Document and Entity Information
Document and Entity Information | 3 Months Ended |
Jan. 31, 2021shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jan. 31, 2021 |
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 | 313,438,923 |
Current Fiscal Year End Date | --10-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
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 | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Net Sales and Revenues | ||
Net sales and revenues | $ 9,112 | $ 7,631 |
Costs and Expenses | ||
Research and development expenses | 366 | 425 |
Selling, administrative and general expenses | 769 | 809 |
Interest expense | 271 | 336 |
Total | 7,584 | 7,062 |
Income of Consolidated Group before Income Taxes | 1,528 | 569 |
Provision for income taxes | 308 | 50 |
Income of Consolidated Group | 1,220 | 519 |
Equity in income (loss) of unconsolidated affiliates | 4 | (1) |
Net Income | 1,224 | 518 |
Less: Net income attributable to noncontrolling interests | 0 | 1 |
Net Income Attributable to Deere & Company | $ 1,224 | $ 517 |
Per Share Data | ||
Basic (in dollars per share) | $ 3.90 | $ 1.65 |
Diluted (in dollars per share) | $ 3.87 | $ 1.63 |
Average Shares Outstanding | ||
Basic (in shares) | 313.5 | 313.5 |
Diluted (in shares) | 316.1 | 317.2 |
Net Sales | ||
Net Sales and Revenues | ||
Net sales | $ 8,051 | $ 6,530 |
Costs and Expenses | ||
Costs and expenses | 5,805 | 5,077 |
Finance and Interest Income | ||
Net Sales and Revenues | ||
Net sales and revenues | 834 | 896 |
Other | ||
Net Sales and Revenues | ||
Net sales and revenues | 227 | 205 |
Costs and Expenses | ||
Costs and expenses | $ 373 | $ 415 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||
Net income | $ 1,224 | $ 518 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||
Retirement benefits adjustment | 63 | 230 |
Cumulative translation adjustment | 396 | 43 |
Unrealized gain on derivatives | 4 | |
Unrealized gain (loss) on debt securities | (2) | 5 |
Other Comprehensive Income (Loss), Net of Income Taxes | 461 | 278 |
Comprehensive Income of Consolidated Group | 1,685 | 796 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 1 |
Comprehensive Income Attributable to Deere & Company | $ 1,685 | $ 795 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
ASSETS | |||
Cash and cash equivalents | $ 6,962 | $ 7,066 | $ 3,602 |
Marketable securities | 667 | 641 | 609 |
Receivables from unconsolidated affiliates | 28 | 31 | 38 |
Trade accounts and notes receivable - net | 5,037 | 4,171 | 5,360 |
Financing receivables - net | 29,438 | 29,750 | 27,294 |
Financing receivables securitized - net | 3,931 | 4,703 | 4,478 |
Other receivables | 1,141 | 1,220 | 1,367 |
Equipment on operating leases - net | 7,030 | 7,298 | 7,504 |
Inventories | 5,956 | 4,999 | 6,482 |
Property and equipment - net | 5,741 | 5,817 | 5,900 |
Investments in unconsolidated affiliates | 178 | 193 | 217 |
Goodwill | 3,194 | 3,081 | 2,945 |
Other intangible assets - net | 1,342 | 1,327 | 1,349 |
Retirement benefits | 906 | 863 | 900 |
Deferred income taxes | 1,556 | 1,499 | 1,414 |
Other assets | 2,373 | 2,432 | 2,362 |
Total Assets | 75,480 | 75,091 | 71,821 |
LIABILITIES | |||
Short-term borrowings | 9,224 | 8,582 | 10,008 |
Short-term securitization borrowings | 3,969 | 4,682 | 4,416 |
Payables to unconsolidated affiliates | 119 | 105 | 147 |
Accounts payable and accrued expenses | 9,404 | 10,112 | 8,630 |
Deferred income taxes | 532 | 519 | 491 |
Long-term borrowings | 32,772 | 32,734 | 30,475 |
Retirement benefits and other liabilities | 5,374 | 5,413 | 5,710 |
Total liabilities | 61,394 | 62,147 | 59,877 |
Commitments and contingencies (Note 16) | |||
Redeemable noncontrolling interest | 14 | ||
STOCKHOLDERS' EQUITY | |||
Common stock, $1 par value (issued shares at January 31, 2021 - 536,431,204) | 4,942 | 4,895 | 4,675 |
Common stock in treasury | (18,377) | (18,065) | (17,549) |
Retained earnings | 32,596 | 31,646 | 30,129 |
Accumulated other comprehensive income (loss) | (5,078) | (5,539) | (5,329) |
Total Deere & Company stockholders' equity | 14,083 | 12,937 | 11,926 |
Noncontrolling interests | 3 | 7 | 4 |
Total stockholders' equity | 14,086 | 12,944 | 11,930 |
Total Liabilities and Stockholders' Equity | $ 75,480 | $ 75,091 | $ 71,821 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) | Jan. 31, 2021$ / 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 | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 1,224 | $ 518 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Provision (credit) for credit losses | (5) | 15 |
Provision for depreciation and amortization | 538 | 538 |
Impairment charges | 50 | |
Share-based compensation expense | 15 | 19 |
Undistributed earnings of unconsolidated affiliates | 18 | |
Credit for deferred income taxes | (38) | (29) |
Changes in assets and liabilities: | ||
Trade, notes, and financing receivables related to sales | (97) | 70 |
Inventories | (926) | (642) |
Accounts payable and accrued expenses | (705) | (1,134) |
Accrued income taxes payable/receivable | 130 | (53) |
Retirement benefits | (14) | 36 |
Other | (47) | 154 |
Net cash provided by (used for) operating activities | 143 | (508) |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 5,999 | 5,664 |
Proceeds from maturities and sales of marketable securities | 20 | 18 |
Proceeds from sales of equipment on operating leases | 460 | 426 |
Cost of receivables acquired (excluding receivables related to sales) | (5,300) | (4,303) |
Acquisitions of businesses, net of cash acquired | (19) | |
Purchases of marketable securities | (39) | (34) |
Purchases of property and equipment | (154) | (271) |
Cost of equipment on operating leases acquired | (294) | (517) |
Collateral on derivatives - net | (88) | 26 |
Other | (6) | 17 |
Net cash provided by investing activities | 579 | 1,026 |
Cash Flows from Financing Activities | ||
Decrease in total short-term borrowings | (695) | (473) |
Proceeds from long-term borrowings | 1,757 | 1,702 |
Payments of long-term borrowings | (1,441) | (1,651) |
Proceeds from issuance of common stock | 71 | 53 |
Repurchases of common stock | (352) | (114) |
Dividends paid | (242) | (242) |
Other | (31) | (38) |
Net cash used for financing activities | (933) | (763) |
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 103 | (1) |
Net Decrease in Cash, Cash Equivalents, and Restricted Cash | (108) | (246) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 7,172 | 3,956 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ 7,064 | $ 3,710 |
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) | Noncontrolling Interests | Cumulative Effect from Adoption | Total |
Balance at Nov. 03, 2019 | $ 4,642 | $ (17,474) | $ 29,852 | $ (5,607) | $ 4 | $ 11,417 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 517 | 517 | ||||||
Other comprehensive income | 278 | 278 | ||||||
Repurchases of common stock | (114) | (114) | ||||||
Treasury shares reissued | 39 | 39 | ||||||
Dividends declared | (239) | (239) | ||||||
Stock options and other | 33 | (1) | 32 | |||||
Balance at Feb. 02, 2020 | 4,675 | (17,549) | 30,129 | (5,329) | 4 | 11,930 | ||
Redeemable Noncontrolling Interest - Balance at Nov. 03, 2019 | 14 | |||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Net income | 1 | |||||||
Dividends declared | (1) | |||||||
Redeemable Noncontrolling Interest - Balance at Feb. 02, 2020 | 14 | |||||||
Balance (ASU 2016-13) at Nov. 01, 2020 | $ (35) | $ (35) | ||||||
Balance at Nov. 01, 2020 | 4,895 | (18,065) | 31,646 | (5,539) | 7 | 12,944 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,224 | 1,224 | ||||||
Other comprehensive income | 461 | 461 | ||||||
Repurchases of common stock | (352) | (352) | ||||||
Treasury shares reissued | 40 | 40 | ||||||
Dividends declared | (239) | (239) | ||||||
Stock options and other | 47 | (4) | 43 | |||||
Balance at Jan. 31, 2021 | $ 4,942 | $ (18,377) | $ 32,596 | $ (5,078) | $ 3 | $ 14,086 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 3 Months Ended |
Jan. 31, 2021 | |
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 – Beginning in fiscal year 2021, the Company implemented a new strategy, operating model, and reporting structure. With this change, the Company’s agriculture and turf operations were divided into two new segments: production and precision agriculture and small agriculture and turf. There were no changes to the construction and forestry and financial services segments. In addition, at the beginning of fiscal year 2021 the Company also reclassified goodwill from identifiable operating assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Additional information on the new segments and the segment financial results are presented in Note 10. Prior period segment information was recast for a consistent presentation. References to agriculture and turf include both production and precision agriculture and small agriculture and turf. The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The first quarter ends for fiscal year 2021 and 2020 were January 31, 2021 and February 2, 2020, respectively. Both periods contained 13 weeks. Prior to November 2, 2020, the operating results of the Wirtgen Group (Wirtgen) were incorporated into the Company’s consolidated financial statements using a one-month lag period. In the first quarter of 2021, the reporting lag was eliminated resulting in four months of Wirtgen’s activity in the quarter. The effect was an increase to “Net sales” of $270 million, which the Company considers immaterial to construction and forestry’s annual net sales. Prior period results were not restated. 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 $7 million, $5 million, and $19 million at January 31, 2021, November 1, 2020, and February 2, 2020, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 3 Months Ended |
Jan. 31, 2021 | |
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 pandemic has resulted in uncertainties in the Company’s business, which may result in actual results differing 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 $84 million and $112 million in the first three months of 2021 and 2020, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $39 million and $48 million at January 31, 2021 and February 2, 2020, respectively. The Company’s restricted cash held at January 31, 2021, November 1, 2020, February 2, 2020, and November 3, 2019 was as follows in millions of dollars: January 31 November 1 February 2 November 3 2021 2020 2020 2019 Equipment operations $ 11 $ 11 $ 21 $ 21 Financial services 91 95 87 78 Total $ 102 $ 106 $ 108 $ 99 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 | 3 Months Ended |
Jan. 31, 2021 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | (3) New Accounting Standards New Accounting Standards Adopted In the first quarter of 2021, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13 , Measurement of Credit Losses on Financial Instruments, which establishes Accounting Standards Codification (ASC) 326, Financial Instruments - Credit Losses. This ASU was adopted using a modified-retrospective approach. The ASU, along with related amendments, revised 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. The Company holds deposits from dealers (dealer deposits), which are recorded in “Accounts payable and accrued liabilities” to absorb certain credit losses. Prior to adopting this ASU, the allowance for credit losses was estimated on probable credit losses incurred after consideration of recoveries from dealer deposits. The ASU considers dealer deposits and certain credit insurance contracts as freestanding credit enhancements. As a result, after adoption, credit losses recovered from dealer deposits and certain credit insurance contracts are presented in “Other income” and no longer as part of the allowance for credit losses or the provision for credit losses. The ASU also modified the treatment of the estimated write-off of delinquent receivables by no longer including the estimated benefit of charges to the dealer deposits in the write-off amount. This change increases the estimated write-offs on delinquent financing receivables with the benefit of credit losses recovered from dealer deposits presented in “Other income.” This benefit, in both situations, is recorded when the dealer deposits are charged and no longer based on estimated recoveries. The effects of adopting the ASU on the consolidated balance sheet follows in millions of dollars: November 1 Cumulative Effect November 2 2020 from Adoption 2020 Assets Trade accounts and note receivable - net $ 4,171 $ 2 $ 4,173 Financing receivables - net 29,750 (27) 29,723 Financing receivables securitized - net 4,703 (4) 4,699 Deferred income taxes 1,499 1 1,500 Liabilities Accounts payable and accrued expenses $ 10,112 $ 14 $ 10,126 Deferred income taxes 519 (7) 512 Stockholders’ equity Retained earnings $ 31,646 $ (35) $ 31,611 Note 11 contains additional disclosures as well as the Company’s updated allowance for credit losses accounting policy. The Company also adopted the following standards in 2021, none of which had a material effect on the Company’s consolidated financial statements: No. 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 No. 2019-04 Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments No. 2021-01 Reference Rate Reform (Topic 848): Scope New Accounting Standards to be Adopted The Company will adopt the following standards in future periods, none of which are expected to have a material effect on the Company’s consolidated financial statements: No. 2019-12 Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes No. 2020-08 Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Primary geographical markets: United States $ 1,608 $ 1,424 $ 1,202 $ 598 $ 4,832 Canada 112 79 188 154 533 Western Europe 449 486 439 24 1,398 Central Europe and CIS 161 84 178 9 432 Latin America 513 77 170 59 819 Asia, Africa, Australia, New Zealand, and Middle East 304 401 353 40 1,098 Total $ 3,147 $ 2,551 $ 2,530 $ 884 $ 9,112 Major product lines: Production Agriculture $ 3,011 $ 3,011 Small Agriculture $ 1,812 1,812 Turf 651 651 Construction $ 887 887 Compact Construction 346 346 Roadbuilding 910 910 Forestry 290 290 Financial Products 16 10 7 $ 884 917 Other 120 78 90 288 Total $ 3,147 $ 2,551 $ 2,530 $ 884 $ 9,112 Timing of revenue recognition: Revenue recognized at a point in time $ 3,105 $ 2,535 $ 2,500 $ 24 $ 8,164 Revenue recognized over time 42 16 30 860 948 Total $ 3,147 $ 2,551 $ 2,530 $ 884 $ 9,112 Three Months Ended February 2, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Primary geographical markets: United States $ 1,433 $ 1,067 $ 1,020 $ 643 $ 4,163 Canada 75 63 172 156 466 Western Europe 365 413 339 22 1,139 Central Europe and CIS 131 89 159 10 389 Latin America 383 72 159 66 680 Asia, Africa, Australia, New Zealand, and Middle East 189 315 256 34 794 Total $ 2,576 $ 2,019 $ 2,105 $ 931 $ 7,631 Major product lines: Production Agriculture $ 2,425 $ 2,425 Small Agriculture $ 1,479 1,479 Turf 468 468 Construction $ 841 841 Compact Construction 288 288 Roadbuilding 605 605 Forestry 274 274 Financial Products 18 9 7 $ 931 965 Other 133 63 90 286 Total $ 2,576 $ 2,019 $ 2,105 $ 931 $ 7,631 Timing of revenue recognition: Revenue recognized at a point in time $ 2,536 $ 2,004 $ 2,079 $ 26 $ 6,645 Revenue recognized over time 40 15 26 905 986 Total $ 2,576 $ 2,019 $ 2,105 $ 931 $ 7,631 The Company’s major product lines are described as follows: Production 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 $1,169 million, $1,090 million, and $1,070 million at January 31, 2021, November 1, 2020, and February 2, 2020, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended January 31, 2021 and February 2, 2020, $223 million and $181 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 January 31, 2021 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 $925 million at January 31, 2021. The estimated revenue to be recognized by fiscal year in millions of dollars follows: remainder of 2021 2022 2023 2024 2025 2026 later years During 2020, the Company provided short-term payment relief on trade accounts and notes receivables to independent dealers and certain other customers that were 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 and remaining outstanding at January 31, 2021 was not material. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 3 Months Ended |
