Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 30, 2021 | Apr. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Oct. 31, 2021 | ||
Entity File Number | 1-4121 | ||
Entity Registrant Name | DEERE & CO | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-2382580 | ||
Entity Address, Address Line One | One John Deere Place | ||
Entity Address, City or Town | Moline | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 61265 | ||
City Area Code | 309 | ||
Local Phone Number | 765-8000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 307,407,282 | ||
Entity Public Float | $ 115,521,151,966 | ||
Current Fiscal Year End Date | --10-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
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 | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Net Sales and Revenues | |||
Net sales and revenues | $ 44,024 | $ 35,540 | $ 39,258 |
Costs and Expenses | |||
Research and development expenses | 1,587 | 1,644 | 1,783 |
Selling, administrative and general expenses | 3,383 | 3,477 | 3,551 |
Interest expense | 993 | 1,247 | 1,466 |
Total | 36,422 | 31,657 | 35,170 |
Income of Consolidated Group before Income Taxes | 7,602 | 3,883 | 4,088 |
Provision for income taxes | 1,658 | 1,082 | 852 |
Income of Consolidated Group | 5,944 | 2,801 | 3,236 |
Equity in income (loss) of unconsolidated affiliates | 21 | (48) | 21 |
Net Income | 5,965 | 2,753 | 3,257 |
Less: Net income attributable to noncontrolling interests | 2 | 2 | 4 |
Net Income Attributable to Deere & Company | $ 5,963 | $ 2,751 | $ 3,253 |
Per Share Data | |||
Basic (in dollars per share) | $ 19.14 | $ 8.77 | $ 10.28 |
Diluted (in dollars per share) | 18.99 | 8.69 | 10.15 |
Dividends declared (in dollars per share) | $ 3.61 | $ 3.04 | $ 3.04 |
Average Shares Outstanding | |||
Basic (in shares) | 311.6 | 313.5 | 316.5 |
Diluted (in shares) | 314 | 316.6 | 320.6 |
Net Sales | |||
Net Sales and Revenues | |||
Net sales and revenues | $ 39,737 | $ 31,272 | $ 34,886 |
Costs and Expenses | |||
Costs and expenses | 29,116 | 23,677 | 26,792 |
Finance and Interest Income | |||
Net Sales and Revenues | |||
Net sales and revenues | 3,296 | 3,450 | 3,493 |
Other | |||
Net Sales and Revenues | |||
Net sales and revenues | 991 | 818 | 879 |
Costs and Expenses | |||
Costs and expenses | $ 1,343 | $ 1,612 | $ 1,578 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | |||
Net Income | $ 5,965 | $ 2,753 | $ 3,257 |
Other Comprehensive Income (Loss), Net of Income Taxes | |||
Retirement benefits adjustment | 2,884 | (3) | (678) |
Cumulative translation adjustment | 118 | 55 | (448) |
Unrealized gain (loss) on derivatives | 16 | 2 | (75) |
Unrealized gain (loss) on debt securities | (18) | 14 | 29 |
Other Comprehensive Income (Loss), Net of Income Taxes | 3,000 | 68 | (1,172) |
Comprehensive Income of Consolidated Group | 8,965 | 2,821 | 2,085 |
Less: Comprehensive income attributable to noncontrolling interests | 2 | 2 | 4 |
Comprehensive Income Attributable to Deere & Company | $ 8,963 | $ 2,819 | $ 2,081 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Assets | ||
Cash and cash equivalents | $ 8,017 | $ 7,066 |
Marketable securities | 728 | 641 |
Receivables from unconsolidated affiliates | 27 | 31 |
Trade accounts and notes receivable - net | 4,208 | 4,171 |
Financing receivables - net | 33,799 | 29,750 |
Financing receivables securitized - net | 4,659 | 4,703 |
Other receivables | 1,738 | 1,220 |
Equipment on operating leases - net | 6,988 | 7,298 |
Inventories | 6,781 | 4,999 |
Property and equipment - net | 5,820 | 5,817 |
Investments in unconsolidated affiliates | 175 | 193 |
Goodwill | 3,291 | 3,081 |
Other intangible assets - net | 1,275 | 1,327 |
Retirement benefits | 3,601 | 863 |
Deferred income taxes | 1,037 | 1,499 |
Other assets | 1,970 | 2,432 |
Total Assets | 84,114 | 75,091 |
Liabilities | ||
Short-term borrowings | 10,919 | 8,582 |
Short-term securitization borrowings | 4,605 | 4,682 |
Payables to unconsolidated affiliates | 143 | 105 |
Accounts payable and accrued expenses | 12,205 | 10,112 |
Deferred income taxes | 576 | 519 |
Long-term borrowings | 32,888 | 32,734 |
Retirement benefits and other liabilities | 4,344 | 5,413 |
Total liabilities | 65,680 | 62,147 |
Commitments and contingencies (Note 21) | ||
Stockholders' Equity | ||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2021 and 2020), at paid-in amount | 5,054 | 4,895 |
Common stock in treasury, 228,366,144 shares in 2021 and 222,775,254 shares in 2020, at cost | (20,533) | (18,065) |
Retained earnings | 36,449 | 31,646 |
Accumulated other comprehensive income (loss) | (2,539) | (5,539) |
Total Deere & Company stockholders' equity | 18,431 | 12,937 |
Noncontrolling interests | 3 | 7 |
Total stockholders' equity | 18,434 | 12,944 |
Total Liabilities and Stockholders' Equity | $ 84,114 | $ 75,091 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Oct. 31, 2021 | Nov. 01, 2020 |
CONSOLIDATED BALANCE SHEET | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 |
Common stock, issued shares | 536,431,204 | 536,431,204 |
Common stock in treasury, shares | 228,366,144 | 222,775,254 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Cash Flows from Operating Activities | |||
Net income | $ 5,965 | $ 2,753 | $ 3,257 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (credit) for credit losses | (6) | 110 | 43 |
Provision for depreciation and amortization | 2,050 | 2,118 | 2,019 |
Impairment charges | 50 | 194 | 77 |
Share-based compensation expense | 82 | 81 | 82 |
Loss on sales of businesses and unconsolidated affiliates | 24 | 5 | |
Undistributed earnings of unconsolidated affiliates | 2 | (7) | 9 |
Credit for deferred income taxes | (441) | (11) | (465) |
Changes in assets and liabilities: | |||
Trade, notes, and financing receivables related to sales | 969 | 2,009 | (869) |
Inventories | (2,497) | 397 | (780) |
Accounts payable and accrued expenses | 1,884 | (7) | 46 |
Accrued income taxes payable/receivable | 11 | 8 | 173 |
Retirement benefits | 29 | (537) | (233) |
Other | (372) | 351 | 48 |
Net cash provided by operating activities | 7,726 | 7,483 | 3,412 |
Cash Flows from Investing Activities | |||
Collections of receivables (excluding receivables related to sales) | 18,959 | 17,381 | 16,706 |
Proceeds from maturities and sales of marketable securities | 109 | 93 | 89 |
Proceeds from sales of equipment on operating leases | 2,094 | 1,783 | 1,648 |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 93 | ||
Cost of receivables acquired (excluding receivables related to sales) | (23,653) | (19,965) | (18,873) |
Acquisitions of businesses, net of cash acquired | (244) | (66) | |
Purchases of marketable securities | (194) | (130) | (140) |
Purchases of property and equipment | (848) | (820) | (1,120) |
Cost of equipment on operating leases acquired | (1,732) | (1,836) | (2,329) |
Collateral on derivatives - net | (281) | 268 | 59 |
Other | 40 | (27) | (57) |
Net cash used for investing activities | (5,750) | (3,319) | (3,924) |
Cash Flows from Financing Activities | |||
Increase (decrease) in total short-term borrowings | 818 | (1,360) | (917) |
Proceeds from long-term borrowings | 8,722 | 9,271 | 9,986 |
Payments of long-term borrowings | (7,090) | (7,383) | (6,426) |
Proceeds from issuance of common stock | 148 | 331 | 178 |
Repurchases of common stock | (2,538) | (750) | (1,253) |
Dividends paid | (1,040) | (956) | (943) |
Other | (98) | (133) | (116) |
Net cash provided by (used for) financing activities | (1,078) | (980) | 509 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 55 | 32 | (56) |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 953 | 3,216 | (59) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year | 7,172 | 3,956 | 4,015 |
Cash, Cash Equivalents, and Restricted Cash at End of Year | $ 8,125 | $ 7,172 | $ 3,956 |
STATEMENT OF CHANGES IN CONSOLI
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained EarningsCumulative Effect from Adoption | Retained Earnings | Accumulated Other Comprehensive Income (Loss)Cumulative Effect from Adoption | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Cumulative Effect from Adoption | Total |
Balance (ASU 2016-01) at Oct. 28, 2018 | $ 8 | $ (8) | |||||||
Balance at Oct. 28, 2018 | $ 4,474 | $ (16,312) | $ 27,553 | $ (4,427) | $ 3 | $ 11,291 | |||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 3,253 | 4 | 3,257 | ||||||
Other comprehensive income (loss) | (1,172) | (1,172) | |||||||
Repurchases of common stock | (1,253) | (1,253) | |||||||
Treasury shares reissued | 91 | 91 | |||||||
Dividends declared | (963) | (2) | (965) | ||||||
Stock options and other | 168 | 1 | (1) | 168 | |||||
Balance at Nov. 03, 2019 | 4,642 | (17,474) | 29,852 | (5,607) | 4 | 11,417 | |||
Redeemable Noncontrolling Interest - Balance at Oct. 28, 2018 | 14 | ||||||||
Redeemable Noncontrolling Interest - Balance at Nov. 03, 2019 | 14 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 2,751 | 1 | 2,752 | ||||||
Other comprehensive income (loss) | 68 | 68 | |||||||
Repurchases of common stock | (750) | (750) | |||||||
Treasury shares reissued | 159 | 159 | |||||||
Dividends declared | (955) | (1) | (956) | ||||||
Stock options and other | 253 | (2) | 3 | 254 | |||||
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 Redeemable Noncontrolling Interest | |||||||||
Net income | 1 | ||||||||
Dividends declared | (1) | ||||||||
Noncontrolling interest redemption (Note 5) | (14) | ||||||||
Net income | 5,963 | 2 | 5,965 | ||||||
Other comprehensive income (loss) | 3,000 | 3,000 | |||||||
Repurchases of common stock | (2,538) | (2,538) | |||||||
Treasury shares reissued | 70 | 70 | |||||||
Dividends declared | (1,125) | (2) | (1,127) | ||||||
Stock options and other | 159 | (4) | 155 | ||||||
Balance at Oct. 31, 2021 | $ 5,054 | $ (20,533) | $ 36,449 | $ (2,539) | $ 3 | $ 18,434 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 12 Months Ended |
Oct. 31, 2021 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | 1. ORGANIZATION AND CONSOLIDATION Structure of Operations The information in the notes and related commentary are presented in a format that includes data grouped as follows: Consolidated – Represents the consolidation of the equipment operations and financial services. References to “Deere & Company” or “the company” refer to the entire enterprise. Equipment Operations – Represents the enterprise without financial services, while including the company’s production and precision agriculture operations, small agriculture and turf operations, construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Financial Services – Represents the company’s financing operations. New Segment Reporting Structure In fiscal year 2021, the company implemented a new 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 (PPA) and small agriculture and turf (SAT). There were no changes to the construction and forestry (CF) and financial services (FS) segments. 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 28. 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. Principles of Consolidation The consolidated financial statements represent the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company is the primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. Deere & Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 11). Other investments (less than 20 percent ownership) are recorded at cost. Fiscal Year The company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period, which generally occurs in October. An additional week is included in the fourth fiscal quarter every five or six years to realign the company’s fiscal quarters with the calendar. The fiscal year ends for 2021, 2020, and 2019 were October 31, 2021, November 1, 2020, and November 3, 2019, respectively. Fiscal years 2021 and 2020 contained 52 weeks compared to 53 weeks in fiscal year 2019. Unless otherwise stated, references to particular years or quarters refer to the company’s fiscal years and the associated periods in those fiscal years. Wirtgen Reporting Lag Removal 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 2021, the reporting lag was eliminated resulting in one additional month of Wirtgen activity in fiscal year 2021. 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 VIEs related to retail note securitizations (see Note 14). The company also has an interest in a joint venture that manufactures construction equipment in Indaiatuba, 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. In 2020, the investment in the joint venture was impaired. The maximum exposure to loss was $9 million and $5 million at October 31, 2021 and November 1, 2020, respectively. On August 19, 2021, the company announced the dissolution of the joint venture with Hitachi Construction Machinery Co., Ltd. and the purchase of the shares in the relevant joint venture manufacturing entities, including the above referenced factory in Indaiatuba, Brazil. Refer to Note 4 for more details. Argentina The company has equipment operations and financial services operations in Argentina. The U.S. dollar has historically been the functional currency for the company’s Argentina operations, as its business is generally indexed to the U.S. dollar due to the highly inflationary conditions. The Argentine government has certain capital and currency controls that restrict the company’s ability to access U.S. dollars in Argentina and remit earnings from its Argentine operations. As of October 31, 2021, the company's net investment in Argentina was approximately $578 million. The company's net investment in its Argentine operations is likely to increase as Deere generates net income that is unable to be remitted. Net sales and revenues from the company’s Argentine operations represented approximately 1 percent of consolidated net sales and revenues for 2021. The company has employed mechanisms to convert Argentine pesos into U.S. dollars to the extent possible. The net peso exposure as of October 31, 2021 was approximately $3 million. Argentine peso-denominated monetary assets and liabilities are remeasured at each balance sheet date using the official currency exchange rate. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following are significant accounting policies in addition to those included in other notes to the consolidated financial statements. 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. Revenue Recognition Sales of equipment and service parts are recognized when each of the following criteria are met: (1) the company and an independent customer approve a contract with commercial substance, (2) the sales price is determinable and collectability of the payments are probable based on the terms outlined in the contract, and (3) control of the goods has transferred to the independent customer. In most situations, the independent customer is a dealer, which subsequently sells the equipment and service parts purchased from the company to a retail customer, who can finance the equipment with the financial services segment or another source of financing. In some situations, the company sells directly to a retail customer. The term “customer” includes both dealers and retail customers to whom the company makes direct sales. Transfer of control generally occurs for equipment and service parts when the good is delivered as specified in the contract and the risks and rewards of ownership are transferred. In the U.S. and most international locations, this transfer occurs primarily when goods are shipped. In Canada and some other international locations, certain goods are shipped to dealers on a consignment basis under which the risks and rewards of ownership are not transferred to the dealer at the time the goods are shipped. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. Generally, no right of return exists on sales of equipment. In limited instances, equipment is transferred to a customer or a financial institution with an obligation to repurchase the equipment for a specified amount, which is exercisable at the customer’s option. When the equipment is expected to be repurchased, those arrangements are accounted for as leases. No sale is recorded at the time of the equipment transfer and the difference between sale price and the specified repurchase amount is recognized as revenue on a straight-line basis until the customer’s option expires. When this equipment is not expected to be repurchased, a sale is recorded with a return obligation. Under the terms of sales agreements with dealers, interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from one until payment is received by the company. Interest charged may not be forgiven and the past due interest rates exceed market rates. In 2020 and to a much lesser extent in 2021, short-term payment relief was provided to dealers due to the economic effects of COVID (see Note 13). Dealers cannot cancel purchases after the company recognizes a sale and are responsible for payment even if the equipment is not sold to retail customers. If the interest-free or below market interest rate period exceeds one year, the company adjusts the expected sales revenue for the effects of the time value of money using a current market interest rate. The revenue related to the financing component is recognized in “Finance and interest income” using the interest method. The company does not adjust the sales price to account for a financing component if the expected interest-free or below market period is one year or less. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The estimated returns are recorded in “Other assets” for the inventory value of estimated returns, adjusted for restocking fees. The estimated dealer refund liability, adjusted for restocking fees, is recorded in “Accounts payable and accrued expenses.” The estimated returns are based on historical return rates, current dealer inventory levels, and current economic conditions. The company remanufactures used engines and components (cores) that are sold to dealers and retail customers for maintenance and repair parts. Revenue for remanufactured components is recognized using the same criteria as other parts sales. When a remanufactured part is sold, the company collects a deposit that is repaid if the customer returns a core that meets certain specifications within a defined time period. The deposit received from the customer is recognized as a liability in “Accounts payable and accrued expenses” and the used component that is expected to be returned is recognized in “Other assets” in the consolidated balance sheet. When a customer returns a core, the deposit is repaid, the liability reversed, and the returned core is recorded in inventory to be remanufactured and sold to another customer. If a core is not returned within the required time, the deposit is recognized as revenue in “Net sales,” and the estimated core return is recorded as an expense in “Cost of sales” in the statement of consolidated income. Certain equipment is sold with precision guidance, telematics, and other information gathering and analyzing capabilities. These technology solutions require hardware, software, and may include an obligation to provide services for a period of time. These solutions are generally bundled with the sale of the equipment but can also be purchased or renewed separately. The revenue related to the hardware and embedded software is generally recognized at the time of the equipment sale and recorded in “Net sales” in the statement of consolidated income. The revenue for the future services is generally deferred and recognized over the service period. The deferred revenue is recorded as a contract liability in “Accounts payable and accrued expenses” in the consolidated balance sheet and is recognized in “Other income” with the associated expenses recognized in “Other operating expenses” in the statement of consolidated income. Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of financing receivables are recognized as a reduction in “Finance and interest income” over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in “Finance and interest income.” Sales Incentives In certain markets, the company provides sales incentives to dealers. These incentives may be based on a dealer’s purchase volume or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. At the time of the sale to a dealer, the company records an estimated cost of these programs as a reduction to the sales price. The estimated cost is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to a retail customer. Actual cost differences from the original cost estimate are recognized in “Net sales.” Product Warranties For most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period. At the time a sale is recognized, the estimated future warranty costs are recorded. The company generally determines its total warranty liability by applying historical warranty 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 with consideration of current quality developments. The company also offers extended warranty arrangements for purchase at the customer’s option. The premiums for extended warranties are recognized in “Other income” in the statement of consolidated income primarily in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in “Accounts payable and accrued expenses” in the consolidated balance sheet (see Note 21). Sales and Transaction Taxes The company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with revenue producing transactions between the company and its customers. These taxes include sales, use, value-added, and some excise taxes. The company elected to exclude these taxes from the determination of the sales price (excluded from revenues). Contract Costs Incremental costs of obtaining an equipment revenue contract are recognized as an expense when incurred since the amortization period would be one year or less. Advertising Costs Advertising costs are charged to expense as incurred. This expense was $212 million in 2021, $196 million in 2020, and $215 million in 2019. Depreciation and Amortization Property and equipment, capitalized software, and other intangible assets are generally stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives generally using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and revised products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are generally charged to expense as incurred. Securitization of Receivables Certain financing receivables are periodically transferred to special purpose entities (SPEs) in securitization transactions (see Note 14). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Financing receivables securitized - net.” The company recognizes finance income over the lives of these receivables using the interest method. Receivables and Allowances All financing and trade receivables are reported on the balance sheet at outstanding principal and accrued interest, adjusted for any write-offs, the allowance for credit losses, and any unamortized deferred fees or costs on originated financing receivables. The company also records an allowance and provision for credit losses related to the receivables from sales (trade receivables and certain financing receivables). The allowance is a reduction to the receivable balances and the provision is recorded in “Selling, administrative and general expenses.” The allowance represents an estimate of the credit losses expected over the life of the receivable portfolio. The company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. 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. Receivables are written-off to the allowance when the account is considered uncollectible (see Note 13). Impairment of Long-Lived Assets, Goodwill, and Other Intangible Assets The company evaluates the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. Goodwill and unamortized intangible assets are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances indicate a reduction in the fair value below the carrying value. Goodwill is allocated and reviewed for impairment by reporting unit. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (see Notes 5 and 26). Derivative Financial Instruments The company’s policy is 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, fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. 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 (see Note 27). Foreign Currency Translation The functional currencies for most of the company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange derivative contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2021, 2020, and 2019 was $(134) million, $18 million, and $(13) million, respectively. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 12 Months Ended |
Oct. 31, 2021 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | 3. NEW ACCOUNTING STANDARDS New Accounting Standards Adopted In the first quarter of 2021, the company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13 , Measurement of Credit Losses on Financial Instruments, which establishes Accounting Standards Codification (ASC) 326, Financial Instruments - Credit Losses. This ASU was adopted using a modified-retrospective approach. The ASU, along with related amendments, revised the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. The company holds deposits from dealers (dealer deposits), which are recorded in “Accounts payable and accrued expenses” 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 13 contains additional disclosures, while the company’s updated allowance for credit losses accounting policy is included in Note 2 and the MD&A’s Critical Accounting Estimates. The company also adopted the following standards in 2021, none of which had a material effect on the company’s consolidated financial statements: Accounting Standards Updates 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: Accounting Standards Updates 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 |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 12 Months Ended |
Oct. 31, 2021 | |
ACQUISITIONS AND DISPOSITIONS | |
