Document and Entity Information
Document and Entity Information | 6 Months Ended |
May 02, 2021shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | May 2, 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 | 311,942,092 |
Current Fiscal Year End Date | --10-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q2 |
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 | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Net Sales and Revenues | ||||
Net sales and revenues | $ 12,058 | $ 9,253 | $ 21,170 | $ 16,884 |
Costs and Expenses | ||||
Research and development expenses | 377 | 406 | 743 | 831 |
Selling, administrative and general expenses | 838 | 906 | 1,607 | 1,715 |
Interest expense | 268 | 342 | 538 | 678 |
Total | 9,746 | 8,325 | 17,330 | 15,387 |
Income of Consolidated Group before Income Taxes | 2,312 | 928 | 3,840 | 1,497 |
Provision for income taxes | 530 | 245 | 838 | 295 |
Income of Consolidated Group | 1,782 | 683 | 3,002 | 1,202 |
Equity in income (loss) of unconsolidated affiliates | 8 | (17) | 12 | (18) |
Net Income | 1,790 | 666 | 3,014 | 1,184 |
Less: Net income attributable to noncontrolling interests | 1 | 2 | ||
Net Income Attributable to Deere & Company | $ 1,790 | $ 666 | $ 3,013 | $ 1,182 |
Per Share Data | ||||
Basic (in dollars per share) | $ 5.72 | $ 2.13 | $ 9.62 | $ 3.77 |
Diluted (in dollars per share) | $ 5.68 | $ 2.11 | $ 9.55 | $ 3.73 |
Average Shares Outstanding | ||||
Basic (in shares) | 312.8 | 313.2 | 313.1 | 313.3 |
Diluted (in shares) | 315.2 | 316.2 | 315.6 | 316.7 |
Net Sales | ||||
Net Sales and Revenues | ||||
Net sales | $ 10,998 | $ 8,224 | $ 19,049 | $ 14,754 |
Costs and Expenses | ||||
Costs and expenses | 7,928 | 6,294 | 13,734 | 11,371 |
Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 809 | 849 | 1,644 | 1,745 |
Other | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 251 | 180 | 477 | 385 |
Costs and Expenses | ||||
Costs and expenses | $ 335 | $ 377 | $ 708 | $ 792 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||||
Net income | $ 1,790 | $ 666 | $ 3,014 | $ 1,184 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||||
Retirement benefits adjustment | 91 | 57 | 154 | 287 |
Cumulative translation adjustment | 37 | (441) | 433 | (398) |
Unrealized gain (loss) on derivatives | 3 | (8) | 7 | (8) |
Unrealized gain (loss) on debt securities | (13) | 6 | (15) | 11 |
Other Comprehensive Income (Loss), Net of Income Taxes | 118 | (386) | 579 | (108) |
Comprehensive Income of Consolidated Group | 1,908 | 280 | 3,593 | 1,076 |
Less: Comprehensive income attributable to noncontrolling interests | 1 | 2 | ||
Comprehensive Income Attributable to Deere & Company | $ 1,908 | $ 280 | $ 3,592 | $ 1,074 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
ASSETS | |||
Cash and cash equivalents | $ 7,182 | $ 7,066 | $ 8,900 |
Marketable securities | 668 | 641 | 626 |
Receivables from unconsolidated affiliates | 31 | 31 | 32 |
Trade accounts and notes receivable - net | 6,158 | 4,171 | 5,986 |
Financing receivables - net | 30,994 | 29,750 | 27,256 |
Financing receivables securitized - net | 4,107 | 4,703 | 4,685 |
Other receivables | 1,473 | 1,220 | 1,212 |
Equipment on operating leases - net | 7,108 | 7,298 | 7,245 |
Inventories | 6,042 | 4,999 | 6,171 |
Property and equipment - net | 5,704 | 5,817 | 5,685 |
Investments in unconsolidated affiliates | 182 | 193 | 192 |
Goodwill | 3,190 | 3,081 | 2,917 |
Other intangible assets - net | 1,310 | 1,327 | 1,311 |
Retirement benefits | 951 | 863 | 960 |
Deferred income taxes | 1,724 | 1,499 | 1,435 |
Other assets | 2,155 | 2,432 | 2,713 |
Total Assets | 78,979 | 75,091 | 77,326 |
LIABILITIES | |||
Short-term borrowings | 9,911 | 8,582 | 11,179 |
Short-term securitization borrowings | 4,106 | 4,682 | 4,640 |
Payables to unconsolidated affiliates | 155 | 105 | 91 |
Accounts payable and accrued expenses | 10,527 | 10,112 | 9,072 |
Deferred income taxes | 533 | 519 | 475 |
Long-term borrowings | 33,346 | 32,734 | 34,324 |
Retirement benefits and other liabilities | 5,305 | 5,413 | 5,680 |
Total liabilities | 63,883 | 62,147 | 65,461 |
Commitments and contingencies (Note 18) | |||
STOCKHOLDERS' EQUITY | |||
Common stock, $1 par value (issued shares at May 2, 2021 - 536,431,204) | 4,999 | 4,895 | 4,713 |
Common stock in treasury | (19,052) | (18,065) | (17,690) |
Retained earnings | 34,105 | 31,646 | 30,556 |
Accumulated other comprehensive income (loss) | (4,960) | (5,539) | (5,715) |
Total Deere & Company stockholders' equity | 15,092 | 12,937 | 11,864 |
Noncontrolling interests | 4 | 7 | 1 |
Total stockholders' equity | 15,096 | 12,944 | 11,865 |
Total Liabilities and Stockholders' Equity | $ 78,979 | $ 75,091 | $ 77,326 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) | May 02, 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 | 6 Months Ended | |
May 02, 2021 | May 03, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 3,014 | $ 1,184 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (credit) for credit losses | (24) | 107 |
Provision for depreciation and amortization | 1,054 | 1,067 |
Impairment charges | 50 | |
Impairment charges | 114 | |
Share-based compensation expense | 45 | 48 |
Undistributed earnings of unconsolidated affiliates | 11 | (8) |
Credit for deferred income taxes | (213) | (61) |
Changes in assets and liabilities: | ||
Trade, notes, and financing receivables related to sales | (1,124) | (491) |
Inventories | (1,193) | (496) |
Accounts payable and accrued expenses | 318 | (707) |
Accrued income taxes payable/receivable | 54 | (173) |
Retirement benefits | (5) | 58 |
Other | (201) | 134 |
Net cash provided by operating activities | 1,786 | 776 |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 10,367 | 9,624 |
Proceeds from maturities and sales of marketable securities | 47 | 39 |
Proceeds from sales of equipment on operating leases | 1,011 | 898 |
Cost of receivables acquired (excluding receivables related to sales) | (11,359) | (9,367) |
Acquisitions of businesses, net of cash acquired | (19) | |
Purchases of marketable securities | (74) | (71) |
Purchases of property and equipment | (320) | (441) |
Cost of equipment on operating leases acquired | (764) | (960) |
Collateral on derivatives - net | (255) | 319 |
Other | (21) | (11) |
Net cash provided by (used for) investing activities | (1,387) | 30 |
Cash Flows from Financing Activities | ||
Increase in total short-term borrowings | 212 | 1,138 |
Proceeds from long-term borrowings | 3,967 | 7,275 |
Payments of long-term borrowings | (3,157) | (3,315) |
Proceeds from issuance of common stock | 116 | 70 |
Repurchases of common stock | (1,044) | (263) |
Dividends paid | (480) | (481) |
Other | (55) | (81) |
Net cash provided by (used for) financing activities | (441) | 4,343 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 151 | (102) |
Net Increase in Cash, Cash Equivalents, and Restricted Cash | 109 | 5,047 |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 7,172 | 3,956 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ 7,281 | $ 9,003 |
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 | 1,182 | 1 | 1,183 | |||||
Other comprehensive income (loss) | (108) | (108) | ||||||
Repurchases of common stock | (263) | (263) | ||||||
Treasury shares reissued | 47 | 47 | ||||||
Dividends declared | (477) | (3) | (480) | |||||
Stock options and other | 71 | (1) | (1) | 69 | ||||
Balance at May. 03, 2020 | 4,713 | (17,690) | 30,556 | (5,715) | 1 | 11,865 | ||
Redeemable Noncontrolling Interest - Balance at Nov. 03, 2019 | 14 | |||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Net income | 1 | |||||||
Dividends declared | (1) | |||||||
Noncontrolling interest redemption (Note 22) | (14) | |||||||
Balance at Feb. 02, 2020 | 4,675 | (17,549) | 30,129 | (5,329) | 4 | 11,930 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 666 | 666 | ||||||
Other comprehensive income (loss) | (386) | (386) | ||||||
Repurchases of common stock | (149) | (149) | ||||||
Treasury shares reissued | 8 | 8 | ||||||
Dividends declared | (238) | (3) | (241) | |||||
Stock options and other | 38 | (1) | 37 | |||||
Balance at May. 03, 2020 | 4,713 | (17,690) | 30,556 | (5,715) | 1 | 11,865 | ||
Redeemable Noncontrolling Interest - Balance at Feb. 02, 2020 | 14 | |||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Noncontrolling interest redemption (Note 22) | (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 | 3,013 | 1 | 3,014 | |||||
Other comprehensive income (loss) | 579 | 579 | ||||||
Repurchases of common stock | (1,044) | (1,044) | ||||||
Treasury shares reissued | 57 | 57 | ||||||
Dividends declared | (520) | (520) | ||||||
Stock options and other | 104 | 1 | (4) | 101 | ||||
Balance at May. 02, 2021 | 4,999 | (19,052) | 34,105 | (4,960) | 4 | 15,096 | ||
Balance at Jan. 31, 2021 | 4,942 | (18,377) | 32,596 | (5,078) | 3 | 14,086 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,790 | 1,790 | ||||||
Other comprehensive income (loss) | 118 | 118 | ||||||
Repurchases of common stock | (692) | (692) | ||||||
Treasury shares reissued | 17 | 17 | ||||||
Dividends declared | (282) | (282) | ||||||
Stock options and other | 57 | 1 | 1 | 59 | ||||
Balance at May. 02, 2021 | $ 4,999 | $ (19,052) | $ 34,105 | $ (4,960) | $ 4 | $ 15,096 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 6 Months Ended |
May 02, 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: Consolidated Equipment Operations Financial Services – 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 second quarter ends for fiscal year 2021 and 2020 were May 2, 2021 and May 3, 2020, respectively. Both second quarters contained 13 weeks, while both year-to-date periods contained 26 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 one additional month of Wirtgen activity in the first quarter and the year-to-date period. 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 $13 million at May 2, 2021, November 1, 2020, and May 3, 2020, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 6 Months Ended |
May 02, 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 $267 million and $254 million in the first six months of 2021 and 2020, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $40 million and $46 million at May 2, 2021 and May 3, 2020, respectively. The Company’s restricted cash held at May 2, 2021, November 1, 2020, May 3, 2020, and November 3, 2019 was as follows in millions of dollars: May 2 November 1 May 3 November 3 2021 2020 2020 2019 Equipment operations $ 12 $ 11 $ 11 $ 21 Financial services 87 95 92 78 Total $ 99 $ 106 $ 103 $ 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 | 6 Months Ended |
May 02, 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 were as 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 | 6 Months Ended |
May 02, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | (4) Revenue Recognition The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition was as follows in millions of dollars: Three Months Ended May 2, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 2,211 $ 1,838 $ 1,481 $ 608 $ 6,138 Canada 252 144 320 153 869 Western Europe 589 738 514 26 1,867 Central Europe and CIS 531 160 209 9 909 Latin America 700 103 220 60 1,083 Asia, Africa, Australia, New Zealand, and Middle East 319 444 393 36 1,192 Total $ 4,602 $ 3,427 $ 3,137 $ 892 $ 12,058 Major product lines: Production agriculture $ 4,466 $ 4,466 Small agriculture $ 2,417 2,417 Turf 898 898 Construction $ 1,232 1,232 Compact construction 396 396 Roadbuilding 1,066 1,066 Forestry 343 343 Financial products 12 10 5 $ 892 919 Other 124 102 95 321 Total $ 4,602 $ 3,427 $ 3,137 $ 892 $ 12,058 Timing of revenue recognition: Revenue recognized at a point in time $ 4,562 $ 3,412 $ 3,114 $ 26 $ 11,114 Revenue recognized over time 40 15 23 866 944 Total $ 4,602 $ 3,427 $ 3,137 $ 892 $ 12,058 Six Months Ended May 2, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 3,820 $ 3,261 $ 2,683 $ 1,206 $ 10,970 Canada 364 223 508 307 1,402 Western Europe 1,038 1,224 953 50 3,265 Central Europe and CIS 692 244 387 18 1,341 Latin America 1,213 180 390 119 1,902 Asia, Africa, Australia, New Zealand, and Middle East 623 845 746 76 2,290 Total $ 7,750 $ 5,977 $ 5,667 $ 1,776 $ 21,170 Major product lines: Production agriculture $ 7,478 $ 7,478 Small agriculture $ 4,228 4,228 Turf 1,549 1,549 Construction $ 2,119 2,119 Compact construction 742 742 Roadbuilding 1,976 1,976 Forestry 633 633 Financial products 28 20 12 $ 1,776 1,836 Other 244 180 185 609 Total $ 7,750 $ 5,977 $ 5,667 $ 1,776 $ 21,170 Timing of revenue recognition: Revenue recognized at a point in time $ 7,668 $ 5,946 $ 5,614 $ 50 $ 19,278 Revenue recognized over time 82 31 53 1,726 1,892 Total $ 7,750 $ 5,977 $ 5,667 $ 1,776 $ 21,170 Three Months Ended May 3, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 1,841 $ 1,540 $ 1,263 $ 604 $ 5,248 Canada 177 89 166 151 583 Western Europe 540 571 358 22 1,491 Central Europe and CIS 258 80 140 8 486 Latin America 394 64 135 60 653 Asia, Africa, Australia, New Zealand, and Middle East 221 290 251 30 792 Total $ 3,431 $ 2,634 $ 2,313 $ 875 $ 9,253 Major product lines: Production agriculture $ 3,280 $ 3,280 Small agriculture $ 1,771 1,771 Turf 806 806 Construction $ 877 877 Compact construction 339 339 Roadbuilding 723 723 Forestry 254 254 Financial products 13 8 6 $ 875 902 Other 138 49 114 301 Total $ 3,431 $ 2,634 $ 2,313 $ 875 $ 9,253 Timing of revenue recognition: Revenue recognized at a point in time $ 3,396 $ 2,620 $ 2,287 $ 26 $ 8,329 Revenue recognized over time 35 14 26 849 924 Total $ 3,431 $ 2,634 $ 2,313 $ 875 $ 9,253 Six Months Ended May 3, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 3,276 $ 2,605 $ 2,283 $ 1,247 $ 9,411 Canada 261 143 338 307 1,049 Western Europe 905 984 697 44 2,630 Central Europe and CIS 389 169 299 18 875 Latin America 778 135 294 126 1,333 Asia, Africa, Australia, New Zealand, and Middle East 410 605 507 64 1,586 Total $ 6,019 $ 4,641 $ 4,418 $ 1,806 $ 16,884 Major product lines: Production agriculture $ 5,706 $ 5,706 Small agriculture $ 3,249 3,249 Turf 1,274 1,274 Construction $ 1,718 1,718 Compact construction 627 627 Roadbuilding 1,328 1,328 Forestry 528 528 Financial products 34 14 13 $ 1,806 1,867 Other 279 104 204 587 Total $ 6,019 $ 4,641 $ 4,418 $ 1,806 $ 16,884 Timing of revenue recognition: Revenue recognized at a point in time $ 5,941 $ 4,615 $ 4,366 $ 52 $ 14,974 Revenue recognized over time 78 26 52 1,754 1,910 Total $ 6,019 $ 4,641 $ 4,418 $ 1,806 $ 16,884 Following is a description of the Company’s major product lines: 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 18, was $1,249 million, $1,090 million, and $1,077 million at May 2, 2021, November 1, 2020, and May 3, 2020, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended May 2, 2021 and May 3, 2020, $111 million and $97 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the six months ended May 2, 2021 and May 3, 2020, $335 million and $278 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 May 2, 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 $962 million at May 2, 2021. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2021 - $199, 2022 - $318, 2023 - $224, 2024 - $130, 2025 - $58, 2026 - $30 and later years - $3. The Company discloses unsatisfied performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and end customers for equipment, service parts, repair services, and certain telematics services. During 2020, and to a much lesser extent in 2021, 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 since the beginning of the pandemic that remained outstanding at May 2, 2021 was not material. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 6 Months Ended |
