization Transactions | |||
Financing receivables securitized (retail notes) | $ 5,484 | 4,395 | 5,214 |
Allowance for credit losses - securitization transactions | (15) | (12) | (14) |
Other assets - securitization transactions | 104 | 82 | 98 |
Total restricted securitized assets - securitization transactions | 5,573 | 4,465 | 5,298 |
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 3,342 | 2,895 | 3,425 |
Total liabilities related to restricted securitized assets - securitization transactions | 3,259 | 2,847 | 3,316 |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 680 | 491 | 587 |
Total liabilities related to restricted securitized assets - securitization transactions | 643 | 465 | 546 |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | 1,463 | ||
Unconsolidated conduits, maximum exposure to loss | 1,551 | ||
Total Assets | 41,000 | ||
Total restricted securitized assets - securitization transactions | 1,551 | 1,079 | 1,286 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,463 | $ 1,015 | $ 1,190 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 |
INVENTORIES | |||
Raw materials and supplies | $ 2,101 | $ 2,285 | $ 2,365 |
Work-in-process | 696 | 747 | 815 |
Finished goods and parts | 4,427 | 4,613 | 5,345 |
Total FIFO value | 7,224 | 7,645 | 8,525 |
Less adjustment to LIFO value | 1,574 | 1,670 | 1,778 |
Inventories | $ 5,650 | $ 5,975 | $ 6,747 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Aug. 02, 2020 | Jul. 28, 2019 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 2,917 | $ 3,101 |
Translation adjustments and other | 67 | (88) |
Goodwill - net, ending balance | 2,984 | 3,013 |
Accumulated impairment loss | 0 | 0 |
Agriculture and Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 574 | 583 |
Translation adjustments and other | 2 | (1) |
Goodwill - net, ending balance | 576 | 582 |
Construction and Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 2,343 | 2,518 |
Translation adjustments and other | 65 | (87) |
Goodwill - net, ending balance | $ 2,408 | $ 2,431 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 04, 2019 | Nov. 03, 2019 | Jul. 28, 2019 |
Amortized intangible assets: | ||||
Total at cost | $ 1,536 | $ 1,539 | $ 1,582 | |
Less accumulated amortization | 358 | 282 | 261 | |
Total amortized intangible assets - net | 1,178 | 1,257 | 1,321 | |
Unamortized intangible assets: | ||||
Other intangible assets - net | 1,301 | $ 1,357 | 1,380 | 1,444 |
Customer Lists and Relationships | ||||
Amortized intangible assets: | ||||
Total at cost | 515 | 511 | 525 | |
Less accumulated amortization | 103 | 77 | 71 | |
Technology, Patents, Trademarks and Other | ||||
Amortized intangible assets: | ||||
Total at cost | 1,021 | 1,028 | 1,057 | |
Less accumulated amortization | 255 | 205 | 190 | |
In-process Research and Development | ||||
Unamortized intangible assets: | ||||
Unamortized intangible assets | $ 123 | $ 123 | $ 123 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Amortized Intangible Assets: | ||||
Amortization expense of other intangible assets | $ 26 | $ 27 | $ 76 | $ 82 |
Amortization expense of other intangible assets - remainder of 2020 | 25 | 25 | ||
Amortization expense of other intangible assets - 2021 | 101 | 101 | ||
Amortization expense of other intangible assets - 2022 | 100 | 100 | ||
Amortization expense of other intangible assets - 2023 | 99 | 99 | ||
Amortization expense of other intangible assets - 2024 | 96 | 96 | ||
Amortization expense of other intangible assets - 2025 | $ 95 | $ 95 |
LEASES - Lease Terms (Details)
LEASES - Lease Terms (Details) | 9 Months Ended |
Aug. 02, 2020 | |
Lessee | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Lessee, Finance Lease, Existence of Option to Extend [true false] | true |
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
Lessee, Finance Lease, Existence of Option to Terminate [true false] | true |
Minimum | |
Lessee | |
Expected use period under lease | 1 year |
Renewal Term | 1 year |
Lessor | |
Financial Services segment lease period | 1 year |
Maximum | |
Lessee | |
Expected use period under lease | 20 years |
Renewal Term | 10 years |
Lessor | |
Financial Services segment lease period | 7 years |
LEASES - Lease Expense By Type
LEASES - Lease Expense By Type - (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Aug. 02, 2020 | Aug. 02, 2020 | |
Lease Expense by Type | ||
Operating lease expense | $ 29 | $ 92 |
Short-term lease expense | 8 | 18 |
Variable lease expense | 8 | 28 |
Finance lease: | ||
Depreciation expense | 3 | 10 |
Interest on lease liabilities | 1 | 2 |
Total lease expense | $ 49 | $ 150 |
LEASES - Lease Right of Use Ass
LEASES - Lease Right of Use Assets and Liabilities - (Details) $ in Millions | Aug. 02, 2020USD ($) |
Lessee | |
Operating leases - Other assets | $ 341 |
Operating lease, right-of-use asset, Condensed Consolidated Balance Sheet location | us-gaap:OtherAssets |
Operating leases - Accounts payable and accrued expenses | $ 318 |
Operating lease, liability, Condensed Consolidated Balance Sheet location | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent |
Finance leases - Property and equipment - net | $ 56 |
Finance lease, right-of-use asset, Condensed Consolidated Balance Sheet location | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Finance leases - Short-term borrowings | $ 18 |
Finance lease, liability, short-term, Condensed Consolidated Balance Sheet location | de:ShortTermBorrowingsIncludingLongTermDebtCurrent |
Finance leases - Long-term borrowings | $ 33 |
Finance lease, liability, long-term, Condensed Consolidated Balance Sheet location | us-gaap:LongTermDebtNoncurrent |
Total finance lease liabilities | $ 51 |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term and Discount Rates - (Details) | Aug. 02, 2020 |
Lessee | |
Weighted-average remaining lease term - operating leases | 7 years |
Weighted-average remaining lease term - finance leases | 3 years |