Jan. 31, 2021 | |
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 November 3, 2019 $ (3,915) $ (1,651) $ (60) $ 19 $ (5,607) Other comprehensive income (loss) items before reclassification 186 43 (1) 5 233 Amounts reclassified from accumulated other comprehensive income 44 1 45 Net current period other comprehensive income (loss) 230 43 5 278 Balance February 2, 2020 $ (3,685) $ (1,608) $ (60) $ 24 $ (5,329) Balance November 1, 2020 $ (3,918) $ (1,596) $ (58) $ 33 $ (5,539) Other comprehensive income (loss) items before reclassification (1) 396 (2) 393 Amounts reclassified from accumulated other comprehensive income 64 4 68 Net current period other comprehensive income (loss) 63 396 4 (2) 461 Balance January 31, 2021 $ (3,855) $ (1,200) $ (54) $ 31 $ (5,078) Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars follow: Before Tax After Tax (Expense) Tax Three Months Ended January 31, 2021 Amount Credit Amount Cumulative translation adjustment $ 394 $ 2 $ 396 Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 5 (1) 4 Net unrealized gain (loss) on derivatives 5 (1) 4 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (3) 1 (2) Net unrealized gain (loss) on debt securities (3) 1 (2) Retirement benefits adjustment: Net actuarial gain (loss) (1) (1) Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 70 (17) 53 Prior service (credit) cost 2 (1) 1 Settlements 13 (3) 10 Net unrealized gain (loss) on retirement benefits adjustment 84 (21) 63 Total other comprehensive income (loss) $ 480 $ (19) $ 461 Before Tax After Tax (Expense) Tax Three Months Ended February 2, 2020 Amount Credit Amount Cumulative translation adjustment $ 43 $ 43 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (2) $ 1 (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 2 (1) 1 Net unrealized gain (loss) on derivatives Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 6 (1) 5 Net unrealized gain (loss) on debt securities 6 (1) 5 Retirement benefits adjustment: Net actuarial gain (loss) 246 (60) 186 Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 69 (28) 41 Prior service (credit) cost 2 (1) 1 Settlements 3 (1) 2 Net unrealized gain (loss) on retirement benefits adjustment 320 (90) 230 Total other comprehensive income (loss) $ 369 $ (91) $ 278 * In the first quarter of 2021 2020 |
DIVIDENDS DECLARED AND PAID
DIVIDENDS DECLARED AND PAID | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31 February 2 2021 2020 Dividends declared $ .76 $ .76 Dividends paid $ .76 $ .76 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31 February 2 2021 2020 Net income attributable to Deere & Company $ 1,224 $ 517 Average shares outstanding 313.5 313.5 Basic per share $ 3.90 $ 1.65 Average shares outstanding 313.5 313.5 Effect of dilutive share-based compensation 2.6 3.7 Total potential shares outstanding 316.1 317.2 Diluted per share $ 3.87 $ 1.63 During the first quarter of 2021 and 2020, .1 million shares and .2 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31 February 2 2021 2020 Service cost $ 85 $ 84 Interest cost 69 87 Expected return on plan assets (200) (205) Amortization of actuarial loss 63 62 Amortization of prior service cost 3 3 Settlements 13 3 Net cost $ 33 $ 34 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended January 31 February 2 2021 2020 Service cost $ 12 $ 12 Interest cost 26 37 Expected return on plan assets (19) (12) Amortization of actuarial loss 7 7 Amortization of prior service credit (1) (1) Curtailments 21 Net cost $ 25 $ 64 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. salary OPEB health care plans due to the U.S. voluntary employee-separation program (see Note 20), which resulted in a $21 million curtailment loss. During the first three months of 2021, the Company contributed approximately $42 million to its pension plans and $57 million to its OPEB plans. The Company presently anticipates contributing an additional $58 million to its pension plans and $789 million to its OPEB plans during the remainder of fiscal year 2021. The anticipated OPEB contributions include a voluntary $700 million in the fourth quarter to a U.S. plan, which will increase plan assets. These pension and remaining OPEB contributions primarily include direct benefit payments from Company funds. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | (9) Income Taxes 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 will be carried back in the Company’s U.S. income tax return, which resulted in a $43 million benefit in the first quarter of 2020. In addition, the Company recognized a discrete benefit for the excess tax benefits related to vesting or exercise of share-based compensation awards of $39 million and $24 million in the first quarters of 2021 and 2020, respectively. The Company’s unrecognized tax benefits at January 31, 2021 were $710 million, compared to $668 million at November 1, 2020. The liability at January 31, 2021, November 1, 2020, and February 2, 2020 consisted of approximately $148 million, $134 million, and $105 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 changes in the unrecognized tax benefits for the first three months of 2021 were not significant. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be material. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Jan. 31, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | (10) Segment Reporting Beginning in fiscal year 2021, the Company implemented a new strategy, operating model, and reporting structure. With this change, the Company’s agriculture and turf operations were divided into two new segments, which are described as follows: The production and precision agriculture The small agriculture and turf There were no reporting changes for the construction and forestry and financial services segments. As a result, the Company has four reportable segments. Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow: Three Months Ended January 31 February 2 % 2021 2020 Change Net sales and revenues: Production & precision ag $ 3,069 $ 2,507 +22 Small ag & turf 2,515 1,979 +27 Construction & forestry 2,467 2,044 +21 Total net sales 8,051 6,530 +23 Financial services 884 931 -5 Other revenues 177 170 +4 Total net sales and revenues $ 9,112 $ 7,631 +19 Operating profit: * Production & precision ag $ 643 $ 218 +195 Small ag & turf 469 155 +203 Construction & forestry 268 93 +188 Financial services 258 179 +44 Total operating profit 1,638 645 +154 Reconciling items ** (106) (78) +36 Income taxes (308) (50) +516 Net income attributable to Deere & Company $ 1,224 $ 517 +137 Intersegment sales and revenues: Production & precision ag net sales $ 6 $ 6 Small ag & turf net sales 3 1 +200 Construction & forestry net sales Financial services 50 67 -25 Equipment operations outside the U.S. and Canada: Net sales $ 3,522 $ 2,780 +27 Operating profit 563 225 +150 * ** 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. At the beginning of fiscal year 2021, the Company reclassified goodwill from identifiable operating segment assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Prior period amounts have been restated for a consistent presentation. January 31 November 1 February 2 2021 2020 2020 Identifiable assets: Production & precision ag $ 6,330 $ 5,708 $ 6,407 Small ag & turf 3,510 3,266 3,838 Construction & forestry 6,341 6,322 7,002 Financial services 48,378 48,719 47,279 Corporate 10,921 11,076 7,295 Total assets $ 75,480 $ 75,091 $ 71,821 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 3 Months Ended |
Jan. 31, 2021 | |
FINANCING RECEIVABLES | |
FINANCING RECEIVABLES | (11) Financing Receivables The Company monitors the credit quality of financing receivables based on delinquency status. 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, and accrued finance income previously recognized is reversed when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer 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 economic effects of COVID, the Company provided short-term relief to dealers and retail customers during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. Financing receivables granted relief represented approximately 4 percent of the financing receivables balance at January 31, 2021. The majority of financing receivables granted short-term relief during 2020 are beyond the deferral period and have either resumed making payments or are reported as delinquent based on the modified payment schedule. While the Company implemented a new strategy in fiscal year 2021 resulting in new operating segments, assets managed by financial services, including most financing receivables and equipment on operating leases, continue to be evaluated by market (agriculture and turf or construction and forestry). The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, customer receivables), in millions of dollars at January 31, 2021 was as follows: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 2,531 $ 9,427 $ 5,129 $ 2,817 $ 1,400 $ 686 $ 2,564 $ 24,554 30-59 days past due 4 65 49 30 13 7 27 195 60-89 days past due 20 17 11 5 3 5 61 90+ days past due 1 1 Non-performing 40 78 57 36 46 7 264 Construction and forestry Current 737 2,251 1,276 573 164 39 77 5,117 30-59 days past due 5 53 32 17 6 1 3 117 60-89 days past due 1 15 16 7 3 1 1 44 90+ days past due 9 13 5 4 2 33 Non-performing 26 34 26 14 8 1 109 Total customer receivables $ 3,278 $ 11,906 $ 6,645 $ 3,543 $ 1,645 $ 793 $ 2,685 $ 30,495 The credit quality analysis of customer receivables in millions of dollars at November 1, 2020 and February 2, 2020 was as follows: November 1, 2020 February 2, 2020 Customer receivables: Retail Notes & Financing Leases Revolving Charge Accounts Total Retail Notes & Financing Leases Revolving Charge Accounts Total Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 $ 19,455 $ 2,578 $ 22,033 30-59 days past due 135 13 148 162 53 215 60-89 days past due 64 4 68 71 15 86 90+ days past due 2 2 4 4 Non-performing 263 6 269 301 6 307 Construction and forestry Current 4,859 88 4,947 4,362 75 4,437 30-59 days past due 111 2 113 121 4 125 60-89 days past due 55 1 56 46 1 47 90+ days past due 14 14 19 19 Non-performing 106 1 107 156 1 157 Total customer receivables $ 27,206 $ 3,902 $ 31,108 $ 24,697 $ 2,733 $ 27,430 The credit quality analysis of wholesale receivables in millions of dollars at January 31, 2021 was as follows: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 78 $ 226 $ 67 $ 18 $ 8 $ 1 $ 2,297 $ 2,695 30-59 days past due 60-89 days past due 90+ days past due Non-performing 35 35 Construction and forestry Current 3 11 20 2 1 2 315 354 30-59 days past due 60-89 days past due 90+ days past due 1 1 Non-performing Total wholesale receivables $ 81 $ 237 $ 122 $ 20 $ 9 $ 4 $ 2,612 $ 3,085 The credit quality analysis of wholesale receivables in millions of dollars at November 1, 2020 and February 2, 2020 was as follows: November 1 February 2 Wholesale receivables: 2020 2020 Agriculture and turf Current $ 3,010 $ 3,938 30-59 days past due 1 60-89 days past due 90+ days past due Non-performing 47 76 Construction and forestry Current 472 482 30-59 days past due 60-89 days past due 90+ days past due Non-performing 2 Total wholesale receivables $ 3,529 $ 4,499 The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Three Months Ended January 31, 2021 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Allowance: Beginning of period balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 adoption 44 (13) 31 Provision (credit) 5 (10) (1) (6) Write-offs (8) (5) (13) Recoveries 5 9 14 Translation adjustments 1 1 End of period balance $ 180 $ 24 $ 7 $ 211 Financing receivables: End of period balance $ 27,810 $ 2,685 $ 3,085 $ 33,580 Three Months Ended February 2, 2020 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Allowance: Beginning of period balance $ 107 $ 40 $ 3 $ 150 Provision (credit) 16 (1) 6 21 Write-offs (18) (7) (25) Recoveries 2 8 10 Translation adjustments (1) 2 1 End of period balance $ 106 $ 40 $ 11 $ 157 Financing receivables: End of period balance $ 24,697 $ 2,733 $ 4,499 $ 31,929 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 three months of 2021, the Company identified 98 receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $5 million pre-modification and post-modification |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 3 Months Ended |
Jan. 31, 2021 | |
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 $2,425 million, $2,898 million, and $2,490 million at January 31, 2021, November 1, 2020, and February 2, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,403 million, $2,856 million, and $2,442 million at January 31, 2021, November 1, 2020, and February 2, 2020, 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 $481 million, $576 million, and $638 million at January 31, 2021, November 1, 2020, and February 2, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $471 million, $554 million, and $609 million at January 31, 2021, November 1, 2020, and February 2, 2020, 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 $1,120 million, $1,327 million, and $1,441 million at January 31, 2021, November 1, 2020, and February 2, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,097 million, $1,275 million, and $1,370 million at January 31, 2021, November 1, 2020, and February 2, 2020, respectively. The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars: January 31, 2021 Carrying value of liabilities $ 1,097 Maximum exposure to loss 1,120 The total assets of unconsolidated VIEs related to securitizations were approximately $37 billion at January 31, 2021. The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Financing receivables securitized (retail notes) $ 3,946 $ 4,716 $ 4,487 Allowance for credit losses (15) (13) (9) Other assets 95 98 91 Total restricted securitized assets $ 4,026 $ 4,801 $ 4,569 The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Short-term securitization borrowings $ 3,969 $ 4,682 $ 4,416 Accrued interest on borrowings 2 3 5 Total liabilities related to restricted securitized assets $ 3,971 $ 4,685 $ 4,421 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 January 31, 2021, the maximum remaining term of all securitized retail notes was approximately six years. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 31, 2021 | |