May 02, 2021 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | (5) Other Comprehensive Income Items The after-tax changes in accumulated other comprehensive income (loss) was as follows in millions of dollars: 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 (398) (13) 11 (214) Amounts reclassified from accumulated other comprehensive income 101 5 106 Net current period other comprehensive income (loss) 287 (398) (8) 11 (108) Balance May 3, 2020 $ (3,628) $ (2,049) $ (68) $ 30 $ (5,715) Balance November 1, 2020 $ (3,918) $ (1,596) $ (58) $ 33 $ (5,539) Other comprehensive income (loss) items before reclassification 31 433 (15) 449 Amounts reclassified from accumulated other comprehensive income 123 7 130 Net current period other comprehensive income (loss) 154 433 7 (15) 579 Balance May 2, 2021 $ (3,764) $ (1,163) $ (51) $ 18 $ (4,960) Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars. Retirement benefits adjustment reclassifications for actuarial gain (loss), prior service (credit) cost, and settlements are included in net periodic pension and other postretirement benefit costs (see Note 8). Before Tax After Tax (Expense) Tax Three Months Ended May 2, 2021 Amount Credit Amount Cumulative translation adjustment $ 37 $ 37 Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 4 $ (1) 3 Net unrealized gain (loss) on derivatives 4 (1) 3 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (14) 1 (13) Net unrealized gain (loss) on debt securities (14) 1 (13) Retirement benefits adjustment: Net actuarial gain (loss) 41 (9) 32 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 72 (19) 53 Prior service (credit) cost 2 2 Settlements 5 (1) 4 Net unrealized gain (loss) on retirement benefits adjustment 120 (29) 91 Total other comprehensive income (loss) $ 147 $ (29) $ 118 Before Tax After Tax (Expense) Tax Six Months Ended May 2, 2021 Amount Credit Amount Cumulative translation adjustment $ 431 $ 2 $ 433 Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 9 (2) 7 Net unrealized gain (loss) on derivatives 9 (2) 7 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (17) 2 (15) Net unrealized gain (loss) on debt securities (17) 2 (15) Retirement benefits adjustment: Net actuarial gain (loss) 40 (9) 31 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 142 (36) 106 Prior service (credit) cost 4 (1) 3 Settlements 18 (4) 14 Net unrealized gain (loss) on retirement benefits adjustment 204 (50) 154 Total other comprehensive income (loss) $ 627 $ (48) $ 579 Before Tax After Tax (Expense) Tax Three Months Ended May 3, 2020 Amount Credit Amount Cumulative translation adjustment $ (441) $ (441) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (15) $ 3 (12) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 4 4 Net unrealized gain (loss) on derivatives (11) 3 (8) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 8 (2) 6 Net unrealized gain (loss) on debt securities 8 (2) 6 Retirement benefits adjustment: Net actuarial gain (loss) 1 (1) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 69 (17) 52 Prior service (credit) cost 2 2 Settlements 3 3 Net unrealized gain (loss) on retirement benefits adjustment 75 (18) 57 Total other comprehensive income (loss) $ (369) $ (17) $ (386) Before Tax After Tax (Expense) Tax Six Months Ended May 3, 2020 Amount Credit Amount Cumulative translation adjustment $ (398) $ (398) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (17) $ 4 (13) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 6 (1) 5 Net unrealized gain (loss) on derivatives (11) 3 (8) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 14 (3) 11 Net unrealized gain (loss) on debt securities 14 (3) 11 Retirement benefits adjustment: Net actuarial gain (loss) 247 (61) 186 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 138 (45) 93 Prior service (credit) cost 4 (1) 3 Settlements 6 (1) 5 Net unrealized gain (loss) on retirement benefits adjustment 395 (108) 287 Total other comprehensive income (loss) $ (108) $ (108) |
DIVIDENDS DECLARED AND PAID
DIVIDENDS DECLARED AND PAID | 6 Months Ended |
May 02, 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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Dividends declared $ .90 $ .76 $ 1.66 $ 1.52 Dividends paid $ .76 $ .76 $ 1.52 $ 1.52 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
May 02, 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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Net income attributable to Deere & Company $ 1,790 $ 666 $ 3,013 $ 1,182 Average shares outstanding 312.8 313.2 313.1 313.3 Basic per share $ 5.72 $ 2.13 $ 9.62 $ 3.77 Average shares outstanding 312.8 313.2 313.1 313.3 Effect of dilutive share-based compensation 2.4 3.0 2.5 3.4 Total potential shares outstanding 315.2 316.2 315.6 316.7 Diluted per share $ 5.68 $ 2.11 $ 9.55 $ 3.73 During the second quarter and first six months of 2021, no shares were antidilutive. During the second quarter and first six months of 2020, 1.0 million shares and .6 million shares, respectively, were excluded from the above per share computation because the incremental shares would have been antidilutive. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 6 Months Ended |
May 02, 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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Service cost $ 83 $ 77 $ 168 $ 161 Interest cost 69 87 138 174 Expected return on plan assets (200) (204) (400) (409) Amortization of actuarial loss 65 62 128 124 Amortization of prior service cost 3 3 6 6 Settlements 5 3 18 6 Net cost $ 25 $ 28 $ 58 $ 62 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Service cost $ 12 $ 12 $ 24 $ 24 Interest cost 25 35 51 72 Expected return on plan assets (20) (12) (39) (24) Amortization of actuarial loss 7 7 14 14 Amortization of prior service credit (1) (1) (2) (2) Curtailments 21 Net cost $ 23 $ 41 $ 48 $ 105 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 22), which resulted in a $21 million curtailment loss. During the first six months of 2021, the Company contributed approximately $68 million to its pension plans and $85 million to its OPEB plans. The Company presently anticipates contributing an additional $33 million to its pension plans and $757 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. The pension and OPEB contributions exceeding the voluntary amount primarily include direct benefit payments from Company funds. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
May 02, 2021 | |
INCOME TAXES | |
INCOME TAXES | (9) Income Taxes The Company’s unrecognized tax benefits at May 2, 2021, November 1, 2020, and May 3, 2020 were $751 million, $668 million, and $610 million, respectively. The liability at May 2, 2021, November 1, 2020, and May 3, 2020 consisted of approximately $189 million, $134 million, and $145 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be significant. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
May 02, 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 were as follows in millions of dollars. Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and OPEB benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. Three Months Ended Six Months Ended May 2 May 3 % May 2 May 3 % 2021 2020 Change 2021 2020 Change Net sales and revenues: Production & precision ag net sales $ 4,529 $ 3,365 +35 $ 7,599 $ 5,872 +29 Small ag & turf net sales 3,390 2,603 +30 5,904 4,583 +29 Construction & forestry net sales 3,079 2,256 +36 5,546 4,299 +29 Financial services revenues 892 875 +2 1,776 1,806 -2 Other revenues 168 154 +9 345 324 +6 Total net sales and revenues $ 12,058 $ 9,253 +30 $ 21,170 $ 16,884 +25 Operating profit: Production & precision ag $ 1,007 $ 568 +77 $ 1,651 $ 786 +110 Small ag & turf 648 226 +187 1,117 381 +193 Construction & forestry 489 96 +409 756 189 +300 Financial services 295 75 +293 553 254 +118 Total operating profit 2,439 965 +153 4,077 1,610 +153 Reconciling items (119) (54) +120 (226) (133) +70 Income taxes (530) (245) +116 (838) (295) +184 Net income attributable to Deere & Company $ 1,790 $ 666 +169 $ 3,013 $ 1,182 +155 Intersegment sales and revenues: Production & precision ag net sales $ 7 $ 7 $ 13 $ 14 -7 Small ag & turf net sales 4 1 +300 8 1 +700 Construction & forestry net sales Financial services 62 93 -33 112 159 -30 Outside the U.S. and Canada: Net sales and revenues $ 5,051 $ 3,422 +48 $ 8,798 $ 6,424 +37 Operating profit 1,003 232 +332 1,633 533 +206 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. May 2 November 1 May 3 2021 2020 2020 Identifiable assets: Production & precision ag $ 6,602 $ 5,708 $ 6,328 Small ag & turf 3,605 3,266 3,485 Construction & forestry 6,500 6,322 6,984 Financial services 50,849 48,719 48,664 Corporate 11,423 11,076 11,865 Total assets $ 78,979 $ 75,091 $ 77,326 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 6 Months Ended |
May 02, 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 payment 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 since the beginning of the pandemic that remained outstanding at May 2, 2021 represented approximately 4 percent of the financing receivables balance. The majority of financing receivables granted short-term relief 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), was as follows in millions of dollars at May 2, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 6,017 $ 8,375 $ 4,436 $ 2,402 $ 1,136 $ 494 $ 3,221 $ 26,081 30-59 days past due 20 64 41 19 10 5 20 179 60-89 days past due 5 34 18 9 4 2 5 77 90+ days past due 1 1 2 Non-performing 2 51 69 54 29 33 16 254 Construction and forestry Current 1,568 2,077 1,106 454 118 22 81 5,426 30-59 days past due 21 43 35 14 5 1 3 122 60-89 days past due 6 13 12 7 3 1 1 43 90+ days past due 2 10 5 6 3 26 Non-performing 1 38 37 22 11 7 1 117 Total customer receivables $ 7,640 $ 10,697 $ 5,765 $ 2,987 $ 1,322 $ 568 $ 3,348 $ 32,327 The credit quality analysis of customer receivables was as follows in millions of dollars at November 1, 2020 and May 3, 2020: November 1, 2020 May 3, 2020 Retail Notes & Financing Leases Revolving Charge Accounts Total Retail Notes & Financing Leases Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 $ 19,178 $ 3,282 $ 22,460 30-59 days past due 135 13 148 215 32 247 60-89 days past due 64 4 68 103 13 116 90+ days past due 2 2 3 3 Non-performing 263 6 269 310 42 352 Construction and forestry Current 4,859 88 4,947 4,169 78 4,247 30-59 days past due 111 2 113 174 4 178 60-89 days past due 55 1 56 58 2 60 90+ days past due 14 14 18 18 Non-performing 106 1 107 176 1 177 Total customer receivables $ 27,206 $ 3,902 $ 31,108 $ 24,404 $ 3,454 $ 27,858 The credit quality analysis of wholesale receivables was as follows in millions of dollars at May 2, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 191 $ 144 $ 55 $ 13 $ 4 $ 1 $ 2,146 $ 2,554 30-59 days past due 60-89 days past due 90+ days past due Non-performing 22 22 Construction and forestry Current 5 10 15 1 1 3 341 376 30-59 days past due 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 196 $ 154 $ 92 $ 14 $ 5 $ 4 $ 2,487 $ 2,952 The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020 and May 3, 2020: November 1 May 3 2020 2020 Wholesale receivables: Agriculture and turf Current $ 3,010 $ 3,704 30-59 days past due 60-89 days past due 90+ days past due Non-performing 47 62 Construction and forestry Current 472 510 30-59 days past due 60-89 days past due 90+ days past due Non-performing 2 Total wholesale receivables $ 3,529 $ 4,278 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. Non-performing financing receivables are included in the estimate of expected credit losses. 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 follows in millions of dollars during the periods: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended May 2, 2021 Allowance: Beginning of period balance $ 180 $ 24 $ 7 $ 211 Provision (credit) (17) (6) (23) Write-offs (15) (9) (24) Recoveries 4 10 14 End of period balance $ 152 $ 19 $ 7 $ 178 Six Months Ended May 2, 2021 Allowance: Beginning of period balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 adoption 44 (13) 31 Provision (credit) (13) (16) (1) (30) Write-offs (23) (14) (37) Recoveries 10 19 29 Translation adjustments 1 1 End of period balance $ 152 $ 19 $ 7 $ 178 Financing receivables: End of period balance $ 28,979 $ 3,348 $ 2,952 $ 35,279 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended May 3, 2020 Allowance: Beginning of period balance $ 106 $ 40 $ 11 $ 157 Provision 65 20 85 Write-offs (26) (23) (49) Recoveries 3 6 9 Translation adjustments (7) (7) End of period balance $ 141 $ 43 $ 11 $ 195 Six Months Ended May 3, 2020 Allowance: Beginning of period balance $ 107 $ 40 $ 3 $ 150 Provision 82 18 6 106 Write-offs (45) (29) (74) Recoveries 6 14 20 Translation adjustments (9) 2 (7) End of period balance $ 141 $ 43 $ 11 $ 195 Financing receivables: End of period balance $ 24,404 $ 3,454 $ 4,278 $ 32,136 The allowance for credit losses on financing receivables decreased $33 million in the second quarter of 2021, primarily due to lower expected losses on retail notes and financing leases in the construction and forestry market and better than expected performance of accounts granted payment relief due to the economic effects of COVID. The allowance for credit losses on revolving charge accounts also decreased in the second quarter of 2021, reflecting strong payment performance due to continued improvement in the agricultural market. For the first six months of 2021, the allowance for credit losses on financing receivables decreased slightly, as the reductions noted above were largely offset by the impact of adopting ASU No. 2016-13. 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 date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first six months of 2021, the Company identified 199 receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $8 million pre-modification and $7 million post-modification. During the first six months of 2020, there were 259 receivable contracts, primarily wholesale receivables in Argentina, identified as troubled debt restructurings with aggregate balances of $94 million pre-modification and $83 million post-modification. The short-term payment relief related to COVID, mentioned earlier, did not meet the definition of a troubled debt restructuring. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At May 3, 2021, the Company had no commitments to lend to borrowers whose accounts were modified in troubled debt restructurings. |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 6 Months Ended |
May 02, 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 $2,875 million, $2,898 million, and $3,017 million at May 2, 2021, November 1, 2020, and May 3, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,833 million, $2,856 million, and $2,977 million at May 2, 2021, November 1, 2020, and May 3, 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 $397 million, $576 million, and $542 million at May 2, 2021, November 1, 2020, and May 3, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $383 million, $554 million, and $515 million at May 2, 2021, November 1, 2020, and May 3, 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 $926 million, $1,327 million, and $1,221 million at May 2, 2021, November 1, 2020, and May 3, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $893 million, $1,275 million, and $1,154 million at May 2, 2021, November 1, 2020, and May 3, 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: May 2 2021 Carrying value of liabilities $ 893 Maximum exposure to loss 926 The total assets of unconsolidated VIEs related to securitizations were approximately $35 billion at May 2, 2021. The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Financing receivables securitized (retail notes) $ 4,122 $ 4,716 $ 4,703 Allowance for credit losses (15) (13) (18) Other assets 91 98 95 Total restricted securitized assets $ 4,198 $ 4,801 $ 4,780 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Short-term securitization borrowings $ 4,106 $ 4,682 $ 4,640 Accrued interest on borrowings 3 3 6 Total liabilities related to restricted securitized assets $ 4,109 $ 4,685 $ 4,646 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 May 2, 2021, the maximum remaining term of all securitized retail notes was approximately six years. |
INVENTORIES
INVENTORIES | 6 Months Ended |
May 02, 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: May 2 November 1 May 3 2021 2020 2020 Raw materials and supplies $ 2,469 $ 1,995 $ 2,394 Work-in-process 967 648 722 Finished goods and parts 4,334 4,006 4,646 Total FIFO value 7,770 6,649 7,762 Less adjustment to LIFO value 1,728 1,650 1,591 Inventories $ 6,042 $ 4,999 $ 6,171 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 6 Months Ended |
May 02, 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 segments were as follows in millions of dollars: Production & Small Ag Construction Precision Ag & Turf & Forestry Total Goodwill at November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Translation adjustments and other (5) (4) 9 Goodwill at May 3, 2020 $ 305 $ 260 $ 2,352 $ 2,917 Goodwill at November 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments and other 10 (2) 89 97 Goodwill at May 2, 2021 $ 355 $ 266 $ 2,569 $ 3,190 There were no accumulated goodwill impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Amortized intangible assets: Customer lists and relationships $ 549 $ 535 $ 509 Technology, patents, trademarks, and other 1,097 1,056 1,006 Total at cost 1,646 1,591 1,515 Less accumulated amortization: Customer lists and relationships 136 113 93 Technology, patents, trademarks, and other 323 274 234 Total accumulated amortization 459 387 327 Amortized intangible assets, net 1,187 1,204 1,188 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,310 $ 1,327 $ 1,311 The amortization of other intangible assets in the second quarter and the first six months of 2021 was $27 million and $62 million, and for 2020 was $26 million and $51 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2021 – $55, 2022 – $109, 2023 – $107, 2024 – $103, 2025 – $100, and 2026 –$98. |
TOTAL SHORT-TERM BORROWINGS
TOTAL SHORT-TERM BORROWINGS | 6 Months Ended |
May 02, 2021 | |
TOTAL SHORT-TERM BORROWINGS | |
TOTAL SHORT-TERM BORROWINGS | (15) Total Short-Term Borrowings Total short-term borrowings were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Equipment Operations Commercial paper $ 466 Notes payable to banks $ 122 $ 192 439 Finance lease obligations due within one year 24 21 13 Long-term borrowings due within one year 206 79 480 Total 352 292 1,398 Financial Services Commercial paper 2,259 1,238 2,958 Notes payable to banks 89 182 236 Long-term borrowings due within one year 7,211 6,870 6,587 Total 9,559 8,290 9,781 Short-term borrowings 9,911 8,582 11,179 Short-term securitization borrowings Equipment Operations 14 26 37 Financial Services 4,092 4,656 4,603 Total 4,106 4,682 4,640 Total short-term borrowings $ 14,017 $ 13,264 $ 15,819 |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 6 Months Ended |