Weighted-average discount rate - operating leases (as a percent) | 2.20% |
Weighted-average discount rate - finance leases (as a percent) | 2.40% |
LEASES - Lease Payments - (Deta
LEASES - Lease Payments - (Details) $ in Millions | Aug. 02, 2020USD ($) |
Operating Leases | |
Remainder of 2020 | $ 30 |
2021 | 83 |
2022 | 71 |
2023 | 50 |
2024 | 39 |
2025 | 22 |
Later years | 43 |
Total lease payments | 338 |
Less imputed interest | 20 |
Total operating lease liabilities | 318 |
Finance Leases | |
Remainder of 2020 | 5 |
2021 | 18 |
2022 | 15 |
2023 | 10 |
2024 | 3 |
2025 | 1 |
Later years | 2 |
Total lease payments | 54 |
Less imputed interest | 3 |
Total finance lease liabilities | $ 51 |
LEASES - Minimum Lease Payments
LEASES - Minimum Lease Payments (Details) $ in Millions | Nov. 03, 2019USD ($) |
Operating Leases, Future Minimum Lease Payments under Previous Lease Standard | |
2020 | $ 111 |
2021 | 77 |
2022 | 56 |
2023 | 39 |
2024 | 28 |
Later years | 26 |
Total minimum lease payments under operating leases | 337 |
Capital Leases, Future Minimum Lease Payments under Previous Lease Standard | |
2020 | 12 |
2021 | 10 |
2022 | 6 |
2023 | 2 |
2024 | 1 |
Later years | 1 |
Total minimum lease payments under finance leases | $ 32 |
LEASES - Cash Flows (Details)
LEASES - Cash Flows (Details) $ in Millions | 9 Months Ended |
Aug. 02, 2020USD ($) | |
Cash Paid Amounts Included in the Measurement of Lease Liabilities | |
Operating cash flows from operating leases | $ 92 |
Operating cash flows from finance leases | 2 |
Financing cash flows from finance leases | 16 |
Right of Use Assets Obtained in Exchange for Lease Liabilities | |
Operating leases | 27 |
Finance leases | $ 37 |
LEASES - Lessor Lease Terms (De
LEASES - Lessor Lease Terms (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended |
May 03, 2020 | Aug. 02, 2020 | Aug. 02, 2020 | |
Lessor | |||
Sales-type lease early termination options | true | ||
Sales-type lease renewal options | true | ||
Sales-type lease option to purchase the underlying equipment | true | ||
Direct financing lease early termination options | true | ||
Direct financing lease renewal options | true | ||
Direct financing lease option to purchase the underlying equipment | true | ||
Operating lease early termination options | true | ||
Operating lease renewal options | true | ||
Operating lease option to purchase the underlying equipment | true | ||
Non-cash charge in other operating expenses for the impairment of equipment on operating leases, pretax | $ 22 | ||
Elected to combine lease and nonlease components | true | true | |
Elected to report consideration related to sales and value added taxes net of the related tax expense | true | ||
COVID | |||
Lessor | |||
Operating lease portfolio granted relief (as a percent) | 4.00% | 4.00% | |
Maximum | COVID | |||
Lessor | |||
Lease payment deferral period | 3 months |
LEASES - Lease Revenues (Detail
LEASES - Lease Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Aug. 02, 2020 | Aug. 02, 2020 | |
Lessor | ||
Sales-type and direct finance lease revenues | $ 33 | $ 101 |
Operating lease revenues | 361 | 1,104 |
Variable lease revenues | 6 | 17 |
Total lease revenues | $ 400 | $ 1,222 |
LEASES - Sales-type and Direct
LEASES - Sales-type and Direct Financing Lease Receivables (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 |
Sales-type and Direct Financing Lease Receivables | ||
Total sales-type and direct financing lease receivables | $ 1,881 | $ 1,930 |
Guaranteed residual values | 238 | 232 |
Unguaranteed residual values | 80 | 101 |
Less unearned finance income | 223 | 212 |
Financing lease receivables | 1,976 | 2,051 |
Agriculture and Turf | ||
Sales-type and Direct Financing Lease Receivables | ||
Total sales-type and direct financing lease receivables | 902 | 897 |
Construction and Forestry | ||
Sales-type and Direct Financing Lease Receivables | ||
Total sales-type and direct financing lease receivables | $ 979 | $ 1,033 |
LEASES - Scheduled Payments on
LEASES - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Current Year (Details) $ in Millions | Aug. 02, 2020USD ($) |
Payments on Sales-type and Direct Financing Leases Receivables | |
Remainder of 2020 | $ 296 |
2021 | 850 |
2022 | 488 |
2023 | 281 |
2024 | 146 |
2025 | 46 |
Later years | 12 |
Total | $ 2,119 |
LEASES - Scheduled Payments o_2
LEASES - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Prior Year (Details) $ in Millions | Nov. 03, 2019USD ($) |
Scheduled Payments on Finance Leases under the Previous Lease Standard | |
2020 | $ 833 |
2021 | 557 |
2022 | 321 |
2023 | 153 |
2024 | 53 |
Later years | 13 |
Total | $ 1,930 |
LEASES - Cost of Equipment on O
LEASES - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 |
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | $ 9,175 | $ 9,422 | |
Less accumulated depreciation | 2,017 | 1,855 | |
Equipment on operating leases - net | 7,158 | 7,567 | $ 7,269 |
Operating lease residual value | 5,167 | 5,259 | |
Operating lease residual value guarantees | 691 | 647 | |
Agriculture and Turf | |||
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | 7,162 | 7,257 | |
Construction and Forestry | |||
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | $ 2,013 | $ 2,165 |
LEASES - Lease Payments for Equ
LEASES - Lease Payments for Equipment on Operating Leases (Details) - USD ($) $ in Millions | 3 Months Ended | ||
May 03, 2020 | Aug. 02, 2020 | Nov. 03, 2019 | |
Lease Payments for Equipment on Operating Leases | |||
Remainder of 2020 | $ 300 | ||
2021 | 993 | ||
2022 | 633 | ||
2023 | 324 | ||
2024 | 140 | ||
2025 | 15 | ||
Total | 2,405 | ||
Non-cash charge in other operating expenses for the impairment of matured operating lease inventory recorded in other assets, pretax | $ 10 | ||
Matured operating lease inventory | $ 106 | $ 163 | |
Rental Payments for Equipment on Operating Leases | |||