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: January 31 November 1 February 2 2021 2020 2020 Raw materials and supplies $ 2,303 $ 1,995 $ 2,311 Work-in-process 839 648 818 Finished goods and parts 4,485 4,006 4,946 Total FIFO value 7,627 6,649 8,075 Less adjustment to LIFO value 1,671 1,650 1,593 Inventories $ 5,956 $ 4,999 $ 6,482 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 3 Months Ended |
Jan. 31, 2021 | |
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 segment were as follows in millions of dollars: Production & Precision Ag Small Ag & Turf Construction & Forestry Total Goodwill at November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Translation adjustments and other (2) (1) 31 28 Goodwill at February 2, 2020 $ 308 $ 263 $ 2,374 $ 2,945 Goodwill at November 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments and other 12 (1) 90 101 Goodwill at January 31, 2021 $ 357 $ 267 $ 2,570 $ 3,194 There were no accumulated goodwill impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Amortized intangible assets: Customer lists and relationships $ 553 $ 535 $ 517 Technology, patents, trademarks, and other 1,099 1,056 1,013 Total at cost 1,652 1,591 1,530 Less accumulated amortization * 433 387 304 Total 1,219 1,204 1,226 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,342 $ 1,327 $ 1,349 * The amortization of other intangible assets in the first quarter of 2021 and 2020 was $34 million and $25 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2021 – $82, 2022 – $109, 2023 – $107, 2024 – $103, 2025 – $100, and 2026 – $98. |
LEASES
LEASES | 3 Months Ended |
Jan. 31, 2021 | |
LEASES | |
LEASES | (15) Leases Lessee Lessee operating and finance lease right of use assets and liabilities follow in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Operating leases: Other assets $ 327 $ 324 $ 376 Accounts payable and accrued expenses 315 305 361 Finance leases: Property and equipment – net $ 57 $ 63 $ 37 Short-term borrowings 20 21 12 Long-term borrowings 36 39 23 Total finance lease liabilities $ 56 $ 60 $ 35 Right of use assets obtained in exchange for lease liabilities follow in millions of dollars: Three Months Ended January 31, 2021 February 2, 2020 Operating leases $ 22 $ 16 Finance leases 2 9 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, while operating leases are reported in “Equipment on operating leases – net.” Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended January 31, 2021 February 2, 2020 Sales-type and direct finance lease revenues $ 36 $ 36 Operating lease revenues 363 374 Variable lease revenues 6 5 Total lease revenues $ 405 $ 415 Due to the significant, negative effects of COVID, the Company provided short-term relief to lessees during 2020, and to a much lesser extent in 2021. The relief, which included payment deferrals of three months or less, was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief represented approximately 3 percent of the Company’s operating lease portfolio at January 31, 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2021 | |
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 $656 million and $588 million at January 31, 2021 and February 2, 2020, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Three Months Ended January 31 February 2 2021 2020 Beginning of period balance $ 1,743 $ 1,800 Payments (215) (230) Amortization of premiums received (63) (59) Accruals for warranties 247 222 Premiums received 73 65 Foreign exchange 18 (6) End of period balance $ 1,803 $ 1,792 At January 31, 2021, the Company had approximately $398 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At January 31, 2021, the Company had accrued losses of approximately $18 million under these agreements. The maximum remaining term of the receivables guaranteed at January 31, 2021 was approximately seven years. At January 31, 2021, the Company had commitments of approximately $167 million for the construction and acquisition of property and equipment. Also, at January 31, 2021, the Company had restricted assets of $72 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 $55 million at January 31, 2021. The accrued liability for these contingencies was not material at January 31, 2021. 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 | 3 Months Ended |
Jan. 31, 2021 | |
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: January 31, 2021 November 1, 2020 February 2, 2020 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 103 $ 100 $ 105 $ 103 $ 130 $ 123 Financial services 29,335 29,591 29,645 29,838 27,164 27,177 Total $ 29,438 $ 29,691 $ 29,750 $ 29,941 $ 27,294 $ 27,300 Financing receivables Equipment operations $ 18 $ 17 $ 26 $ 26 $ 42 $ 40 Financial services 3,913 4,002 4,677 4,773 4,436 4,464 Total $ 3,931 $ 4,019 $ 4,703 $ 4,799 $ 4,478 $ 4,504 Short-term securitization borrowings: Equipment operations $ 17 $ 17 $ 26 $ 26 $ 42 $ 42 Financial services 3,952 3,986 4,656 4,698 4,374 4,403 Total $ 3,969 $ 4,003 $ 4,682 $ 4,724 $ 4,416 $ 4,445 Long-term borrowings due within one year: ** Equipment operations $ 191 $ 198 $ 79 $ 78 $ 567 $ 567 Financial services 7,341 7,424 6,870 6,936 6,638 6,650 Total $ 7,532 $ 7,622 $ 6,949 $ 7,014 $ 7,205 $ 7,217 Long-term borrowings: ** Equipment operations $ 10,103 $ 11,813 $ 10,085 $ 11,837 $ 5,544 $ 6,403 Financial services 22,633 23,219 22,610 23,170 24,908 25,299 Total $ 32,736 $ 35,032 $ 32,695 $ 35,007 $ 30,452 $ 31,702 * Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings. ** Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow*: January 31 November 1 February 2 2021 2020 2020 Level 1: Marketable securities International equity securities $ 2 $ 2 $ 3 U.S. equity fund 70 62 62 U.S. government debt securities 60 55 52 Total Level 1 marketable securities 132 119 117 Level 2: Marketable securities U.S. government debt securities 119 113 87 Municipal debt securities 71 68 62 Corporate debt securities 197 188 173 International debt securities 8 2 4 Mortgage-backed securities** 140 147 165 Total Level 2 marketable securities 535 518 491 Other assets Derivatives: Interest rate contracts 568 669 443 Foreign exchange contracts 34 48 37 Cross-currency interest rate contracts 3 8 1 Total Level 2 other assets 605 725 481 Accounts payable and accrued expenses Derivatives: Interest rate contracts 97 88 57 Foreign exchange contracts 76 26 40 Cross-currency interest rate contracts 2 1 4 Total Level 2 accounts payable and accrued expenses 175 115 101 Level 3: Marketable securities International debt securities 4 1 * ** The contractual maturities of debt securities at January 31, 2021 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 $ 21 $ 22 Due after one through five years 89 94 Due after five through 10 years 117 124 Due after 10 years 203 215 Mortgage-backed securities 134 140 Debt securities $ 564 $ 595 Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow: Three Months Ended January 31 February 2 2021 2020 Beginning of period balance $ 4 $ 1 Principal payments Other (4) End of period balance $ 1 Fair value, nonrecurring Level 3 measurements from impairments in millions of dollars follow: Fair Value * Losses Three Months Ended January 31 November 1 February 2 January 31 February 2 2021 2020 2020 2021 2020 Other receivables $ 1 Equipment on operating leases – net $ 371 Property and equipment – net $ 41 $ 135 $ 44 Investments in unconsolidated affiliates $ 19 Other assets $ 1 $ 59 $ 6 * 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 – Other Receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation. Equipment on Operating Leases - Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of return rates and equipment sale price at lease maturity. Inputs include realized sales values. Property and Equipment - Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence or quoted prices when available. Investment in Unconsolidated Affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value and the carrying value of the investments or the estimated realization amount. Other Assets – The impairments were measured at the fair value of the matured operating lease inventory or the right of use operating lease asset. The inputs for matured operating lease inventory include sales of comparable assets. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021, November 1, 2020, and February 2, 2020 were $2,350 million, $1,550 million, and $2,900 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 January 31, 2021 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 $6 million after-tax. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at January 31, 2021, November 1, 2020, and February 2, 2020 were $8,333 million, $7,239 million, and $9,424 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 January 31, 2021 Long-term borrowings due within one year* $ 159 $ 2 $ 1 $ 3 Long-term borrowings 8,713 435 137 572 November 1, 2020 Long-term borrowings due within one year* $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 February 2, 2020 Long-term borrowings due within one year* $ 220 $ (1) $ (5) $ (6) Long-term borrowings 9,521 379 (21) 358 * Derivatives not designated as hedging instruments The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings, purchases or sales of inventory, and below market retail financing programs. The total notional amounts of these interest rate swaps at January 31, 2021, November 1, 2020, and February 2, 2020 were $8,801 million, $8,514 million, and $9,102 million, the foreign exchange contracts were $5,478 million, $4,903 million, and $5,249 million, and the cross-currency interest rate contracts were $145 million, $113 million, and $102 million, respectively. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense or net sales 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: January 31 November 1 February 2 Other Assets 2021 2020 2020 Designated as hedging instruments: Interest rate contracts $ 491 $ 586 $ 409 Total designated 491 586 409 Not designated as hedging instruments: Interest rate contracts 77 83 34 Foreign exchange contracts 34 48 37 Cross-currency interest rate contracts 3 8 1 Total not designated 114 139 72 Total derivative assets $ 605 $ 725 $ 481 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 31 $ 14 $ 17 Total designated 31 14 17 Not designated as hedging instruments: Interest rate contracts 66 74 40 Foreign exchange contracts 76 26 40 Cross-currency interest rate contracts 2 1 4 Total not designated 144 101 84 Total derivative liabilities $ 175 $ 115 $ 101 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 January 31 February 2 2021 2020 Fair Value Hedges: Interest rate contracts - Interest expense $ (55) $ 96 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (2) Reclassified from OCI Interest rate contracts - Interest expense (5) (2) Not Designated as Hedges: Interest rate contracts - Net sales $ (4) Interest rate contracts - Interest expense * $ (4) 2 Foreign exchange contracts - Cost of sales (52) 11 Foreign exchange contracts - Other operating * (126) (1) Total not designated $ (182) $ 8 * 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 collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at January 31, 2021, November 1, 2020, and February 2, 2020, was $99 million, $89 million, and $60 million, respectively. In accordance with the limits established in these agreements, the Company posted no cash collateral at January 31, 2021, November 1, 2020, and February 2, 2020. In addition, the Company paid $8 million of collateral either in cash or pledged securities that was outstanding at both January 31, 2021 and November 1, 2020 to participate in an international futures market to hedge currency exposure, 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 January 31, 2021 Recognized Arrangements Collateral Net Amount Assets $ 605 $ (106) $ (186) $ 313 Liabilities 175 (106) 69 Gross Amounts Netting November 1, 2020 Recognized Arrangements Collateral Net Amount Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 Gross Amounts Netting February 2, 2020 Recognized Arrangements Collateral Net Amount Assets $ 481 $ (60) $ (26) $ 395 Liabilities 101 (60) 41 |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 3 Months Ended |
Jan. 31, 2021 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (19) Stock Option and Restricted Stock Awards In December 2020, the Company granted stock options to employees for the purchase of 269 thousand shares of common stock at an exercise price of $254.83 per share and a binomial lattice model fair value of $62.73 per share at the grant date. At January 31, 2021, options for 3.2 million shares were outstanding with a weighted-average exercise price of $122.01 per share. The Company also granted 205 thousand restricted stock units to employees in the first three months of 2021, of which 158 thousand are subject to service based only conditions and 47 thousand are subject to performance/service based conditions. The weighted-average fair value of the service based only units at the grant date was $254.71 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 $245.73 per unit based on the market price of a share of underlying common stock excluding dividends. At January 31, 2021, the Company was authorized to grant an additional 17.7 million shares under the equity incentive plan. |
SPECIAL ITEMS
SPECIAL ITEMS | 3 Months Ended |
Jan. 31, 2021 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | (20) S pecial Items During the first quarter of 2021, the fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and after-tax Three Months Ended January 31, 2021 Expense (benefit): Production & Precision Ag Small Ag & Turf Construction & Forestry Total Long-lived asset impairments – Cost of sales $ 5 $ 3 $ 42 $ 50 Brazil indirect tax – Cost of sales (53) (5) (58) Total expense (benefit) $ (48) $ 3 $ 37 $ (8) See Note 17 for fair value measurement information. 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 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. Three Months Ended February 2, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Cost of sales $ 19 $ 11 $ 9 $ 39 Research and development expenses 6 7 3 16 Selling, administrative and general expenses 17 18 12 $ 3 50 Total operating profit impact $ 42 $ 36 $ 24 $ 3 105 Other operating expenses 22 Total expense $ 127 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
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 first quarter ends for fiscal year 2021 and 2020 were January 31, 2021 and February 2, 2020, 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 pandemic has resulted in uncertainties in the Company’s business, which may result in actual results differing from those estimates. |
Financing Receivables - Non-Performing, Policy | The Company monitors the credit quality of financing receivables based on delinquency status. 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, and accrued finance income previously recognized is reversed when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer 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. |