May 02, 2021 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | (16) Long-Term Borrowings Long-term borrowings were as follows in millions of dollars. The financial services medium-term notes include fair value adjustments related to interest rate swaps. May 2 November 1 May 3 2021 2020 2020 Equipment Operations U.S. dollar notes and debentures: 8½% debentures due 2022 $ 105 $ 105 2.60% notes due 2022 $ 1,000 1,000 1,000 2.75% notes due 2025 700 700 700 6.55% debentures due 2028 200 200 200 5.375% notes due 2029 500 500 500 3.10% notes due 2030 700 700 700 8.10% debentures due 2030 250 250 250 7.125% notes due 2031 300 300 300 3.90% notes due 2042 1,250 1,250 1,250 2.875% notes due 2049 500 500 500 3.75% notes due 2050 850 850 850 Euro notes: .5% notes due 2023 (€500 principal) 606 584 548 1.375% notes due 2024 (€800 principal) 969 934 876 1.85% notes due 2028 (€600 principal) 727 700 657 2.20% notes due 2032 (€600 principal) 727 700 657 1.65% notes due 2039 (€650 principal) 788 759 712 Finance lease obligations and other notes 115 153 204 Less debt issuance costs and debt discounts 58 61 62 Total 10,124 10,124 9,947 Financial Services Notes and debentures: Medium-term notes: (principal as of: May 2, 2021 - $21,800, November 1, 2020 - $20,996, May 3, 2020 - $22,565) 22,161 21,661 23,326 Other notes 1,121 1,003 1,111 Less debt issuance costs and debt discounts 60 54 60 Total 23,222 22,610 24,377 Long-term borrowings $ 33,346 $ 32,734 $ 34,324 |
LEASES
LEASES | 6 Months Ended |
May 02, 2021 | |
LEASES | |
LEASES | (17) Leases Lessee Operating and finance lease right of use assets and liabilities were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Operating leases: Other assets $ 345 $ 324 $ 341 Accounts payable and accrued expenses 328 305 319 Finance leases: Property and equipment - net $ 73 $ 63 $ 43 Short-term borrowings $ 24 $ 21 $ 13 Long-term borrowings 45 39 26 Total finance lease liabilities $ 69 $ 60 $ 39 Right of use assets obtained in exchange for lease liabilities were as follows in millions of dollars: Six Months Ended May 2, 2021 May 3, 2020 Operating leases $ 71 $ 10 Finance leases 23 18 Lessor The Company leases equipment manufactured or sold by the Company and a limited amount of non-Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in “Financing receivables - net” on the consolidated balance sheet. Operating leases are reported in “Equipment on operating leases - net” on the consolidated balance sheet. Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Six Months Ended May 2, 2021 May 3, 2020 May 2, 2021 May 3, 2020 Sales-type and direct financing lease revenues $ 34 $ 32 $ 70 $ 68 Operating lease revenues 358 369 721 743 Variable lease revenues 6 6 12 11 Total lease revenues $ 398 $ 407 $ 803 $ 822 The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. In the second quarter of 2020, the Company recorded impairment losses on operating leases of $22 million due to higher expected equipment return rates and lower estimated values of used construction equipment. Operating lease impairments are recorded in “Other operating expenses.” The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. In the second quarter of 2020, the Company recorded impairment losses on matured operating lease inventory of $10 million due to lower estimated values of used construction equipment. These impairment losses are included in “Other operating expenses.” Due to the significant, negative effects of COVID, the Company provided short-term payment 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 since the beginning of the pandemic that remained outstanding at May 2, 2021 represented approximately 3 percent of the Company’s operating lease portfolio. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
May 02, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (18) 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 $681 million and $602 million at May 2, 2021 and May 3, 2020, respectively. A reconciliation of the changes in the warranty liability and unearned premiums was as follows in millions of dollars: Three Months Ended Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Beginning of period balance $ 1,803 $ 1,792 $ 1,743 $ 1,800 Payments (202) (223) (417) (453) Amortization of premiums received (65) (51) (128) (110) Accruals for warranties 248 210 495 432 Premiums received 90 69 163 134 Foreign exchange 2 (30) 20 (36) End of period balance $ 1,876 $ 1,767 $ 1,876 $ 1,767 At May 2, 2021, the Company had approximately $384 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 May 2, 2021, the Company had accrued losses of approximately $16 million under these agreements. The maximum remaining term of the receivables guaranteed at May 2, 2021 was approximately six years. At May 2, 2021, the Company had commitments of approximately $246 million for the construction and acquisition of property and equipment. Also, at May 2, 2021, the Company had restricted assets of $70 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 $60 million at May 2, 2021. The accrued liability for these contingencies was not material at May 2, 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 | 6 Months Ended |
May 02, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | (19) 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 were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities (see Note 17). May 2, 2021 November 1, 2020 May 3, 2020 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 99 $ 94 $ 105 $ 103 $ 118 $ 111 Financial services 30,895 31,071 29,645 29,838 27,138 27,317 Total $ 30,994 $ 31,165 $ 29,750 $ 29,941 $ 27,256 $ 27,428 Financing receivables securitized – net: Equipment operations $ 15 $ 15 $ 26 $ 26 $ 37 $ 35 Financial services 4,092 4,173 4,677 4,773 4,648 4,722 Total $ 4,107 $ 4,188 $ 4,703 $ 4,799 $ 4,685 $ 4,757 Short-term Equipment operations $ 14 $ 15 $ 26 $ 26 $ 37 $ 37 Financial services 4,092 4,117 4,656 4,698 4,603 4,632 Total $ 4,106 $ 4,132 $ 4,682 $ 4,724 $ 4,640 $ 4,669 Long-term borrowings due within one year: Equipment operations $ 206 $ 211 $ 79 $ 78 $ 480 $ 477 Financial services 7,211 7,293 6,870 6,936 6,587 6,609 Total $ 7,417 $ 7,504 $ 6,949 $ 7,014 $ 7,067 $ 7,086 Long-term borrowings: Equipment operations $ 10,079 $ 11,391 $ 10,085 $ 11,837 $ 9,921 $ 11,192 Financial services 23,222 23,701 22,610 23,170 24,377 24,537 Total $ 33,301 $ 35,092 $ 32,695 $ 35,007 $ 34,298 $ 35,729 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, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021. May 2 November 1 May 3 2021 2020 2020 Level 1: Marketable securities International equity securities $ 2 $ 2 $ 2 U.S. equity fund 71 62 62 U.S. government debt securities 59 55 50 Total Level 1 marketable securities 132 119 114 Level 2: Marketable securities U.S. government debt securities 121 113 104 Municipal debt securities 69 68 63 Corporate debt securities 202 188 177 International debt securities 4 2 2 Mortgage-backed securities 140 147 165 Total Level 2 marketable securities 536 518 511 Other assets Derivatives: Interest rate contracts 368 669 842 Foreign exchange contracts 30 48 92 Cross-currency interest rate contracts 4 8 17 Total Level 2 other assets 402 725 951 Accounts payable and accrued expenses Derivatives: Interest rate contracts 132 88 131 Foreign exchange contracts 89 26 68 Cross-currency interest rate contracts 2 1 Total Level 2 accounts payable and accrued expenses 223 115 199 Level 3: Marketable securities International debt securities 4 1 The contractual maturities of debt securities at May 2, 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. Mortgage-backed securities were primarily issued by U.S. government sponsored enterprises. Amortized Fair Cost Value Due in one year or less $ 20 $ 21 Due after one through five years 90 94 Due after five through 10 years 124 127 Due after 10 years 207 213 Mortgage-backed securities 136 140 Debt securities $ 577 $ 595 Fair value, nonrecurring measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. Equipment on operating leases – net and Other assets fair value for November 1, 2020 represents the fair value assessment at May 3, 2020. Fair Value Losses Three Months Ended Six Months Ended May 2 November 1 May 3 May 2 May 3 May 2 May 3 2021 2020 2020 2021 2020 2021 2020 Other receivables $ 1 Equipment on operating leases – net $ 371 $ 371 $ 22 $ 22 Property and equipment – net $ 135 $ 70 $ 62 $ 44 $ 62 Investments in unconsolidated affiliates $ 19 $ 10 $ 20 $ 20 Other assets $ 59 $ 59 $ 10 $ 6 $ 10 The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable Securities – Derivatives – Financing Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. Other Receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation (see Note 22). Equipment on Operating Leases – Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus estimates of return rates and equipment sale price at lease maturity. Inputs include historical return rates and realized sales values (see Note 22). 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 (see Note 22). 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 (see Note 22). Other Assets – The impairments of matured operating lease inventory are measured at the fair value of that inventory. The valuations were based on a market approach. The inputs include sales of comparable assets (see Note 22). |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
May 02, 2021 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | (20) 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 May 2, 2021, November 1, 2020, and May 3, 2020 were $1,850 million, $1,550 million, and $2,450 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 May 2, 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 $4 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at May 2, 2021, November 1, 2020, and May 3, 2020 were $8,340 million, $7,239 million, and $8,983 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 were as follows in millions of dollars: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued Hedged Item Relationships Relationships Total May 2, 2021 Long-term borrowings due within one year $ 163 $ 1 $ (1) Long-term borrowings 8,502 190 171 $ 361 November 1, 2020 Long-term borrowings due within one year $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 May 3, 2020 Long-term borrowings due within one year $ 214 $ (2) $ (2) Long-term borrowings 9,496 $ 726 36 762 Long-term borrowings due within one year are presented in short-term borrowings. Derivatives not designated as hedging instruments The Company has certain interest rate contracts (swaps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings, purchases or sales of inventory, and below market retail financing programs. The total notional amounts of these interest rate swaps at May 2, 2021, November 1, 2020, and May 3, 2020 were $8,694 million, $8,514 million, and $7,975 million, the foreign exchange contracts were $6,239 million, $4,903 million, and $4,430 million, and the cross-currency interest rate contracts were $151 million, $113 million, and $89 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 were as follows in millions of dollars: May 2 November 1 May 3 Other Assets 2021 2020 2020 Designated as hedging instruments: Interest rate contracts $ 301 $ 586 $ 758 Not designated as hedging instruments: Interest rate contracts 67 83 84 Foreign exchange contracts 30 48 92 Cross-currency interest rate contracts 4 8 17 Total not designated 101 139 193 Total derivative assets $ 402 $ 725 $ 951 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 80 $ 14 $ 30 Not designated as hedging instruments: Interest rate contracts 52 74 101 Foreign exchange contracts 89 26 68 Cross-currency interest rate contracts 2 1 Total not designated 143 101 169 Total derivative liabilities $ 223 $ 115 $ 199 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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Fair Value Hedges: Interest rate contracts - Interest expense $ (170) $ 415 $ (225) $ 511 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (15) (17) Reclassified from OCI Interest rate contracts - Interest expense (4) (4) (9) (6) Not Designated as Hedges: Interest rate contracts - Net sales $ 5 $ (20) $ 5 $ (24) Interest rate contracts - Interest expense * 1 (4) 3 Foreign exchange contracts - Cost of sales (48) 81 (100) 92 Foreign exchange contracts - Other operating * (78) 175 (204) 174 Total not designated $ (121) $ 237 $ (303) $ 245 * 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 May 2, 2021, November 1, 2020, and May 3, 2020, was $136 million, $89 million, and $130 million, respectively. In accordance with the limits established in these agreements, the Company posted no cash collateral at May 2, 2021, November 1, 2020, and May 3, 2020. In addition, the Company paid $8 million of collateral, either in cash or pledged securities, that was outstanding at May 2, 2021 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 was as follows in millions of dollars: Gross Amounts Netting May 2, 2021 Recognized Arrangements Collateral Net Amount Assets $ 402 $ (125) $ (21) $ 256 Liabilities 223 (125) (1) 97 Gross Amounts Netting November 1, 2020 Recognized Arrangements Collateral Net Amount Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 Gross Amounts Netting May 3, 2020 Recognized Arrangements Collateral Net Amount Assets $ 951 $ (125) $ (319) $ 507 Liabilities 199 (125) 74 |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 6 Months Ended |
May 02, 2021 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (21) 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 May 2, 2021, options for 2.8 million shares were outstanding with a weighted-average exercise price of $125.50 per share. The Company also granted 212 thousand restricted stock units to employees and non-employee directors in the first six months of 2021, of which 165 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 $258.42 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 May 2, 2021, the Company was authorized to grant an additional 17.7 million shares under the equity incentive plan. |
SPECIAL ITEMS
SPECIAL ITEMS | 6 Months Ended |
May 02, 2021 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | (22) 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 Six Months Ended May 2, 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) In the second quarter of 2020, the fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax . The impairment is the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The equipment on operating leases and matured operating lease inventory were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows will not cover the carrying amount of the net assets. A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax . The impairment was the result of an other than temporary decline in value. See Note 19 for fair value measurement information. Six Months Ended May 3, 2020 Expense: Construction & Forestry Financial Services Total Long-lived asset impairments – Cost of sales $ 62 $ 62 Investments in unconsolidated affiliates impairment – Equity in loss of unconsolidated affiliate 20 20 Equipment on operating leases & matured operating lease inventory impairments – Other operating expenses $ 32 32 Total expense $ 82 $ 32 $ 114 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. Six Months Ended May 3, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Cost of sales $ 21 $ 11 $ 9 $ 41 Research and development expenses 7 7 4 18 Selling, administrative and general expenses 18 19 14 $ 3 54 Total operating profit impact $ 46 $ 37 $ 27 $ 3 113 Other operating expenses 23 Total expense $ 136 Redeemable Noncontrolling Interest In the second quarter of 2020, the minority interest holder in Hagie Manufacturing Company, LLC exercised its right to sell the remaining 20 percent interest to the Company for $14 million. The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statement of consolidated income. This operation is included in the Company’s production and precision agriculture segment. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 6 Months Ended |
May 02, 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 second quarter ends for fiscal year 2021 and 2020 were May 2, 2021 and May 3, 2020, respectively. Both second quarters contained 13 weeks, while both year-to-date periods contained 26 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. Non-performing financing receivables are included in the estimate of expected credit losses. 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 date, 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) | 6 Months Ended |
May 02, 2021 | |
CASH FLOW INFORMATION | |
Restricted Cash Held | The Company’s restricted cash held at May 2, 2021, November 1, 2020, May 3, 2020, and November 3, 2019 was as follows in millions of dollars: May 2 November 1 May 3 November 3 2021 2020 2020 2019 Equipment operations $ 12 $ 11 $ 11 $ 21 Financial services 87 95 92 78 Total $ 99 $ 106 $ 103 $ 99 |
NEW ACCOUNTING STANDARDS (Table
NEW ACCOUNTING STANDARDS (Tables) | 6 Months Ended |
May 02, 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 were as 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) | 6 Months Ended |
May 02, 2021 | |
REVENUE RECOGNITION | |