ACQUISITIONS AND DISPOSITIONS | 4. ACQUISITIONS AND DISPOSITIONS Pending Acquisitions In August 2021, the company and Hitachi Construction Machinery Co., Ltd. (Hitachi) entered into a Joint Venture Dissolution Agreement (Dissolution Agreement) pursuant to which the parties agreed to voluntarily terminate (Termination) the joint venture agreement dated May 16, 1988 between the company and Hitachi. The joint venture agreement governs the terms of the joint venture between the company and Hitachi for the manufacture and distribution of excavators in North, Central, and South America under the John Deere and Hitachi trademarks and tradenames. In connection with the Termination, the company will purchase all of Hitachi’s shares in the relevant joint venture manufacturing entities located in Kernersville, North Carolina, U.S.; Langley, British Columbia, Canada; and Indaiatuba, Brazil. The company will receive certain intellectual property rights relating to certain manufacturing processes under a perpetual license agreement. The initial cash consideration consists of $275 million for the shares and an intellectual property license. The cash consideration will be offset by cash acquired and the settlement of intercompany balances. The company will also assume substantially all liabilities and debt of the joint venture entities. In addition to the foregoing payments, Hitachi will pay the book value of certain pre-existing inventory. Following the Termination, the company will purchase John Deere-branded excavators, components, and service parts from Hitachi under a new supply agreement with a duration that ranges from 5 Acquisitions Bear Flag In August 2021, the company acquired Bear Flag Robotics, Inc. (Bear Flag) to further accelerate Deere’s development and delivery of advanced technology. Bear Flag’s technology is complementary to other Deere technology efforts and enables autonomous tractor operations. The total cash purchase price before final adjustments, net of cash acquired of $4 million, was $225 million, with an additional $25 million to be recognized as compensation expense over the four-year post-acquisition service period. In addition to the cash purchase price, $19 million of liabilities were assumed. The preliminary asset and liability fair values at the acquisition date in millions of dollars follow: August 2021 Property and equipment $ 1 Goodwill 189 Other intangible assets 54 Total assets $ 244 Accounts payable and accrued expenses $ 1 Deferred income taxes 18 Total liabilities $ 19 The identified intangible was related to technology with a seven-year amortization period. The goodwill will not be deductible for tax purposes. Unimil In September 2020, the company acquired Unimil, a leading Brazilian company in the after-sales service parts business for sugarcane harvesters, which is based in Piracicaba, Brazil. The total cash purchase price, net of cash acquired of $5 million, was $66 million, with $6 million funded to an escrow to secure certain indemnity obligations. In addition to the cash purchase price, $14 million of liabilities were assumed. The asset and liability fair values at the acquisition date in millions of dollars follow: September 2020 Trade accounts and notes receivable $ 5 Other receivables 2 Inventories 10 Property and equipment 22 Goodwill 28 Other intangible assets 13 Total assets $ 80 Accounts payable and accrued expenses $ 5 Deferred income taxes 9 Total liabilities $ 14 The identified intangibles were primarily related to customer relationships, trade name, and a non-compete agreement. The weighted-average amortization period is approximately nine years . The goodwill is not deductible for tax purposes. For the acquisitions, the goodwill was the result of future cash flows and related fair value exceeding the fair value of the identified assets and liabilities. The results of these operations have been included in the company’s consolidated financial statements in the production and precision agriculture operating segment and the pro forma results of operations as if these acquisitions had occurred at the beginning of the current or comparative fiscal year would not differ significantly from the reported results. Dispositions In September 2020, the company sold its German lawn mower business. At the time of the sale, total assets were $26 million, which were recorded in “Other assets,” and total liabilities were $5 million, which were recorded in “Accounts payable and accrued expenses.” No cash proceeds were received, resulting in a loss on sale, including transaction costs, of $24 million pretax and after-tax . The loss was recorded with a pretax and after-tax accrual recognized in the third quarter of 2020 when a definitive sale agreement was finalized. The loss was recorded in “Other operating expenses” in the small agriculture and turf segment. In October 2019, the company sold its construction and forestry retail locations in Canada. At the time of the sale, total assets were $187 million consisting of inventory of $138 million, property and equipment – net of $24 million, other assets of $3 million, and goodwill of $22 million. The liabilities consisted of $10 million of accounts payable and accrued expenses. In addition, the company accrued $15 million for transaction expenses and related costs. The total proceeds from the sale were approximately $187 million, with $93 million received in 2019. The remaining sales price was due based on standard payment terms of new equipment sales to independent dealers and separately negotiated terms ranging from 12 months to five years . A pretax loss of approximately $5 million was recorded in “Other operating expenses” in the construction and forestry segment. For the retail location disposition, the company sells equipment, service parts, and provides other services to the purchaser as an independent dealer. |
SPECIAL ITEMS
SPECIAL ITEMS | 12 Months Ended |
Oct. 31, 2021 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | 5. SPECIAL ITEMS In 2021, the company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. The fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and after-tax Expense (benefit): PPA SAT CF Total Gain on sale – Other income $ (27) $ (27) Long-lived asset impairments – Cost of sales $ 5 3 $ 42 50 Brazil indirect tax – Cost of sales (53) (5) (58) Total pretax expense (benefit) $ (48) $ (24) $ 37 $ (35) In 2020, the company closed a factory that produced small agricultural equipment in China, recognized impairments in the fixed assets in an asphalt plant factory in Germany, a construction equipment factory in Brazil, and other international locations, recorded impairments of equipment on operating leases and matured lease inventory, as well as impairments of the investment in certain affiliate companies. See Note 26 for a description of the valuation methodologies used to measure these impairments. PPA SAT CF FS Total Factory closure – Cost of sales $ 20 $ 20 Long-lived asset impairments: Cost of sales 13 $ 80 93 SA&G expenses $ 2 2 4 Other operating expenses $ 32 32 Affiliate company impairments – Equity in loss of unconsolidated affiliates 50 50 Total pretax impairments and closure costs $ 2 $ 35 $ 130 $ 32 $ 199 In the fourth quarter of 2019, the company recorded non-cash charges in “Other operating expenses” of approximately $59 million pretax for the impairment of equipment on operating leases and approximately $18 million pretax on matured operating lease inventory recorded in “Other assets.” The impairment was the result of lower estimated values of used agriculture and construction equipment than originally estimated with the probable effect that the future cash flows would not cover the carrying amount of the net assets. The assets are part of the financial services operations (see Note 26). Employee-Separation Programs During 2020, the company implemented employee-separation programs for the company’s salaried workforce in several geographic areas, including the U.S., Europe, Asia, and Latin America. The programs’ main purpose was to improve efficiency through a leaner, more flexible organization. The programs were largely voluntary in nature with the expense recorded primarily in the period in which the employees irrevocably accepted a separation offer. For the limited involuntary employee-separation programs, the expense was recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period. The programs provided for cash payments based on years of service, and in some countries subsidized healthcare for a limited period and outplacement services. The programs’ total pretax expenses in 2020 were as follows: PPA SAT CF FS Total Cost of sales $ 51 $ 31 $ 22 $ 104 Research and development expenses 29 18 8 55 Selling, administrative and general expenses 53 43 24 $ 15 135 Total operating profit impact $ 133 $ 92 $ 54 $ 15 294 Non-operating profit impact* 41 Total pretax expense $ 335 * Relates primarily to non-cash charges of $34 million from curtailments in certain OPEB plans (see Note 8) and other corporate expenses, both of which were recorded outside of operating profit . Approximately $6 million of the curtailment charge was recorded by financial services. During 2019, the company also completed certain employee-separation programs designed for specific functions and geographic areas as part of its on-going efforts to create a more efficient organizational structure. These programs provided for cash payments based on years of service. The expenses were recorded in the period the employees irrevocably accepted the separation offer with the following total pretax expenses: PPA SAT CF FS Total Cost of sales $ 3 $ 2 $ 5 Research and development expenses 1 1 Selling, administrative and general expenses 7 6 $ 2 $ 9 24 Total pretax expense $ 11 $ 8 $ 2 $ 9 $ 30 Redeemable Noncontrolling Interest In 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. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Oct. 31, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 6. REVENUE RECOGNITION The company’s net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow: PPA SAT CF FS Total 2021 Primary geographic markets: United States $ 8,223 $ 6,505 $ 5,697 $ 2,389 $ 22,814 Canada 853 498 1,047 617 3,015 Western Europe 2,086 2,433 1,807 103 6,429 Central Europe and CIS 1,322 475 828 39 2,664 Latin America 2,916 456 903 247 4,522 Asia, Africa, Australia, New Zealand, and Middle East 1,417 1,679 1,331 153 4,580 Total $ 16,817 $ 12,046 $ 11,613 $ 3,548 $ 44,024 Major product lines: Production agriculture $ 16,248 $ 16,248 Small agriculture $ 8,619 8,619 Turf 2,853 2,853 Construction $ 4,684 4,684 Compact construction 1,489 1,489 Roadbuilding 3,749 3,749 Forestry 1,280 1,280 Financial products 55 46 20 $ 3,548 3,669 Other 514 528 391 1,433 Total $ 16,817 $ 12,046 $ 11,613 $ 3,548 $ 44,024 Revenue recognized: At a point in time $ 16,659 $ 11,969 $ 11,522 $ 105 $ 40,255 Over time 158 77 91 3,443 3,769 Total $ 16,817 $ 12,046 $ 11,613 $ 3,548 $ 44,024 PPA SAT CF FS Total 2020 Primary geographic markets: United States $ 6,889 $ 5,059 $ 4,548 $ 2,500 $ 18,996 Canada 640 350 802 598 2,390 Western Europe 1,827 1,937 1,479 90 5,333 Central Europe and CIS 898 493 646 35 2,072 Latin America 1,902 334 553 234 3,023 Asia, Africa, Australia, New Zealand, and Middle East 1,119 1,322 1,153 132 3,726 Total $ 13,275 $ 9,495 $ 9,181 $ 3,589 $ 35,540 Major product lines: Production agriculture $ 12,662 $ 12,662 Small agriculture $ 6,827 6,827 Turf 2,390 2,390 Construction $ 3,521 3,521 Compact construction 1,269 1,269 Roadbuilding 2,924 2,924 Forestry 1,100 1,100 Financial products 69 37 25 $ 3,589 3,720 Other 544 241 342 1,127 Total $ 13,275 $ 9,495 $ 9,181 $ 3,589 $ 35,540 Revenue recognized: At a point in time $ 13,106 $ 9,439 $ 9,071 $ 106 $ 31,722 Over time 169 56 110 3,483 3,818 Total $ 13,275 $ 9,495 $ 9,181 $ 3,589 $ 35,540 PPA SAT CF FS Total 2019 Primary geographic markets: United States $ 6,772 $ 5,590 $ 6,082 $ 2,482 $ 20,926 Canada 675 421 1,107 617 2,820 Western Europe 1,813 2,053 1,586 87 5,539 Central Europe and CIS 859 564 749 37 2,209 Latin America 2,527 367 719 272 3,885 Asia, Africa, Australia, New Zealand, and Middle East 1,039 1,449 1,265 126 3,879 Total $ 13,685 $ 10,444 $ 11,508 $ 3,621 $ 39,258 Major product lines: Production agriculture $ 13,001 $ 13,001 Small agriculture $ 7,422 7,422 Turf 2,650 2,650 Construction $ 5,188 5,188 Compact construction 1,279 1,279 Roadbuilding 3,193 3,193 Forestry 1,403 1,403 Financial products 78 22 30 $ 3,621 3,751 Other 606 350 415 1,371 Total $ 13,685 $ 10,444 $ 11,508 $ 3,621 $ 39,258 Revenue recognized: At a point in time $ 13,509 $ 10,406 $ 11,391 $ 111 $ 35,417 Over time 176 38 117 3,510 3,841 Total $ 13,685 $ 10,444 $ 11,508 $ 3,621 $ 39,258 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 extended warranty premiums, 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 21, was $1,344 million and $1,090 million at October 31, 2021 and November 1, 2020, respectively. The contract liability is reduced as the revenue is recognized. Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $485 million in 2021, $425 million in 2020, and $444 million in 2019. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $1,062 million at October 31, 2021. The estimated revenue to be recognized by fiscal year follows in millions of dollars: 2022 - $339, 2023 - $289, 2024 - $199, 2025 - $101, 2026 - $64, and later years - $70. As permitted, the company elected only to disclose remaining 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 retail customers for equipment, service parts, repair services, and certain telematics services. |
CASH FLOW INFORMATION
CASH FLOW INFORMATION | 12 Months Ended |
Oct. 31, 2021 | |
CASH FLOW INFORMATION | |