Allowance for Credit Losses, Policy | The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Inventory Valuation, Policy | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. |
Product Warranties | The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. 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) | 3 Months Ended |
Jan. 31, 2021 | |
CASH FLOW INFORMATION | |
Restricted Cash Held | The Company’s restricted cash held at January 31, 2021, November 1, 2020, February 2, 2020, and November 3, 2019 was as follows in millions of dollars: January 31 November 1 February 2 November 3 2021 2020 2020 2019 Equipment operations $ 11 $ 11 $ 21 $ 21 Financial services 91 95 87 78 Total $ 102 $ 106 $ 108 $ 99 |
NEW ACCOUNTING STANDARDS (Table
NEW ACCOUNTING STANDARDS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
NEW ACCOUNTING STANDARDS | |
Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Measurement of Credit Losses on Financial Instruments Guidance | The effects of adopting the ASU on the consolidated balance sheet follows in millions of dollars: November 1 Cumulative Effect November 2 2020 from Adoption 2020 Assets Trade accounts and note receivable - net $ 4,171 $ 2 $ 4,173 Financing receivables - net 29,750 (27) 29,723 Financing receivables securitized - net 4,703 (4) 4,699 Deferred income taxes 1,499 1 1,500 Liabilities Accounts payable and accrued expenses $ 10,112 $ 14 $ 10,126 Deferred income taxes 519 (7) 512 Stockholders’ equity Retained earnings $ 31,646 $ (35) $ 31,611 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Primary geographical markets: United States $ 1,608 $ 1,424 $ 1,202 $ 598 $ 4,832 Canada 112 79 188 154 533 Western Europe 449 486 439 24 1,398 Central Europe and CIS 161 84 178 9 432 Latin America 513 77 170 59 819 Asia, Africa, Australia, New Zealand, and Middle East 304 401 353 40 1,098 Total $ 3,147 $ 2,551 $ 2,530 $ 884 $ 9,112 Major product lines: Production Agriculture $ 3,011 $ 3,011 Small Agriculture $ 1,812 1,812 Turf 651 651 Construction $ 887 887 Compact Construction 346 346 Roadbuilding 910 910 Forestry 290 290 Financial Products 16 10 7 $ 884 917 Other 120 78 90 288 Total $ 3,147 $ 2,551 $ 2,530 $ 884 $ 9,112 Timing of revenue recognition: Revenue recognized at a point in time $ 3,105 $ 2,535 $ 2,500 $ 24 $ 8,164 Revenue recognized over time 42 16 30 860 948 Total $ 3,147 $ 2,551 $ 2,530 $ 884 $ 9,112 Three Months Ended February 2, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Primary geographical markets: United States $ 1,433 $ 1,067 $ 1,020 $ 643 $ 4,163 Canada 75 63 172 156 466 Western Europe 365 413 339 22 1,139 Central Europe and CIS 131 89 159 10 389 Latin America 383 72 159 66 680 Asia, Africa, Australia, New Zealand, and Middle East 189 315 256 34 794 Total $ 2,576 $ 2,019 $ 2,105 $ 931 $ 7,631 Major product lines: Production Agriculture $ 2,425 $ 2,425 Small Agriculture $ 1,479 1,479 Turf 468 468 Construction $ 841 841 Compact Construction 288 288 Roadbuilding 605 605 Forestry 274 274 Financial Products 18 9 7 $ 931 965 Other 133 63 90 286 Total $ 2,576 $ 2,019 $ 2,105 $ 931 $ 7,631 Timing of revenue recognition: Revenue recognized at a point in time $ 2,536 $ 2,004 $ 2,079 $ 26 $ 6,645 Revenue recognized over time 40 15 26 905 986 Total $ 2,576 $ 2,019 $ 2,105 $ 931 $ 7,631 |
OTHER COMPREHENSIVE INCOME IT_2
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 November 3, 2019 $ (3,915) $ (1,651) $ (60) $ 19 $ (5,607) Other comprehensive income (loss) items before reclassification 186 43 (1) 5 233 Amounts reclassified from accumulated other comprehensive income 44 1 45 Net current period other comprehensive income (loss) 230 43 5 278 Balance February 2, 2020 $ (3,685) $ (1,608) $ (60) $ 24 $ (5,329) Balance November 1, 2020 $ (3,918) $ (1,596) $ (58) $ 33 $ (5,539) Other comprehensive income (loss) items before reclassification (1) 396 (2) 393 Amounts reclassified from accumulated other comprehensive income 64 4 68 Net current period other comprehensive income (loss) 63 396 4 (2) 461 Balance January 31, 2021 $ (3,855) $ (1,200) $ (54) $ 31 $ (5,078) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars follow: Before Tax After Tax (Expense) Tax Three Months Ended January 31, 2021 Amount Credit Amount Cumulative translation adjustment $ 394 $ 2 $ 396 Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 5 (1) 4 Net unrealized gain (loss) on derivatives 5 (1) 4 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (3) 1 (2) Net unrealized gain (loss) on debt securities (3) 1 (2) Retirement benefits adjustment: Net actuarial gain (loss) (1) (1) Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 70 (17) 53 Prior service (credit) cost 2 (1) 1 Settlements 13 (3) 10 Net unrealized gain (loss) on retirement benefits adjustment 84 (21) 63 Total other comprehensive income (loss) $ 480 $ (19) $ 461 Before Tax After Tax (Expense) Tax Three Months Ended February 2, 2020 Amount Credit Amount Cumulative translation adjustment $ 43 $ 43 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (2) $ 1 (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 2 (1) 1 Net unrealized gain (loss) on derivatives Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 6 (1) 5 Net unrealized gain (loss) on debt securities 6 (1) 5 Retirement benefits adjustment: Net actuarial gain (loss) 246 (60) 186 Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 69 (28) 41 Prior service (credit) cost 2 (1) 1 Settlements 3 (1) 2 Net unrealized gain (loss) on retirement benefits adjustment 320 (90) 230 Total other comprehensive income (loss) $ 369 $ (91) $ 278 * |
DIVIDENDS DECLARED AND PAID (Ta
DIVIDENDS DECLARED AND PAID (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
DIVIDENDS DECLARED AND PAID | |
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended January 31 February 2 2021 2020 Dividends declared $ .76 $ .76 Dividends paid $ .76 $ .76 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
EARNINGS PER SHARE | |
Reconciliation of Basic and Diluted Net Income Per Share | A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended January 31 February 2 2021 2020 Net income attributable to Deere & Company $ 1,224 $ 517 Average shares outstanding 313.5 313.5 Basic per share $ 3.90 $ 1.65 Average shares outstanding 313.5 313.5 Effect of dilutive share-based compensation 2.6 3.7 Total potential shares outstanding 316.1 317.2 Diluted per share $ 3.87 $ 1.63 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31 February 2 2021 2020 Service cost $ 85 $ 84 Interest cost 69 87 Expected return on plan assets (200) (205) Amortization of actuarial loss 63 62 Amortization of prior service cost 3 3 Settlements 13 3 Net cost $ 33 $ 34 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended January 31 February 2 2021 2020 Service cost $ 12 $ 12 Interest cost 26 37 Expected return on plan assets (19) (12) Amortization of actuarial loss 7 7 Amortization of prior service credit (1) (1) Curtailments 21 Net cost $ 25 $ 64 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31 February 2 % 2021 2020 Change Net sales and revenues: Production & precision ag $ 3,069 $ 2,507 +22 Small ag & turf 2,515 1,979 +27 Construction & forestry 2,467 2,044 +21 Total net sales 8,051 6,530 +23 Financial services 884 931 -5 Other revenues 177 170 +4 Total net sales and revenues $ 9,112 $ 7,631 +19 Operating profit: * Production & precision ag $ 643 $ 218 +195 Small ag & turf 469 155 +203 Construction & forestry 268 93 +188 Financial services 258 179 +44 Total operating profit 1,638 645 +154 Reconciling items ** (106) (78) +36 Income taxes (308) (50) +516 Net income attributable to Deere & Company $ 1,224 $ 517 +137 Intersegment sales and revenues: Production & precision ag net sales $ 6 $ 6 Small ag & turf net sales 3 1 +200 Construction & forestry net sales Financial services 50 67 -25 Equipment operations outside the U.S. and Canada: Net sales $ 3,522 $ 2,780 +27 Operating profit 563 225 +150 * ** 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. At the beginning of fiscal year 2021, the Company reclassified goodwill from identifiable operating segment assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Prior period amounts have been restated for a consistent presentation. January 31 November 1 February 2 2021 2020 2020 Identifiable assets: Production & precision ag $ 6,330 $ 5,708 $ 6,407 Small ag & turf 3,510 3,266 3,838 Construction & forestry 6,341 6,322 7,002 Financial services 48,378 48,719 47,279 Corporate 10,921 11,076 7,295 Total assets $ 75,480 $ 75,091 $ 71,821 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
Financing Receivables | |
Analysis of the Allowance for Credit Losses and Investment in Financing Receivables | An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Three Months Ended January 31, 2021 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Allowance: Beginning of period balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 adoption 44 (13) 31 Provision (credit) 5 (10) (1) (6) Write-offs (8) (5) (13) Recoveries 5 9 14 Translation adjustments 1 1 End of period balance $ 180 $ 24 $ 7 $ 211 Financing receivables: End of period balance $ 27,810 $ 2,685 $ 3,085 $ 33,580 Three Months Ended February 2, 2020 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Allowance: Beginning of period balance $ 107 $ 40 $ 3 $ 150 Provision (credit) 16 (1) 6 21 Write-offs (18) (7) (25) Recoveries 2 8 10 Translation adjustments (1) 2 1 End of period balance $ 106 $ 40 $ 11 $ 157 Financing receivables: End of period balance $ 24,697 $ 2,733 $ 4,499 $ 31,929 |
Customer Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, customer receivables), in millions of dollars at January 31, 2021 was as follows: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 2,531 $ 9,427 $ 5,129 $ 2,817 $ 1,400 $ 686 $ 2,564 $ 24,554 30-59 days past due 4 65 49 30 13 7 27 195 60-89 days past due 20 17 11 5 3 5 61 90+ days past due 1 1 Non-performing 40 78 57 36 46 7 264 Construction and forestry Current 737 2,251 1,276 573 164 39 77 5,117 30-59 days past due 5 53 32 17 6 1 3 117 60-89 days past due 1 15 16 7 3 1 1 44 90+ days past due 9 13 5 4 2 33 Non-performing 26 34 26 14 8 1 109 Total customer receivables $ 3,278 $ 11,906 $ 6,645 $ 3,543 $ 1,645 $ 793 $ 2,685 $ 30,495 |
Age Credit Quality Analysis | The credit quality analysis of customer receivables in millions of dollars at November 1, 2020 and February 2, 2020 was as follows: November 1, 2020 February 2, 2020 Customer receivables: Retail Notes & Financing Leases Revolving Charge Accounts Total Retail Notes & Financing Leases Revolving Charge Accounts Total Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 $ 19,455 $ 2,578 $ 22,033 30-59 days past due 135 13 148 162 53 215 60-89 days past due 64 4 68 71 15 86 90+ days past due 2 2 4 4 Non-performing 263 6 269 301 6 307 Construction and forestry Current 4,859 88 4,947 4,362 75 4,437 30-59 days past due 111 2 113 121 4 125 60-89 days past due 55 1 56 46 1 47 90+ days past due 14 14 19 19 Non-performing 106 1 107 156 1 157 Total customer receivables $ 27,206 $ 3,902 $ 31,108 $ 24,697 $ 2,733 $ 27,430 |
Wholesale Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of wholesale receivables in millions of dollars at January 31, 2021 was as follows: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 78 $ 226 $ 67 $ 18 $ 8 $ 1 $ 2,297 $ 2,695 30-59 days past due 60-89 days past due 90+ days past due Non-performing 35 35 Construction and forestry Current 3 11 20 2 1 2 315 354 30-59 days past due 60-89 days past due 90+ days past due 1 1 Non-performing Total wholesale receivables $ 81 $ 237 $ 122 $ 20 $ 9 $ 4 $ 2,612 $ 3,085 |
Age Credit Quality Analysis | The credit quality analysis of wholesale receivables in millions of dollars at November 1, 2020 and February 2, 2020 was as follows: November 1 February 2 Wholesale receivables: 2020 2020 Agriculture and turf Current $ 3,010 $ 3,938 30-59 days past due 1 60-89 days past due 90+ days past due Non-performing 47 76 Construction and forestry Current 472 482 30-59 days past due 60-89 days past due 90+ days past due Non-performing 2 Total wholesale receivables $ 3,529 $ 4,499 |
SECURITIZATION OF FINANCING R_2
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars: January 31, 2021 Carrying value of liabilities $ 1,097 Maximum exposure to loss 1,120 |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Financing receivables securitized (retail notes) $ 3,946 $ 4,716 $ 4,487 Allowance for credit losses (15) (13) (9) Other assets 95 98 91 Total restricted securitized assets $ 4,026 $ 4,801 $ 4,569 The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Short-term securitization borrowings $ 3,969 $ 4,682 $ 4,416 Accrued interest on borrowings 2 3 5 Total liabilities related to restricted securitized assets $ 3,971 $ 4,685 $ 4,421 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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: January 31 November 1 February 2 2021 2020 2020 Raw materials and supplies $ 2,303 $ 1,995 $ 2,311 Work-in-process 839 648 818 Finished goods and parts 4,485 4,006 4,946 Total FIFO value 7,627 6,649 8,075 Less adjustment to LIFO value 1,671 1,650 1,593 Inventories $ 5,956 $ 4,999 $ 6,482 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segment were as follows in millions of dollars: Production & Precision Ag Small Ag & Turf Construction & Forestry Total Goodwill at November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Translation adjustments and other (2) (1) 31 28 Goodwill at February 2, 2020 $ 308 $ 263 $ 2,374 $ 2,945 Goodwill at November 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments and other 12 (1) 90 101 Goodwill at January 31, 2021 $ 357 $ 267 $ 2,570 $ 3,194 There were no accumulated goodwill impairment losses in the reported periods. |
Components of Other Intangible Assets | The components of other intangible assets were as follows in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Amortized intangible assets: Customer lists and relationships $ 553 $ 535 $ 517 Technology, patents, trademarks, and other 1,099 1,056 1,013 Total at cost 1,652 1,591 1,530 Less accumulated amortization * 433 387 304 Total 1,219 1,204 1,226 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,342 $ 1,327 $ 1,349 * |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
LEASES | |
Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Condensed Consolidated Balance Sheet | Lessee operating and finance lease right of use assets and liabilities follow in millions of dollars: January 31 November 1 February 2 2021 2020 2020 Operating leases: Other assets $ 327 $ 324 $ 376 Accounts payable and accrued expenses 315 305 361 Finance leases: Property and equipment – net $ 57 $ 63 $ 37 Short-term borrowings 20 21 12 Long-term borrowings 36 39 23 Total finance lease liabilities $ 56 $ 60 $ 35 |