2020 | 1,086 | ||
2021 | 759 | ||
2022 | 419 | ||
2023 | 193 | ||
2024 | 41 | ||
Total | $ 2,498 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
COMMITMENTS AND CONTINGENCIES | ||||
Historical claims rate, review period | 5 years | |||
Unamortized extended warranty premiums (deferred revenue) | $ 621 | $ 542 | $ 621 | $ 542 |
Change in Warranty Liability and Unearned Premiums | ||||
Beginning of period balance | 1,767 | 1,714 | 1,800 | 1,652 |
Payments | (250) | (252) | (703) | (714) |
Amortization of premiums received | (58) | (57) | (168) | (168) |
Accruals for warranties | 177 | 263 | 609 | 772 |
Premiums received | 68 | 75 | 202 | 209 |
Foreign exchange | 27 | 3 | (9) | (5) |
End of period balance | $ 1,731 | $ 1,746 | $ 1,731 | $ 1,746 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 9 Months Ended |
Aug. 02, 2020USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 257 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 67 |
Miscellaneous contingent liabilities | 50 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 343 |
Guarantee obligations accrued losses | $ 14 |
Guarantee obligations term | 6 years |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 04, 2019 | Nov. 03, 2019 | Jul. 28, 2019 |
Fair Values of Financial Instruments | ||||
Financing receivables - net | $ 27,814 | $ 29,195 | $ 27,049 | |
Financing receivables securitized - net | 5,469 | 4,383 | 5,200 | |
Short-term securitization borrowings | 5,361 | 4,321 | 5,048 | |
Long-term borrowings | 34,037 | $ 30,249 | 30,229 | 29,242 |
Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 6,672 | 7,433 | 7,927 | |
Long-term borrowings | 36,627 | 31,260 | 30,160 | |
Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 28,031 | 29,167 | 27,014 | |
Financing receivables securitized - net | 5,578 | 4,405 | 5,206 | |
Level 2 and Level 3 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 5,418 | 4,347 | 5,071 | |
Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 27,814 | 29,195 | 27,049 | |
Financing receivables securitized - net | 5,469 | 4,383 | 5,200 | |
Short-term securitization borrowings | 5,361 | 4,321 | 5,048 | |
Long-term borrowings due within one year | 6,621 | 7,428 | 7,931 | |
Long-term borrowings | 34,004 | 30,229 | 29,242 | |
Equipment Operations | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 111 | 65 | 100 | |
Financing receivables securitized - net | 37 | 44 | 54 | |
Short-term securitization borrowings | 37 | 44 | 53 | |
Long-term borrowings | 10,217 | 5,415 | 5,364 | |
Equipment Operations | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 504 | 645 | 1,013 | |
Long-term borrowings | 12,163 | 6,138 | 6,017 | |
Equipment Operations | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 102 | 61 | 93 | |
Financing receivables securitized - net | 34 | 43 | 52 | |
Short-term securitization borrowings | 37 | 45 | 54 | |
Equipment Operations | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 111 | 65 | 100 | |
Financing receivables securitized - net | 37 | 44 | 54 | |
Short-term securitization borrowings | 37 | 44 | 53 | |
Long-term borrowings due within one year | 507 | 642 | 1,009 | |
Long-term borrowings | 10,184 | 5,415 | 5,364 | |
Financial Services | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 27,703 | 29,130 | 26,949 | |
Financing receivables securitized - net | 5,432 | 4,339 | 5,146 | |
Short-term securitization borrowings | 5,324 | 4,277 | 4,995 | |
Long-term borrowings | 23,820 | 24,814 | 23,878 | |
Financial Services | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 5,381 | 4,302 | 5,017 | |
Long-term borrowings due within one year | 6,168 | 6,788 | 6,914 | |
Long-term borrowings | 24,464 | 25,122 | 24,143 | |
Financial Services | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 27,929 | 29,106 | 26,921 | |
Financing receivables securitized - net | 5,544 | 4,362 | 5,154 | |
Financial Services | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 27,703 | 29,130 | 26,949 | |
Financing receivables securitized - net | 5,432 | 4,339 | 5,146 | |
Short-term securitization borrowings | 5,324 | 4,277 | 4,995 | |
Long-term borrowings due within one year | 6,114 | 6,786 | 6,922 | |
Long-term borrowings | $ 23,820 | $ 24,814 | $ 23,878 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | Nov. 03, 2019 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | $ 640 | $ 565 | $ 640 | $ 565 | $ 581 |
Derivative assets | 961 | 320 | 961 | 320 | 384 |
Derivative liabilities | 170 | 146 | 170 | 146 | 139 |
Other Assets | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative assets | 961 | 320 | 961 | 320 | 384 |
Accounts Payable and Accrued Expenses | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative liabilities | 170 | 146 | 170 | 146 | 139 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 120 | 108 | 120 | 108 | 109 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Unrealized gain (loss) on equity securities | 10 | 1 | 8 | 7 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | International Equity Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 2 | 2 | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 68 | 59 | 68 | 59 | 59 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 50 | 49 | 50 | 49 | 50 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 515 | 453 | 515 | 453 | 471 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Other Assets | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative assets | 961 | 320 | 961 | 320 | 384 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Accounts Payable and Accrued Expenses | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative liabilities | 170 | 146 | 170 | 146 | 139 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative assets | 895 | 265 | 895 | 265 | 363 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative liabilities | 115 | 99 | 115 | 99 | 65 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative assets | 57 | 53 | 57 | 53 | 20 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative liabilities | 55 | 45 | 55 | 45 | 71 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative assets | 9 | 2 | 9 | 2 | 1 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Derivative liabilities | 2 | 2 | 3 | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | U.S. Government Debt Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 105 | 73 | 105 | 73 | 81 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 64 | 57 | 64 | 57 | 60 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 185 | 156 | 185 | 156 | 165 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 2 | 9 | 2 | 9 | 5 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-backed Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | 159 | 158 | 159 | 158 | 160 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||
Marketable securities | $ 5 | $ 4 | $ 5 | $ 4 | $ 1 |
FAIR VALUE MEASUREMENTS - Contr
FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions | Aug. 02, 2020USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 27 |
Amortized cost, due after one through five years | 89 |
Amortized cost, due after five through 10 years | 102 |
Amortized cost, due after 10 years | 160 |
Amortized cost, mortgage-backed securities | 150 |
Amortized cost, debt securities | 528 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 24 |
Fair value, due after one through five years | 95 |
Fair value, due after five through 10 years | 114 |
Fair value, due after 10 years | 178 |
Fair value, mortgage-backed securities | 159 |
Fair value, debt securities | $ 570 |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring, Level 3 Measurements (Details) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Fair Value, Recurring Level 3 Measurements from Available-for-Sale Marketable Securities | ||||
Beginning of period balance | $ 1 | $ 4 | $ 1 | $ 8 |
Purchases | 5 | 5 | ||
Principal payments | (1) | (1) | (5) | |
Other | 1 | |||
End of period balance | $ 5 | $ 4 | $ 5 | $ 4 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 02, 2020 | May 03, 2020 | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||||
Other receivables | $ 1,217 | $ 1,217 | $ 1,487 | $ 1,535 | |
Equipment on operating leases - net | 7,158 | 7,158 | 7,567 | $ 7,269 | |
Losses, Equipment on operating leases - net | $ 22 | ||||
Fair Value, Nonrecurring Measurements | Level 1 | |||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||||
Losses, Investments in unconsolidated affiliates | 20 | ||||
Fair Value, Nonrecurring Measurements | Level 3 | |||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||||
Other receivables | 1 | 1 | |||
Losses, Other receivables | 2 | 2 | |||
Equipment on operating leases - net | 855 | ||||
Losses, Equipment on operating leases - net | 22 | ||||
Property and equipment - net | 8 | 8 | |||
Losses, Property and equipment - net | 5 | 67 | |||
Losses, Other intangible assets - net | 2 | 2 | |||
Other assets | 19 | 19 | $ 142 | ||
Losses, Other assets | $ 34 | ||||
Losses, Other assets | $ 24 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ (14) | ||
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 | $ 1,900 | $ 3,150 | $ 2,750 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 |
Fair Value Hedges Member | Designated as Hedging Instruments | |||
Fair Value Hedges | |||
Notional amount of interest rate fair value hedge derivatives | $ 8,850 | $ 8,717 | $ 9,245 |
Long-term Borrowings Due in One Year | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 480 | 412 | 187 |
Active Hedging Relationships | 6 | (1) | 1 |
Discontinued Relationships | 2 | (4) | (5) |
Total | 8 | (5) | (4) |
Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 9,140 | 8,532 | 9,154 |
Active Hedging Relationships | 754 | 295 | 184 |
Discontinued Relationships | 40 | (32) | (50) |
Total | $ 794 | $ 263 | $ 134 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 |
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 7,522 | $ 9,166 | $ 7,607 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 4,790 | 4,962 | 6,362 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 125 | $ 92 | $ 90 |
DERIVATIVE INSTRUMENTS - Fair_2
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 961 | $ 384 | $ 320 |
Total derivative liabilities | 170 | 139 | 146 |
Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 961 | 384 | 320 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 170 | 139 | 146 |
Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 806 | 332 | 232 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 24 | 28 | 55 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 806 | 332 | 232 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 24 | 28 | 55 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 155 | 52 | 88 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 146 | 111 | 91 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 89 | 31 | 33 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 91 | 37 | 44 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 57 | 20 | 53 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 55 | 71 | 45 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 9 | 1 | 2 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 3 | $ 2 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (80) | $ (33) | $ 165 | $ 39 |
Interest Rate Contracts | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI | (1) | (27) | (18) | (42) |
Interest Rate Contracts | Net Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (2) | (6) | (26) | (23) |
Interest Rate Contracts | Interest Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | 78 | 193 | 589 | 468 |
Cash flow hedges, reclassified from OCI | (7) | 1 | (13) | 6 |
Not designated as hedges, gains (losses) | (1) | (7) | 2 | (25) |