CASH FLOW INFORMATION | 7. CASH FLOW INFORMATION The company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the company’s short-term borrowings, excluding the current maturities of finance lease obligations and long-term borrowings, mature or may require payment within three months or less. The equipment operations sell a significant portion of their trade receivables to financial services. These intercompany cash flows are eliminated in the consolidated cash flows. All cash flows from the changes in trade accounts and notes receivable (see Note 13) 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 (see Note 13) 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 $662 million, $614 million, and $678 million in 2021, 2020, and 2019, respectively. The company also had accounts payable related to purchases of property and equipment of $121 million, $98 million, and $152 million at October 31, 2021, November 1, 2020, and November 3, 2019, respectively. The company’s restricted cash held at October 31, 2021, November 1, 2020, and November 3, 2019 was as follows in millions of dollars: 2021 2020 2019 Equipment operations $ 12 $ 11 $ 21 Financial services 96 95 78 Total $ 108 $ 106 $ 99 The restricted cash, recorded in “Other assets” in the consolidated balance sheet, primarily relates to securitization of financing receivables (see Note 14). Cash payments for interest and income taxes consisted of the following in millions of dollars: 2021 2020 2019 Interest: Equipment operations $ 584 $ 553 $ 666 Financial services 736 998 1,154 Intercompany eliminations (279) (272) (360) Consolidated $ 1,041 $ 1,279 $ 1,460 Income taxes: Equipment operations $ 1,996 $ 1,000 $ 1,018 Financial services 348 297 (57) Intercompany eliminations (269) (228) 150 Consolidated $ 2,075 $ 1,069 $ 1,111 |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Oct. 31, 2021 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | 8. PENSION AND OTHER POSTRETIREMENT BENEFITS The company has several funded and unfunded defined benefit pension plans and other postretirement benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries. The company uses an October 31 measurement date for these plans. The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages: 2021 2020 2019 Pensions Service cost $ 332 $ 321 $ 261 Interest cost 276 347 447 Expected return on plan assets (799) (819) (802) Amortization of actuarial loss 259 256 148 Amortization of prior service cost 12 13 11 Settlements/curtailments 21 25 5 Net cost $ 101 $ 143 $ 70 Weighted-average assumptions Discount rates - service cost 2.5% 2.9% 4.0% Discount rates - interest cost 2.1% 2.7% 4.0% Rate of compensation increase 3.7% 3.8% 3.8% Expected long-term rates of return 6.0% 6.4% 6.5% Interest crediting rate - U.S. cash balance plan 1.7% 2.1% 3.3% The components of net periodic OPEB cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages: 2021 2020 2019 OPEB Service cost $ 48 $ 49 $ 41 Interest cost 102 140 216 Expected return on plan assets (77) (50) (36) Amortization of actuarial loss 27 29 16 Amortization of prior service credit (4) (4) (72) Curtailments 34 Net cost $ 96 $ 198 $ 165 Weighted-average assumptions Discount rates - service cost 3.4% 3.7% 4.8% Discount rates - interest cost 2.1% 2.7% 4.2% Expected long-term rates of return 5.4% 5.7% 5.7% The 2020 OPEB curtailments were a result of the employee-separation programs (see Note 5). The spot yield curve approach is used to estimate the service and interest cost components of the net periodic pension and OPEB costs by applying the specific spot rates along the yield curve used to determine the benefit plan obligations to relevant projected cash outflows. The components of net periodic pension and OPEB cost excluding the service component are primarily included in the line item “ Other operating expenses ” in the statement of consolidated income. The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2021 2020 2019 Pensions Net cost $ 101 $ 143 $ 70 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (2,821) 438 887 Amortization of actuarial loss (256) (249) (143) Amortization of prior service cost (12) (11) (11) Settlements (22) (26) (3) Total (gain) loss recognized in other comprehensive (income) loss (3,111) 152 730 Total recognized in comprehensive (income) loss $ (3,010) $ 295 $ 800 The previous OPEB cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2021 2020 2019 OPEB Net cost $ 96 $ 198 $ 165 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (671) (136) 141 Amortization of actuarial loss (27) (29) (16) Amortization of prior service credit 4 4 72 Total (gain) loss recognized in other comprehensive (income) loss (694) (161) 197 Total recognized in comprehensive (income) loss $ (598) $ 37 $ 362 The benefit plan obligations, funded status, and the assumptions related to the obligations at October 31, 2021 and November 1, 2020, respectively, in millions of dollars follow: Pensions OPEB 2021 2020 2021 2020 Change in benefit obligations Beginning of year balance $ (15,021) $ (14,250) $ (5,410) $ (5,622) Service cost (332) (321) (48) (49) Interest cost (276) (347) (102) (140) Actuarial gain (loss) 373 (771) 381 119 Benefits paid 755 749 290 297 Health care subsidies (29) (28) Settlements/curtailments 1 15 Foreign exchange and other (25) (96) (12) 13 End of year balance (14,525) (15,021) (4,930) (5,410) Change in plan assets (fair value) Beginning of year balance 14,574 14,024 1,518 936 Actual return on plan assets 3,249 1,144 367 33 Employer contribution 101 108 157 843 Benefits paid (755) (749) (290) (297) Settlements (12) Foreign exchange and other 21 59 3 3 End of year balance 17,190 14,574 1,755 1,518 Funded status $ 2,665 $ (447) $ (3,175) $ (3,892) Weighted-average assumptions Discount rates 2.7% 2.5% 2.8% 2.7% Rate of compensation increase 3.7% 3.7% Interest crediting rate - U.S. cash balance plan 1.8% 1.7% The company remeasured the U.S. hourly pension plan as of November 30, 2021 due to the new collective bargaining agreement, which decreased the plan’s funded status and increased pension expense in 2022. See Note 29 for more information. The actuarial gain for pension for 2021 was primarily due to an increase in discount rates. The actuarial gain for OPEB for 2021 was primarily due to a decrease in health care trend rates, favorable mortality assumptions, and an increase in discount rates. The actuarial loss for pension for 2020 was primarily due to a decrease in discount rates partially offset by favorable mortality assumptions. The actuarial gain for OPEB for 2020 was primarily due to the U.S. enactment of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) that repealed the health insurance provider fee effective in 2021, favorable mortality assumptions, and a decrease in health care trend rates, partially offset by a decrease in discount rates. The mortality assumptions for the 2021 and 2020 benefit plan obligations used the most recent tables and scales issued by the Society of Actuaries at that time. The 2021 mortality assumption includes an adjustment to the scale related to COVID. The amounts recognized at October 31, 2021 and November 1, 2020, respectively, in millions of dollars consisted of the following: Pensions OPEB 2021 2020 2021 2020 Amounts recognized in balance sheet Noncurrent asset $ 3,601 $ 863 Current liability (51) (72) $ (36) $ (36) Noncurrent liability (885) (1,238) (3,139) (3,856) Total $ 2,665 $ (447) $ (3,175) $ (3,892) Amounts recognized in accumulated other comprehensive income – pretax Net actuarial loss $ 1,376 $ 4,475 $ 49 $ 747 Prior service cost (credit) 9 21 (20) (24) Total $ 1,385 $ 4,496 $ 29 $ 723 The total accumulated benefit obligations for all pension plans at October 31, 2021 and November 1, 2020, were $13,787 million and $14,257 million, respectively. The accumulated benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were $2,012 million and $1,207 million, respectively, at October 31, 2021 and $2,107 million and $1,100 million, respectively, at November 1, 2020. The projected benefit obligations and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $2,163 million and $1,227 million, respectively, at October 31, 2021 and $10,792 million and $9,482 million, respectively, at November 1, 2020. Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10 percent of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. The company makes any required contributions to the plan assets under applicable regulations and voluntary contributions after evaluating the company’s liquidity position and ability to make tax-deductible contributions. Total company contributions to the plans were $258 million in 2021 and $951 million in 2020, which included both required and voluntary contributions and direct benefit payments. The voluntary contributions to plan assets were $700 million in 2020. The company expects to contribute approximately $100 million to its pension plans and approximately $1,150 million to its OPEB plans in 2022. Fiscal year 2022 OPEB contributions include a voluntary contribution of $1,000 million to a U.S. plan made on November 30, 2021 (see Note 29), which will increase plan assets. The pension and OPEB contributions exceeding the voluntary amounts primarily include direct benefit payments from company funds. The company has no significant required contributions to U.S. pension plan assets in 2022 under applicable funding regulations. The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars: Pensions OPEB* 2022 $ 730 $ 280 2023 710 279 2024 701 279 2025 693 278 2026 698 278 2027 to 2031 3,426 1,374 * Net of prescription drug group benefit subsidy under Medicare Part D. The annual rates of increase in the per capita cost of covered health care benefits (the health care cost trend rates) used to determine accumulated postretirement benefit obligations were based on the trends for medical and prescription drug claims for pre- and post-65 age groups due to the effects of Medicare. For the 2021 obligation, the weighted-average composite trend rates were assumed to be a 2.1 percent increase from 2021 to 2022, followed by an increase of 8.4 percent from 2022 to 2023, gradually decreasing to 4.7 from 2028 to 2029 and all future years. The lower estimated increase from 2021 to 2022 resulted from a decrease in Medicare Advantage premiums. The 2020 obligations and the cost in 2021 assumed a 4.0 percent increase from 2020 to 2021, followed by an increase of 7.6 percent from 2021 to 2022, gradually decreasing to 4.7 percent from 2027 to 2028 and all future years. The lower estimated increase from 2020 to 2021 resulted from the SECURE Act that repealed the health insurance provider fee effective in 2021. The discount rate assumptions used to determine the pension and OPEB obligations for all periods presented were primarily based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which the company’s benefit obligations could effectively be settled at the October 31 measurement dates. Fair value measurement levels in the following tables are defined in Note 26. The fair values of the pension plan assets at October 31, 2021 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 378 $ 355 $ 23 Equity: U.S. equity securities 1,151 1,123 28 International equity securities and funds 951 931 20 Fixed Income: Government and agency securities 1,475 1,159 316 Corporate debt securities 4,841 4,841 Mortgage-backed securities 144 144 Real estate investment trusts 62 55 7 Derivative contracts - assets 116 37 79 Derivative contracts - liabilities (75) (15) (60) Receivables, payables, and other (155) (177) 22 Securities lending collateral 982 107 875 Securities lending liability (982) (107) (875) Securities sold short (139) (128) (11) Total of Level 1 and Level 2 assets 8,749 $ 3,340 $ 5,409 Investments at net asset value: Short-term investments 815 U.S. equity funds 796 International equity funds 528 Fixed income funds 1,701 Real estate funds 566 Hedge funds 751 Private equity 1,385 Venture capital 1,537 Other investments 362 Total net assets $ 17,190 The fair values of the health care assets at October 31, 2021 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 55 $ 55 Equity securities and funds 30 29 $ 1 Fixed Income: Government and agency securities 243 215 28 Corporate debt securities 307 307 Mortgage-backed securities 10 10 Securities lending collateral 64 20 44 Securities lending liability (64) (20) (44) Securities sold short (3) (3) Total of Level 1 and Level 2 assets 642 $ 296 $ 346 Investments at net asset value: Short-term investments 20 U.S. equity funds 619 International equity funds 358 Fixed income funds 18 Real estate funds 42 Hedge funds 13 Private equity 18 Venture capital 20 Other investments 5 Total net assets $ 1,755 The fair values of the pension plan assets at November 1, 2020 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 309 $ 276 $ 33 Equity: U.S. equity securities 1,184 1,135 49 International equity securities 947 937 10 Fixed Income: Government and agency securities 1,133 824 309 Corporate debt securities 3,534 3,534 Mortgage-backed securities 136 136 Real estate investment trusts 49 48 1 Derivative contracts - assets 94 2 92 Derivative contracts - liabilities (79) (43) (36) Receivables, payables, and other (163) (184) 21 Securities lending collateral 449 90 359 Securities lending liability (449) (90) (359) Securities sold short (149) (144) (5) Total of Level 1 and Level 2 assets 6,995 $ 2,851 $ 4,144 Investments at net asset value: Short-term investments 510 U.S. equity funds 1,246 International equity funds 674 Fixed income funds 1,321 Real estate funds 618 Hedge funds 750 Private equity 1,064 Venture capital 974 Other investments 422 Total net assets $ 14,574 The fair values of the health care assets at November 1, 2020 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 117 $ 117 Equity securities and funds 44 43 $ 1 Fixed Income: Government and agency securities 180 168 12 Corporate debt securities 66 66 Mortgage-backed securities 13 13 Other (1) (1) Securities lending collateral 49 8 41 Securities lending liability (49) (8) (41) Securities sold short (3) (3) Total of Level 1 and Level 2 assets 416 $ 324 $ 92 Investments at net asset value: Short-term investments 9 U.S. equity funds 539 International equity funds 320 Fixed income funds 185 Hedge funds 12 Private equity 13 Venture capital 12 Other investments 12 Total net assets $ 1,518 Investments at net asset value in the preceding tables are measured at fair value using the net asset value per share practical expedient and are not classified in the fair value hierarchy. Fair values are determined as follows: Cash and Short-Term Investments – The investments include (1) cash accounts that are valued based on the account value, which approximates fair value; (2) investments that are valued at quoted prices in the active markets in which the investment trades or using a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data; and (3) investment funds that are valued based on a constant fund net asset value (NAV), which is based on quoted prices in the active market in which the investment fund trades, or the fund’s NAV using the NAV per share practical expedient, which is based on the fair value of the underlying securities. Equity Securities and Funds – The values are determined by quoted prices in the active market in which the equity investment trades, or the fund’s NAV, based on the fair value of the underlying securities. Fixed Income Securities and Funds and Other Funds – The securities are valued using either a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds, or they are valued using the quoted