Schedule of Right of Use Assets Obtained in Exchange for Lease Liabilities | Right of use assets obtained in exchange for lease liabilities follow in millions of dollars: Three Months Ended January 31, 2021 February 2, 2020 Operating leases $ 22 $ 16 Finance leases 2 9 |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended January 31, 2021 February 2, 2020 Sales-type and direct finance lease revenues $ 36 $ 36 Operating lease revenues 363 374 Variable lease revenues 6 5 Total lease revenues $ 405 $ 415 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Reconciliation of the Changes in Warranty Liability and Unearned Premiums | A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Three Months Ended January 31 February 2 2021 2020 Beginning of period balance $ 1,743 $ 1,800 Payments (215) (230) Amortization of premiums received (63) (59) Accruals for warranties 247 222 Premiums received 73 65 Foreign exchange 18 (6) End of period balance $ 1,803 $ 1,792 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow: January 31, 2021 November 1, 2020 February 2, 2020 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 103 $ 100 $ 105 $ 103 $ 130 $ 123 Financial services 29,335 29,591 29,645 29,838 27,164 27,177 Total $ 29,438 $ 29,691 $ 29,750 $ 29,941 $ 27,294 $ 27,300 Financing receivables Equipment operations $ 18 $ 17 $ 26 $ 26 $ 42 $ 40 Financial services 3,913 4,002 4,677 4,773 4,436 4,464 Total $ 3,931 $ 4,019 $ 4,703 $ 4,799 $ 4,478 $ 4,504 Short-term securitization borrowings: Equipment operations $ 17 $ 17 $ 26 $ 26 $ 42 $ 42 Financial services 3,952 3,986 4,656 4,698 4,374 4,403 Total $ 3,969 $ 4,003 $ 4,682 $ 4,724 $ 4,416 $ 4,445 Long-term borrowings due within one year: ** Equipment operations $ 191 $ 198 $ 79 $ 78 $ 567 $ 567 Financial services 7,341 7,424 6,870 6,936 6,638 6,650 Total $ 7,532 $ 7,622 $ 6,949 $ 7,014 $ 7,205 $ 7,217 Long-term borrowings: ** Equipment operations $ 10,103 $ 11,813 $ 10,085 $ 11,837 $ 5,544 $ 6,403 Financial services 22,633 23,219 22,610 23,170 24,908 25,299 Total $ 32,736 $ 35,032 $ 32,695 $ 35,007 $ 30,452 $ 31,702 * Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings. ** |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow*: January 31 November 1 February 2 2021 2020 2020 Level 1: Marketable securities International equity securities $ 2 $ 2 $ 3 U.S. equity fund 70 62 62 U.S. government debt securities 60 55 52 Total Level 1 marketable securities 132 119 117 Level 2: Marketable securities U.S. government debt securities 119 113 87 Municipal debt securities 71 68 62 Corporate debt securities 197 188 173 International debt securities 8 2 4 Mortgage-backed securities** 140 147 165 Total Level 2 marketable securities 535 518 491 Other assets Derivatives: Interest rate contracts 568 669 443 Foreign exchange contracts 34 48 37 Cross-currency interest rate contracts 3 8 1 Total Level 2 other assets 605 725 481 Accounts payable and accrued expenses Derivatives: Interest rate contracts 97 88 57 Foreign exchange contracts 76 26 40 Cross-currency interest rate contracts 2 1 4 Total Level 2 accounts payable and accrued expenses 175 115 101 Level 3: Marketable securities International debt securities 4 1 * ** |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at January 31, 2021 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 $ 21 $ 22 Due after one through five years 89 94 Due after five through 10 years 117 124 Due after 10 years 203 215 Mortgage-backed securities 134 140 Debt securities $ 564 $ 595 |
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 January 31 February 2 2021 2020 Beginning of period balance $ 4 $ 1 Principal payments Other (4) End of period balance $ 1 |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring Level 3 measurements from impairments in millions of dollars follow: Fair Value * Losses Three Months Ended January 31 November 1 February 2 January 31 February 2 2021 2020 2020 2021 2020 Other receivables $ 1 Equipment on operating leases – net $ 371 Property and equipment – net $ 41 $ 135 $ 44 Investments in unconsolidated affiliates $ 19 Other assets $ 1 $ 59 $ 6 * |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021 Long-term borrowings due within one year* $ 159 $ 2 $ 1 $ 3 Long-term borrowings 8,713 435 137 572 November 1, 2020 Long-term borrowings due within one year* $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 February 2, 2020 Long-term borrowings due within one year* $ 220 $ (1) $ (5) $ (6) Long-term borrowings 9,521 379 (21) 358 * |
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: January 31 November 1 February 2 Other Assets 2021 2020 2020 Designated as hedging instruments: Interest rate contracts $ 491 $ 586 $ 409 Total designated 491 586 409 Not designated as hedging instruments: Interest rate contracts 77 83 34 Foreign exchange contracts 34 48 37 Cross-currency interest rate contracts 3 8 1 Total not designated 114 139 72 Total derivative assets $ 605 $ 725 $ 481 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 31 $ 14 $ 17 Total designated 31 14 17 Not designated as hedging instruments: Interest rate contracts 66 74 40 Foreign exchange contracts 76 26 40 Cross-currency interest rate contracts 2 1 4 Total not designated 144 101 84 Total derivative liabilities $ 175 $ 115 $ 101 |
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 January 31 February 2 2021 2020 Fair Value Hedges: Interest rate contracts - Interest expense $ (55) $ 96 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (2) Reclassified from OCI Interest rate contracts - Interest expense (5) (2) Not Designated as Hedges: Interest rate contracts - Net sales $ (4) Interest rate contracts - Interest expense * $ (4) 2 Foreign exchange contracts - Cost of sales (52) 11 Foreign exchange contracts - Other operating * (126) (1) Total not designated $ (182) $ 8 * |
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows: Gross Amounts Netting January 31, 2021 Recognized Arrangements Collateral Net Amount Assets $ 605 $ (106) $ (186) $ 313 Liabilities 175 (106) 69 Gross Amounts Netting November 1, 2020 Recognized Arrangements Collateral Net Amount Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 Gross Amounts Netting February 2, 2020 Recognized Arrangements Collateral Net Amount Assets $ 481 $ (60) $ (26) $ 395 Liabilities 101 (60) 41 |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
SPECIAL ITEMS | |
Schedule of Impairments and Other Benefits | During the first quarter of 2021, the fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and after-tax Three Months Ended January 31, 2021 Expense (benefit): Production & Precision Ag Small Ag & Turf Construction & Forestry Total Long-lived asset impairments – Cost of sales $ 5 $ 3 $ 42 $ 50 Brazil indirect tax – Cost of sales (53) (5) (58) Total expense (benefit) $ (48) $ 3 $ 37 $ (8) |
Schedule of Employee-Separation Programs Pretax Expenses | 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 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. Three Months Ended February 2, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Cost of sales $ 19 $ 11 $ 9 $ 39 Research and development expenses 6 7 3 16 Selling, administrative and general expenses 17 18 12 $ 3 50 Total operating profit impact $ 42 $ 36 $ 24 $ 3 105 Other operating expenses 22 Total expense $ 127 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Nov. 01, 2020 | |
Fiscal period duration | 91 days | 91 days | |
VIE-Not Primary Beneficiary | |||
Maximum Exposure to Losses | |||
Maximum exposure to loss | $ 1,120 | ||
VIE-Not Primary Beneficiary | Brazilian Construction Equipment Manufacturer Joint Venture | |||
Maximum Exposure to Losses | |||
Maximum exposure to loss | 7 | $ 19 | $ 5 |
Wirtgen Group Holding GmbH (Wirtgen) | |||
Net sales | $ 270 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jan. 31, 2021 | Feb. 02, 2020 | Nov. 01, 2020 | Nov. 03, 2019 | |
Transfer of inventory to equipment on operating leases | $ 84 | $ 112 | ||
Accounts payable related to purchases of property and equipment | 39 | 48 | ||
Restricted cash | 102 | 108 | $ 106 | $ 99 |
Equipment Operations | ||||
Restricted cash | 11 | 21 | 11 | 21 |
Financial Services | ||||
Restricted cash | $ 91 | $ 87 | $ 95 | $ 78 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jan. 31, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | Feb. 02, 2020 | |
Assets | ||||
Trade accounts and notes receivable - net | $ 5,037 | $ 4,173 | $ 4,171 | $ 5,360 |
Financing receivables - net | 29,438 | 29,723 | 29,750 | 27,294 |
Financing receivables securitized - net | 3,931 | 4,699 | 4,703 | 4,478 |
Deferred income taxes | 1,556 | 1,500 | 1,499 | 1,414 |
Liabilities | ||||
Accounts payable and accrued expenses | 9,404 | 10,126 | 10,112 | 8,630 |
Deferred income taxes | 532 | 512 | 519 | 491 |
Stockholders' Equity | ||||
Retained earnings | $ 32,596 | $ 31,611 | 31,646 | $ 30,129 |
ASU 2016-13 | ||||
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] | de:AccountingStandardsUpdate201613CumulativeEffectPeriodOfAdoptionMember | |||
ASU 2016-13 | Cumulative Effect from Adoption | ||||
Assets | ||||
Trade accounts and notes receivable - net | 2 | |||
Financing receivables - net | (27) | |||
Financing receivables securitized - net | (4) | |||
Deferred income taxes | 1 | |||
Liabilities | ||||
Accounts payable and accrued expenses | 14 | |||
Deferred income taxes | (7) | |||
Stockholders' Equity | ||||
Retained earnings | $ (35) | |||
ASU 2018-15 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2019-04 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2021-01 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2019-12 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |||
ASU 2020-08 | ||||
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 | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Revenue Recognition | ||
Net sales and revenues | $ 9,112 | $ 7,631 |
Revenue recognized at a point in time | ||
Revenue Recognition | ||
Net sales and revenues | 8,164 | 6,645 |
Revenue recognized over time | ||
Revenue Recognition | ||
Net sales and revenues | 948 | 986 |
Production Agriculture | ||
Revenue Recognition | ||
Net sales | 3,011 | 2,425 |
Small Agriculture | ||
Revenue Recognition | ||
Net sales | 1,812 | 1,479 |
Turf | ||
Revenue Recognition | ||
Net sales | 651 | 468 |
Construction | ||
Revenue Recognition | ||
Net sales | 887 | 841 |
Compact Construction | ||
Revenue Recognition | ||
Net sales | 346 | 288 |
Roadbuilding | ||
Revenue Recognition | ||
Net sales | 910 | 605 |
Forestry | ||
Revenue Recognition | ||
Net sales | 290 | 274 |
Financial Products | ||
Revenue Recognition | ||
Net sales and revenues | 917 | 965 |
Other | ||
Revenue Recognition | ||
Net sales and revenues | 288 | 286 |
United States | ||
Revenue Recognition | ||
Net sales and revenues | 4,832 | 4,163 |
Canada | ||
Revenue Recognition | ||
Net sales and revenues | 533 | 466 |
Western Europe | ||
Revenue Recognition | ||
Net sales and revenues | 1,398 | 1,139 |
Central Europe and CIS | ||
Revenue Recognition | ||
Net sales and revenues | 432 | 389 |
Latin America | ||
Revenue Recognition | ||
Net sales and revenues | 819 | 680 |
Asia, Africa, Australia, New Zealand, and Middle East | ||
Revenue Recognition | ||
Net sales and revenues | 1,098 | 794 |
Production & Precision Ag | ||
Revenue Recognition | ||
Net sales and revenues | 3,147 | 2,576 |
Production & Precision Ag | Revenue recognized at a point in time | ||
Revenue Recognition | ||
Net sales and revenues | 3,105 | 2,536 |
Production & Precision Ag | Revenue recognized over time | ||
Revenue Recognition | ||
Net sales and revenues | 42 | 40 |
Production & Precision Ag | Production Agriculture | ||
Revenue Recognition | ||
Net sales | 3,011 | 2,425 |
Production & Precision Ag | Financial Products | ||
Revenue Recognition | ||
Net sales and revenues | 16 | 18 |
Production & Precision Ag | Other | ||
Revenue Recognition | ||
Net sales and revenues | 120 | 133 |
Production & Precision Ag | United States | ||
Revenue Recognition | ||
Net sales and revenues | 1,608 | 1,433 |
Production & Precision Ag | Canada | ||
Revenue Recognition | ||
Net sales and revenues | 112 | 75 |
Production & Precision Ag | Western Europe | ||
Revenue Recognition | ||
Net sales and revenues | 449 | 365 |
Production & Precision Ag | Central Europe and CIS | ||
Revenue Recognition | ||
Net sales and revenues | 161 | 131 |
Production & Precision Ag | Latin America | ||
Revenue Recognition | ||
Net sales and revenues | 513 | 383 |
Production & Precision Ag | Asia, Africa, Australia, New Zealand, and Middle East | ||
Revenue Recognition | ||
Net sales and revenues | 304 | 189 |
Small Ag & Turf | ||
Revenue Recognition | ||
Net sales and revenues | 2,551 | 2,019 |
Small Ag & Turf | Revenue recognized at a point in time | ||
Revenue Recognition | ||
Net sales and revenues | 2,535 | 2,004 |
Small Ag & Turf | Revenue recognized over time | ||
Revenue Recognition | ||
Net sales and revenues | 16 | 15 |
Small Ag & Turf | Small Agriculture | ||
Revenue Recognition | ||
Net sales | 1,812 | 1,479 |
Small Ag & Turf | Turf | ||
Revenue Recognition | ||
Net sales | 651 | 468 |
Small Ag & Turf | Financial Products | ||
Revenue Recognition | ||
Net sales and revenues | 10 | 9 |
Small Ag & Turf | Other | ||
Revenue Recognition | ||
Net sales and revenues | 78 | 63 |
Small Ag & Turf | United States | ||
Revenue Recognition | ||
Net sales and revenues | 1,424 | 1,067 |
Small Ag & Turf | Canada | ||
Revenue Recognition | ||
Net sales and revenues | 79 | 63 |
Small Ag & Turf | Western Europe | ||
Revenue Recognition | ||
Net sales and revenues | 486 | 413 |
Small Ag & Turf | Central Europe and CIS | ||
Revenue Recognition | ||
Net sales and revenues | 84 | 89 |
Small Ag & Turf | Latin America | ||
Revenue Recognition | ||
Net sales and revenues | 77 | 72 |
Small Ag & Turf | Asia, Africa, Australia, New Zealand, and Middle East | ||
Revenue Recognition | ||
Net sales and revenues | 401 | 315 |
Construction & Forestry | ||
Revenue Recognition | ||
Net sales and revenues | 2,530 | 2,105 |
Construction & Forestry | Revenue recognized at a point in time | ||
Revenue Recognition | ||
Net sales and revenues | 2,500 | 2,079 |
Construction & Forestry | Revenue recognized over time | ||
Revenue Recognition | ||
Net sales and revenues | 30 | 26 |
Construction & Forestry | Construction | ||
Revenue Recognition | ||
Net sales | 887 | 841 |
Construction & Forestry | Compact Construction | ||
Revenue Recognition | ||
Net sales | 346 | 288 |
Construction & Forestry | Roadbuilding | ||
Revenue Recognition | ||
Net sales | 910 | 605 |
Construction & Forestry | Forestry | ||
Revenue Recognition | ||
Net sales | 290 | 274 |
Construction & Forestry | Financial Products | ||
Revenue Recognition | ||
Net sales and revenues | 7 | 7 |
Construction & Forestry | Other | ||
Revenue Recognition | ||
Net sales and revenues | 90 | 90 |
Construction & Forestry | United States | ||
Revenue Recognition | ||
Net sales and revenues | 1,202 | 1,020 |
Construction & Forestry | Canada | ||
Revenue Recognition | ||
Net sales and revenues | 188 | 172 |
Construction & Forestry | Western Europe | ||
Revenue Recognition | ||
Net sales and revenues | 439 | 339 |
Construction & Forestry | Central Europe and CIS | ||
Revenue Recognition | ||
Net sales and revenues | 178 | 159 |
Construction & Forestry | Latin America | ||
Revenue Recognition | ||
Net sales and revenues | 170 | 159 |
Construction & Forestry | Asia, Africa, Australia, New Zealand, and Middle East | ||
Revenue Recognition | ||