Foreign Exchange Contracts | Cost of Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (28) | (8) | 64 | (1) |
Foreign Exchange Contracts | Other Operating Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (49) | $ (12) | $ 125 | $ 88 |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Aug. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 |
Derivative instruments | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 115 | $ 68 | $ 101 |
Cash collateral received | 332 | 0 | 0 |
Cash collateral paid | 0 | 0 | |
Derivative Assets | |||
Gross amounts recognized | 961 | 384 | 320 |
Netting arrangements | (120) | (70) | (70) |
Collateral received | (332) | 0 | 0 |
Net amount | 509 | 314 | 250 |
Derivative Liabilities | |||
Gross amounts recognized | 170 | 139 | 146 |
Netting arrangements | (120) | (70) | (70) |
Collateral paid | 0 | 0 | |
Net amount | 50 | $ 69 | $ 76 |
International Futures Market | |||
Derivative instruments | |||
Cash collateral paid to participate in an international futures market | $ 8 |
STOCK OPTION AND RESTRICTED S_2
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands | 1 Months Ended | 9 Months Ended |
Dec. 29, 2019 | Aug. 02, 2020 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant related to stock option and restricted stock awards | 18,500 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 495 | |
Options granted, exercise price (in dollars per share) | $ 169.70 | |
Options granted, fair value (in dollars per share) | $ 35.83 | |
Options outstanding (in shares) | 6,100 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 100.84 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 362 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 295 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 168.73 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 67 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 160.81 |
SPECIAL ITEMS - Employee-Separa
SPECIAL ITEMS - Employee-Separation Programs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 01, 2020 | Aug. 02, 2020 | Feb. 02, 2020 | Aug. 02, 2020 | Oct. 31, 2021 | Nov. 01, 2020 | |
OPEB | ||||||
Employee-Separation Programs | ||||||
Curtailment expense | $ (21) | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | ||||||
Employee-Separation Programs | ||||||
Total employee-separation programs' expenses, pretax | $ 2 | $ 138 | ||||
First Quarter of 2020 Voluntary Employee-Separation Program | OPEB | United States | ||||||
Employee-Separation Programs | ||||||
Curtailment expense | $ (21) | |||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | Other Cost of Operating Revenue | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Forecasted | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs savings | $ 85 | $ 65 | ||||
First Quarter of 2020 Voluntary Employee-Separation Program | Agriculture and Turf | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs' expenses allocation (as a percent) | 74.00% | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Construction and Forestry | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs' expenses allocation (as a percent) | 23.00% | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Financial Services | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs' expenses allocation (as a percent) | 3.00% | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Operating Profit | ||||||
Employee-Separation Programs | ||||||
Total employee-separation programs' expenses, pretax | $ 115 | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Cost of Sales | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs' expenses allocation (as a percent) | 36.00% | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Research and Development | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs' expenses allocation (as a percent) | 16.00% | |||||
First Quarter of 2020 Voluntary Employee-Separation Program | Selling, Administrative, and General Expenses | ||||||
Employee-Separation Programs | ||||||
Employee-separation programs' expenses allocation (as a percent) | 48.00% | |||||
Fourth Quarter of 2020 Employee-Separation Programs | Forecasted | ||||||
Employee-Separation Programs | ||||||
Total employee-separation programs' expenses, pretax | $ 175 | |||||
Employee-separation programs savings | $ 175 |
SPECIAL ITEMS - Impairments and
SPECIAL ITEMS - Impairments and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 02, 2020 | May 03, 2020 | |
Asset Impairment | ||
Non-cash charge in other operating expenses for the impairment of equipment on operating leases, pretax | $ 22 | |
Non-cash charge in other operating expenses for the impairment of matured operating lease inventory recorded in other assets, pretax | 10 | |
Construction and Forestry | ||
Asset Impairment | ||
Non-cash charge in equity in loss of unconsolidated affiliates for an other than temporary decline in value, pretax | 20 | |
Non-cash charge in equity in loss of unconsolidated affiliates for an other than temporary decline in value, after-tax | 20 | |
Construction and Forestry | Cost of Sales | ||
Asset Impairment | ||
Non-cash charge for impairment of fixed assets, pretax | 62 | |
Non-cash charge for impairment of fixed assets, after-tax | 62 | |
Financial Services | ||
Asset Impairment | ||
Non-cash charge in other operating expenses for the impairment of equipment on operating leases, pretax | 22 | |
Non-cash charge in other operating expenses for the impairment of matured operating lease inventory recorded in other assets, pretax | 10 | |
Income tax benefit for the non-cash charge for impairments of equipment on operating leases and matured operating lease inventory | $ 9 | |
Agriculture and Turf | Sale Of German Walk-behind Lawn Mower Business | ||
Asset Impairment | ||
Non-cash impairment charge, pretax | $ 24 | |
Non-cash impairment charge, after-tax | 24 | |
Assets and Liabilities Held for Sale | ||
Total assets reclassified to other assets | 19 | |