prices in the active market in which the fixed income investment trades. Fixed income and other funds are valued using the fund’s NAV, based on the fair value of the underlying securities. Real Estate, Venture Capital, Private Equity, and Hedge Funds – The investments that are structured as limited partnerships are valued at estimated fair value based on their proportionate share of the limited partnership’s fair value that is determined by the respective general partner. These investments are valued using the fund’s NAV, which is based on the fair value of the underlying investments. Real estate investment trusts are primarily valued at the quoted prices in the active markets in which the investment trades. Derivative Instruments – The derivatives are valued using either an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates, or a market approach (quoted prices in the active market in which the derivative instrument trades). The primary investment objective for the pension and health care plans assets is to fulfill the projected obligations to the beneficiaries over a long period of time, while meeting the company’s fiduciary responsibilities. The asset allocation policy is the most important decision in managing the assets and it is reviewed regularly. The asset allocation policy considers the company’s long-term asset class risk/return expectations for each plan since the obligations are long-term in nature. The current target allocations for pension assets are approximately 26 percent for equity, 55 percent for debt, 4 percent for real estate, and 15 percent for other investments. The target allocations for health care assets are approximately 58 percent for equity, 35 percent for debt, 2 percent for real estate, and 5 percent for other investments. The allocation percentages above include the effects of combining derivatives with other investments to manage asset allocations and exposures to interest rates and foreign currency exchange. The assets are well diversified and are managed by professional investment firms as well as by investment professionals who are company employees. As a result of the company’s diversified investment policy, there were no significant concentrations of risk. The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value. The expected return is based on the outlook for inflation and for returns in multiple asset classes, while also considering historical returns, asset allocation, and investment strategy. The company’s approach has emphasized the long-term nature of the return estimate such that the return assumption is not changed significantly unless there are fundamental changes in capital markets that affect the company’s expectations for returns over an extended period of time (i.e., 10 to 20 years ). The average annual return of the company’s U.S. pension fund was approximately 11.0 percent during the past ten years and approximately 9.3 percent during the past 20 years. Since return premiums over inflation and total returns for major asset classes vary widely even over ten-year periods, recent history is not necessarily indicative of long-term future expected returns. The company’s systematic methodology for determining the long-term rate of return for the company’s investment strategies supports its long-term expected return assumptions. The company has created certain Voluntary Employees’ Beneficiary Association trusts (VEBAs) for the funding of postretirement health care benefits. The future expected asset returns for these VEBAs are lower than the expected return on the other pension and health care plan assets due to investment in a higher proportion of liquid securities. These assets are in addition to the other postretirement health care plan assets that have been funded under Section 401(h) of the U.S. Internal Revenue Code and maintained in a separate account in the company’s pension plan trust. The company has defined contribution plans related to employee investment and savings plans primarily in the U.S. The company’s contributions and costs under these plans were $207 million in 2021, $160 million in 2020, and $192 million in 2019. The contribution rate varies primarily based on the company’s performance in the prior year and employee participation in the plans. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars: 2021 2020 2019 Current: U.S.: Federal $ 899 $ 400 $ 545 State 183 53 72 Foreign 1,017 640 700 Total current 2,099 1,093 1,317 Deferred: U.S.: Federal (303) (68) (345) State (45) 9 (26) Foreign (93) 48 (94) Total deferred (441) (11) (465) Provision for income taxes $ 1,658 $ 1,082 $ 852 Based upon the location of the company’s operations, the consolidated income before income taxes in the U.S. in 2021, 2020, and 2019 was $4,061 million, $2,082 million, and $2,166 million, respectively, and in foreign countries was $3,541 million, $1,801 million, and $1,922 million, respectively. Certain foreign operations are branches or partnerships of Deere & Company and are subject to U.S. as well as foreign income tax regulations. The pretax income by location and the preceding analysis of the income tax provision by taxing jurisdiction are not directly related. A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follow: 2021 2020 2019 U.S. federal income tax provision at the U.S. statutory rate ( 21 percent) $ 1,597 $ 815 $ 859 State and local taxes, net of federal effect 119 59 47 Other Impacts of Tax Cuts and Jobs Act of 2017 (85) 39 (101) Rate differential on foreign subsidiaries 148 106 89 Research and business tax credits (48) (50) (85) Excess tax benefits on equity compensation (79) (87) (40) Valuation allowances 18 139 28 Other - net (12) 61 55 Provision for income taxes $ 1,658 $ 1,082 $ 852 At October 31, 2021, accumulated earnings in certain subsidiaries outside the U.S. totaled $2,155 million. A provision for foreign withholding taxes has no t been made since these earnings are expected to remain indefinitely reinvested outside the U.S. Determination of the amount of a foreign withholding tax liability on these unremitted earnings is not practicable. Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of the deferred income tax assets and liabilities at October 31, 2021 and November 1, 2020 in millions of dollars follows: 2021 2020 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities OPEB liabilities $ 676 $ 804 Lessor lease transactions $ 399 $ 489 Tax loss and tax credit carryforwards 1,542 937 Accrual for sales allowances 466 362 Tax over book depreciation 154 196 Goodwill and other intangible assets 337 368 Pension - net 448 316 Allowance for credit losses 78 81 Accrual for employee benefits 298 249 Share-based compensation 53 41 Deferred compensation 49 40 Lessee lease transactions 46 43 56 56 Unearned revenue 172 22 Other items 333 341 344 305 Less valuation allowances (1,530) (858) Deferred income tax assets and liabilities $ 2,183 $ 1,722 $ 2,394 $ 1,414 Deere & Company files a consolidated federal income tax return in the U.S., which includes the wholly-owned financial services subsidiaries. These subsidiaries account for income taxes generally as if they filed separate income tax returns, with a modification for realizability of certain tax benefits. At October 31, 2021, tax loss and tax credit carryforwards of $1,542 million were available with $1,068 million expiring from 2022 through 2041 and $474 million with an indefinite carryforward period. A reconciliation of the total amounts of unrecognized tax benefits at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follows: 2021 2020 2019 Beginning of year balance $ 668 $ 553 $ 279 Increases to tax positions taken during the current year 81 63 30 Increases to tax positions taken during prior years 100 95 357 Decreases to tax positions taken during prior years (23) (30) (30) Decreases due to lapse of statute of limitations (12) (9) (6) Settlements (3) (1) (75) Foreign exchange (3) (2) End of year balance $ 811 $ 668 $ 553 The amount of unrecognized tax benefits at October 31, 2021 and November 1, 2020 that would impact the effective tax rate if the tax benefits were recognized was $227 million and $134 million, respectively. 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 twelve months would not be significant. The company files its tax returns according to the tax laws of the jurisdictions in which it operates, which includes the U.S. federal jurisdiction and various state and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed the examination of the company’s federal income tax returns for periods prior to 2015. The federal income tax returns for years 2015, 2016, and 2017 are currently under examination. Various state and foreign income tax returns, including major tax jurisdictions in Argentina, Australia, Brazil, Canada, China, Finland, France, Germany, India, Luxembourg, Mexico, Russia, Singapore, and Spain also remain subject to examination by taxing authorities. The company’s policy is to recognize interest related to income taxes in interest expense and interest income and recognize penalties in selling, administrative and general expenses. During 2021 and 2019, the total amount of expense from interest and penalties was $7 million and $13 million. During 2020, interest and penalties previously recorded were reversed when tax positions were effectively settled resulting in a $3 million net benefit. The interest income in 2021, 2020, and 2019 was $8 million, $11 million, and $25 million, respectively. At October 31, 2021 and November 1, 2020, the liability for accrued interest and penalties totaled $75 million and $72 million, respectively, and the receivable for interest was $11 million and $6 million, respectively. |
OTHER INCOME AND OTHER OPERATIN
OTHER INCOME AND OTHER OPERATING EXPENSES | 12 Months Ended |
Oct. 31, 2021 | |
OTHER INCOME AND OTHER OPERATING EXPENSES | |
OTHER INCOME AND OTHER OPERATING EXPENSES | 10. OTHER INCOME AND OTHER OPERATING EXPENSES The major components of other income and other operating expenses consisted of the following in millions of dollars: 2021 2020 2019 Other income Revenues from services $ 322 $ 314 $ 348 Insurance premiums and fees earned* 227 223 214 Trademark licensing income 87 73 66 Operating lease disposition gains 65 Investment income 41 26 25 Other 249 182 226 Total $ 991 $ 818 $ 879 Other operating expenses Depreciation of equipment on operating leases $ 983 $ 1,083 $ 981 Insurance claims and expenses* 235 231 210 Cost of services 202 188 228 Operating lease residual losses and impairments 52 159 Pension and OPEB benefit, excluding service cost component (183) (31) (67) Other 106 89 67 Total $ 1,343 $ 1,612 $ 1,578 * Primarily related to extended warranties (s ee Note 21). |
UNCONSOLIDATED AFFILIATED COMPA
UNCONSOLIDATED AFFILIATED COMPANIES | 12 Months Ended |
Oct. 31, 2021 | |
UNCONSOLIDATED AFFILIATED COMPANIES | |
UNCONSOLIDATED AFFILIATED COMPANIES | 11. UNCONSOLIDATED AFFILIATED COMPANIES Unconsolidated affiliated companies are companies in which Deere & Company generally owns 20 percent to 50 percent of the outstanding voting shares. Deere & Company does not control these companies and accounts for its investments in them on the equity basis. The investments in these companies primarily consist of Deere-Hitachi Construction Machinery Corporation (50 percent ownership) and Deere-Hitachi Maquinas de Construcao do Brasil S.A. (50 percent ownership). During 2021, the company sold its investment in Bell Equipment Limited, resulting in no material gain or loss. The company also entered into a Dissolution Agreement with Hitachi to terminate the joint venture agreement. The termination is expected to occur in 2022 (see Note 4). The unconsolidated affiliated companies primarily manufacture or market equipment. Deere & Company’s share of the income or loss of these companies is reported in the consolidated income statement under “Equity in income (loss) of unconsolidated affiliates.” In 2020, the company recorded impairments on certain unconsolidated affiliates. The impairments were the result of an other-than-temporary decline in value (see Note 5). The investment in these companies is reported in the consolidated balance sheet under “Investments in unconsolidated affiliates.” Combined financial information of the unconsolidated affiliated companies in millions of dollars follows: Operations 2021 2020 2019 Sales $ 2,095 $ 1,793 $ 2,483 Net income 51 7 50 Deere & Company’s equity in net income (loss) 21 (48) 21 Financial Position 2021 2020 Total assets $ 1,289 $ 1,541 Total external borrowings 497 540 Total net assets 366 598 Deere & Company’s share of the net assets 175 193 Consolidated retained earnings at October 31, 2021 include undistributed earnings of the unconsolidated affiliates of $48 million. Dividends from unconsolidated affiliates were $21 million in 2021, none in 2020, and $30 million in 2019. In the ordinary course of business, the company purchases and sells components and finished goods to the unconsolidated affiliated companies. Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow: 2021 2020 2019 Net sales $ 78 $ 81 $ 143 Purchases 1,605 1,288 1,937 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Oct. 31, 2021 | |
MARKETABLE SECURITIES | |