Net sales and revenues | 353 | 256 |
Financial Services | ||
Revenue Recognition | ||
Net sales and revenues | 884 | 931 |
Financial Services | Revenue recognized at a point in time | ||
Revenue Recognition | ||
Net sales and revenues | 24 | 26 |
Financial Services | Revenue recognized over time | ||
Revenue Recognition | ||
Net sales and revenues | 860 | 905 |
Financial Services | Financial Products | ||
Revenue Recognition | ||
Net sales and revenues | 884 | 931 |
Financial Services | United States | ||
Revenue Recognition | ||
Net sales and revenues | 598 | 643 |
Financial Services | Canada | ||
Revenue Recognition | ||
Net sales and revenues | 154 | 156 |
Financial Services | Western Europe | ||
Revenue Recognition | ||
Net sales and revenues | 24 | 22 |
Financial Services | Central Europe and CIS | ||
Revenue Recognition | ||
Net sales and revenues | 9 | 10 |
Financial Services | Latin America | ||
Revenue Recognition | ||
Net sales and revenues | 59 | 66 |
Financial Services | Asia, Africa, Australia, New Zealand, and Middle East | ||
Revenue Recognition | ||
Net sales and revenues | $ 40 | $ 34 |
REVENUE RECOGNITION - Advanced
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Nov. 01, 2020 | |
Advanced customer payments | |||
Deferred revenue received | $ 1,169 | $ 1,070 | $ 1,090 |
Revenue recognized from deferred revenue | $ 223 | $ 181 |
REVENUE RECOGNITION - Unsatisfi
REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions | Jan. 31, 2021USD ($) |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 925 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-02-01 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 274 |
Period estimated revenue to be recognized | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-11-01 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 291 |
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 | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 195 |
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 | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 104 |
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 | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 43 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-11-03 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 15 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-11-02 | |
Unsatisfied performance obligations | |
Unsatisfied 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) - Trade Accounts and Notes Receivable - COVID-19 - Maximum | 9 Months Ended |
Nov. 01, 2020 | |
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 | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Accumulated other comprehensive income (loss) | ||
Balance | $ 12,937 | |
Net current period other comprehensive income (loss) | 461 | $ 278 |
Balance | 14,083 | 11,926 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated other comprehensive income (loss) | ||
Balance | (5,539) | (5,607) |
Other comprehensive income (loss) items before reclassification | 393 | 233 |
Amounts reclassified from accumulated other comprehensive income | 68 | 45 |
Net current period other comprehensive income (loss) | 461 | 278 |
Balance | (5,078) | (5,329) |
Retirement Benefits Adjustment | ||
Accumulated other comprehensive income (loss) | ||
Balance | (3,918) | (3,915) |
Other comprehensive income (loss) items before reclassification | (1) | 186 |
Amounts reclassified from accumulated other comprehensive income | 64 | 44 |
Net current period other comprehensive income (loss) | 63 | 230 |
Balance | (3,855) | (3,685) |
Cumulative Translation Adjustment | ||
Accumulated other comprehensive income (loss) | ||
Balance | (1,596) | (1,651) |
Other comprehensive income (loss) items before reclassification | 396 | 43 |
Net current period other comprehensive income (loss) | 396 | 43 |
Balance | (1,200) | (1,608) |
Unrealized Gain (Loss) on Derivatives | ||
Accumulated other comprehensive income (loss) | ||
Balance | (58) | (60) |
Other comprehensive income (loss) items before reclassification | (1) | |
Amounts reclassified from accumulated other comprehensive income | 4 | 1 |
Net current period other comprehensive income (loss) | 4 | |
Balance | (54) | (60) |
Unrealized Gain (Loss) on Debt Securities | ||
Accumulated other comprehensive income (loss) | ||
Balance | 33 | 19 |
Other comprehensive income (loss) items before reclassification | (2) | 5 |
Net current period other comprehensive income (loss) | (2) | 5 |
Balance | $ 31 | $ 24 |
OTHER COMPREHENSIVE INCOME IT_4
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Other Comprehensive Income (Loss), Before Tax | ||
Interest expense | $ (271) | $ (336) |
Total other comprehensive income (loss), before tax | 480 | 369 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Total other comprehensive income (loss), tax (expense) credit | (19) | (91) |
Other Comprehensive Income (Loss), After Tax | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 461 | 278 |
Cumulative Translation Adjustment | ||
Other Comprehensive Income (Loss), Before Tax | ||
Total other comprehensive income (loss), before tax | 394 | 43 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Total other comprehensive income (loss), tax (expense) credit | 2 | |
Other Comprehensive Income (Loss), After Tax | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 396 | 43 |
Unrealized Gain (Loss) on Derivatives | ||
Other Comprehensive Income (Loss), Before Tax | ||
Other comprehensive income (loss) before reclassification, before tax | (2) | |
Total other comprehensive income (loss), before tax | 5 | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 1 | |
Total other comprehensive income (loss), tax (expense) credit | (1) | |
Other Comprehensive Income (Loss), After Tax | ||
Other comprehensive income (loss) before reclassification, after tax | (1) | |
Other Comprehensive Income (Loss), Net of Income Taxes | 4 | |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of accumulated other comprehensive income (loss) | ||
Other Comprehensive Income (Loss), Before Tax | ||
Interest expense | 5 | 2 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (1) |
Other Comprehensive Income (Loss), After Tax | ||
Reclassification from accumulated other comprehensive income, after tax | 4 | 1 |
Unrealized Gain (Loss) on Debt Securities | ||
Other Comprehensive Income (Loss), Before Tax | ||
Other comprehensive income (loss) before reclassification, before tax | (3) | 6 |
Total other comprehensive income (loss), before tax | (3) | 6 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 1 | (1) |
Total other comprehensive income (loss), tax (expense) credit | 1 | (1) |
Other Comprehensive Income (Loss), After Tax | ||
Other comprehensive income (loss) before reclassification, after tax | (2) | 5 |
Other Comprehensive Income (Loss), Net of Income Taxes | (2) | 5 |
Retirement Benefits Adjustment | ||
Other Comprehensive Income (Loss), Before Tax | ||
Other comprehensive income (loss) before reclassification, before tax | (1) | 246 |
Total other comprehensive income (loss), before tax | 84 | 320 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (60) | |
Total other comprehensive income (loss), tax (expense) credit | (21) | (90) |
Other Comprehensive Income (Loss), After Tax | ||
Other comprehensive income (loss) before reclassification, after tax | (1) | 186 |
Other Comprehensive Income (Loss), Net of Income Taxes | 63 | 230 |
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | ||
Other Comprehensive Income (Loss), Before Tax | ||
Other operating expenses | 70 | 69 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (17) | (28) |
Other Comprehensive Income (Loss), After Tax | ||
Reclassification from accumulated other comprehensive income, after tax | 53 | 41 |
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | ||
Other Comprehensive Income (Loss), Before Tax | ||
Other operating expenses | 2 | 2 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (1) |
Other Comprehensive Income (Loss), After Tax | ||
Reclassification from accumulated other comprehensive income, after tax | 1 | 1 |
Settlements | Reclassification out of accumulated other comprehensive income (loss) | ||
Other Comprehensive Income (Loss), Before Tax | ||
Other operating expenses | 13 | 3 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (3) | (1) |
Other Comprehensive Income (Loss), After Tax | ||
Reclassification from accumulated other comprehensive income, after tax | $ 10 | $ 2 |
OTHER COMPREHENSIVE INCOME IT_5
OTHER COMPREHENSIVE INCOME ITEMS - Noncontrolling Interests' (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | ||
Comprehensive income (loss) attributable to noncontrolling interests | $ 0 | $ 1 |
Net income attributable to noncontrolling interests | $ 0 | $ 1 |
DIVIDENDS DECLARED AND PAID (De
DIVIDENDS DECLARED AND PAID (Details) - $ / shares | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
DIVIDENDS DECLARED AND PAID | ||
Dividends declared (in dollars per share) | $ 0.76 | $ 0.76 |
Dividends paid (in dollars per share) | $ 0.76 | $ 0.76 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
EARNINGS PER SHARE | ||
Net income attributable to Deere & Company | $ 1,224 | $ 517 |
Average shares outstanding | 313.5 | 313.5 |
Basic (in dollars per share) | $ 3.90 | $ 1.65 |
Diluted Earnings Per Share | ||
Average shares outstanding | 313.5 | 313.5 |
Effect of dilutive share-based compensation (in shares) | 2.6 | 3.7 |
Total potential shares outstanding | 316.1 | 317.2 |
Diluted (in dollars per share) | $ 3.87 | $ 1.63 |
Antidilutive incremental shares excluded from computation of earnings per share | 0.1 | 0.2 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Net Periodic Cost | ||
Location of costs excluding the service component | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue |
Pensions | ||
Net Periodic Cost | ||
Service cost | $ 85 | $ 84 |
Interest cost | 69 | 87 |
Expected return on plan assets | (200) | (205) |
Amortization of actuarial loss | 63 | 62 |
Amortization of prior service (credit) cost | 3 | 3 |
Settlements | 13 | 3 |
Net cost | 33 | 34 |
Employer Contributions | ||
Defined benefit plan employer contributions | 42 | |
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 58 | |
OPEB | ||
Net Periodic Cost | ||
Service cost | 12 | 12 |
Interest cost | 26 | 37 |
Expected return on plan assets | (19) | (12) |
Amortization of actuarial loss | 7 | 7 |
Amortization of prior service (credit) cost | (1) | (1) |
Curtailments | 21 | |
Net cost | 25 | 64 |
Employer Contributions | ||
Defined benefit plan employer contributions | 57 | |
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 789 | |
OPEB | United States | ||
Employer Contributions | ||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $ 700 | |
OPEB | United States | 2020 Employee-Separation Programs | ||
Net Periodic Cost | ||
Curtailments | $ 21 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Feb. 02, 2020 | Nov. 01, 2020 | |
INCOME TAXES | |||
Capital loss carryback | $ 43 | ||
Excess tax benefits on equity compensation | $ (39) | (24) | |
UNRECOGNIZED TAX BENEFITS | |||
Unrecognized tax benefits | 710 | $ 668 | |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 148 | $ 105 | $ 134 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021USD ($)segment | Feb. 02, 2020USD ($) | Nov. 01, 2020USD ($) | |
Operating Segments | |||
Number of reportable segments | segment | 4 | ||
Net Sales and Revenues | |||
Net sales and revenues | $ 9,112 | $ 7,631 | |
% Change - Net sales and revenues | 19.00% | ||
Operating Profit (Loss) | |||
Total operating profit | $ 1,638 | 645 | |
% Change - Operating profit | 154.00% | ||
Net income attributable to Deere & Company | $ 1,224 | 517 | |
% Change - Net income attributable to Deere & Company | 137.00% | ||
Identifiable Assets | |||
Total Assets | $ 75,480 | 71,821 | $ 75,091 |
Operating Segments (Other) | |||
Reconciling items | $ (106) | (78) | |
% Change - Reconciling items | 36.00% | ||
Income taxes | $ (308) | (50) | |
% Change - Income taxes | 516.00% | ||
Equipment Operations | Outside U.S. and Canada: | |||
Net Sales and Revenues | |||
Net sales and revenues | $ 3,522 | 2,780 | |
% Change - Net sales and revenues | 27.00% | ||
Operating Profit (Loss) | |||
Total operating profit | $ 563 | 225 | |
% Change - Operating profit | 150.00% | ||
Corporate | |||
Identifiable Assets | |||
Total Assets | $ 10,921 | 7,295 | 11,076 |
Other Revenues | |||
Net Sales and Revenues | |||
Net sales and revenues | $ 177 | 170 | |
% Change - Net sales and revenues | 4.00% | ||
Production & Precision Ag | |||
Net Sales and Revenues | |||
Net sales and revenues | $ 3,147 | 2,576 | |
Intersegment sales and revenues | 6 | 6 | |
Operating Profit (Loss) | |||
Total operating profit | $ 643 | 218 | |
% Change - Operating profit | 195.00% | ||
Identifiable Assets | |||
Total Assets | $ 6,330 | 6,407 | 5,708 |
Small Ag & Turf | |||
Net Sales and Revenues | |||
Net sales and revenues | 2,551 | 2,019 | |
Intersegment sales and revenues | $ 3 | 1 | |
% Change - Intersegment sales and revenues | 200.00% | ||
Operating Profit (Loss) | |||
Total operating profit | $ 469 | 155 | |
% Change - Operating profit | 203.00% | ||
Identifiable Assets | |||
Total Assets | $ 3,510 | 3,838 | 3,266 |
Construction & Forestry | |||
Net Sales and Revenues | |||
Net sales and revenues | 2,530 | 2,105 | |
Operating Profit (Loss) | |||
Total operating profit | $ 268 | 93 | |
% Change - Operating profit | 188.00% | ||
Identifiable Assets | |||
Total Assets | $ 6,341 | 7,002 | 6,322 |
Financial Services | |||
Net Sales and Revenues | |||
Net sales and revenues | $ 884 | 931 | |
% Change - Net sales and revenues | (5.00%) | ||
Intersegment sales and revenues | $ 50 | 67 | |
% Change - Intersegment sales and revenues | (25.00%) | ||
Operating Profit (Loss) | |||
Total operating profit | $ 258 | 179 | |
% Change - Operating profit | 44.00% | ||
Identifiable Assets | |||
Total Assets | $ 48,378 | 47,279 | $ 48,719 |
Net Sales | |||
Net Sales and Revenues | |||
Net sales | $ 8,051 | 6,530 | |
% Change - Net sales | 23.00% | ||
Net Sales | Production & Precision Ag | |||
Net Sales and Revenues | |||
Net sales | $ 3,069 | 2,507 | |
% Change - Net sales | 22.00% | ||
Net Sales | Small Ag & Turf | |||
Net Sales and Revenues | |||
Net sales | $ 2,515 | 1,979 | |
% Change - Net sales | 27.00% | ||
Net Sales | Construction & Forestry | |||
Net Sales and Revenues | |||
Net sales | $ 2,467 | $ 2,044 | |
% Change - Net sales | 21.00% |
FINANCING RECEIVABLES - Financi
FINANCING RECEIVABLES - Financing Receivables Past Due (Details) | 3 Months Ended |
Jan. 31, 2021 | |
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 |
COVID-19 | |
Financing Receivable, Past Due | |
Financing receivables balance granted relief (as a percent) | 4.00% |
FINANCING RECEIVABLES - Retail
FINANCING RECEIVABLES - Retail Notes, Financing Leases, and Revolving Charge Accounts Credit Quality Analysis (Details) - Customer Receivables - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Credit Quality Analysis | |||
2021 | $ 3,278 | ||
2020 | 11,906 | ||
2019 | 6,645 | ||
2018 | 3,543 | ||
2017 | 1,645 | ||
Prior | 793 | ||
Revolving | 2,685 | ||