Schedule of Revenue Recognition | The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition was as follows in millions of dollars: Three Months Ended May 2, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 2,211 $ 1,838 $ 1,481 $ 608 $ 6,138 Canada 252 144 320 153 869 Western Europe 589 738 514 26 1,867 Central Europe and CIS 531 160 209 9 909 Latin America 700 103 220 60 1,083 Asia, Africa, Australia, New Zealand, and Middle East 319 444 393 36 1,192 Total $ 4,602 $ 3,427 $ 3,137 $ 892 $ 12,058 Major product lines: Production agriculture $ 4,466 $ 4,466 Small agriculture $ 2,417 2,417 Turf 898 898 Construction $ 1,232 1,232 Compact construction 396 396 Roadbuilding 1,066 1,066 Forestry 343 343 Financial products 12 10 5 $ 892 919 Other 124 102 95 321 Total $ 4,602 $ 3,427 $ 3,137 $ 892 $ 12,058 Timing of revenue recognition: Revenue recognized at a point in time $ 4,562 $ 3,412 $ 3,114 $ 26 $ 11,114 Revenue recognized over time 40 15 23 866 944 Total $ 4,602 $ 3,427 $ 3,137 $ 892 $ 12,058 Six Months Ended May 2, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 3,820 $ 3,261 $ 2,683 $ 1,206 $ 10,970 Canada 364 223 508 307 1,402 Western Europe 1,038 1,224 953 50 3,265 Central Europe and CIS 692 244 387 18 1,341 Latin America 1,213 180 390 119 1,902 Asia, Africa, Australia, New Zealand, and Middle East 623 845 746 76 2,290 Total $ 7,750 $ 5,977 $ 5,667 $ 1,776 $ 21,170 Major product lines: Production agriculture $ 7,478 $ 7,478 Small agriculture $ 4,228 4,228 Turf 1,549 1,549 Construction $ 2,119 2,119 Compact construction 742 742 Roadbuilding 1,976 1,976 Forestry 633 633 Financial products 28 20 12 $ 1,776 1,836 Other 244 180 185 609 Total $ 7,750 $ 5,977 $ 5,667 $ 1,776 $ 21,170 Timing of revenue recognition: Revenue recognized at a point in time $ 7,668 $ 5,946 $ 5,614 $ 50 $ 19,278 Revenue recognized over time 82 31 53 1,726 1,892 Total $ 7,750 $ 5,977 $ 5,667 $ 1,776 $ 21,170 Three Months Ended May 3, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 1,841 $ 1,540 $ 1,263 $ 604 $ 5,248 Canada 177 89 166 151 583 Western Europe 540 571 358 22 1,491 Central Europe and CIS 258 80 140 8 486 Latin America 394 64 135 60 653 Asia, Africa, Australia, New Zealand, and Middle East 221 290 251 30 792 Total $ 3,431 $ 2,634 $ 2,313 $ 875 $ 9,253 Major product lines: Production agriculture $ 3,280 $ 3,280 Small agriculture $ 1,771 1,771 Turf 806 806 Construction $ 877 877 Compact construction 339 339 Roadbuilding 723 723 Forestry 254 254 Financial products 13 8 6 $ 875 902 Other 138 49 114 301 Total $ 3,431 $ 2,634 $ 2,313 $ 875 $ 9,253 Timing of revenue recognition: Revenue recognized at a point in time $ 3,396 $ 2,620 $ 2,287 $ 26 $ 8,329 Revenue recognized over time 35 14 26 849 924 Total $ 3,431 $ 2,634 $ 2,313 $ 875 $ 9,253 Six Months Ended May 3, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 3,276 $ 2,605 $ 2,283 $ 1,247 $ 9,411 Canada 261 143 338 307 1,049 Western Europe 905 984 697 44 2,630 Central Europe and CIS 389 169 299 18 875 Latin America 778 135 294 126 1,333 Asia, Africa, Australia, New Zealand, and Middle East 410 605 507 64 1,586 Total $ 6,019 $ 4,641 $ 4,418 $ 1,806 $ 16,884 Major product lines: Production agriculture $ 5,706 $ 5,706 Small agriculture $ 3,249 3,249 Turf 1,274 1,274 Construction $ 1,718 1,718 Compact construction 627 627 Roadbuilding 1,328 1,328 Forestry 528 528 Financial products 34 14 13 $ 1,806 1,867 Other 279 104 204 587 Total $ 6,019 $ 4,641 $ 4,418 $ 1,806 $ 16,884 Timing of revenue recognition: Revenue recognized at a point in time $ 5,941 $ 4,615 $ 4,366 $ 52 $ 14,974 Revenue recognized over time 78 26 52 1,754 1,910 Total $ 6,019 $ 4,641 $ 4,418 $ 1,806 $ 16,884 |
OTHER COMPREHENSIVE INCOME IT_2
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 6 Months Ended |
May 02, 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) was as follows in millions of dollars: 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 (398) (13) 11 (214) Amounts reclassified from accumulated other comprehensive income 101 5 106 Net current period other comprehensive income (loss) 287 (398) (8) 11 (108) Balance May 3, 2020 $ (3,628) $ (2,049) $ (68) $ 30 $ (5,715) Balance November 1, 2020 $ (3,918) $ (1,596) $ (58) $ 33 $ (5,539) Other comprehensive income (loss) items before reclassification 31 433 (15) 449 Amounts reclassified from accumulated other comprehensive income 123 7 130 Net current period other comprehensive income (loss) 154 433 7 (15) 579 Balance May 2, 2021 $ (3,764) $ (1,163) $ (51) $ 18 $ (4,960) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars. Retirement benefits adjustment reclassifications for actuarial gain (loss), prior service (credit) cost, and settlements are included in net periodic pension and other postretirement benefit costs (see Note 8). Before Tax After Tax (Expense) Tax Three Months Ended May 2, 2021 Amount Credit Amount Cumulative translation adjustment $ 37 $ 37 Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 4 $ (1) 3 Net unrealized gain (loss) on derivatives 4 (1) 3 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (14) 1 (13) Net unrealized gain (loss) on debt securities (14) 1 (13) Retirement benefits adjustment: Net actuarial gain (loss) 41 (9) 32 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 72 (19) 53 Prior service (credit) cost 2 2 Settlements 5 (1) 4 Net unrealized gain (loss) on retirement benefits adjustment 120 (29) 91 Total other comprehensive income (loss) $ 147 $ (29) $ 118 Before Tax After Tax (Expense) Tax Six Months Ended May 2, 2021 Amount Credit Amount Cumulative translation adjustment $ 431 $ 2 $ 433 Unrealized gain (loss) on derivatives: Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 9 (2) 7 Net unrealized gain (loss) on derivatives 9 (2) 7 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (17) 2 (15) Net unrealized gain (loss) on debt securities (17) 2 (15) Retirement benefits adjustment: Net actuarial gain (loss) 40 (9) 31 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 142 (36) 106 Prior service (credit) cost 4 (1) 3 Settlements 18 (4) 14 Net unrealized gain (loss) on retirement benefits adjustment 204 (50) 154 Total other comprehensive income (loss) $ 627 $ (48) $ 579 Before Tax After Tax (Expense) Tax Three Months Ended May 3, 2020 Amount Credit Amount Cumulative translation adjustment $ (441) $ (441) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (15) $ 3 (12) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 4 4 Net unrealized gain (loss) on derivatives (11) 3 (8) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 8 (2) 6 Net unrealized gain (loss) on debt securities 8 (2) 6 Retirement benefits adjustment: Net actuarial gain (loss) 1 (1) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 69 (17) 52 Prior service (credit) cost 2 2 Settlements 3 3 Net unrealized gain (loss) on retirement benefits adjustment 75 (18) 57 Total other comprehensive income (loss) $ (369) $ (17) $ (386) Before Tax After Tax (Expense) Tax Six Months Ended May 3, 2020 Amount Credit Amount Cumulative translation adjustment $ (398) $ (398) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (17) $ 4 (13) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 6 (1) 5 Net unrealized gain (loss) on derivatives (11) 3 (8) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 14 (3) 11 Net unrealized gain (loss) on debt securities 14 (3) 11 Retirement benefits adjustment: Net actuarial gain (loss) 247 (61) 186 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 138 (45) 93 Prior service (credit) cost 4 (1) 3 Settlements 6 (1) 5 Net unrealized gain (loss) on retirement benefits adjustment 395 (108) 287 Total other comprehensive income (loss) $ (108) $ (108) |
DIVIDENDS DECLARED AND PAID (Ta
DIVIDENDS DECLARED AND PAID (Tables) | 6 Months Ended |
May 02, 2021 | |
DIVIDENDS DECLARED AND PAID | |
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Dividends declared $ .90 $ .76 $ 1.66 $ 1.52 Dividends paid $ .76 $ .76 $ 1.52 $ 1.52 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
May 02, 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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Net income attributable to Deere & Company $ 1,790 $ 666 $ 3,013 $ 1,182 Average shares outstanding 312.8 313.2 313.1 313.3 Basic per share $ 5.72 $ 2.13 $ 9.62 $ 3.77 Average shares outstanding 312.8 313.2 313.1 313.3 Effect of dilutive share-based compensation 2.4 3.0 2.5 3.4 Total potential shares outstanding 315.2 316.2 315.6 316.7 Diluted per share $ 5.68 $ 2.11 $ 9.55 $ 3.73 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 6 Months Ended |
May 02, 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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Service cost $ 83 $ 77 $ 168 $ 161 Interest cost 69 87 138 174 Expected return on plan assets (200) (204) (400) (409) Amortization of actuarial loss 65 62 128 124 Amortization of prior service cost 3 3 6 6 Settlements 5 3 18 6 Net cost $ 25 $ 28 $ 58 $ 62 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Service cost $ 12 $ 12 $ 24 $ 24 Interest cost 25 35 51 72 Expected return on plan assets (20) (12) (39) (24) Amortization of actuarial loss 7 7 14 14 Amortization of prior service credit (1) (1) (2) (2) Curtailments 21 Net cost $ 23 $ 41 $ 48 $ 105 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
May 02, 2021 | |
SEGMENT REPORTING | |
Schedule of Segment Reporting Information | Worldwide net sales and revenues, operating profit, and identifiable assets by segment were as follows in millions of dollars. Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and OPEB benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. Three Months Ended Six Months Ended May 2 May 3 % May 2 May 3 % 2021 2020 Change 2021 2020 Change Net sales and revenues: Production & precision ag net sales $ 4,529 $ 3,365 +35 $ 7,599 $ 5,872 +29 Small ag & turf net sales 3,390 2,603 +30 5,904 4,583 +29 Construction & forestry net sales 3,079 2,256 +36 5,546 4,299 +29 Financial services revenues 892 875 +2 1,776 1,806 -2 Other revenues 168 154 +9 345 324 +6 Total net sales and revenues $ 12,058 $ 9,253 +30 $ 21,170 $ 16,884 +25 Operating profit: Production & precision ag $ 1,007 $ 568 +77 $ 1,651 $ 786 +110 Small ag & turf 648 226 +187 1,117 381 +193 Construction & forestry 489 96 +409 756 189 +300 Financial services 295 75 +293 553 254 +118 Total operating profit 2,439 965 +153 4,077 1,610 +153 Reconciling items (119) (54) +120 (226) (133) +70 Income taxes (530) (245) +116 (838) (295) +184 Net income attributable to Deere & Company $ 1,790 $ 666 +169 $ 3,013 $ 1,182 +155 Intersegment sales and revenues: Production & precision ag net sales $ 7 $ 7 $ 13 $ 14 -7 Small ag & turf net sales 4 1 +300 8 1 +700 Construction & forestry net sales Financial services 62 93 -33 112 159 -30 Outside the U.S. and Canada: Net sales and revenues $ 5,051 $ 3,422 +48 $ 8,798 $ 6,424 +37 Operating profit 1,003 232 +332 1,633 533 +206 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. May 2 November 1 May 3 2021 2020 2020 Identifiable assets: Production & precision ag $ 6,602 $ 5,708 $ 6,328 Small ag & turf 3,605 3,266 3,485 Construction & forestry 6,500 6,322 6,984 Financial services 50,849 48,719 48,664 Corporate 11,423 11,076 11,865 Total assets $ 78,979 $ 75,091 $ 77,326 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 6 Months Ended |
May 02, 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 follows in millions of dollars during the periods: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended May 2, 2021 Allowance: Beginning of period balance $ 180 $ 24 $ 7 $ 211 Provision (credit) (17) (6) (23) Write-offs (15) (9) (24) Recoveries 4 10 14 End of period balance $ 152 $ 19 $ 7 $ 178 Six Months Ended May 2, 2021 Allowance: Beginning of period balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 adoption 44 (13) 31 Provision (credit) (13) (16) (1) (30) Write-offs (23) (14) (37) Recoveries 10 19 29 Translation adjustments 1 1 End of period balance $ 152 $ 19 $ 7 $ 178 Financing receivables: End of period balance $ 28,979 $ 3,348 $ 2,952 $ 35,279 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended May 3, 2020 Allowance: Beginning of period balance $ 106 $ 40 $ 11 $ 157 Provision 65 20 85 Write-offs (26) (23) (49) Recoveries 3 6 9 Translation adjustments (7) (7) End of period balance $ 141 $ 43 $ 11 $ 195 Six Months Ended May 3, 2020 Allowance: Beginning of period balance $ 107 $ 40 $ 3 $ 150 Provision 82 18 6 106 Write-offs (45) (29) (74) Recoveries 6 14 20 Translation adjustments (9) 2 (7) End of period balance $ 141 $ 43 $ 11 $ 195 Financing receivables: End of period balance $ 24,404 $ 3,454 $ 4,278 $ 32,136 |
Customer Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, customer receivables), was as follows in millions of dollars at May 2, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 6,017 $ 8,375 $ 4,436 $ 2,402 $ 1,136 $ 494 $ 3,221 $ 26,081 30-59 days past due 20 64 41 19 10 5 20 179 60-89 days past due 5 34 18 9 4 2 5 77 90+ days past due 1 1 2 Non-performing 2 51 69 54 29 33 16 254 Construction and forestry Current 1,568 2,077 1,106 454 118 22 81 5,426 30-59 days past due 21 43 35 14 5 1 3 122 60-89 days past due 6 13 12 7 3 1 1 43 90+ days past due 2 10 5 6 3 26 Non-performing 1 38 37 22 11 7 1 117 Total customer receivables $ 7,640 $ 10,697 $ 5,765 $ 2,987 $ 1,322 $ 568 $ 3,348 $ 32,327 |
Age Credit Quality Analysis | The credit quality analysis of customer receivables was as follows in millions of dollars at November 1, 2020 and May 3, 2020: November 1, 2020 May 3, 2020 Retail Notes & Financing Leases Revolving Charge Accounts Total Retail Notes & Financing Leases Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 $ 19,178 $ 3,282 $ 22,460 30-59 days past due 135 13 148 215 32 247 60-89 days past due 64 4 68 103 13 116 90+ days past due 2 2 3 3 Non-performing 263 6 269 310 42 352 Construction and forestry Current 4,859 88 4,947 4,169 78 4,247 30-59 days past due 111 2 113 174 4 178 60-89 days past due 55 1 56 58 2 60 90+ days past due 14 14 18 18 Non-performing 106 1 107 176 1 177 Total customer receivables $ 27,206 $ 3,902 $ 31,108 $ 24,404 $ 3,454 $ 27,858 |
Wholesale Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at May 2, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 191 $ 144 $ 55 $ 13 $ 4 $ 1 $ 2,146 $ 2,554 30-59 days past due 60-89 days past due 90+ days past due Non-performing 22 22 Construction and forestry Current 5 10 15 1 1 3 341 376 30-59 days past due 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 196 $ 154 $ 92 $ 14 $ 5 $ 4 $ 2,487 $ 2,952 |
Age Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020 and May 3, 2020: November 1 May 3 2020 2020 Wholesale receivables: Agriculture and turf Current $ 3,010 $ 3,704 30-59 days past due 60-89 days past due 90+ days past due Non-performing 47 62 Construction and forestry Current 472 510 30-59 days past due 60-89 days past due 90+ days past due Non-performing 2 Total wholesale receivables $ 3,529 $ 4,278 |
SECURITIZATION OF FINANCING R_2
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 6 Months Ended |
May 02, 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: May 2 2021 Carrying value of liabilities $ 893 Maximum exposure to loss 926 |
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 were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Financing receivables securitized (retail notes) $ 4,122 $ 4,716 $ 4,703 Allowance for credit losses (15) (13) (18) Other assets 91 98 95 Total restricted securitized assets $ 4,198 $ 4,801 $ 4,780 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Short-term securitization borrowings $ 4,106 $ 4,682 $ 4,640 Accrued interest on borrowings 3 3 6 Total liabilities related to restricted securitized assets $ 4,109 $ 4,685 $ 4,646 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
May 02, 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: May 2 November 1 May 3 2021 2020 2020 Raw materials and supplies $ 2,469 $ 1,995 $ 2,394 Work-in-process 967 648 722 Finished goods and parts 4,334 4,006 4,646 Total FIFO value 7,770 6,649 7,762 Less adjustment to LIFO value 1,728 1,650 1,591 Inventories $ 6,042 $ 4,999 $ 6,171 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 6 Months Ended |
May 02, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Production & Small Ag Construction Precision Ag & Turf & Forestry Total Goodwill at November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Translation adjustments and other (5) (4) 9 Goodwill at May 3, 2020 $ 305 $ 260 $ 2,352 $ 2,917 Goodwill at November 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments and other 10 (2) 89 97 Goodwill at May 2, 2021 $ 355 $ 266 $ 2,569 $ 3,190 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: May 2 November 1 May 3 2021 2020 2020 Amortized intangible assets: Customer lists and relationships $ 549 $ 535 $ 509 Technology, patents, trademarks, and other 1,097 1,056 1,006 Total at cost 1,646 1,591 1,515 Less accumulated amortization: Customer lists and relationships 136 113 93 Technology, patents, trademarks, and other 323 274 234 Total accumulated amortization 459 387 327 Amortized intangible assets, net 1,187 1,204 1,188 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,310 $ 1,327 $ 1,311 |
TOTAL SHORT-TERM BORROWINGS (Ta
TOTAL SHORT-TERM BORROWINGS (Tables) | 6 Months Ended |
May 02, 2021 | |
TOTAL SHORT-TERM BORROWINGS | |
Short-Term Borrowings | Total short-term borrowings were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Equipment Operations Commercial paper $ 466 Notes payable to banks $ 122 $ 192 439 Finance lease obligations due within one year 24 21 13 Long-term borrowings due within one year 206 79 480 Total 352 292 1,398 Financial Services Commercial paper 2,259 1,238 2,958 Notes payable to banks 89 182 236 Long-term borrowings due within one year 7,211 6,870 6,587 Total 9,559 8,290 9,781 Short-term borrowings 9,911 8,582 11,179 Short-term securitization borrowings Equipment Operations 14 26 37 Financial Services 4,092 4,656 4,603 Total 4,106 4,682 4,640 Total short-term borrowings $ 14,017 $ 13,264 $ 15,819 |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 6 Months Ended |