MARKETABLE SECURITIES | 12. MARKETABLE SECURITIES All marketable securities are classified as available-for-sale. Realized gains or losses from the sales of marketable securities are based on the specific identification method. The amortized cost and fair value of marketable securities at October 31, 2021 and November 1, 2020 in millions of dollars follow: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2021 U.S. equity fund $ 75 International equity securities 2 Total equity securities 77 U.S. government debt securities $ 196 $ 5 $ 3 198 Municipal debt securities 69 4 73 Corporate debt securities 215 11 2 224 International debt securities 5 3 2 Mortgage-backed securities* 152 3 1 154 Total debt securities $ 637 $ 23 $ 9 651 Marketable securities $ 728 2020 U.S. equity fund $ 62 International equity securities 2 Total equity securities 64 U.S. government debt securities $ 159 $ 10 $ 1 168 Municipal debt securities 63 5 68 Corporate debt securities 173 15 188 International debt securities 9 3 6 Mortgage-backed securities* 140 7 147 Total debt securities $ 544 $ 37 $ 4 577 Marketable securities $ 641 * Primarily issued by U.S. government sponsored enterprises. Equity Securities Proceeds of equity securities sold during 2021, 2020, and 2019 were not material. Unrealized gains on equity securities during 2021 and 2020 in millions of dollars follow: 2021 2020 Net gain recognized on equity securities $ 24 $ 8 Less: Net gain on equity securities sold 2 1 Unrealized gains on equity securities $ 22 $ 7 Debt Securities The contractual maturities of debt securities at October 31, 2021 in millions of dollars follow: Amortized Fair Cost Value Due in one year or less $ 28 $ 28 Due after one through five years 80 82 Due after five through 10 years 144 147 Due after 10 years 233 240 Mortgage-backed securities 152 154 Debt securities $ 637 $ 651 Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Proceeds from the sales of debt securities, realized gains, realized losses, the increase (decrease) in net unrealized gains or losses, and unrealized losses that have been continuous for over twelve months were not significant in 2021, 2020, and 2019. Unrealized losses at October 31, 2021 and November 1, 2020 were not recognized in income due to the ability and intent to hold to maturity. There were no significant impairment write-downs in the periods reported. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Oct. 31, 2021 | |
RECEIVABLES | |
RECEIVABLES | 13. RECEIVABLES Trade Accounts and Notes Receivable Trade accounts and notes receivable at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Trade accounts and notes receivable: Production & precision ag $ 1,204 $ 1,397 Small ag & turf 1,683 1,484 Construction & forestry 1,321 1,290 Trade accounts and notes receivable – net $ 4,208 $ 4,171 Trade accounts and notes receivable have significant concentrations of credit risk in the agriculture and turf market and construction and forestry market as shown in the previous table. On a geographic basis, there is no disproportionate concentration of credit risk in any area. The allowance for credit losses on trade accounts and notes receivable at October 31, 2021, November 1, 2020, and November 3, 2019, as well as the related activity, in millions of dollars follow: 2021 2020 2019 Beginning of year balance $ 39 $ 72 $ 70 ASU No. 2016-13 (2) Provision 10 8 Write-offs (7) (23) (14) Recoveries 1 4 Translation adjustments 1 (11) 4 End of year balance $ 41 $ 39 $ 72 The equipment operations sell a significant portion of their trade receivables to financial services and provide compensation to financial services at approximate market interest rates. Trade accounts and notes receivable primarily arise from sales of goods to independent dealers. See Note 2 for the company’s revenue recognition policy. The company evaluates and assesses dealers on an ongoing basis as to their creditworthiness and generally secures the receivables by retaining a security interest in the goods associated with the trade receivables or with other financial instruments. In certain jurisdictions, the company is obligated to repurchase goods sold to a dealer upon cancellation or termination of the dealer’s contract for such causes as change in ownership and closeout of the business. During 2020 and to a much lesser extent in 2021, the company provided short-term payment relief on trade accounts and notes receivable to 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 receivables granted relief that remained outstanding at October 31, 2021 were not material. This balance at November 1, 2020 was $75 million, or approximately 2 percent of the trade receivable portfolio. Outside of these actions, the company did not modify its normal sales terms with customers that are outlined in Note 2. For customers who obtained payment relief, subsequent sales transactions are evaluated to confirm the revenue recognition criteria are met, including that the sales price is determinable and collectability of the payments is probable based on the terms outlined in the contract. Financing Receivables While the company implemented a new operating model 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). Financing receivables at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Unrestricted/Securitized Unrestricted/Securitized Retail notes: Agriculture and turf $ 21,736 $ 4,041 $ 17,780 $ 4,134 Construction and forestry 4,334 712 3,629 680 Total 26,070 4,753 21,409 4,814 Wholesale notes 2,577 3,547 Revolving charge accounts 3,880 3,962 Financing leases (direct and sales-type) 2,879 2,364 Total financing receivables 35,406 4,753 31,282 4,814 Less: Unearned finance income : Retail notes 1,131 80 1,066 98 Wholesale notes 11 18 Revolving charge accounts 55 60 Financing leases 258 217 Total 1,455 80 1,361 98 Allowance for credit losses 152 14 171 13 Financing receivables – net $ 33,799 $ 4,659 $ 29,750 $ 4,703 Financing receivables have significant concentrations of credit risk in the agriculture and turf and construction and forestry markets as shown in the previous table. On a geographic basis, there is no disproportionate concentration of credit risk in any area. The company generally retains as collateral a security interest in the equipment associated with retail notes, wholesale notes, and financing leases. Financing receivables at October 31, 2021 and November 1, 2020 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars: 2021 2020 Unrestricted/Securitized Unrestricted/Securitized Retail notes*: Agriculture and turf $ 1,977 $ 1,971 Construction and forestry 368 $ 10 335 $ 27 Total 2,345 10 2,306 27 Wholesale notes 2,577 3,547 Sales-type leases 1,269 1,045 Total 6,191 10 6,898 27 Less: Unearned finance income: Retail notes 159 178 Wholesale notes 11 18 Sales-type leases 98 82 Total 268 278 Financing receivables related to the company’s sales of equipment $ 5,923 $ 10 $ 6,620 $ 27 * These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales. Financing receivable installments, including unearned finance income, at October 31, 2021 and November 1, 2020 were scheduled as follows in millions of dollars: 2021 2020 Unrestricted/Securitized Unrestricted/Securitized Due in months: 0 – 12 $ 15,205 $ 1,904 $ 14,983 $ 1,971 13 – 24 7,412 1,323 6,180 1,354 25 – 36 5,629 885 4,556 889 37 – 48 3,991 478 3,145 460 49 – 60 2,397 150 1,794 129 Thereafter 772 13 624 11 Total $ 35,406 $ 4,753 $ 31,282 $ 4,814 The maximum terms for retail notes are generally seven years for agriculture and turf equipment, and five years for construction and forestry equipment. The maximum term for financing leases is generally seven years . The average term for wholesale notes is less than twelve months . Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. The company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount 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 significant, negative effects of COVID on dealers and retail customers, 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 case-by-case situations with customers that were generally current in their payment obligations. This relief generally included payment deferrals or reduced financing rates of three months or less. The financing receivables granted relief that remained outstanding at October 31, 2021 and November 1, 2020 represented approximately 3 percent and 4 percent of the financing receivable portfolio, respectively. 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. The company monitors the credit quality of financing receivables based on delinquency status. The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) was as follows in millions of dollars at October 31, 2021: Year of Origination 2021 2020 2019 2018 Retail customer receivables: Agriculture and turf Current $ 12,877 $ 6,676 $ 3,463 $ 1,738 30-59 days past due 43 53 29 16 60-89 days past due 16 23 12 6 90+ days past due 1 Non-performing 23 57 53 32 Construction and forestry Current 3,122 1,575 754 273 30-59 days past due 50 40 27 7 60-89 days past due 15 11 9 6 90+ days past due 1 2 3 3 Non-performing 26 56 39 17 Total retail customer receivables $ 16,173 $ 8,494 $ 4,389 $ 2,098 Year of Origination 2017 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 728 $ 211 $ 3,704 $ 29,397 30-59 days past due 7 3 14 165 60-89 days past due 3 1 4 65 90+ days past due 1 Non-performing 17 23 7 212 Construction and forestry Current 57 7 92 5,880 30-59 days past due 4 1 3 132 60-89 days past due 1 1 43 90+ days past due 4 2 15 Non-performing 7 3 148 Total retail customer receivables $ 828 $ 251 $ 3,825 $ 36,058 The credit quality analysis of retail customer receivables was as follows in millions of dollars at November 1, 2020: 2020 Retail Notes & Financing Leases Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 30-59 days past due 135 13 148 60-89 days past due 64 4 68 90+ days past due 2 2 Non-performing 263 6 269 Construction and forestry Current 4,859 88 4,947 30-59 days past due 111 2 113 60-89 days past due 55 1 56 90+ days past due 14 14 Non-performing 106 1 107 Total retail customer receivables $ 27,206 $ 3,902 $ 31,108 The credit quality analysis of wholesale receivables was as follows in millions of dollars at October 31, 2021: Year of Origination 2021 2020 2019 2018 Wholesale receivables: Agriculture and turf Current $ 346 $ 80 $ 22 $ 9 30-59 days past due 60-89 days past due 90+ days past due Non-performing 12 Construction and forestry Current 41 7 7 30-59 days past due 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 387 $ 87 $ 41 $ 9 Year of Origination 2017 Prior Years Revolving Total Wholesale receivables: Agriculture and turf Current $ 3 $ 1,696 $ 2,156 30-59 days past due 60-89 days past due 90+ days past due Non-performing 12 Construction and forestry Current 1 $ 1 340 397 30-59 days past due 60-89 days past due 1 1 90+ days past due Non-performing Total wholesale receivables $ 4 $ 2 $ 2,036 $ 2,566 The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020: 2020 Wholesale receivables: Agriculture and turf Current $ 3,010 30-59 days past due 60-89 days past due 90+ days past due Non-performing 47 Construction and forestry Current 472 30-59 days past due 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 3,529 An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total 2021 Allowance: Beginning of year balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 44 (13) 31 Provision (credit) (17) (1) (18) Write-offs (60) (28) (88) Recoveries 20 36 56 Translation adjustments 1 1 End of year balance* $ 138 $ 21 $ 7 $ 166 Financing receivables: End of year balance $ 32,233 $ 3,825 $ 2,566 $ 38,624 2020 Allowance: Beginning of year balance $ 107 $ 40 $ 3 $ 150 Provision 81 26 3 110 Write-offs (65) (53) (118) Recoveries 17 30 47 Translation adjustments (7) 2 (5) End of year balance* $ 133 $ 43 $ 8 $ 184 Financing receivables: End of year balance $ 27,206 $ 3,902 $ 3,529 $ 34,637 2019 Allowance: Beginning of year balance $ 129 $ 43 $ 6 $ 178 Provision 6 29 35 Write-offs (47) (58) (105) Recoveries 23 26 49 Translation adjustments (4) (3) (7) End of year balance* $ 107 $ 40 $ 3 $ 150 Financing receivables: End of year balance $ 25,151 $ 3,943 $ 4,634 $ 33,728 * Individual allowances were not significant. In 2021, the allowance for credit losses on retail notes and financing lease receivables increased due to the adoption of ASU No. 2016-13. This was partially offset by lower expected losses 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 decreased in 2021, reflecting a decrease due to the adoption of ASU No. 2016-13 and continued improvement in the agricultural and turf market. In 2020, the negative economic effects related to COVID and other macroeconomic issues significantly affected certain retail customers, particularly purchasers of construction equipment. Past-due amounts over 30 days represented 1.09 percent and 1.16 percent of the receivables financed at October 31, 2021 and November 1, 2020, respectively. Non-performing receivables comprised .96 percent and 1.22 percent of the financing receivables at October 31, 2021 and November 1, 2020, respectively. The allowance for credit losses represented .43 percent and .53 percent of financing receivables outstanding at October 31, 2021 and November 1, 2020, respectively. In addition, at October 31, 2021 and November 1, 2020, the company’s financial services operations had $154 million and $136 million, respectively, of deposits primarily withheld from dealers and merchants as credit enhancements. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During 2021, 2020, and 2019, the company identified 397 , 574 , and 522 receivable contracts as troubled debt restructurings with aggregate balances of $18 million, $108 million, and $36 million pre-modification and $17 million, $95 million, and $35 million post-modification, respectively. Troubled debt restructurings in 2021 and 2019 primarily related to retail notes, while 2020 modifications primarily related to wholesale receivables in Argentina. The short-term relief related to COVID did not meet the definition of a troubled debt restructuring. In 2021 and 2020, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At October 31, 2021, the company had no commitments to lend to customers whose accounts were modified in troubled debt restructurings. Other Receivables Other receivables at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Taxes receivable $ 1,436 $ 931 Other 302 289 Other receivables $ 1,738 $ 1,220 |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 12 Months Ended |