Total customer receivables | 30,495 | $ 31,108 | $ 27,430 |
Agriculture and Turf | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 4 | ||
2020 | 65 | ||
2019 | 49 | ||
2018 | 30 | ||
2017 | 13 | ||
Prior | 7 | ||
Revolving | 27 | ||
Total customer receivables | 195 | ||
Agriculture and Turf | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2020 | 20 | ||
2019 | 17 | ||
2018 | 11 | ||
2017 | 5 | ||
Prior | 3 | ||
Revolving | 5 | ||
Total customer receivables | 61 | ||
Agriculture and Turf | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2019 | 1 | ||
Total customer receivables | 1 | ||
Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 2,531 | ||
2020 | 9,427 | ||
2019 | 5,129 | ||
2018 | 2,817 | ||
2017 | 1,400 | ||
Prior | 686 | ||
Revolving | 2,564 | ||
Total customer receivables | 24,554 | ||
Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2020 | 40 | ||
2019 | 78 | ||
2018 | 57 | ||
2017 | 36 | ||
Prior | 46 | ||
Revolving | 7 | ||
Total customer receivables | 264 | ||
Construction and Forestry | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 5 | ||
2020 | 53 | ||
2019 | 32 | ||
2018 | 17 | ||
2017 | 6 | ||
Prior | 1 | ||
Revolving | 3 | ||
Total customer receivables | 117 | ||
Construction and Forestry | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 1 | ||
2020 | 15 | ||
2019 | 16 | ||
2018 | 7 | ||
2017 | 3 | ||
Prior | 1 | ||
Revolving | 1 | ||
Total customer receivables | 44 | ||
Construction and Forestry | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2020 | 9 | ||
2019 | 13 | ||
2018 | 5 | ||
2017 | 4 | ||
Prior | 2 | ||
Total customer receivables | 33 | ||
Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 737 | ||
2020 | 2,251 | ||
2019 | 1,276 | ||
2018 | 573 | ||
2017 | 164 | ||
Prior | 39 | ||
Revolving | 77 | ||
Total customer receivables | 5,117 | ||
Construction and Forestry | Non-performing | |||
Credit Quality Analysis | |||
2020 | 26 | ||
2019 | 34 | ||
2018 | 26 | ||
2017 | 14 | ||
Prior | 8 | ||
Revolving | 1 | ||
Total customer receivables | $ 109 |
FINANCING RECEIVABLES - Custome
FINANCING RECEIVABLES - Customer Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Customer Receivables | |||
Age Credit Quality Analysis | |||
Total customer receivables | $ 30,495 | $ 31,108 | $ 27,430 |
Customer Receivables | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 25,384 | 22,033 | |
Non-performing | 269 | 307 | |
Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 148 | 215 | |
Total customer receivables | 195 | ||
Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 68 | 86 | |
Total customer receivables | 61 | ||
Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 2 | 4 | |
Total customer receivables | 1 | ||
Customer Receivables | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | 4,947 | 4,437 | |
Non-performing | 107 | 157 | |
Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 113 | 125 | |
Total customer receivables | 117 | ||
Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 56 | 47 | |
Total customer receivables | 44 | ||
Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 14 | 19 | |
Total customer receivables | $ 33 | ||
Retail Notes and Financing Leases | |||
Age Credit Quality Analysis | |||
Total customer receivables | 27,206 | 24,697 | |
Retail Notes and Financing Leases | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 21,597 | 19,455 | |
Non-performing | 263 | 301 | |
Retail Notes and Financing Leases | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 135 | 162 | |
Retail Notes and Financing Leases | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 64 | 71 | |
Retail Notes and Financing Leases | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 2 | 4 | |
Retail Notes and Financing Leases | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | 4,859 | 4,362 | |
Non-performing | 106 | 156 | |
Retail Notes and Financing Leases | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 111 | 121 | |
Retail Notes and Financing Leases | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 55 | 46 | |
Retail Notes and Financing Leases | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 14 | 19 | |
Revolving Charge Accounts | |||
Age Credit Quality Analysis | |||
Total customer receivables | 3,902 | 2,733 | |
Revolving Charge Accounts | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 3,787 | 2,578 | |
Non-performing | 6 | 6 | |
Revolving Charge Accounts | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 13 | 53 | |
Revolving Charge Accounts | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 4 | 15 | |
Revolving Charge Accounts | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | 88 | 75 | |
Non-performing | 1 | 1 | |
Revolving Charge Accounts | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 2 | 4 | |
Revolving Charge Accounts | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | $ 1 | $ 1 |
FINANCING RECEIVABLES - Wholesa
FINANCING RECEIVABLES - Wholesale Receivables Credit Quality Analysis (Details) - Wholesale Receivables - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Credit Quality Analysis | |||
2021 | $ 81 | ||
2020 | 237 | ||
2019 | 122 | ||
2018 | 20 | ||
2017 | 9 | ||
Prior | 4 | ||
Revolving | 2,612 | ||
Total wholesale receivables | 3,085 | $ 3,529 | $ 4,499 |
Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 78 | ||
2020 | 226 | ||
2019 | 67 | ||
2018 | 18 | ||
2017 | 8 | ||
Prior | 1 | ||
Revolving | 2,297 | ||
Total wholesale receivables | 2,695 | ||
Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2019 | 35 | ||
Total wholesale receivables | 35 | ||
Construction and Forestry | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
Prior | 1 | ||
Total wholesale receivables | 1 | ||
Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 3 | ||
2020 | 11 | ||
2019 | 20 | ||
2018 | 2 | ||
2017 | 1 | ||
Prior | 2 | ||
Revolving | 315 | ||
Total wholesale receivables | $ 354 |
FINANCING RECEIVABLES - Whole_2
FINANCING RECEIVABLES - Wholesale Receivables Age Credit Quality Analysis (Details) - Wholesale Receivables - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 3,085 | $ 3,529 | $ 4,499 |
Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 3,010 | 3,938 | |
Non-performing | 47 | 76 | |
Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 1 | ||
Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | $ 472 | 482 | |
Non-performing | $ 2 | ||
Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 1 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Allowance: | ||
Beginning of period balance | $ 184 | $ 150 |
Provision (credit) | (6) | |
Provision (credit) | 21 | |
Write-offs | (13) | (25) |
Recoveries | 14 | 10 |
Translation adjustments | 1 | |
Translation adjustments | 1 | |
End of period balance | 211 | 157 |
Financing receivables: | ||
End of period balance | 33,580 | 31,929 |
Cumulative Effect from Adoption | ASU 2016-13 | ||
Allowance: | ||
Beginning of period balance | 31 | |
Retail Notes and Financing Leases | ||
Allowance: | ||
Beginning of period balance | 133 | 107 |
Provision (credit) | 5 | |
Provision (credit) | 16 | |
Write-offs | (8) | (18) |
Recoveries | 5 | 2 |
Translation adjustments | 1 | |
Translation adjustments | (1) | |
End of period balance | 180 | 106 |
Financing receivables: | ||
End of period balance | 27,810 | 24,697 |
Retail Notes and Financing Leases | Cumulative Effect from Adoption | ASU 2016-13 | ||
Allowance: | ||
Beginning of period balance | 44 | |
Revolving Charge Accounts | ||
Allowance: | ||
Beginning of period balance | 43 | 40 |
Provision (credit) | (10) | |
Provision (credit) | (1) | |
Write-offs | (5) | (7) |
Recoveries | 9 | 8 |
End of period balance | 24 | 40 |
Financing receivables: | ||
End of period balance | 2,685 | 2,733 |
Revolving Charge Accounts | Cumulative Effect from Adoption | ASU 2016-13 | ||
Allowance: | ||
Beginning of period balance | (13) | |
Wholesale Receivables | ||
Allowance: | ||
Beginning of period balance | 8 | 3 |
Provision (credit) | (1) | |
Provision (credit) | 6 | |
Translation adjustments | 2 | |
End of period balance | 7 | 11 |
Financing receivables: | ||
End of period balance | $ 3,085 | $ 4,499 |
FINANCING RECEIVABLES - Trouble
FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 3 Months Ended | |
Jan. 31, 2021USD ($)item | Feb. 02, 2020USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | ||
Financing receivable contracts in troubled debt restructuring, number | item | 98 | 88 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 5 | $ 85 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 5 | $ 74 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 |
SECURITIZATION OF FINANCING R_3
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 | |
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | $ 61,394 | $ 62,147 | $ 59,877 |
Short-term securitization borrowings | 3,969 | 4,682 | 4,416 |
Accrued interest on borrowings - securitization transactions | 2 | 3 | 5 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 3,971 | 4,685 | 4,421 |
Maximum remaining term of all restricted securitized retail notes | 6 years | ||
Securitized | |||
Securitization Transactions | |||
Financing receivables securitized (retail notes) | $ 3,946 | 4,716 | 4,487 |
Allowance for credit losses - securitization transactions | (15) | (13) | (9) |
Other assets - securitization transactions | 95 | 98 | 91 |
Total restricted securitized assets - securitization transactions | 4,026 | 4,801 | 4,569 |
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 2,425 | 2,898 | 2,490 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,403 | 2,856 | 2,442 |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 481 | 576 | 638 |
Total liabilities related to restricted securitized assets - securitization transactions | 471 | 554 | 609 |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | 1,097 | ||
Unconsolidated conduits, maximum exposure to loss | 1,120 | ||
Total Assets | 37,000 | ||
Total restricted securitized assets - securitization transactions | 1,120 | 1,327 | 1,441 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,097 | $ 1,275 | $ 1,370 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
INVENTORIES | |||
Raw materials and supplies | $ 2,303 | $ 1,995 | $ 2,311 |
Work-in-process | 839 | 648 | 818 |
Finished goods and parts | 4,485 | 4,006 | 4,946 |
Total FIFO value | 7,627 | 6,649 | 8,075 |
Less adjustment to LIFO value | 1,671 | 1,650 | 1,593 |
Inventories | $ 5,956 | $ 4,999 | $ 6,482 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 3,081 | $ 2,917 |
Acquisitions | 12 | |
Translation adjustments and other | 101 | 28 |
Goodwill - net, ending balance | 3,194 | 2,945 |
Accumulated goodwill impairment losses | 0 | 0 |
Production & Precision Ag | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 333 | 310 |
Acquisitions | 12 | |
Translation adjustments and other | 12 | (2) |
Goodwill - net, ending balance | 357 | 308 |
Small Ag & Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 268 | 264 |
Translation adjustments and other | (1) | (1) |
Goodwill - net, ending balance | 267 | 263 |
Construction & Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 2,480 | 2,343 |
Translation adjustments and other | 90 | 31 |
Goodwill - net, ending balance | $ 2,570 | $ 2,374 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Amortized intangible assets: | |||
Total at cost | $ 1,652 | $ 1,591 | $ 1,530 |
Less accumulated amortization | 433 | 387 | 304 |
Total amortized intangible assets - net | 1,219 | 1,204 | 1,226 |
Unamortized intangible assets: | |||
Other intangible assets - net | 1,342 | 1,327 | 1,349 |
Customer Lists and Relationships | |||
Amortized intangible assets: | |||
Total at cost | 553 | 535 | 517 |
Less accumulated amortization | 128 | 113 | 86 |
Technology, Patents, Trademarks and Other | |||
Amortized intangible assets: | |||
Total at cost | 1,099 | 1,056 | 1,013 |
Less accumulated amortization | 305 | 274 | 218 |
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 | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Amortized Intangible Assets: | ||
Amortization expense of other intangible assets | $ 34 | $ 25 |
Amortization expense of other intangible assets - remainder of 2021 | 82 | |
Amortization expense of other intangible assets - 2022 | 109 | |
Amortization expense of other intangible assets - 2023 | 107 | |
Amortization expense of other intangible assets - 2024 | 103 | |
Amortization expense of other intangible assets - 2025 | 100 | |
Amortization expense of other intangible assets - 2026 | $ 98 |
LEASES - Lease Right of Use Ass
LEASES - Lease Right of Use Assets and Liabilities - (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Lessee | |||
Operating leases - Other assets | $ 327 | $ 324 | $ 376 |
Operating lease, right-of-use asset, Condensed Consolidated Balance Sheet location | us-gaap:OtherAssets | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating leases - Accounts payable and accrued expenses | $ 315 | $ 305 | $ 361 |
Operating lease, liability, Condensed Consolidated Balance Sheet location | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent |
Finance leases - Property and equipment - net | $ 57 | $ 63 | $ 37 |
Finance lease, right-of-use asset, Condensed Consolidated Balance Sheet location | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Finance leases - Short-term borrowings | $ 20 | $ 21 | $ 12 |
Finance lease, liability, short-term, Condensed Consolidated Balance Sheet location | de:ShortTermBorrowingsIncludingLongTermDebtCurrent | de:ShortTermBorrowingsIncludingLongTermDebtCurrent | de:ShortTermBorrowingsIncludingLongTermDebtCurrent |
Finance leases - Long-term borrowings | $ 36 | $ 39 | $ 23 |
Finance lease, liability, long-term, Condensed Consolidated Balance Sheet location | us-gaap:LongTermDebtNoncurrent | us-gaap:LongTermDebtNoncurrent | us-gaap:LongTermDebtNoncurrent |
Total finance lease liabilities | $ 56 | $ 60 | $ 35 |
LEASES - Right of Use Assets Ob
LEASES - Right of Use Assets Obtained in Exchange for Lease Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Right of Use Assets Obtained in Exchange for Lease Liabilities | ||
Operating leases | $ 22 | $ 16 |
Finance leases | $ 2 | $ 9 |
LEASES - Lease Revenues (Detail
LEASES - Lease Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Lessor | ||
Sales-type and direct finance lease revenues | $ 36 | $ 36 |
Operating lease revenues | 363 | 374 |
Variable lease revenues | 6 | 5 |
Total lease revenues | $ 405 | $ 415 |
LEASES - Short-term Relief to L
LEASES - Short-term Relief to Lessees (Details) - COVID-19 | 9 Months Ended | |
Nov. 01, 2020 | Jan. 31, 2021 | |
Lessor | ||
Operating lease portfolio granted relief (as a percent) | 3.00% | |
Maximum | ||
Lessor | ||
Lease payment deferral period | 3 months |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
Historical claims rate, review period | 5 years | |
Unamortized extended warranty premiums (deferred revenue) | $ 656 | $ 588 |
Change in Warranty Liability and Unearned Premiums | ||
Beginning of period balance | 1,743 | 1,800 |
Payments | (215) | (230) |
Amortization of premiums received | (63) | (59) |
Accruals for warranties | 247 | 222 |
Premiums received | 73 | 65 |
Foreign exchange | 18 | (6) |