Liabilities reclassified to accounts payable and accrued expenses | 25 | |
Agriculture and Turf | Cost of Sales | Closure of Small Agriculture Equipment Factory in China | ||
Asset Impairment | ||
Non-cash impairment charge, pretax | 9 | |
Non-cash impairment charge, after-tax | 9 | |
Severance expense, pretax | 4 | |
Severance expense, after-tax | $ 4 |
SPECIAL ITEMS - Redeemable Nonc
SPECIAL ITEMS - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
May 03, 2020 | Aug. 02, 2020 | |
Redeemable Noncontrolling Interest | ||
Noncontrolling interest redemption | $ 14 | |
Agriculture and Turf | ||
Redeemable Noncontrolling Interest | ||
Noncontrolling interest redemption (as a percent) | 20.00% | |
Noncontrolling interest redemption | $ 14 | |
Noncontrolling interest redemption gain or loss | $ 0 |
SUPPLEMENTAL CONSOLIDATING DA_3
SUPPLEMENTAL CONSOLIDATING DATA - Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Net Sales and Revenues | ||||
Net sales and revenues | $ 8,925 | $ 10,036 | $ 25,809 | $ 29,362 |
Costs and Expenses | ||||
Research and development expenses | 370 | 431 | 1,201 | 1,295 |
Selling, administrative and general expenses | 752 | 896 | 2,467 | 2,607 |
Interest expense | 290 | 374 | 969 | 1,078 |
Total | 7,655 | 8,923 | 23,042 | 26,099 |
Income of Consolidated Group before Income Taxes | 1,270 | 1,113 | 2,767 | 3,263 |
Provision for income taxes | 457 | 221 | 752 | 748 |
Income of Consolidated Group | 813 | 892 | 2,015 | 2,515 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Net Income | 811 | 899 | 1,995 | 2,535 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 2 | 3 |
Net Income Attributable to Deere & Company | 811 | 899 | 1,993 | 2,532 |
Net Sales | ||||
Net Sales and Revenues | ||||
Net sales | 7,859 | 8,969 | 22,612 | 26,182 |
Costs and Expenses | ||||
Costs and expenses | 5,835 | 6,870 | 17,206 | 20,056 |
Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 838 | 884 | 2,584 | 2,537 |
Other | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 228 | 183 | 613 | 643 |
Costs and Expenses | ||||
Costs and expenses | 408 | 352 | 1,199 | 1,063 |
Equipment Operations | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 8,090 | 9,184 | 23,284 | 26,875 |
Costs and Expenses | ||||
Research and development expenses | 370 | 431 | 1,201 | 1,295 |
Selling, administrative and general expenses | 616 | 751 | 1,989 | 2,191 |
Interest expense | 91 | 67 | 237 | 182 |
Interest compensation to Financial Services | 58 | 93 | 195 | 254 |
Total | 7,065 | 8,277 | 21,016 | 24,183 |
Income of Consolidated Group before Income Taxes | 1,025 | 907 | 2,268 | 2,692 |
Provision for income taxes | 395 | 190 | 632 | 625 |
Income of Consolidated Group | 630 | 717 | 1,636 | 2,067 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 181 | 182 | 359 | 468 |
Net Income | 811 | 899 | 1,995 | 2,535 |
Less: Net income attributable to noncontrolling interests | 2 | 3 | ||
Net Income Attributable to Deere & Company | 811 | 899 | 1,993 | 2,532 |
Equipment Operations | Financial Services | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 183 | 175 | 381 | 450 |
Equipment Operations | Other | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | (2) | 7 | (22) | 18 |
Equipment Operations | Net Sales | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 7,859 | 8,969 | 22,612 | 26,182 |
Costs and Expenses | ||||
Costs and expenses | 5,836 | 6,871 | 17,208 | 20,058 |
Equipment Operations | Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 25 | 30 | 75 | 79 |
Equipment Operations | Other | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 206 | 185 | 597 | 614 |
Costs and Expenses | ||||
Costs and expenses | 94 | 64 | 186 | 203 |
Financial Services | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 951 | 1,003 | 2,916 | 2,911 |
Costs and Expenses | ||||
Selling, administrative and general expenses | 137 | 147 | 483 | 422 |
Interest expense | 206 | 311 | 747 | 910 |
Total | 706 | 797 | 2,417 | 2,340 |
Income of Consolidated Group before Income Taxes | 245 | 206 | 499 | 571 |
Provision for income taxes | 62 | 31 | 120 | 123 |
Income of Consolidated Group | 183 | 175 | 379 | 448 |
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 2 | 2 | ||
Net Income | 183 | 175 | 381 | 450 |
Net Income Attributable to Deere & Company | 183 | 175 | 381 | 450 |
Financial Services | Financial Services | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 2 | 2 | ||
Financial Services | Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 878 | 952 | 2,720 | 2,727 |
Financial Services | Other | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 73 | 51 | 196 | 184 |
Costs and Expenses | ||||
Costs and expenses | $ 363 | $ 339 | $ 1,187 | $ 1,008 |
SUPPLEMENTAL CONSOLIDATING DA_4
SUPPLEMENTAL CONSOLIDATING DATA - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 02, 2020 | May 03, 2020 | Nov. 04, 2019 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Oct. 28, 2018 |
Assets | |||||||
Cash and cash equivalents | $ 8,190 | $ 3,857 | $ 3,383 | ||||
Marketable securities | 640 | 581 | 565 | ||||
Receivables from unconsolidated subsidiaries and affiliates | 26 | 46 | 54 | ||||
Trade accounts and notes receivable - net | 5,473 | 5,230 | 6,758 | ||||
Financing receivables - net | 27,814 | 29,195 | 27,049 | ||||
Financing receivables securitized - net | 5,469 | 4,383 | 5,200 | ||||
Other receivables | 1,217 | 1,487 | 1,535 | ||||
Equipment on operating leases - net | 7,158 | 7,567 | 7,269 | ||||
Inventories | 5,650 | 5,975 | 6,747 | ||||
Property and equipment - net | 5,754 | 5,973 | 5,798 | ||||
Investments in unconsolidated subsidiaries and affiliates | 199 | 215 | 219 | ||||
Goodwill | 2,984 | 2,917 | 3,013 | $ 3,101 | |||
Other intangible assets - net | 1,301 | $ 1,357 | 1,380 | 1,444 | |||
Retirement benefits | 1,031 | 840 | 1,431 | ||||
Deferred income taxes | 1,534 | 1,466 | 1,088 | ||||
Other assets | 2,824 | 2,301 | 1,899 | 1,977 | |||