May 02, 2021 | |
LONG-TERM BORROWINGS | |
Long-Term Borrowings | Long-term borrowings were as follows in millions of dollars. The financial services medium-term notes include fair value adjustments related to interest rate swaps. May 2 November 1 May 3 2021 2020 2020 Equipment Operations U.S. dollar notes and debentures: 8½% debentures due 2022 $ 105 $ 105 2.60% notes due 2022 $ 1,000 1,000 1,000 2.75% notes due 2025 700 700 700 6.55% debentures due 2028 200 200 200 5.375% notes due 2029 500 500 500 3.10% notes due 2030 700 700 700 8.10% debentures due 2030 250 250 250 7.125% notes due 2031 300 300 300 3.90% notes due 2042 1,250 1,250 1,250 2.875% notes due 2049 500 500 500 3.75% notes due 2050 850 850 850 Euro notes: .5% notes due 2023 (€500 principal) 606 584 548 1.375% notes due 2024 (€800 principal) 969 934 876 1.85% notes due 2028 (€600 principal) 727 700 657 2.20% notes due 2032 (€600 principal) 727 700 657 1.65% notes due 2039 (€650 principal) 788 759 712 Finance lease obligations and other notes 115 153 204 Less debt issuance costs and debt discounts 58 61 62 Total 10,124 10,124 9,947 Financial Services Notes and debentures: Medium-term notes: (principal as of: May 2, 2021 - $21,800, November 1, 2020 - $20,996, May 3, 2020 - $22,565) 22,161 21,661 23,326 Other notes 1,121 1,003 1,111 Less debt issuance costs and debt discounts 60 54 60 Total 23,222 22,610 24,377 Long-term borrowings $ 33,346 $ 32,734 $ 34,324 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
May 02, 2021 | |
LEASES | |
Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Condensed Consolidated Balance Sheet | Operating and finance lease right of use assets and liabilities were as follows in millions of dollars: May 2 November 1 May 3 2021 2020 2020 Operating leases: Other assets $ 345 $ 324 $ 341 Accounts payable and accrued expenses 328 305 319 Finance leases: Property and equipment - net $ 73 $ 63 $ 43 Short-term borrowings $ 24 $ 21 $ 13 Long-term borrowings 45 39 26 Total finance lease liabilities $ 69 $ 60 $ 39 |
Schedule of Right of Use Assets Obtained in Exchange for Lease Liabilities | Right of use assets obtained in exchange for lease liabilities were as follows in millions of dollars: Six Months Ended May 2, 2021 May 3, 2020 Operating leases $ 71 $ 10 Finance leases 23 18 |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Six Months Ended May 2, 2021 May 3, 2020 May 2, 2021 May 3, 2020 Sales-type and direct financing lease revenues $ 34 $ 32 $ 70 $ 68 Operating lease revenues 358 369 721 743 Variable lease revenues 6 6 12 11 Total lease revenues $ 398 $ 407 $ 803 $ 822 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
May 02, 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 was as follows in millions of dollars: Three Months Ended Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Beginning of period balance $ 1,803 $ 1,792 $ 1,743 $ 1,800 Payments (202) (223) (417) (453) Amortization of premiums received (65) (51) (128) (110) Accruals for warranties 248 210 495 432 Premiums received 90 69 163 134 Foreign exchange 2 (30) 20 (36) End of period balance $ 1,876 $ 1,767 $ 1,876 $ 1,767 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
May 02, 2021 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities (see Note 17). May 2, 2021 November 1, 2020 May 3, 2020 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 99 $ 94 $ 105 $ 103 $ 118 $ 111 Financial services 30,895 31,071 29,645 29,838 27,138 27,317 Total $ 30,994 $ 31,165 $ 29,750 $ 29,941 $ 27,256 $ 27,428 Financing receivables securitized – net: Equipment operations $ 15 $ 15 $ 26 $ 26 $ 37 $ 35 Financial services 4,092 4,173 4,677 4,773 4,648 4,722 Total $ 4,107 $ 4,188 $ 4,703 $ 4,799 $ 4,685 $ 4,757 Short-term Equipment operations $ 14 $ 15 $ 26 $ 26 $ 37 $ 37 Financial services 4,092 4,117 4,656 4,698 4,603 4,632 Total $ 4,106 $ 4,132 $ 4,682 $ 4,724 $ 4,640 $ 4,669 Long-term borrowings due within one year: Equipment operations $ 206 $ 211 $ 79 $ 78 $ 480 $ 477 Financial services 7,211 7,293 6,870 6,936 6,587 6,609 Total $ 7,417 $ 7,504 $ 6,949 $ 7,014 $ 7,067 $ 7,086 Long-term borrowings: Equipment operations $ 10,079 $ 11,391 $ 10,085 $ 11,837 $ 9,921 $ 11,192 Financial services 23,222 23,701 22,610 23,170 24,377 24,537 Total $ 33,301 $ 35,092 $ 32,695 $ 35,007 $ 34,298 $ 35,729 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, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021. May 2 November 1 May 3 2021 2020 2020 Level 1: Marketable securities International equity securities $ 2 $ 2 $ 2 U.S. equity fund 71 62 62 U.S. government debt securities 59 55 50 Total Level 1 marketable securities 132 119 114 Level 2: Marketable securities U.S. government debt securities 121 113 104 Municipal debt securities 69 68 63 Corporate debt securities 202 188 177 International debt securities 4 2 2 Mortgage-backed securities 140 147 165 Total Level 2 marketable securities 536 518 511 Other assets Derivatives: Interest rate contracts 368 669 842 Foreign exchange contracts 30 48 92 Cross-currency interest rate contracts 4 8 17 Total Level 2 other assets 402 725 951 Accounts payable and accrued expenses Derivatives: Interest rate contracts 132 88 131 Foreign exchange contracts 89 26 68 Cross-currency interest rate contracts 2 1 Total Level 2 accounts payable and accrued expenses 223 115 199 Level 3: Marketable securities International debt securities 4 1 |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at May 2, 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. Mortgage-backed securities were primarily issued by U.S. government sponsored enterprises. Amortized Fair Cost Value Due in one year or less $ 20 $ 21 Due after one through five years 90 94 Due after five through 10 years 124 127 Due after 10 years 207 213 Mortgage-backed securities 136 140 Debt securities $ 577 $ 595 |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. Equipment on operating leases – net and Other assets fair value for November 1, 2020 represents the fair value assessment at May 3, 2020. Fair Value Losses Three Months Ended Six Months Ended May 2 November 1 May 3 May 2 May 3 May 2 May 3 2021 2020 2020 2021 2020 2021 2020 Other receivables $ 1 Equipment on operating leases – net $ 371 $ 371 $ 22 $ 22 Property and equipment – net $ 135 $ 70 $ 62 $ 44 $ 62 Investments in unconsolidated affiliates $ 19 $ 10 $ 20 $ 20 Other assets $ 59 $ 59 $ 10 $ 6 $ 10 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
May 02, 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 were as follows in millions of dollars: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued Hedged Item Relationships Relationships Total May 2, 2021 Long-term borrowings due within one year $ 163 $ 1 $ (1) Long-term borrowings 8,502 190 171 $ 361 November 1, 2020 Long-term borrowings due within one year $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 May 3, 2020 Long-term borrowings due within one year $ 214 $ (2) $ (2) Long-term borrowings 9,496 $ 726 36 762 Long-term borrowings due within one year are presented in short-term borrowings. |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the condensed consolidated balance sheet were as follows in millions of dollars: May 2 November 1 May 3 Other Assets 2021 2020 2020 Designated as hedging instruments: Interest rate contracts $ 301 $ 586 $ 758 Not designated as hedging instruments: Interest rate contracts 67 83 84 Foreign exchange contracts 30 48 92 Cross-currency interest rate contracts 4 8 17 Total not designated 101 139 193 Total derivative assets $ 402 $ 725 $ 951 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 80 $ 14 $ 30 Not designated as hedging instruments: Interest rate contracts 52 74 101 Foreign exchange contracts 89 26 68 Cross-currency interest rate contracts 2 1 Total not designated 143 101 169 Total derivative liabilities $ 223 $ 115 $ 199 |
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 Six Months Ended May 2 May 3 May 2 May 3 2021 2020 2021 2020 Fair Value Hedges: Interest rate contracts - Interest expense $ (170) $ 415 $ (225) $ 511 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (15) (17) Reclassified from OCI Interest rate contracts - Interest expense (4) (4) (9) (6) Not Designated as Hedges: Interest rate contracts - Net sales $ 5 $ (20) $ 5 $ (24) Interest rate contracts - Interest expense * 1 (4) 3 Foreign exchange contracts - Cost of sales (48) 81 (100) 92 Foreign exchange contracts - Other operating * (78) 175 (204) 174 Total not designated $ (121) $ 237 $ (303) $ 245 * |
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid was as follows in millions of dollars: Gross Amounts Netting May 2, 2021 Recognized Arrangements Collateral Net Amount Assets $ 402 $ (125) $ (21) $ 256 Liabilities 223 (125) (1) 97 Gross Amounts Netting November 1, 2020 Recognized Arrangements Collateral Net Amount Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 Gross Amounts Netting May 3, 2020 Recognized Arrangements Collateral Net Amount Assets $ 951 $ (125) $ (319) $ 507 Liabilities 199 (125) 74 |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 6 Months Ended |
May 02, 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 Six Months Ended May 2, 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) In the second quarter of 2020, the fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax . The impairment is the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The equipment on operating leases and matured operating lease inventory were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows will not cover the carrying amount of the net assets. A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax . The impairment was the result of an other than temporary decline in value. See Note 19 for fair value measurement information. Six Months Ended May 3, 2020 Expense: Construction & Forestry Financial Services Total Long-lived asset impairments – Cost of sales $ 62 $ 62 Investments in unconsolidated affiliates impairment – Equity in loss of unconsolidated affiliate 20 20 Equipment on operating leases & matured operating lease inventory impairments – Other operating expenses $ 32 32 Total expense $ 82 $ 32 $ 114 |
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. Six Months Ended May 3, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Cost of sales $ 21 $ 11 $ 9 $ 41 Research and development expenses 7 7 4 18 Selling, administrative and general expenses 18 19 14 $ 3 54 Total operating profit impact $ 46 $ 37 $ 27 $ 3 113 Other operating expenses 23 Total expense $ 136 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
May 02, 2021 | Jan. 31, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | Nov. 01, 2020 | |
Fiscal period duration | 91 days | 91 days | 182 days | 182 days | ||
VIE-Not Primary Beneficiary | ||||||
Maximum Exposure to Losses | ||||||
Maximum exposure to loss | $ 926 | $ 926 | ||||
VIE-Not Primary Beneficiary | Brazilian Construction Equipment Manufacturer Joint Venture | ||||||
Maximum Exposure to Losses | ||||||
Maximum exposure to loss | $ 7 | $ 13 | 7 | $ 13 | $ 5 | |
Wirtgen Group Holding GmbH (Wirtgen) | ||||||
Net sales | $ 270 | $ 270 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 6 Months Ended | |||
May 02, 2021 | May 03, 2020 | Nov. 01, 2020 | Nov. 03, 2019 | |
Transfer of inventory to equipment on operating leases | $ 267 | $ 254 | ||
Accounts payable related to purchases of property and equipment | 40 | 46 | ||
Restricted cash | 99 | 103 | $ 106 | $ 99 |
Equipment Operations | ||||
Restricted cash | 12 | 11 | 11 | 21 |
Financial Services | ||||
Restricted cash | $ 87 | $ 92 | $ 95 | $ 78 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 6 Months Ended | |||
May 02, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | May 03, 2020 | |
Assets | ||||
Trade accounts and notes receivable - net | $ 6,158 | $ 4,173 | $ 4,171 | $ 5,986 |
Financing receivables - net | 30,994 | 29,723 | 29,750 | 27,256 |
Financing receivables securitized - net | 4,107 | 4,699 | 4,703 | 4,685 |
Deferred income taxes | 1,724 | 1,500 | 1,499 | 1,435 |
Liabilities | ||||
Accounts payable and accrued expenses | 10,527 | 10,126 | 10,112 | 9,072 |
Deferred income taxes | 533 | 512 | 519 | 475 |
Stockholders' Equity | ||||
Retained earnings | $ 34,105 | $ 31,611 | 31,646 | $ 30,556 |
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 | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Revenue Recognition | ||||
Net sales and revenues | $ 12,058 | $ 9,253 | $ 21,170 | $ 16,884 |
Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 11,114 | 8,329 | 19,278 | 14,974 |
Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 944 | 924 | 1,892 | 1,910 |
Production agriculture | ||||
Revenue Recognition | ||||
Net sales | 4,466 | 3,280 | 7,478 | 5,706 |
Small agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,417 | 1,771 | 4,228 | 3,249 |
Turf | ||||
Revenue Recognition | ||||
Net sales | 898 | 806 | 1,549 | 1,274 |
Construction | ||||
Revenue Recognition | ||||
Net sales | 1,232 | 877 | 2,119 | 1,718 |
Compact construction | ||||
Revenue Recognition | ||||
Net sales | 396 | 339 | 742 | 627 |
Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 1,066 | 723 | 1,976 | 1,328 |
Forestry | ||||
Revenue Recognition | ||||
Net sales | 343 | 254 | 633 | 528 |
Financial products | ||||
Revenue Recognition | ||||
Net sales and revenues | 919 | 902 | 1,836 | 1,867 |
Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 321 | 301 | 609 | 587 |
United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 6,138 | 5,248 | 10,970 | 9,411 |
Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 869 | 583 | 1,402 | 1,049 |
Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,867 | 1,491 | 3,265 | 2,630 |
Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 909 | 486 | 1,341 | 875 |
Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,083 | 653 | 1,902 | 1,333 |
Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,192 | 792 | 2,290 | 1,586 |
Production & Precision Ag | ||||
Revenue Recognition | ||||
Net sales and revenues | 4,602 | 3,431 | 7,750 | 6,019 |
Production & Precision Ag | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 4,562 | 3,396 | 7,668 | 5,941 |
Production & Precision Ag | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 40 | 35 | 82 | 78 |
Production & Precision Ag | Production agriculture | ||||
Revenue Recognition | ||||
Net sales | 4,466 | 3,280 | 7,478 | 5,706 |
Production & Precision Ag | Financial products | ||||
Revenue Recognition | ||||
Net sales and revenues | 12 | 13 | 28 | 34 |
Production & Precision Ag | Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 124 | 138 | 244 | 279 |
Production & Precision Ag | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,211 | 1,841 | 3,820 | 3,276 |
Production & Precision Ag | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 252 | 177 | 364 | 261 |
Production & Precision Ag | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 589 | 540 | 1,038 | 905 |
Production & Precision Ag | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 531 | 258 | 692 | 389 |
Production & Precision Ag | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 700 | 394 | 1,213 | 778 |
Production & Precision Ag | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 319 | 221 | 623 | 410 |
Small Ag & Turf | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,427 | 2,634 | 5,977 | 4,641 |
Small Ag & Turf | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,412 | 2,620 | 5,946 | 4,615 |
Small Ag & Turf | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 15 | 14 | 31 | 26 |
Small Ag & Turf | Small agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,417 | 1,771 | 4,228 | 3,249 |
Small Ag & Turf | Turf | ||||
Revenue Recognition | ||||
Net sales | 898 | 806 | 1,549 | 1,274 |
Small Ag & Turf | Financial products | ||||
Revenue Recognition | ||||
Net sales and revenues | 10 | 8 | 20 | 14 |
Small Ag & Turf | Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 102 | 49 | 180 | 104 |
Small Ag & Turf | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,838 | 1,540 | 3,261 | 2,605 |
Small Ag & Turf | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 144 | 89 | 223 | 143 |
Small Ag & Turf | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 738 | 571 | 1,224 | 984 |
Small Ag & Turf | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 160 | 80 | 244 | 169 |
Small Ag & Turf | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 103 | 64 | 180 | 135 |
Small Ag & Turf | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 444 | 290 | 845 | 605 |
Construction & Forestry | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,137 | 2,313 | 5,667 | 4,418 |
Construction & Forestry | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,114 | 2,287 | 5,614 | 4,366 |
Construction & Forestry | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 23 | 26 | 53 | 52 |
Construction & Forestry | Construction | ||||
Revenue Recognition | ||||
Net sales | 1,232 | 877 | 2,119 | 1,718 |
Construction & Forestry | Compact construction | ||||
Revenue Recognition | ||||
Net sales | 396 | 339 | 742 | 627 |
Construction & Forestry | Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 1,066 | 723 | 1,976 | 1,328 |
Construction & Forestry | Forestry | ||||
Revenue Recognition | ||||
Net sales | 343 | 254 | 633 | 528 |
Construction & Forestry | Financial products | ||||
Revenue Recognition | ||||