Oct. 31, 2021 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | 14. 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 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 does 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, which in turn issue debt to investors, or to non-VIE banking operations, which provide funding directly to the company. The funding provided by these third-parties result 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 balance sheet related to these securitizations include the financing receivables securitized, less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the financing receivables securitized or a fixed percentage of the outstanding balance of the securitized financing receivables. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs, and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $3,094 million and $2,898 million at October 31, 2021 and November 1, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $3,024 million and $2,856 million at October 31, 2021 and November 1, 2020, respectively. The credit holders of these SPEs do not have legal recourse to the company’s general credit. The company has a revolving credit agreement to utilize bank conduit facilities to secure retail notes, described further in the following paragraphs. At October 31, 2021, the revolving credit agreement had a total capacity, or “financing limit,” of up to $2,000 million of secured financings at any time. The agreement was renewed in November 2021 with an expiration in November 2022 and a capacity of $1,000 million. As a result of the reduced capacity, the company repurchased $511 million of outstanding short-term securitization borrowings in November 2021, in addition to the normal monthly liquidations as a result of payments collected on the retail notes. Through the revolving credit agreement, the company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,176 million and $1,327 million at October 31, 2021 and November 1, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,113 million and $1,275 million at October 31, 2021 and November 1, 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 at October 31, 2021 in millions of dollars: 2021 Carrying value of liabilities $ 1,113 Maximum exposure to loss 1,176 The total assets of the unconsolidated conduits related to securitizations were approximately $40 billion at October 31, 2021. In addition, through the revolving credit agreement, the company transfers retail notes to banks, which may elect to fund the retail notes through the use of their own funding sources. These non-VIE banking operations are not consolidated since the company does not have a controlling interest in them. 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 $496 million and $576 million at October 31, 2021 and November 1, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $470 million and $554 million at October 31, 2021 and November 1, 2020, respectively. The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 31, 2021 and November 1, 2020 were as follows in millions of dollars: 2021 2020 Financing receivables securitized (retail notes) $ 4,673 $ 4,716 Allowance for credit losses (14) (13) Other assets 107 98 Total restricted securitized assets $ 4,766 $ 4,801 The components of consolidated secured borrowings and other liabilities related to securitizations at October 31, 2021 and November 1, 2020 were as follows in millions of dollars: 2021 2020 Short-term securitization borrowings $ 4,605 $ 4,682 Accrued interest on borrowings 2 3 Total liabilities related to restricted securitized assets $ 4,607 $ 4,685 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 October 31, 2021, the maximum remaining term of all securitized retail notes was approximately seven years . |
INVENTORIES
INVENTORIES | 12 Months Ended |
Oct. 31, 2021 | |
INVENTORIES | |
INVENTORIES | 15. INVENTORIES A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the “last-in, first-out” (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the “first-in, first-out” (FIFO) basis, or net realizable value. The value of gross inventories on the LIFO basis at October 31, 2021 and November 1, 2020 represented 54 percent and 52 percent, respectively, of worldwide gross inventories at FIFO value. The pretax favorable income effect from the liquidation of LIFO inventory during 2020 was $33 million. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31, 2021 and November 1, 2020 in millions of dollars would have been as follows: 2021 2020 Raw materials and supplies $ 3,524 $ 1,995 Work-in-process 994 648 Finished goods and parts 4,373 4,006 Total FIFO value 8,891 6,649 Less adjustment to LIFO value 2,110 1,650 Inventories $ 6,781 $ 4,999 |
PROPERTY AND DEPRECIATION
PROPERTY AND DEPRECIATION | 12 Months Ended |
Oct. 31, 2021 | |
PROPERTY AND DEPRECIATION | |
PROPERTY AND DEPRECIATION | 16. PROPERTY AND DEPRECIATION A summary of property and equipment at October 31, 2021 and November 1, 2020 in millions of dollars follows: Useful Lives* (Years) 2021 2020 Equipment Operations Land $ 293 $ 282 Buildings and building equipment 22 4,287 4,114 Machinery and equipment 11 6,123 5,936 Dies, patterns, tools, etc. 8 1,679 1,662 All other 5 1,165 1,115 Construction in progress 527 440 Total at cost 14,074 13,549 Less accumulated depreciation 8,291 7,771 Total 5,783 5,778 Financial Services Land 4 4 Buildings and building equipment 26 65 65 All other 6 32 34 Total at cost 101 103 Less accumulated depreciation 64 64 Total 37 39 Property and equipment - net $ 5,820 $ 5,817 * Weighted-averages Total property and equipment additions in 2021, 2020, and 2019 were $897 million, $815 million, and $1,107 million and depreciation was $830 million, $800 million, and $779 million, respectively. Capitalized interest was $3 million, $6 million, and $7 million in the same periods, respectively. The cost of leased property and equipment under finance leases of $131 million and $99 million and accumulated depreciation of $60 million and $36 million at October 31, 2021 and November 1, 2020, respectively, is included in property and equipment. Capitalized software has an estimated useful life of three years . The amounts of total capitalized software costs, including purchased and internally developed software, classified as “Other assets” at October 31, 2021 and November 1, 2020 were $1,326 million and $1,339 million, less accumulated amortization of $1,044 million and $1,070 million, respectively. Capitalized interest on software was $2 million and $3 million at October 31, 2021 and November 1, 2020, respectively. Amortization of these software costs in 2021, 2020, and 2019 was $121 million, $133 million, and $150 million, respectively. The cost of compliance with foreseeable environmental requirements has been accrued and did not have a material effect on the company’s consolidated financial statements. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 12 Months Ended |
Oct. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 17. 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 November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Acquisitions (Note 4) 28 28 Translation adjustments and other (5) 4 137 136 November 1, 2020 333 268 2,480 3,081 Acquisitions (Note 4) 201 201 Translation adjustments and other 8 (3) 4 9 October 31, 2021 $ 542 $ 265 $ 2,484 $ 3,291 There were no accumulated goodwill impairment losses in the reported periods. The components of other intangible assets are as follows in millions of dollars: 2021 2020 Amortized intangible assets: Customer lists and relationships $ 542 $ 535 Technology, patents, trademarks, and other 1,104 1,056 Total at cost 1,646 1,591 Less accumulated amortization: Customer lists and relationships 151 113 Technology, patents, trademarks, and other 343 274 Total accumulated amortization 494 387 Amortized intangible assets 1,152 1,204 Unamortized intangible assets: In-process research and development 123 123 Other intangible assets - net $ 1,275 $ 1,327 Other intangible assets are stated at cost less accumulated amortization. The amortization of other intangible assets in 2021, 2020, and 2019 was $116 million, $102 million, and $109 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: 2022 - $113, 2023 - $112, 2024 - $108, 2025 - $105, and 2026 - $103. |
TOTAL SHORT-TERM BORROWINGS
TOTAL SHORT-TERM BORROWINGS | 12 Months Ended |
Oct. 31, 2021 | |
TOTAL SHORT-TERM BORROWINGS | |
TOTAL SHORT-TERM BORROWINGS | 18. TOTAL SHORT-TERM BORROWINGS Total short-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Equipment Operations Notes payable to banks $ 273 $ 192 Finance lease obligations due within one year 23 21 Long-term borrowings due within one year 1,213 79 Total 1,509 292 Financial Services Commercial paper 2,230 1,238 Notes payable to banks 63 182 Long-term borrowings due within one year* 7,117 6,870 Total 9,410 8,290 Short-term borrowings 10,919 8,582 Short-term securitization borrowings Equipment Operations 10 26 Financial Services 4,595 4,656 Total 4,605 4,682 Total short-term borrowings $ 15,524 $ 13,264 * Includes unamortized fair value adjustments related to interest rate swaps. The short-term securitization borrowings are secured by financing receivables (retail notes) on the balance sheet (see Note 14) and presented net of debt acquisition costs. Although these securitization borrowings are classified as short-term since payment is required if the retail notes are liquidated early, the payment schedule for these borrowings at October 31, 2021 based on the expected liquidation of the retail notes in millions of dollars is as follows: 2022 - $2,556 , 2023 - $1,150 , 2024 - $623 , 2025 - $231 , 2026 - $44 , and later years - $6 . The weighted-average interest rates on total short-term borrowings, excluding current maturities of finance lease obligations and long-term borrowings, at October 31, 2021 and November 1, 2020 were .9 percent and 1.6 percent, respectively. Lines of credit available from U.S. and foreign banks were $8,336 million at October 31, 2021. At October 31, 2021, $5,770 million of these worldwide lines of credit were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were primarily considered to constitute utilization. Included in the total credit lines at October 31, 2021 was a 364-day credit facility agreement of $3,000 million, expiring in fiscal April 2022. In addition, total credit lines included long-term credit facility agreements of $2,500 million, expiring in fiscal April 2025, and $2,500 million, expiring in fiscal March 2026. The agreements are mutually extendable and the annual facility fees are not significant. These credit agreements require Capital Corporation to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. The credit agreements also require the equipment operations to maintain a ratio of total debt to total capital (total debt and stockholders’ equity excluding accumulated other comprehensive income (loss)) of 65 percent or less at the end of each fiscal quarter. Under this provision, the company’s excess equity capacity and retained earnings balance free of restriction at October 31, 2021 was $15,388 million. Alternatively under this provision, the equipment operations had the capacity to incur additional debt of $28,579 million at October 31, 2021. All of these credit agreement requirements have been met during the periods included in the consolidated financial statements. Deere & Company has an agreement with Capital Corporation pursuant to which it has agreed to continue to own, directly or through one or more wholly-owned subsidiaries, at least 51 percent of the voting shares of capital stock of Capital Corporation and to maintain Capital Corporation’s consolidated tangible net worth at not less than $50 million. This agreement also obligates Deere & Company to make payments to Capital Corporation such that its consolidated ratio of earnings to fixed charges is not less than 1.05 to 1 for each fiscal quarter. Deere & Company’s obligations to make payments to Capital Corporation under the agreement are independent of whether Capital Corporation is in default on its indebtedness, obligations or other liabilities. Further, Deere & Company’s obligations under the agreement are not measured by the amount of Capital Corporation’s indebtedness, obligations, or other liabilities. Deere & Company’s obligations to make payments under this agreement are expressly stated not to be a guaranty of any specific indebtedness, obligation, or liability of Capital Corporation and are enforceable only by or in the name of Capital Corporation. No payments were required under this agreement during the periods included in the consolidated financial statements. At October 31, 2021, Deere & Company indirectly owned 100 percent of the voting shares of Capital Corporation’s capital stock and Capital Corporation’s consolidated tangible net worth was $4,524 million. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Oct. 31, 2021 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 19. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Equipment Operations Accounts payable: Trade payables $ 2,967 $ 1,926 Dividends payable 329 244 Operating lease liabilities 279 297 Other 155 251 Accrued expenses: Dealer sales discounts 1,636 1,682 Product warranties 1,312 1,105 Employee benefits 1,448 1,086 Accrued taxes 933 730 Unearned revenue 825 679 Other 1,171 1,114 Total 11,055 9,114 Financial Services Accounts payable: Deposits withheld from dealers and merchants 157 141 Collateral on derivatives 274 Other 210 194 Accrued expenses: Unearned revenue 1,013 968 Accrued interest 165 181 Employee benefits 83 60 Other 387 309 Total 2,015 2,127 Eliminations* 865 1,129 Accounts payable and accrued expenses $ 12,205 $ 10,112 * Pri marily sales incentive accruals with a right of set-off against trade receivables. At October 31, 2021 and November 1, 2020, $836 million and $1,073 million, respectively, of sales incentive accruals were classified as accrued expenses by the equipment operations as the related trade receivables had been sold to financial services. |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 12 Months Ended |