Total Assets | 77,264 | 73,011 | 73,530 | ||||
Liabilities | |||||||
Short-term borrowings | 9,075 | 10,795 | 10,784 | 11,142 | |||
Short-term securitization borrowings | 5,361 | 4,321 | 5,048 | ||||
Payables to unconsolidated subsidiaries and affiliates | 80 | 142 | 136 | ||||
Accounts payable and accrued expenses | 9,565 | 10,004 | 9,656 | 9,390 | |||
Deferred income taxes | 479 | 495 | 507 | ||||
Long-term borrowings | 34,037 | $ 30,249 | 30,229 | 29,242 | |||
Retirement benefits and other liabilities | 5,776 | 5,953 | 5,781 | ||||
Total liabilities | 64,373 | 61,580 | 61,246 | ||||
Commitments and contingencies (Note 16) | |||||||
Redeemable noncontrolling interest (Note 20) | 14 | 14 | |||||
Stockholders' Equity | |||||||
Common stock, $1 par value (issued shares at August 2, 2020 - 536,431,204) | $ 4,750 | 4,642 | 4,599 | ||||
Common stock, par value (in dollars per share) | $ 1 | ||||||
Common stock, issued shares | 536,431,204 | ||||||
Common stock in treasury | $ (17,671) | (17,474) | (17,121) | ||||
Retained earnings | 31,128 | 29,852 | 29,369 | ||||
Accumulated other comprehensive income (loss) | (5,319) | (5,607) | (4,581) | ||||
Total Deere & Company stockholders' equity | 12,888 | 11,413 | 12,266 | ||||
Noncontrolling interests | 3 | 4 | 4 | ||||
Total stockholders' equity | 12,891 | $ 11,865 | 11,417 | 12,270 | $ 11,924 | $ 11,291 | |
Total Liabilities and Stockholders' Equity | 77,264 | 73,011 | 73,530 | ||||
Equipment Operations | |||||||
Assets | |||||||
Cash and cash equivalents | 7,440 | 3,175 | 2,694 | ||||
Marketable securities | 8 | 1 | 5 | ||||
Receivables from unconsolidated subsidiaries and affiliates | 3,619 | 2,017 | 2,395 | ||||
Trade accounts and notes receivable - net | 1,251 | 1,482 | 1,606 | ||||
Financing receivables - net | 111 | 65 | 100 | ||||
Financing receivables securitized - net | 37 | 44 | 54 | ||||
Other receivables | 1,083 | 1,376 | 1,428 | ||||
Inventories | 5,650 | 5,975 | 6,747 | ||||
Property and equipment - net | 5,711 | 5,929 | 5,753 | ||||
Investments in unconsolidated subsidiaries and affiliates | 5,383 | 5,326 | 5,309 | ||||
Goodwill | 2,984 | 2,917 | 3,013 | ||||
Other intangible assets - net | 1,301 | 1,380 | 1,444 | ||||
Retirement benefits | 972 | 836 | 1,374 | ||||
Deferred income taxes | 1,865 | 1,896 | 1,579 | ||||
Other assets | 1,566 | 1,158 | 1,269 | ||||
Total Assets | 38,981 | 33,577 | 34,770 | ||||
Liabilities | |||||||
Short-term borrowings | 853 | 987 | 1,372 | ||||
Short-term securitization borrowings | 37 | 44 | 53 | ||||
Payables to unconsolidated subsidiaries and affiliates | 80 | 142 | 136 | ||||
Accounts payable and accrued expenses | 8,834 | 9,232 | 9,422 | ||||
Deferred income taxes | 398 | 414 | 454 | ||||
Long-term borrowings | 10,217 | 5,415 | 5,364 | ||||
Retirement benefits and other liabilities | 5,671 | 5,912 | 5,685 | ||||
Total liabilities | 26,090 | 22,146 | 22,486 | ||||
Commitments and contingencies (Note 16) | |||||||
Redeemable noncontrolling interest (Note 20) | 14 | 14 | |||||
Stockholders' Equity | |||||||
Common stock, $1 par value (issued shares at August 2, 2020 - 536,431,204) | $ 4,750 | 4,642 | 4,599 | ||||
Common stock, par value (in dollars per share) | $ 1 | ||||||
Common stock, issued shares | 536,431,204 | ||||||
Common stock in treasury | $ (17,671) | (17,474) | (17,121) | ||||
Retained earnings | 31,128 | 29,852 | 29,369 | ||||
Accumulated other comprehensive income (loss) | (5,319) | (5,607) | (4,581) | ||||
Total Deere & Company stockholders' equity | 12,888 | 11,413 | 12,266 | ||||
Noncontrolling interests | 3 | 4 | 4 | ||||
Total stockholders' equity | 12,891 | 11,417 | 12,270 | ||||
Total Liabilities and Stockholders' Equity | 38,981 | 33,577 | 34,770 | ||||
Financial Services | |||||||
Assets | |||||||
Cash and cash equivalents | 750 | 682 | 689 | ||||
Marketable securities | 632 | 580 | 560 | ||||
Trade accounts and notes receivable - net | 5,595 | 5,153 | 6,807 | ||||
Financing receivables - net | 27,703 | 29,130 | 26,949 | ||||
Financing receivables securitized - net | 5,432 | 4,339 | 5,146 | ||||
Other receivables | 162 | 116 | 126 | ||||
Equipment on operating leases - net | 7,158 | 7,567 | 7,269 | ||||
Property and equipment - net | 43 | 44 | 45 | ||||
Investments in unconsolidated subsidiaries and affiliates | 19 | 16 | 16 | ||||
Retirement benefits | 59 | 58 | 57 | ||||
Deferred income taxes | 56 | 57 | 72 | ||||
Other assets | 1,260 | 741 | 708 | ||||
Total Assets | 48,869 | 48,483 | 48,444 | ||||
Liabilities | |||||||
Short-term borrowings | 8,222 | 9,797 | 9,770 | ||||
Short-term securitization borrowings | 5,324 | 4,277 | 4,995 | ||||
Payables to unconsolidated subsidiaries and affiliates | 3,593 | 1,970 | 2,341 | ||||
Accounts payable and accrued expenses | 2,134 | 1,836 | 1,641 | ||||
Deferred income taxes | 468 | 568 | 616 | ||||
Long-term borrowings | 23,820 | 24,814 | 23,878 | ||||
Retirement benefits and other liabilities | 105 | 94 | 97 | ||||
Total liabilities | 43,666 | 43,356 | 43,338 | ||||
Commitments and contingencies (Note 16) | |||||||
Stockholders' Equity | |||||||
Common stock, $1 par value (issued shares at August 2, 2020 - 536,431,204) | 2,121 | 2,107 | 2,107 | ||||
Retained earnings | 3,498 | 3,378 | 3,338 | ||||
Accumulated other comprehensive income (loss) | (416) | (358) | (339) | ||||
Total Deere & Company stockholders' equity | 5,203 | 5,127 | 5,106 | ||||
Total stockholders' equity | 5,203 | 5,127 | 5,106 | ||||
Total Liabilities and Stockholders' Equity | $ 48,869 | $ 48,483 | $ 48,444 |
SUPPLEMENTAL CONSOLIDATING DA_5
SUPPLEMENTAL CONSOLIDATING DATA - Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Jul. 28, 2019 | Aug. 02, 2020 | Jul. 28, 2019 | |
Cash Flows from Operating Activities | ||||
Net income | $ 811 | $ 899 | $ 1,995 | $ 2,535 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Provision for credit losses | 123 | 58 | ||