End of period balance | $ 1,803 | $ 1,792 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2021USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 167 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 72 |
Miscellaneous contingent liabilities | 55 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 398 |
Guarantee obligations accrued losses | $ 18 |
Guarantee obligations term | 7 years |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | Feb. 02, 2020 |
Fair Values of Financial Instruments | ||||
Financing receivables - net | $ 29,438 | $ 29,723 | $ 29,750 | $ 27,294 |
Financing receivables securitized - net | 3,931 | $ 4,699 | 4,703 | 4,478 |
Short-term securitization borrowings | 3,969 | 4,682 | 4,416 | |
Long-term borrowings | 32,772 | 32,734 | 30,475 | |
Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 7,622 | 7,014 | 7,217 | |
Long-term borrowings | 35,032 | 35,007 | 31,702 | |
Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 29,691 | 29,941 | 27,300 | |
Financing receivables securitized - net | 4,019 | 4,799 | 4,504 | |
Level 2 and Level 3 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 4,003 | 4,724 | 4,445 | |
Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 29,438 | 29,750 | 27,294 | |
Financing receivables securitized - net | 3,931 | 4,703 | 4,478 | |
Short-term securitization borrowings | 3,969 | 4,682 | 4,416 | |
Long-term borrowings due within one year | 7,532 | 6,949 | 7,205 | |
Long-term borrowings | 32,736 | 32,695 | 30,452 | |
Equipment Operations | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 198 | 78 | 567 | |
Long-term borrowings | 11,813 | 11,837 | 6,403 | |
Equipment Operations | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 100 | 103 | 123 | |
Financing receivables securitized - net | 17 | 26 | 40 | |
Short-term securitization borrowings | 17 | 26 | 42 | |
Equipment Operations | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 103 | 105 | 130 | |
Financing receivables securitized - net | 18 | 26 | 42 | |
Short-term securitization borrowings | 17 | 26 | 42 | |
Long-term borrowings due within one year | 191 | 79 | 567 | |
Long-term borrowings | 10,103 | 10,085 | 5,544 | |
Financial Services | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 3,986 | 4,698 | 4,403 | |
Long-term borrowings due within one year | 7,424 | 6,936 | 6,650 | |
Long-term borrowings | 23,219 | 23,170 | 25,299 | |
Financial Services | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 29,591 | 29,838 | 27,177 | |
Financing receivables securitized - net | 4,002 | 4,773 | 4,464 | |
Financial Services | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 29,335 | 29,645 | 27,164 | |
Financing receivables securitized - net | 3,913 | 4,677 | 4,436 | |
Short-term securitization borrowings | 3,952 | 4,656 | 4,374 | |
Long-term borrowings due within one year | 7,341 | 6,870 | 6,638 | |
Long-term borrowings | $ 22,633 | $ 22,610 | $ 24,908 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 667 | $ 641 | $ 609 |
Derivative assets | 605 | 725 | 481 |
Derivative liabilities | 175 | 115 | 101 |
Other Assets | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 605 | 725 | 481 |
Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 175 | 115 | 101 |
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 | 132 | 119 | 117 |
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 | 3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Equity Fund | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 70 | 62 | 62 |
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 | 60 | 55 | 52 |
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 | 535 | 518 | 491 |
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 | 605 | 725 | 481 |
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 | 175 | 115 | 101 |
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 | 568 | 669 | 443 |
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 | 97 | 88 | 57 |
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 | 34 | 48 | 37 |
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 | 76 | 26 | 40 |
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 | 3 | 8 | 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 | 1 | 4 |
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 | 119 | 113 | 87 |
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 | 71 | 68 | 62 |
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 | 197 | 188 | 173 |
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 | 8 | 2 | 4 |
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 | $ 140 | 147 | 165 |
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 | $ 4 | $ 1 |
FAIR VALUE MEASUREMENTS - Contr
FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions | Jan. 31, 2021USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 21 |
Amortized cost, due after one through five years | 89 |
Amortized cost, due after five through 10 years | 117 |
Amortized cost, due after 10 years | 203 |
Amortized cost, mortgage-backed securities | 134 |
Amortized cost, debt securities | 564 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 22 |
Fair value, due after one through five years | 94 |
Fair value, due after five through 10 years | 124 |
Fair value, due after 10 years | 215 |
Fair value, mortgage-backed securities | 140 |
Fair value, debt securities | $ 595 |
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 | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Fair Value, Recurring Level 3 Measurements from Available-for-Sale Marketable Securities | ||
Beginning of period balance | $ 4 | $ 1 |
Other | $ (4) | |
End of period balance | $ 1 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||
Other receivables | $ 1,141 | $ 1,220 | $ 1,367 |
Equipment on operating leases - net | 7,030 | 7,298 | $ 7,504 |
Fair Value, Nonrecurring Measurements | Level 3 | |||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |||
Other receivables | 1 | ||
Equipment on operating leases - net | 371 | ||
Property and equipment - net | 41 | 135 | |
Losses, Property and equipment - net | 44 | ||
Investments in unconsolidated affiliates | 19 | ||
Other assets | 1 | $ 59 | |
Losses, Other assets | $ 6 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 | |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ 6 | ||
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 | $ 2,350 | $ 1,550 | $ 2,900 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Fair Value Hedges Member | Designated as Hedging Instruments | |||
Fair Value Hedges | |||
Notional amount of interest rate fair value hedge derivatives | $ 8,333 | $ 7,239 | $ 9,424 |
Long-term Borrowings Due in One Year | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 159 | 155 | 220 |
Active Hedging Relationships | 2 | 2 | (1) |
Discontinued Relationships | 1 | 3 | (5) |
Total | 3 | 5 | (6) |
Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 8,713 | 7,725 | 9,521 |
Active Hedging Relationships | 435 | 543 | 379 |
Discontinued Relationships | 137 | 122 | (21) |
Total | $ 572 | $ 665 | $ 358 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 8,801 | $ 8,514 | $ 9,102 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 5,478 | 4,903 | 5,249 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 145 | $ 113 | $ 102 |
DERIVATIVE INSTRUMENTS - Fair_2
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 605 | $ 725 | $ 481 |
Total derivative liabilities | 175 | 115 | 101 |
Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 605 | 725 | 481 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 175 | 115 | 101 |
Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 491 | 586 | 409 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 31 | 14 | 17 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 491 | 586 | 409 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 31 | 14 | 17 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 114 | 139 | 72 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 144 | 101 | 84 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 77 | 83 | 34 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 66 | 74 | 40 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 34 | 48 | 37 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 76 | 26 | 40 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 3 | 8 | 1 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 2 | $ 1 | $ 4 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | $ (182) | $ 8 |
Interest Rate Contracts | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Cash flow hedges, recognized in OCI | (2) | |
Interest Rate Contracts | Net Sales | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | (4) | |
Interest Rate Contracts | Interest Expense | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Fair value hedges, gains (losses) | (55) | 96 |
Cash flow hedges, reclassified from OCI | (5) | (2) |
Not designated as hedges, gains (losses) | (4) | 2 |
Foreign Exchange Contracts | Cost of Sales | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | (52) | 11 |
Foreign Exchange Contracts | Other Operating Expense | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | $ (126) | $ (1) |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Jan. 31, 2021 | Nov. 01, 2020 | Feb. 02, 2020 |
Derivative instruments | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 99 | $ 89 | $ 60 |
Cash collateral posted | 0 | 0 | 0 |
Derivative Assets | |||
Gross amounts recognized | 605 | 725 | 481 |
Netting arrangements | (106) | (93) | (60) |
Collateral received | (186) | (274) | (26) |
Net amount | 313 | 358 | 395 |
Derivative Liabilities | |||
Gross amounts recognized | 175 | 115 | 101 |
Netting arrangements | (106) | (93) | (60) |
Collateral paid | 0 | 0 | 0 |
Net amount | 69 | 22 | $ 41 |
International Futures Market | |||
Derivative instruments | |||
Collateral to participate in an international futures market | $ 8 | $ 8 |
STOCK OPTION AND RESTRICTED S_2
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands | 1 Months Ended | 3 Months Ended |
Dec. 27, 2020 | Jan. 31, 2021 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant under the equity incentive plan | 17,700 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 269 | |
Options granted, exercise price (in dollars per share) | $ 254.83 | |
Options granted, fair value (in dollars per share) | $ 62.73 | |
Options outstanding (in shares) | 3,200 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 122.01 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 205 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 158 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 254.71 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 47 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 245.73 |
SPECIAL ITEMS - Impairments and
SPECIAL ITEMS - Impairments and Other Benefit (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2021USD ($) | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | $ 50 |
Impairments and Other Benefit | Cost of Sales | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | 50 |
Indirect tax benefit, pretax | (58) |
Total expense (benefit), pretax | (8) |
Impairments and Other Benefit | Cost of Sales | Foreign Tax Authority | Brazil | |
Impairments and Other Benefit | |
Indirect tax benefit, pretax | (58) |
Impairments and Other Benefit | Production & Precision Ag | Cost of Sales | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | 5 |
Indirect tax benefit, pretax | (53) |
Total expense (benefit), pretax | (48) |
Impairments and Other Benefit | Small Ag & Turf | Cost of Sales | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | 3 |
Total expense (benefit), pretax | 3 |
Impairments and Other Benefit | Construction & Forestry | Cost of Sales | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | 42 |
Indirect tax benefit, pretax | (5) |
Total expense (benefit), pretax | 37 |
Impairments and Other Benefit | German Asphalt Plant Factory | Cost of Sales | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | 38 |
Fixed asset impairment, after-tax | 38 |
Impairments and Other Benefit | Manufacturing Locations | Cost of Sales | |
Impairments and Other Benefit | |
Long-lived asset impairments, pretax | $ 12 |
SPECIAL ITEMS - Employee-Separa
SPECIAL ITEMS - Employee-Separation Programs (Details) $ in Millions | 3 Months Ended |
Feb. 02, 2020USD ($) | |
OPEB | |
Employee-Separation Programs | |
Curtailment expense | $ 21 |
2020 Employee-Separation Programs | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 127 |
2020 Employee-Separation Programs | 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 |
2020 Employee-Separation Programs | Cost of Sales | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | $ 39 |
2020 Employee-Separation Programs | Research and Development | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 16 |
2020 Employee-Separation Programs | Selling, Administrative and General Expenses | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 50 |
2020 Employee-Separation Programs | Operating Profit | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 105 |
2020 Employee-Separation Programs | Other Operating Expenses | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 22 |
2020 Employee-Separation Programs | Production & Precision Ag | Cost of Sales | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 19 |
2020 Employee-Separation Programs | Production & Precision Ag | Research and Development | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 6 |
2020 Employee-Separation Programs | Production & Precision Ag | Selling, Administrative and General Expenses | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 17 |
2020 Employee-Separation Programs | Production & Precision Ag | Operating Profit | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 42 |
2020 Employee-Separation Programs | Small Ag & Turf | Cost of Sales | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 11 |
2020 Employee-Separation Programs | Small Ag & Turf | Research and Development | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 7 |
2020 Employee-Separation Programs | Small Ag & Turf | Selling, Administrative and General Expenses | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 18 |
2020 Employee-Separation Programs | Small Ag & Turf | Operating Profit | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 36 |
2020 Employee-Separation Programs | Construction & Forestry | Cost of Sales | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 9 |
2020 Employee-Separation Programs | Construction & Forestry | Research and Development | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 3 |
2020 Employee-Separation Programs | Construction & Forestry | Selling, Administrative and General Expenses | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 12 |
2020 Employee-Separation Programs | Construction & Forestry | Operating Profit | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 24 |
2020 Employee-Separation Programs | Financial Services | Selling, Administrative and General Expenses | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | 3 |
2020 Employee-Separation Programs | Financial Services | Operating Profit | |
Employee-Separation Programs | |
Total employee-separation programs' expenses, pretax | $ 3 |