Net sales and revenues | 5 | 6 | 12 | 13 |
Construction & Forestry | Other | ||||
Revenue Recognition | ||||
Net sales and revenues | 95 | 114 | 185 | 204 |
Construction & Forestry | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,481 | 1,263 | 2,683 | 2,283 |
Construction & Forestry | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 320 | 166 | 508 | 338 |
Construction & Forestry | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 514 | 358 | 953 | 697 |
Construction & Forestry | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 209 | 140 | 387 | 299 |
Construction & Forestry | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 220 | 135 | 390 | 294 |
Construction & Forestry | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 393 | 251 | 746 | 507 |
Financial Services | ||||
Revenue Recognition | ||||
Net sales and revenues | 892 | 875 | 1,776 | 1,806 |
Financial Services | Revenue recognized at a point in time | ||||
Revenue Recognition | ||||
Net sales and revenues | 26 | 26 | 50 | 52 |
Financial Services | Revenue recognized over time | ||||
Revenue Recognition | ||||
Net sales and revenues | 866 | 849 | 1,726 | 1,754 |
Financial Services | Financial products | ||||
Revenue Recognition | ||||
Net sales and revenues | 892 | 875 | 1,776 | 1,806 |
Financial Services | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 608 | 604 | 1,206 | 1,247 |
Financial Services | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 153 | 151 | 307 | 307 |
Financial Services | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 26 | 22 | 50 | 44 |
Financial Services | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 9 | 8 | 18 | 18 |
Financial Services | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 60 | 60 | 119 | 126 |
Financial Services | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | $ 36 | $ 30 | $ 76 | $ 64 |
REVENUE RECOGNITION - Advanced
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | Nov. 01, 2020 | |
Advanced customer payments | |||||
Deferred revenue received | $ 1,249 | $ 1,077 | $ 1,249 | $ 1,077 | $ 1,090 |
Revenue recognized from deferred revenue | $ 111 | $ 97 | $ 335 | $ 278 |
REVENUE RECOGNITION - Unsatisfi
REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions | May 02, 2021USD ($) |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 962 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-05-03 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 199 |
Period estimated revenue to be recognized | 6 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 | $ 318 |
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 | $ 224 |
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 | $ 130 |
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 | $ 58 |
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 | $ 30 |
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 | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Accumulated other comprehensive income (loss) | ||||
Balance | $ 12,937 | |||
Net current period other comprehensive income (loss) | $ 118 | $ (386) | 579 | $ (108) |
Balance | 15,092 | 11,864 | 15,092 | 11,864 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (5,539) | (5,607) | ||
Other comprehensive income (loss) items before reclassification | 449 | (214) | ||
Amounts reclassified from accumulated other comprehensive income | 130 | 106 | ||
Net current period other comprehensive income (loss) | 118 | (386) | 579 | (108) |
Balance | (4,960) | (5,715) | (4,960) | (5,715) |
Retirement Benefits Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (3,918) | (3,915) | ||
Other comprehensive income (loss) items before reclassification | 31 | 186 | ||
Amounts reclassified from accumulated other comprehensive income | 123 | 101 | ||
Net current period other comprehensive income (loss) | 154 | 287 | ||
Balance | (3,764) | (3,628) | (3,764) | (3,628) |
Cumulative Translation Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (1,596) | (1,651) | ||
Other comprehensive income (loss) items before reclassification | 433 | (398) | ||
Net current period other comprehensive income (loss) | 433 | (398) | ||
Balance | (1,163) | (2,049) | (1,163) | (2,049) |
Unrealized Gain (Loss) on Derivatives | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (58) | (60) | ||
Other comprehensive income (loss) items before reclassification | (13) | |||
Amounts reclassified from accumulated other comprehensive income | 7 | 5 | ||
Net current period other comprehensive income (loss) | 7 | (8) | ||
Balance | (51) | (68) | (51) | (68) |
Unrealized Gain (Loss) on Debt Securities | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | 33 | 19 | ||
Other comprehensive income (loss) items before reclassification | (15) | 11 | ||
Net current period other comprehensive income (loss) | (15) | 11 | ||
Balance | $ 18 | $ 30 | $ 18 | $ 30 |
OTHER COMPREHENSIVE INCOME IT_4
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | $ (268) | $ (342) | $ (538) | $ (678) |
Total other comprehensive income (loss), before tax | 147 | (369) | 627 | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (29) | (17) | (48) | (108) |
Other Comprehensive Income (Loss), After Tax | ||||
Other Comprehensive Income (Loss), Net of Income Taxes | 118 | (386) | 579 | (108) |
Cumulative Translation Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | 37 | (441) | 431 | (398) |
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 | 37 | (441) | 433 | (398) |
Unrealized Gain (Loss) on Derivatives | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (15) | (17) | ||
Total other comprehensive income (loss), before tax | 4 | (11) | 9 | (11) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 3 | 4 | ||
Total other comprehensive income (loss), tax (expense) credit | (1) | 3 | (2) | 3 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (12) | (13) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 3 | (8) | 7 | (8) |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | 4 | 4 | 9 | 6 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (2) | (1) | |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 3 | 4 | 7 | 5 |
Unrealized Gain (Loss) on Debt Securities | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (14) | 8 | (17) | 14 |
Total other comprehensive income (loss), before tax | (14) | 8 | (17) | 14 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 1 | (2) | 2 | (3) |
Total other comprehensive income (loss), tax (expense) credit | 1 | (2) | 2 | (3) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (13) | 6 | (15) | 11 |
Other Comprehensive Income (Loss), Net of Income Taxes | (13) | 6 | (15) | 11 |
Retirement Benefits Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 41 | 1 | 40 | 247 |
Total other comprehensive income (loss), before tax | 120 | 75 | 204 | 395 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (9) | (1) | (9) | (61) |
Total other comprehensive income (loss), tax (expense) credit | (29) | (18) | (50) | (108) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 32 | 31 | 186 | |
Other Comprehensive Income (Loss), Net of Income Taxes | 91 | 57 | 154 | 287 |
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 72 | 69 | 142 | 138 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (19) | (17) | (36) | (45) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 53 | 52 | 106 | 93 |
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 2 | 2 | 4 | 4 |
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 | 2 | 2 | 3 | 3 |
Settlements | Reclassification out of accumulated other comprehensive income (loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 5 | 3 | 18 | 6 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (4) | (1) | |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 4 | $ 3 | $ 14 | $ 5 |
DIVIDENDS DECLARED AND PAID (De
DIVIDENDS DECLARED AND PAID (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
DIVIDENDS DECLARED AND PAID | ||||
Dividends declared (in dollars per share) | $ 0.90 | $ 0.76 | $ 1.66 | $ 1.52 |
Dividends paid (in dollars per share) | $ 0.76 | $ 0.76 | $ 1.52 | $ 1.52 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
EARNINGS PER SHARE | ||||
Net income attributable to Deere & Company | $ 1,790 | $ 666 | $ 3,013 | $ 1,182 |
Average shares outstanding | 312.8 | 313.2 | 313.1 | 313.3 |
Basic (in dollars per share) | $ 5.72 | $ 2.13 | $ 9.62 | $ 3.77 |
Diluted Earnings Per Share | ||||
Average shares outstanding | 312.8 | 313.2 | 313.1 | 313.3 |
Effect of dilutive share-based compensation (in shares) | 2.4 | 3 | 2.5 | 3.4 |
Total potential shares outstanding | 315.2 | 316.2 | 315.6 | 316.7 |
Diluted (in dollars per share) | $ 5.68 | $ 2.11 | $ 9.55 | $ 3.73 |
Antidilutive incremental shares excluded from computation of earnings per share | 0 | 1 | 0 | 0.6 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 02, 2021 | May 03, 2020 | Feb. 02, 2020 | May 02, 2021 | May 03, 2020 | |
Net Periodic Cost | |||||
Location of costs excluding the service component | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | |
Pensions | |||||
Net Periodic Cost | |||||
Service cost | $ 83 | $ 77 | $ 168 | $ 161 | |
Interest cost | 69 | 87 | 138 | 174 | |
Expected return on plan assets | (200) | (204) | (400) | (409) | |
Amortization of actuarial loss | 65 | 62 | 128 | 124 | |
Amortization of prior service (credit) cost | 3 | 3 | 6 | 6 | |
Settlements | 5 | 3 | 18 | 6 | |
Net cost | 25 | 28 | 58 | 62 | |
Employer Contributions | |||||
Defined benefit plan employer contributions | 68 | ||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 33 | 33 | |||
OPEB | |||||
Net Periodic Cost | |||||
Service cost | 12 | 12 | 24 | 24 | |
Interest cost | 25 | 35 | 51 | 72 | |
Expected return on plan assets | (20) | (12) | (39) | (24) | |
Amortization of actuarial loss | 7 | 7 | 14 | 14 | |
Amortization of prior service (credit) cost | (1) | (1) | (2) | (2) | |
Curtailments | 21 | ||||
Net cost | 23 | $ 41 | 48 | $ 105 | |
Employer Contributions | |||||
Defined benefit plan employer contributions | 85 | ||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 757 | 757 | |||
OPEB | 2020 Employee-Separation Programs | |||||
Net Periodic Cost | |||||
Curtailments | $ 21 | ||||
OPEB | United States | |||||
Employer Contributions | |||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $ 700 | $ 700 | |||
OPEB | United States | 2020 Employee-Separation Programs | |||||
Net Periodic Cost | |||||
Curtailments | $ 21 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
UNRECOGNIZED TAX BENEFITS | |||
Unrecognized tax benefits | $ 751 | $ 668 | $ 610 |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 189 | $ 134 | $ 145 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | Nov. 01, 2020 | |
Net Sales and Revenues | |||||
Net sales and revenues | $ 12,058 | $ 9,253 | $ 21,170 | $ 16,884 | |
% Change - Net sales and revenues | 30.00% | 25.00% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 2,439 | 965 | $ 4,077 | 1,610 | |
% Change - Operating profit | 153.00% | 153.00% | |||
Net income attributable to Deere & Company | $ 1,790 | 666 | $ 3,013 | 1,182 | |
% Change - Net income attributable to Deere & Company | 169.00% | 155.00% | |||
Identifiable Assets | |||||
Total Assets | $ 78,979 | 77,326 | $ 78,979 | 77,326 | $ 75,091 |
Operating Segments (Other) | |||||
Reconciling items | $ (119) | (54) | $ (226) | (133) | |
% Change - Reconciling items | 120.00% | 70.00% | |||
Income taxes | $ (530) | (245) | $ (838) | (295) | |
% Change - Income taxes | 116.00% | 184.00% | |||
Outside U.S. and Canada: | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 5,051 | 3,422 | $ 8,798 | 6,424 | |
% Change - Net sales and revenues | 48.00% | 37.00% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 1,003 | 232 | $ 1,633 | 533 | |
% Change - Operating profit | 332.00% | 206.00% | |||
Corporate | |||||
Identifiable Assets | |||||
Total Assets | $ 11,423 | 11,865 | $ 11,423 | 11,865 | 11,076 |
Other Revenues | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 168 | 154 | $ 345 | 324 | |
% Change - Net sales and revenues | 9.00% | 6.00% | |||
Production & Precision Ag | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 4,602 | 3,431 | $ 7,750 | 6,019 | |
Intersegment sales and revenues | 7 | 7 | $ 13 | 14 | |
% Change - Intersegment sales and revenues | (7.00%) | ||||
Operating Profit (Loss) | |||||
Total operating profit | $ 1,007 | 568 | $ 1,651 | 786 | |
% Change - Operating profit | 77.00% | 110.00% | |||
Identifiable Assets | |||||
Total Assets | $ 6,602 | 6,328 | $ 6,602 | 6,328 | 5,708 |
Small Ag & Turf | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 3,427 | 2,634 | 5,977 | 4,641 | |
Intersegment sales and revenues | $ 4 | 1 | $ 8 | 1 | |
% Change - Intersegment sales and revenues | 300.00% | 700.00% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 648 | 226 | $ 1,117 | 381 | |
% Change - Operating profit | 187.00% | 193.00% | |||
Identifiable Assets | |||||
Total Assets | $ 3,605 | 3,485 | $ 3,605 | 3,485 | 3,266 |
Construction & Forestry | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 3,137 | 2,313 | 5,667 | 4,418 | |
Operating Profit (Loss) | |||||
Total operating profit | $ 489 | 96 | $ 756 | 189 | |
% Change - Operating profit | 409.00% | 300.00% | |||
Identifiable Assets | |||||
Total Assets | $ 6,500 | 6,984 | $ 6,500 | 6,984 | 6,322 |
Financial Services | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 892 | 875 | $ 1,776 | 1,806 | |
% Change - Net sales and revenues | 2.00% | (2.00%) | |||
Intersegment sales and revenues | $ 62 | 93 | $ 112 | 159 | |
% Change - Intersegment sales and revenues | (33.00%) | (30.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 295 | 75 | $ 553 | 254 | |
% Change - Operating profit | 293.00% | 118.00% | |||
Identifiable Assets | |||||
Total Assets | $ 50,849 | 48,664 | $ 50,849 | 48,664 | $ 48,719 |
Net Sales | |||||
Net Sales and Revenues | |||||
Net sales | 10,998 | 8,224 | 19,049 | 14,754 | |
Net Sales | Production & Precision Ag | |||||
Net Sales and Revenues | |||||
Net sales | $ 4,529 | 3,365 | $ 7,599 | 5,872 | |
% Change - Net sales | 35.00% | 29.00% | |||
Net Sales | Small Ag & Turf | |||||
Net Sales and Revenues | |||||
Net sales | $ 3,390 | 2,603 | $ 5,904 | 4,583 | |
% Change - Net sales | 30.00% | 29.00% | |||
Net Sales | Construction & Forestry | |||||
Net Sales and Revenues | |||||
Net sales | $ 3,079 | $ 2,256 | $ 5,546 | $ 4,299 | |
% Change - Net sales | 36.00% | 29.00% |
FINANCING RECEIVABLES - Financi
FINANCING RECEIVABLES - Financing Receivables Past Due (Details) | 6 Months Ended |
May 02, 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 | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Credit Quality Analysis | |||
2021 | $ 7,640 | ||
2020 | 10,697 | ||
2019 | 5,765 | ||
2018 | 2,987 | ||
2017 | 1,322 | ||
Prior | 568 | ||
Revolving | 3,348 | ||
Total customer receivables | 32,327 | $ 31,108 | $ 27,858 |
Agriculture and Turf | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 20 | ||
2020 | 64 | ||
2019 | 41 | ||
2018 | 19 | ||
2017 | 10 | ||
Prior | 5 | ||
Revolving | 20 | ||
Total customer receivables | 179 | ||
Agriculture and Turf | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 5 | ||
2020 | 34 | ||
2019 | 18 | ||
2018 | 9 | ||
2017 | 4 | ||
Prior | 2 | ||
Revolving | 5 | ||
Total customer receivables | 77 | ||
Agriculture and Turf | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2019 | 1 | ||
2018 | 1 | ||
Total customer receivables | 2 | ||
Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 6,017 | ||
2020 | 8,375 | ||
2019 | 4,436 | ||
2018 | 2,402 | ||
2017 | 1,136 | ||
Prior | 494 | ||
Revolving | 3,221 | ||
Total customer receivables | 26,081 | ||
Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2021 | 2 | ||
2020 | 51 | ||
2019 | 69 | ||
2018 | 54 | ||
2017 | 29 | ||
Prior | 33 | ||
Revolving | 16 | ||
Total customer receivables | 254 | ||
Construction and Forestry | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 21 | ||
2020 | 43 | ||
2019 | 35 | ||
2018 | 14 | ||
2017 | 5 | ||
Prior | 1 | ||
Revolving | 3 | ||
Total customer receivables | 122 | ||
Construction and Forestry | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 6 | ||
2020 | 13 | ||
2019 | 12 | ||
2018 | 7 | ||
2017 | 3 | ||
Prior | 1 | ||
Revolving | 1 | ||
Total customer receivables | 43 | ||
Construction and Forestry | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2020 | 2 | ||
2019 | 10 | ||
2018 | 5 | ||
2017 | 6 | ||
Prior | 3 | ||
Total customer receivables | 26 | ||
Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 1,568 | ||
2020 | 2,077 | ||
2019 | 1,106 | ||
2018 | 454 | ||
2017 | 118 | ||
Prior | 22 | ||
Revolving | 81 | ||
Total customer receivables | 5,426 | ||
Construction and Forestry | Non-performing | |||
Credit Quality Analysis | |||
2021 | 1 | ||
2020 | 38 | ||
2019 | 37 | ||
2018 | 22 | ||
2017 | 11 | ||
Prior | 7 | ||
Revolving | 1 | ||
Total customer receivables | $ 117 |
FINANCING RECEIVABLES - Custome
FINANCING RECEIVABLES - Customer Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Customer Receivables | |||
Age Credit Quality Analysis | |||
Total customer receivables | $ 32,327 | $ 31,108 | $ 27,858 |
Customer Receivables | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 25,384 | 22,460 | |
Non-performing | 269 | 352 | |
Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 148 | 247 | |
Total customer receivables | 179 | ||
Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 68 | 116 | |
Total customer receivables | 77 | ||
Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 2 | 3 | |