Provision for depreciation and amortization | 1,614 | 1,522 | ||
Impairment charges | 147 | |||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (5) | 10 | ||
Credit for deferred income taxes | (160) | (332) | ||
Changes in assets and liabilities: | ||||
Trade receivables and Equipment Operations' financing receivables | 626 | (2,206) | ||
Inventories | (1) | (1,168) | ||
Accounts payable and accrued expenses | (572) | (306) | ||
Accrued income taxes payable/receivable | 4 | 253 | ||
Retirement benefits | 88 | 40 | ||
Other | 135 | (65) | ||
Net cash provided by (used for) operating activities | 4,057 | 404 | ||
Cash Flows from Investing Activities | ||||
Proceeds from maturities and sales of marketable securities | 70 | 72 | ||
Proceeds from sales of equipment on operating leases | 1,310 | 1,171 | ||
Purchases of marketable securities | (91) | (110) | ||
Purchases of property and equipment | (594) | (756) | ||
Cost of equipment on operating leases acquired | (1,312) | (1,462) | ||
Collateral on derivatives - net | 324 | 59 | ||
Other | (12) | (126) | ||
Net cash used for investing activities | (1,517) | (2,129) | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | 170 | (336) | ||
Proceeds from long-term borrowings | 8,331 | 7,440 | ||
Payments of long-term borrowings | (5,797) | (4,356) | ||
Proceeds from issuance of common stock | 111 | 133 | ||
Repurchases of common stock | (263) | (880) | ||
Dividends paid | (718) | (703) | ||
Other | (110) | (82) | ||
Net cash provided by (used for) financing activities | 1,724 | 1,216 | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 80 | (24) | ||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 4,344 | (533) | ||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 3,956 | 4,015 | ||
Cash, Cash Equivalents, and Restricted Cash at End of Period | 8,300 | 3,482 | 8,300 | 3,482 |
Equipment Operations | ||||
Cash Flows from Operating Activities | ||||
Net income | 811 | 899 | 1,995 | 2,535 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Provision for credit losses | 6 | 1 | ||
Provision for depreciation and amortization | 787 | 782 | ||
Impairment charges | 115 | |||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (124) | (62) | ||
Credit for deferred income taxes | (57) | (123) | ||
Changes in assets and liabilities: | ||||
Trade receivables and Equipment Operations' financing receivables | 116 | (248) | ||
Inventories | 387 | (670) | ||
Accounts payable and accrued expenses | (567) | 50 | ||
Accrued income taxes payable/receivable | (25) | (282) | ||
Retirement benefits | 77 | 35 | ||
Other | 145 | (59) | ||
Net cash provided by (used for) operating activities | 2,855 | 1,959 | ||
Cash Flows from Investing Activities | ||||
Proceeds from maturities and sales of marketable securities | 9 | |||
Purchases of marketable securities | (3) | |||
Purchases of property and equipment | (591) | (754) | ||
Collateral on derivatives - net | (6) | |||
Other | (55) | (64) | ||
Net cash used for investing activities | (652) | (812) | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | (32) | (119) | ||
Change in intercompany receivables/payables | (1,468) | (683) | ||
Proceeds from long-term borrowings | 4,592 | 868 | ||
Payments of long-term borrowings | (179) | (194) | ||
Proceeds from issuance of common stock | 111 | 133 | ||
Repurchases of common stock | (263) | (880) | ||
Dividends paid | (718) | (703) | ||
Other | (86) | (52) | ||
Net cash provided by (used for) financing activities | 1,957 | (1,630) | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 95 | (16) | ||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 4,255 | (499) | ||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 3,196 | 3,202 | ||
Cash, Cash Equivalents, and Restricted Cash at End of Period | 7,451 | 2,703 | 7,451 | 2,703 |
Financial Services | ||||
Cash Flows from Operating Activities | ||||
Net income | 183 | 175 | 381 | 450 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Provision for credit losses | 117 | 57 | ||
Provision for depreciation and amortization | 925 | 836 | ||
Impairment charges | 32 | |||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (1) | (1) | ||
Credit for deferred income taxes | (103) | (209) | ||
Changes in assets and liabilities: | ||||
Accounts payable and accrued expenses | (38) | 23 | ||
Accrued income taxes payable/receivable | 29 | 535 | ||
Retirement benefits | 11 | 5 | ||
Other | 89 | 140 | ||
Net cash provided by (used for) operating activities | 1,442 | 1,836 | ||
Cash Flows from Investing Activities | ||||
Collections of receivables (excluding trade and wholesale) | 14,352 | 13,807 | ||
Proceeds from maturities and sales of marketable securities | 70 | 63 | ||
Proceeds from sales of equipment on operating leases | 1,310 | 1,171 | ||
Cost of receivables acquired (excluding trade and wholesale) | (15,367) | (14,597) | ||
Purchases of marketable securities | (91) | (107) | ||
Purchases of property and equipment | (3) | (2) | ||
Cost of equipment on operating leases acquired | (1,836) | (2,135) | ||
Decrease (increase) in trade and wholesale receivables | 423 | (2,551) | ||
Collateral on derivatives - net | 330 | 59 | ||
Other | (46) | (47) | ||
Net cash used for investing activities | (858) | (4,339) | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | 202 | (217) | ||
Change in intercompany receivables/payables | 1,468 | 683 | ||
Proceeds from long-term borrowings | 3,739 | 6,572 | ||
Payments of long-term borrowings | (5,618) | (4,162) | ||
Dividends paid | (260) | (377) | ||
Other | (11) | (22) | ||
Net cash provided by (used for) financing activities | (480) | 2,477 | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | (15) | (8) | ||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 89 | (34) | ||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 760 | 813 | ||
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ 849 | $ 779 | $ 849 | $ 779 |