Total customer receivables | 2 | ||
Customer Receivables | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | 4,947 | 4,247 | |
Non-performing | 107 | 177 | |
Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 113 | 178 | |
Total customer receivables | 122 | ||
Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 56 | 60 | |
Total customer receivables | 43 | ||
Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 14 | 18 | |
Total customer receivables | $ 26 | ||
Retail Notes and Financing Leases | |||
Age Credit Quality Analysis | |||
Total customer receivables | 27,206 | 24,404 | |
Retail Notes and Financing Leases | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 21,597 | 19,178 | |
Non-performing | 263 | 310 | |
Retail Notes and Financing Leases | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 135 | 215 | |
Retail Notes and Financing Leases | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 64 | 103 | |
Retail Notes and Financing Leases | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 2 | 3 | |
Retail Notes and Financing Leases | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | 4,859 | 4,169 | |
Non-performing | 106 | 176 | |
Retail Notes and Financing Leases | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 111 | 174 | |
Retail Notes and Financing Leases | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 55 | 58 | |
Retail Notes and Financing Leases | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Past due | 14 | 18 | |
Revolving Charge Accounts | |||
Age Credit Quality Analysis | |||
Total customer receivables | 3,902 | 3,454 | |
Revolving Charge Accounts | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 3,787 | 3,282 | |
Non-performing | 6 | 42 | |
Revolving Charge Accounts | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 13 | 32 | |
Revolving Charge Accounts | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Past due | 4 | 13 | |
Revolving Charge Accounts | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | 88 | 78 | |
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 | $ 2 |
FINANCING RECEIVABLES - Wholesa
FINANCING RECEIVABLES - Wholesale Receivables Credit Quality Analysis (Details) - Wholesale Receivables - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Credit Quality Analysis | |||
2021 | $ 196 | ||
2020 | 154 | ||
2019 | 92 | ||
2018 | 14 | ||
2017 | 5 | ||
Prior | 4 | ||
Revolving | 2,487 | ||
Total wholesale receivables | 2,952 | $ 3,529 | $ 4,278 |
Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 191 | ||
2020 | 144 | ||
2019 | 55 | ||
2018 | 13 | ||
2017 | 4 | ||
Prior | 1 | ||
Revolving | 2,146 | ||
Total wholesale receivables | 2,554 | ||
Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2019 | 22 | ||
Total wholesale receivables | 22 | ||
Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 5 | ||
2020 | 10 | ||
2019 | 15 | ||
2018 | 1 | ||
2017 | 1 | ||
Prior | 3 | ||
Revolving | 341 | ||
Total wholesale receivables | $ 376 |
FINANCING RECEIVABLES - Whole_2
FINANCING RECEIVABLES - Wholesale Receivables Age Credit Quality Analysis (Details) - Wholesale Receivables - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 2,952 | $ 3,529 | $ 4,278 |
Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Current | 3,010 | 3,704 | |
Non-performing | 47 | 62 | |
Construction and Forestry | |||
Age Credit Quality Analysis | |||
Current | $ 472 | 510 | |
Non-performing | $ 2 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Allowance: | ||||
Beginning of period balance | $ 211 | $ 157 | $ 184 | $ 150 |
Provision (credit) | (23) | (30) | ||
Provision | 85 | 106 | ||
Write-offs | (24) | (49) | (37) | (74) |
Recoveries | 14 | 9 | 29 | 20 |
Translation adjustments | 1 | |||
Translation adjustments | (7) | (7) | ||
End of period balance | 178 | 195 | 178 | 195 |
Allowance for credit losses increase (decrease) | (33) | |||
Financing receivables: | ||||
End of period balance | 35,279 | 32,136 | 35,279 | 32,136 |
Cumulative Effect from Adoption | ASU 2016-13 | ||||
Allowance: | ||||
Beginning of period balance | 31 | |||
Retail Notes and Financing Leases | ||||
Allowance: | ||||
Beginning of period balance | 180 | 106 | 133 | 107 |
Provision (credit) | (17) | (13) | ||
Provision | 65 | 82 | ||
Write-offs | (15) | (26) | (23) | (45) |
Recoveries | 4 | 3 | 10 | 6 |
Translation adjustments | 1 | |||
Translation adjustments | (7) | (9) | ||
End of period balance | 152 | 141 | 152 | 141 |
Financing receivables: | ||||
End of period balance | 28,979 | 24,404 | 28,979 | 24,404 |
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 | 24 | 40 | 43 | 40 |
Provision (credit) | (6) | (16) | ||
Provision | 20 | 18 | ||
Write-offs | (9) | (23) | (14) | (29) |
Recoveries | 10 | 6 | 19 | 14 |
End of period balance | 19 | 43 | 19 | 43 |
Financing receivables: | ||||
End of period balance | 3,348 | 3,454 | 3,348 | 3,454 |
Revolving Charge Accounts | Cumulative Effect from Adoption | ASU 2016-13 | ||||
Allowance: | ||||
Beginning of period balance | (13) | |||
Wholesale Receivables | ||||
Allowance: | ||||
Beginning of period balance | 7 | 11 | 8 | 3 |
Provision (credit) | (1) | |||
Provision | 6 | |||
Translation adjustments | 2 | |||
End of period balance | 7 | 11 | 7 | 11 |
Financing receivables: | ||||
End of period balance | $ 2,952 | $ 4,278 | $ 2,952 | $ 4,278 |
FINANCING RECEIVABLES - Trouble
FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 6 Months Ended | |
May 02, 2021USD ($)item | May 03, 2020USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | ||
Financing receivable contracts in troubled debt restructuring, number | item | 199 | 259 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 8 | $ 94 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 7 | $ 83 |
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 | 6 Months Ended | ||
May 02, 2021 | Nov. 01, 2020 | May 03, 2020 | |
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | $ 63,883 | $ 62,147 | $ 65,461 |
Short-term securitization borrowings | 4,106 | 4,682 | 4,640 |
Accrued interest on borrowings - securitization transactions | 3 | 3 | 6 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,109 | 4,685 | 4,646 |
Maximum remaining term of all restricted securitized retail notes | 6 years | ||
Securitized | |||
Securitization Transactions | |||
Financing receivables securitized (retail notes) | $ 4,122 | 4,716 | 4,703 |
Allowance for credit losses - securitization transactions | (15) | (13) | (18) |
Other assets - securitization transactions | 91 | 98 | 95 |
Total restricted securitized assets - securitization transactions | 4,198 | 4,801 | 4,780 |
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 2,875 | 2,898 | 3,017 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,833 | 2,856 | 2,977 |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 397 | 576 | 542 |
Total liabilities related to restricted securitized assets - securitization transactions | 383 | 554 | 515 |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | 893 | ||
Unconsolidated conduits, maximum exposure to loss | 926 | ||
Total Assets | 35,000 | ||
Total restricted securitized assets - securitization transactions | 926 | 1,327 | 1,221 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 893 | $ 1,275 | $ 1,154 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
INVENTORIES | |||
Raw materials and supplies | $ 2,469 | $ 1,995 | $ 2,394 |
Work-in-process | 967 | 648 | 722 |
Finished goods and parts | 4,334 | 4,006 | 4,646 |
Total FIFO value | 7,770 | 6,649 | 7,762 |
Less adjustment to LIFO value | 1,728 | 1,650 | 1,591 |
Inventories | $ 6,042 | $ 4,999 | $ 6,171 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
May 02, 2021 | May 03, 2020 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 3,081 | $ 2,917 |
Acquisitions | 12 | |
Translation adjustments and other | 97 | |
Goodwill - net, ending balance | 3,190 | 2,917 |
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 | 10 | (5) |
Goodwill - net, ending balance | 355 | 305 |
Small Ag & Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 268 | 264 |
Translation adjustments and other | (2) | (4) |
Goodwill - net, ending balance | 266 | 260 |
Construction & Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 2,480 | 2,343 |
Translation adjustments and other | 89 | 9 |
Goodwill - net, ending balance | $ 2,569 | $ 2,352 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Amortized intangible assets: | |||
Total at cost | $ 1,646 | $ 1,591 | $ 1,515 |
Total accumulated amortization | 459 | 387 | 327 |
Amortized intangible assets - net | 1,187 | 1,204 | 1,188 |
Unamortized intangible assets: | |||
Other intangible assets - net | 1,310 | 1,327 | 1,311 |
Customer Lists and Relationships | |||
Amortized intangible assets: | |||
Total at cost | 549 | 535 | 509 |
Total accumulated amortization | 136 | 113 | 93 |
Technology, Patents, Trademarks and Other | |||
Amortized intangible assets: | |||
Total at cost | 1,097 | 1,056 | 1,006 |
Total accumulated amortization | 323 | 274 | 234 |
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 | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Amortized Intangible Assets: | ||||
Amortization expense of other intangible assets | $ 27 | $ 26 | $ 62 | $ 51 |
Amortization expense of other intangible assets - remainder of 2021 | 55 | 55 | ||
Amortization expense of other intangible assets - 2022 | 109 | 109 | ||
Amortization expense of other intangible assets - 2023 | 107 | 107 | ||
Amortization expense of other intangible assets - 2024 | 103 | 103 | ||
Amortization expense of other intangible assets - 2025 | 100 | 100 | ||
Amortization expense of other intangible assets - 2026 | $ 98 | $ 98 |
TOTAL SHORT-TERM BORROWINGS (De
TOTAL SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Short-term borrowings | |||
Short-term borrowings | $ 9,911 | $ 8,582 | $ 11,179 |
Short-term securitization borrowings | 4,106 | 4,682 | 4,640 |
Total short-term borrowings | 14,017 | 13,264 | 15,819 |
Equipment Operations | |||
Short-term borrowings | |||
Short-term borrowings | 352 | 292 | 1,398 |
Short-term securitization borrowings | 14 | 26 | 37 |
Equipment Operations | Commercial Paper | |||
Short-term borrowings | |||
Short-term borrowings | 466 | ||
Equipment Operations | Notes Payable to Banks | |||
Short-term borrowings | |||
Short-term borrowings | 122 | 192 | 439 |
Equipment Operations | Finance Lease Obligations Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | 24 | 21 | 13 |
Equipment Operations | Long-term Borrowings Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | 206 | 79 | 480 |
Financial Services | |||
Short-term borrowings | |||
Short-term borrowings | 9,559 | 8,290 | 9,781 |
Short-term securitization borrowings | 4,092 | 4,656 | 4,603 |
Financial Services | Commercial Paper | |||
Short-term borrowings | |||
Short-term borrowings | 2,259 | 1,238 | 2,958 |
Financial Services | Notes Payable to Banks | |||
Short-term borrowings | |||
Short-term borrowings | 89 | 182 | 236 |
Financial Services | Long-term Borrowings Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | $ 7,211 | $ 6,870 | $ 6,587 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) € in Millions, $ in Millions | May 02, 2021USD ($) | May 02, 2021EUR (€) | Nov. 01, 2020USD ($) | Nov. 01, 2020EUR (€) | May 03, 2020USD ($) | May 03, 2020EUR (€) |
Long-term borrowings | ||||||
Total long-term borrowings | $ 33,346 | $ 32,734 | $ 34,324 | |||
Equipment Operations | ||||||
Long-term borrowings | ||||||
Less debt issuance costs and debt discounts | 58 | 61 | 62 | |||
Total long-term borrowings | 10,124 | 10,124 | 9,947 | |||
Equipment Operations | 8-1/2% Debentures Due 2022 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 105 | $ 105 | ||||
Debt instrument, stated interest rate | 8.50% | 8.50% | 8.50% | 8.50% | ||
Equipment Operations | 2.60% Notes Due 2022 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 1,000 | $ 1,000 | $ 1,000 | |||
Debt instrument, stated interest rate | 2.60% | 2.60% | 2.60% | 2.60% | 2.60% | 2.60% |
Equipment Operations | 2.75% Notes Due 2025 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 700 | $ 700 | $ 700 | |||
Debt instrument, stated interest rate | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% |
Equipment Operations | 6.55% Debentures Due 2028 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 200 | $ 200 | $ 200 | |||
Debt instrument, stated interest rate | 6.55% | 6.55% | 6.55% | 6.55% | 6.55% | 6.55% |
Equipment Operations | 5.375% Notes Due 2029 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 500 | $ 500 | $ 500 | |||
Debt instrument, stated interest rate | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% |
Equipment Operations | 3.10% Notes Due 2030 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 700 | $ 700 | $ 700 | |||
Debt instrument, stated interest rate | 3.10% | 3.10% | 3.10% | 3.10% | 3.10% | 3.10% |
Equipment Operations | 8.10% Debentures Due 2030 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 250 | $ 250 | $ 250 | |||
Debt instrument, stated interest rate | 8.10% | 8.10% | 8.10% | 8.10% | 8.10% | 8.10% |
Equipment Operations | 7.125% Notes Due 2031 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 300 | $ 300 | $ 300 | |||
Debt instrument, stated interest rate | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% |
Equipment Operations | 3.90% Notes Due 2042 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 1,250 | $ 1,250 | $ 1,250 | |||
Debt instrument, stated interest rate | 3.90% | 3.90% | 3.90% | 3.90% | 3.90% | 3.90% |
Equipment Operations | 2.875% Notes Due 2049 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 500 | $ 500 | $ 500 | |||
Debt instrument, stated interest rate | 2.875% | 2.875% | 2.875% | 2.875% | 2.875% | 2.875% |
Equipment Operations | 3.75% Notes Due 2050 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 850 | $ 850 | $ 850 | |||
Debt instrument, stated interest rate | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
Equipment Operations | .5% Notes Due 2023 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 606 | $ 584 | $ 548 | |||
Debt instrument, stated interest rate | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% |
Principal amount | € | € 500 | € 500 | € 500 | |||
Equipment Operations | 1.375% Notes Due 2024 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 969 | $ 934 | $ 876 | |||
Debt instrument, stated interest rate | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% |
Principal amount | € | € 800 | € 800 | € 800 | |||
Equipment Operations | 1.85% Notes Due 2028 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 727 | $ 700 | $ 657 | |||
Debt instrument, stated interest rate | 1.85% | 1.85% | 1.85% | 1.85% | 1.85% | 1.85% |
Principal amount | € | € 600 | € 600 | € 600 | |||
Equipment Operations | 2.20% Notes Due 2032 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 727 | $ 700 | $ 657 | |||
Debt instrument, stated interest rate | 2.20% | 2.20% | 2.20% | 2.20% | 2.20% | 2.20% |
Principal amount | € | € 600 | € 600 | € 600 | |||
Equipment Operations | 1.65% Notes Due 2039 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 788 | $ 759 | $ 712 | |||
Debt instrument, stated interest rate | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Principal amount | € | € 650 | € 650 | € 650 | |||
Equipment Operations | Other Notes | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 115 | $ 153 | $ 204 | |||
Financial Services | ||||||
Long-term borrowings | ||||||
Less debt issuance costs and debt discounts | 60 | 54 | 60 | |||
Total long-term borrowings | 23,222 | 22,610 | 24,377 | |||
Financial Services | Medium-term notes | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | 22,161 | 21,661 | 23,326 | |||
Principal amount | 21,800 | 20,996 | 22,565 | |||
Financial Services | Other Notes | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 1,121 | $ 1,003 | $ 1,111 |
LEASES - Lease Right of Use Ass
LEASES - Lease Right of Use Assets and Liabilities - (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Lessee | |||
Operating leases - Other assets | $ 345 | $ 324 | $ 341 |
Operating lease, right-of-use asset, Condensed Consolidated Balance Sheet location | Other assets | Other assets | Other assets |
Operating leases - Accounts payable and accrued expenses | $ 328 | $ 305 | $ 319 |
Operating lease, liability, Condensed Consolidated Balance Sheet location | Accounts payable and accrued expenses | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Finance leases - Property and equipment - net | $ 73 | $ 63 | $ 43 |
Finance lease, right-of-use asset, Condensed Consolidated Balance Sheet location | Property and equipment - net | Property and equipment - net | Property and equipment - net |
Finance leases - Short-term borrowings | $ 24 | $ 21 | $ 13 |
Finance lease, liability, short-term, Condensed Consolidated Balance Sheet location | Short-term borrowings | Short-term borrowings | Short-term borrowings |
Finance leases - Long-term borrowings | $ 45 | $ 39 | $ 26 |
Finance lease, liability, long-term, Condensed Consolidated Balance Sheet location | Long-term borrowings | Long-term borrowings | Long-term borrowings |
Total finance lease liabilities | $ 69 | $ 60 | $ 39 |
LEASES - Right of Use Assets Ob
LEASES - Right of Use Assets Obtained in Exchange for Lease Liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | |
May 02, 2021 | May 03, 2020 | |
Right of Use Assets Obtained in Exchange for Lease Liabilities | ||
Operating leases | $ 71 | $ 10 |
Finance leases | $ 23 | $ 18 |
LEASES - Lease Revenues (Detail
LEASES - Lease Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Lessor | ||||
Sales-type and direct finance lease revenues | $ 34 | $ 32 | $ 70 | $ 68 |
Operating lease revenues | 358 | 369 | 721 | 743 |
Variable lease revenues | 6 | 6 | 12 | 11 |
Total lease revenues | $ 398 | 407 | $ 803 | $ 822 |
Other Operating Expenses | ||||
Lessor | ||||
Equipment on operating leases impairment, pretax | 22 | |||
Non-cash operating lease inventory impairments | $ 10 |
LEASES - Short-term Relief to L
LEASES - Short-term Relief to Lessees (Details) - COVID-19 | 9 Months Ended | |
Nov. 01, 2020 | May 02, 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 | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||||
Historical claims rate, review period | 5 years | |||
Unamortized extended warranty premiums (deferred revenue) | $ 681 | $ 602 | $ 681 | $ 602 |
Change in Warranty Liability and Unearned Premiums | ||||
Beginning of period balance | 1,803 | 1,792 | 1,743 | 1,800 |
Payments | (202) | (223) | (417) | (453) |
Amortization of premiums received | (65) | (51) | (128) | (110) |
Accruals for warranties | 248 | 210 | 495 | 432 |
Premiums received | 90 | 69 | 163 | 134 |
Foreign exchange | 2 | (30) | 20 | (36) |
End of period balance | $ 1,876 | $ 1,767 | $ 1,876 | $ 1,767 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 6 Months Ended |
May 02, 2021USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 246 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 70 |
Miscellaneous contingent liabilities | 60 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 384 |
Guarantee obligations accrued losses | $ 16 |
Guarantee obligations term | 6 years |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | May 03, 2020 |
Fair Values of Financial Instruments | ||||
Financing receivables - net | $ 30,994 | $ 29,723 | $ 29,750 | $ 27,256 |
Financing receivables securitized - net | 4,107 | $ 4,699 | 4,703 | 4,685 |
Short-term securitization borrowings | 4,106 | 4,682 | 4,640 | |
Long-term borrowings | 33,346 | 32,734 | 34,324 | |
Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 7,504 | 7,014 | 7,086 | |
Long-term borrowings | 35,092 | 35,007 | 35,729 | |
Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 31,165 | 29,941 | 27,428 | |
Financing receivables securitized - net | 4,188 | 4,799 | 4,757 | |
Level 2 and Level 3 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 4,132 | 4,724 | 4,669 | |
Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 30,994 | 29,750 | 27,256 | |
Financing receivables securitized - net | 4,107 | 4,703 | 4,685 | |
Short-term securitization borrowings | 4,106 | 4,682 | 4,640 | |
Long-term borrowings due within one year | 7,417 | 6,949 | 7,067 | |
Long-term borrowings | 33,301 | 32,695 | 34,298 | |
Equipment Operations | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 14 | 26 | 37 | |
Long-term borrowings | 10,124 | 10,124 | 9,947 | |
Equipment Operations | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 211 | 78 | 477 | |
Long-term borrowings | 11,391 | 11,837 | 11,192 | |
Equipment Operations | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 94 | 103 | 111 | |
Financing receivables securitized - net | 15 | 26 | 35 | |
Short-term securitization borrowings | 15 | 26 | 37 | |
Equipment Operations | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 99 | 105 | 118 | |
Financing receivables securitized - net | 15 | 26 | 37 | |
Short-term securitization borrowings | 14 | 26 | 37 | |
Long-term borrowings due within one year | 206 | 79 | 480 | |
Long-term borrowings | 10,079 | 10,085 | 9,921 | |
Financial Services | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 4,092 | 4,656 | 4,603 | |
Long-term borrowings | 23,222 | 22,610 | 24,377 | |
Financial Services | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 4,117 | 4,698 | 4,632 | |
Long-term borrowings due within one year | 7,293 | 6,936 | 6,609 | |
Long-term borrowings | 23,701 | 23,170 | 24,537 | |
Financial Services | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 31,071 | 29,838 | 27,317 | |
Financing receivables securitized - net | 4,173 | 4,773 | 4,722 | |
Financial Services | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 30,895 | 29,645 | 27,138 | |
Financing receivables securitized - net | 4,092 | 4,677 | 4,648 | |
Short-term securitization borrowings | 4,092 | 4,656 | 4,603 | |
Long-term borrowings due within one year | 7,211 | 6,870 | 6,587 | |
Long-term borrowings | $ 23,222 | $ 22,610 | $ 24,377 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 668 | $ 641 | $ 626 |
Derivative assets | 402 | 725 | 951 |
Derivative liabilities | 223 | 115 | 199 |
Other Assets | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 402 | 725 | 951 |
Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 223 | 115 | 199 |
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 | 114 |
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 | 2 |
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 | 71 | 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 | 59 | 55 | 50 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 536 | 518 | 511 |
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 | 402 | 725 | 951 |
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 | 223 | 115 | 199 |
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 | 368 | 669 | 842 |
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 | 132 | 88 | 131 |
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 | 30 | 48 | 92 |
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 | 89 | 26 | 68 |
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 | 4 | 8 | 17 |
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 | |
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 | 121 | 113 | 104 |
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 | 69 | 68 | 63 |
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 | 202 | 188 | 177 |
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 | 4 | 2 | 2 |
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 | May 02, 2021USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 20 |
Amortized cost, due after one through five years | 90 |
Amortized cost, due after five through 10 years | 124 |
Amortized cost, due after 10 years | 207 |
Amortized cost, mortgage-backed securities | 136 |
Amortized cost, debt securities | 577 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 21 |
Fair value, due after one through five years | 94 |
Fair value, due after five through 10 years | 127 |
Fair value, due after 10 years | 213 |
Fair value, mortgage-backed securities | 140 |
Fair value, debt securities | $ 595 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | May 02, 2021 | May 03, 2020 | Nov. 01, 2020 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||
Other receivables | $ 1,212 | $ 1,473 | $ 1,212 | $ 1,220 |
Equipment on operating leases - net | 7,245 | 7,108 | 7,245 | 7,298 |
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 | 371 | 371 | |
Losses, Equipment on operating leases - net | 22 | 22 | ||
Property and equipment - net | 70 | 70 | 135 | |
Losses, Property and equipment - net | 62 | 44 | 62 | |
Investments in unconsolidated affiliates | 10 | 10 | 19 | |
Losses, Investments in unconsolidated affiliates | 20 | 20 | ||
Other assets | 59 | 59 | $ 59 | |
Losses, Other assets | $ 10 | $ 6 | $ 10 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 6 Months Ended | ||
May 02, 2021 | Nov. 01, 2020 | May 03, 2020 | |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ (4) | ||
Gains or losses reclassified from OCI to earnings | 0 | ||
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | $ 1,850 | $ 1,550 | $ 2,450 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Fair Value Hedges Member | Designated as Hedging Instruments | |||
Fair Value Hedges | |||
Notional amount of interest rate fair value hedge derivatives | $ 8,340 | $ 7,239 | $ 8,983 |
Long-term Borrowings Due in One Year | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 163 | 155 | 214 |
Active Hedging Relationships | 1 | 2 | |
Discontinued Relationships | (1) | 3 | (2) |
Total | 5 | (2) | |
Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 8,502 | 7,725 | 9,496 |
Active Hedging Relationships | 190 | 543 | 726 |
Discontinued Relationships | 171 | 122 | 36 |
Total | $ 361 | $ 665 | $ 762 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 8,694 | $ 8,514 | $ 7,975 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 6,239 | 4,903 | 4,430 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 151 | $ 113 | $ 89 |
DERIVATIVE INSTRUMENTS - Fair_2
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 402 | $ 725 | $ 951 |
Total derivative liabilities | 223 | 115 | 199 |
Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 402 | 725 | 951 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 223 | 115 | 199 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 301 | 586 | 758 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 80 | 14 | 30 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 101 | 139 | 193 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 143 | 101 | 169 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 67 | 83 | 84 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 52 | 74 | 101 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 30 | 48 | 92 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 89 | 26 | 68 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 4 | 8 | $ 17 |
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 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 02, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (121) | $ 237 | $ (303) | $ 245 |
Interest Rate Contracts | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI | (15) | (17) | ||
Interest Rate Contracts | Net Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | 5 | (20) | 5 | (24) |
Interest Rate Contracts | Interest Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | (170) | 415 | (225) | 511 |
Cash flow hedges, reclassified from OCI | (4) | (4) | (9) | (6) |
Not designated as hedges, gains (losses) | 1 | (4) | 3 | |
Foreign Exchange Contracts | Cost of Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (48) | 81 | (100) | 92 |
Foreign Exchange Contracts | Other Operating Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (78) | $ 175 | $ (204) | $ 174 |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | May 02, 2021 | Nov. 01, 2020 | May 03, 2020 |
Derivative instruments | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 136 | $ 89 | $ 130 |
Cash collateral posted | 0 | 0 | 0 |
Derivative Assets | |||
Gross amounts recognized | 402 | 725 | 951 |
Netting arrangements | (125) | (93) | (125) |
Collateral received | (21) | (274) | (319) |
Net amount | 256 | 358 | 507 |
Derivative Liabilities | |||
Gross amounts recognized | 223 | 115 | 199 |
Netting arrangements | (125) | (93) | (125) |
Collateral paid | (1) | ||
Net amount | 97 | $ 22 | $ 74 |
International Futures Market | |||
Derivative instruments | |||
Collateral to participate in an international futures market | $ 8 |
STOCK OPTION AND RESTRICTED S_2
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands | 1 Months Ended | 6 Months Ended |
Dec. 27, 2020 | May 02, 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) | 2,800 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 125.50 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 212 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 165 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 258.42 | |
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) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2021 | May 03, 2020 | May 02, 2021 | May 03, 2020 | |
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | $ 50 | |||
Total expense, pretax | $ 114 | |||
Cost of Sales | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 62 | |||
Equity in Loss of Unconsolidated Affiliate | ||||
Impairments and Other Benefit | ||||
Investments in unconsolidated affiliates impairment, pretax | 20 | |||
Other Operating Expenses | ||||
Impairments and Other Benefit | ||||
Equipment on operating leases impairment, pretax | $ 22 | |||
Operating lease inventory impairment, pretax | 10 | |||
Equipment on operating leases & matured operating lease inventory impairments, pretax | 32 | |||
Construction & Forestry | ||||
Impairments and Other Benefit | ||||
Total expense, pretax | 82 | |||
Construction & Forestry | Cost of Sales | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 62 | |||
Construction & Forestry | Equity in Loss of Unconsolidated Affiliate | ||||
Impairments and Other Benefit | ||||
Investments in unconsolidated affiliates impairment, pretax | 20 | |||
Financial Services | ||||
Impairments and Other Benefit | ||||
Total expense, pretax | 32 | |||
Financial Services | Other Operating Expenses | ||||
Impairments and Other Benefit | ||||
Equipment on operating leases & matured operating lease inventory impairments, pretax | $ 32 | |||
Impairments and Other Benefit | ||||
Impairments and Other Benefit | ||||
Total expense (benefit), pretax | (8) | |||
Impairments and Other Benefit | Foreign Tax Authority | Brazil | ||||
Impairments and Other Benefit | ||||
Indirect tax benefit, pretax | $ (58) | |||
Impairments and Other Benefit | Cost of Sales | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 50 | |||
Indirect tax benefit, pretax | (58) | |||
Impairments and Other Benefit | Production & Precision Ag | ||||
Impairments and Other Benefit | ||||
Total expense (benefit), pretax | (48) | |||
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) | |||
Impairments and Other Benefit | Small Ag & Turf | ||||
Impairments and Other Benefit | ||||
Total expense (benefit), pretax | 3 | |||
Impairments and Other Benefit | Small Ag & Turf | Cost of Sales | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 3 | |||
Impairments and Other Benefit | Construction & Forestry | ||||
Impairments and Other Benefit | ||||
Total expense (benefit), pretax | 37 | |||
Impairments and Other Benefit | Construction & Forestry | Cost of Sales | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 42 | |||
Indirect tax benefit, pretax | $ (5) | |||
Impairments and Other Benefit | German Asphalt Plant Factory | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 38 | |||
Fixed asset impairment, after-tax | 38 | |||
Impairments and Other Benefit | Manufacturing Locations | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | $ 12 | |||
Impairments | ||||
Impairments and Other Benefit | ||||
Equipment on operating leases impairment, pretax | 22 | |||
Operating lease inventory impairment, pretax | 10 | |||
Income tax benefit for the equipment on operating leases and matured operating lease inventory impairments | 9 | |||
Impairments | South African Construction Equipment Company | ||||
Impairments and Other Benefit | ||||
Investments in unconsolidated affiliates impairment, pretax | 20 | |||
Investments in unconsolidated affiliates impairment, after-tax | 20 | |||
Impairments | German Asphalt Plant Factory | ||||
Impairments and Other Benefit | ||||
Long-lived asset impairments, pretax | 62 | |||
Fixed asset impairments, after-tax | $ 62 |
SPECIAL ITEMS - Employee-Separa
SPECIAL ITEMS - Employee-Separation Programs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Feb. 02, 2020 | May 03, 2020 | |
OPEB | ||
Employee-Separation Programs | ||
Curtailment expense | $ 21 | |
2020 Employee-Separation Programs | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 136 | |
2020 Employee-Separation Programs | OPEB | ||
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 | 41 | |
2020 Employee-Separation Programs | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 18 | |
2020 Employee-Separation Programs | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 54 | |
2020 Employee-Separation Programs | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 113 | |
2020 Employee-Separation Programs | Other Operating Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 23 | |
2020 Employee-Separation Programs | Production & Precision Ag | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 21 | |
2020 Employee-Separation Programs | Production & Precision Ag | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 7 | |
2020 Employee-Separation Programs | Production & Precision Ag | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 18 | |
2020 Employee-Separation Programs | Production & Precision Ag | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 46 | |
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 | 19 | |
2020 Employee-Separation Programs | Small Ag & Turf | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 37 | |
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 | 4 | |
2020 Employee-Separation Programs | Construction & Forestry | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 14 | |
2020 Employee-Separation Programs | Construction & Forestry | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' expenses, pretax | 27 | |
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 |
SPECIAL ITEMS - Redeemable Nonc
SPECIAL ITEMS - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
May 03, 2020 | May 03, 2020 | |
Redeemable Noncontrolling Interest | ||
Noncontrolling interest redemption | $ 14 | $ 14 |
Production & Precision Ag | ||
Redeemable Noncontrolling Interest | ||
Noncontrolling interest redemption (as a percent) | 20.00% | |
Noncontrolling interest redemption | $ 14 | |
Noncontrolling interest redemption gain or loss | $ 0 |