Oct. 31, 2021 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | 20. LONG-TERM BORROWINGS Long-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Equipment Operations U.S. dollar notes and debentures: 8½% debentures due 2022 $ 105 2.60% notes due 2022 1,000 2.75% notes due 2025 $ 700 700 6.55% debentures due 2028 200 200 5.375% notes due 2029 500 500 3.10% notes due 2030 700 700 8.10% debentures due 2030 250 250 7.125% notes due 2031 300 300 3.90% notes due 2042 1,250 1,250 2.875% notes due 2049 500 500 3.75% notes due 2050 850 850 Euro notes: .5% notes due 2023 (€ 500 principal) 584 584 1.375% notes due 2024 (€ 800 principal) 934 934 1.85% notes due 2028 (€ 600 principal) 701 700 2.20% notes due 2032 (€ 600 principal) 701 700 1.65% notes due 2039 (€ 650 principal) 759 759 Finance lease obligations and other notes 40 153 Less debt issuance costs and debt discounts (54) (61) Total 8,915 10,124 Financial Services Notes and debentures: Medium-term notes due 2022 - 2031: (principal $22,647 - 2021, $20,996 - 2020) Average interest rates of 1.2% - 2021, 1.7% - 2020 22,899 * 21,661 * Other notes 1,138 1,003 Less debt issuance costs and debt discounts (64) (54) Total 23,973 22,610 Long-term borrowings** $ 32,888 $ 32,734 * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year-end. The principal amounts of the equipment operations’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2022 - $1,214 , 2023 - $585 , 2024 - $935 , 2025 - $700 , and 2026 - $0 . The principal amounts of the financial services’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2022 - $7,120 , 2023 - $6,834 , 2024 - $6,089 , 2025 - $2,305 , and 2026 - $3,373 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 21. 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. The unamortized extended warranty premiums (deferred revenue) included in the following table totaled $774 million and $638 million at October 31, 2021 and November 1, 2020, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Warranty Liability/ Unearned Premiums 2021 2020 Beginning of year balance $ 1,743 $ 1,800 Payments (864) (942) Amortization of premiums received (227) (222) Accruals for warranties 1,071 851 Premiums received 358 276 Foreign exchange 5 (20) End of year balance $ 2,086 $ 1,743 At October 31, 2021, the company had approximately $409 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 October 31, 2021, the company had accrued losses of approximately $6 million under these agreements. The maximum remaining term of the receivables guaranteed at October 31, 2021 was about six years . At October 31, 2021, the company had commitments of approximately $254 million for the construction and acquisition of property and equipment. Also at October 31, 2021, the company had restricted assets of $68 million, classified as “Other assets.” See Note 14 for additional restricted assets associated with borrowings related to securitizations. The company also had other miscellaneous contingent liabilities totaling approximately $75 million at October 31, 2021. The accrued liability for these contingencies was not material at October 31, 2021. The company has commitments to extend credit to customers through lines of credit and other pre-approved credit arrangements. The amount of unused commitments to extend credit to John Deere dealers was approximately $14 billion at October 31, 2021. The amount of unused commitments to extend credit to retail customers was approximately $30 billion at October 31, 2021, primarily related to revolving charge accounts. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. The company recorded a provision for credit losses on unused commitments that are not unconditionally cancellable of $2 million in 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 financial statements. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Oct. 31, 2021 | |
CAPITAL STOCK | |
CAPITAL STOCK | 22. CAPITAL STOCK The $1 par value common stock of Deere & Company is listed on the New York Stock Exchange under the symbol “DE”. At October 31, 2021, there were 18,466 holders of record of the company’s common stock. The number of common shares the company is authorized to issue is 1,200 million. The number of common shares issued at October 31, 2021, November 1, 2020, and November 3, 2019 was 536.4 million. The number of authorized preferred shares, none of which has been issued, is nine million. The Board of Directors at a meeting in December 2019 authorized the repurchase of up to $8,000 million of common stock. At the end of fiscal year 2021, this repurchase program had $5,811 million ( 17.0 million shares based on the fiscal year end closing common stock price of $342.31 per share) remaining to be repurchased. Repurchases of the company’s common stock under this plan will be made from time to time, at the company’s discretion, in the open market. A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: 2021 2020 2019 Net income attributable to Deere & Company $ 5,963 $ 2,751 $ 3,253 Average shares outstanding 311.6 313.5 316.5 Basic per share $ 19.14 $ 8.77 $ 10.28 Average shares outstanding 311.6 313.5 316.5 Effect of dilutive stock options 2.4 3.1 4.1 Total potential shares outstanding 314.0 316.6 320.6 Diluted per share $ 18.99 $ 8.69 $ 10.15 All stock options outstanding were included in the computation except .6 million in 2020 and .7 million in 2019 that had an antidilutive effect under the treasury stock method. |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 12 Months Ended |
Oct. 31, 2021 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | 23. STOCK OPTION AND RESTRICTED STOCK AWARDS The company issues stock options and restricted stock unit awards to key employees under plans approved by stockholders. Restricted stock units are also issued to nonemployee directors for their services as directors under a plan approved by stockholders. Options are awarded with the exercise price equal to the market price and become exercisable in one The fair value of each option award was estimated on the date of grant using a binomial lattice option valuation model. Expected volatilities are based on implied volatilities from traded call options on the company’s stock. The expected volatilities are constructed from the following three components: the starting implied volatility of short-term call options traded within a few days of the valuation date; the predicted implied volatility of long-term call options; and the trend in implied volatilities over the span of the call options’ time to maturity. The company uses historical data to estimate option exercise behavior. The expected term of options granted is derived from the output of the option valuation model based on the underlying distribution of historical exercise behavior and represents the weighted-average period of time that options granted are expected to be outstanding. The risk-free rates utilized for periods throughout the contractual life of the options are based on U.S. Treasury security yields at the time of grant. The assumptions used for the binomial lattice model to determine the fair value of options follow: 2021 2020 2019 Risk-free interest rate* .47% 1.67% 2.85% Expected dividends 1.2% 1.8% 2.0% Volatility* 31.0% 26.0% 30.0% Expected term (in years)* 5.5 5.7 8.2 * Weighted-averages Stock option activity at October 31, 2021, and changes during 2021 in millions of dollars and shares follow: Remaining Contractual Aggregate Exercise Term Intrinsic Shares Price* (Years) Value Outstanding at beginning of year 3.7 $ 107.30 Granted .3 254.83 Exercised (1.5) 99.38 Outstanding at end of year 2.5 127.82 5.07 $ 527.3 Exercisable at end of year 1.9 103.25 4.00 445.0 * Weighted-averages The weighted-average grant-date fair values of options granted during 2021, 2020, and 2019 were $62.73 , $35.83 , and $46.96 , respectively. The total intrinsic values of options exercised during 2021, 2020, and 2019 were $318 million, $398 million, and $186 million, respectively. During 2021, 2020, and 2019, cash received from stock option exercises was $148 million, $331 million, and $178 million, respectively, with tax benefits of $71 million, $93 million, and $44 million, respectively. The service-only based units award one share of common stock for each unit at the end of the vesting period and include dividend equivalent payments. The performance/service based units are subject to a performance metric based on the company’s compound annual revenue growth rate, compared to a benchmark group of companies over the vesting period. The performance/service based units award common stock in a range of zero to 200 percent for each unit granted based on the level of the metric achieved and do not include dividend equivalent payments over the vesting period. The weighted-average fair values of the service-only based units at the grant dates during 2021, 2020, and 2019 were $258.86 , $168.94 , and $149.54 per unit, respectively, 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 during 2021, 2020, and 2019 were $245.73 , $160.81 , and $140.49 per unit, respectively, based on the market price of a share of underlying common stock excluding dividends. The company’s restricted stock units at October 31, 2021 and changes during 2021 in millions of shares follow: Grant-Date Shares Fair Value* Service-only based Nonvested at beginning of year .9 $ 155.47 Granted .2 258.86 Vested (.5) 190.87 Forfeited (.1) 163.16 Nonvested at end of year .5 190.87 Performance/service based Nonvested at beginning of year .2 $ 147.55 Granted .1 245.73 Vested (.2) 145.16 Performance change .1 144.98 Nonvested at end of year .2 171.82 * Weighted-averages During 2021, 2020, and 2019, the total share-based compensation expense was $82 million, $81 million, and $82 million, respectively, with recognized income tax benefits of $16 million, $19 million, and $20 million, respectively. At October 31, 2021, there was $63 million of total unrecognized compensation cost from share-based compensation arrangements granted under the plans, which is related to restricted shares and options. This compensation is expected to be recognized over a weighted-average period of approximately two years . The total grant-date fair values of stock options and restricted shares vested during 2021, 2020, and 2019 were $93 million, $79 million, and $66 million, respectively. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 12 Months Ended |
Oct. 31, 2021 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | 24. OTHER COMPREHENSIVE INCOME ITEMS The after-tax components of accumulated other comprehensive income at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follow: 2021 2020 2019 Retirement benefits adjustment $ (1,034) $ (3,918) $ (3,915) Cumulative translation adjustment (1,478) (1,596) (1,651) Unrealized loss on derivatives (42) (58) (60) Unrealized gain on debt securities 15 33 19 Total accumulated other comprehensive income (loss) $ (2,539) $ (5,539) $ (5,607) Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Amount Credit Amount 2021 Cumulative translation adjustment: Unrealized translation gain (loss) $ 112 $ 112 Reclassification of realized (gain) loss to: Equity in (income) loss of unconsolidated affiliates 6 6 Net unrealized translation gain (loss) 118 118 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 8 $ (2) 6 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 13 (3) 10 Net unrealized gain (loss) on derivatives 21 (5) 16 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (21) 3 (18) Net unrealized gain (loss) on debt securities (21) 3 (18) Retirement benefits adjustment: Net actuarial gain (loss) 3,492 (845) 2,647 Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 283 (69) 214 Prior service (credit) cost 8 (2) 6 Settlements 22 (5) 17 Net unrealized gain (loss) on retirement benefits adjustment 3,805 (921) 2,884 Total other comprehensive income (loss) $ 3,923 $ (923) $ 3,000 * These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2020 Cumulative translation adjustment: Unrealized translation gain (loss) $ 18 $ 1 $ 19 Reclassification of realized (gain) loss to: Other operating expenses 13 13 Equity in (income) loss of unconsolidated affiliates 23 23 Net unrealized translation gain (loss) 54 1 55 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (18) 2 (16) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 21 (3) 18 Net unrealized gain (loss) on derivatives 3 (1) 2 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 17 (3) 14 Net unrealized gain (loss) on debt securities 17 (3) 14 Retirement benefits adjustment: Net actuarial gain (loss) (302) 65 (237) Reclassification primarily to other operating expenses through amortization of: * Actuarial (gain) loss 278 (68) 210 Prior service (credit) cost 7 (2) 5 Settlements 26 (7) 19 Net unrealized gain (loss) on retirement benefits adjustment 9 (12) (3) Total other comprehensive income (loss) $ 83 $ (15) $ 68 * These accumulated other comprehensive income amounts are primarily included in net periodic pension and OPEB costs. See Note 8 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2019 Cumulative translation adjustment $ (447) $ (1) $ (448) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (92) 21 (71) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (5) 1 (4) Net unrealized gain (loss) on derivatives (97) 22 (75) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 36 (7) 29 Net unrealized gain (loss) on debt securities 36 (7) 29 Retirement benefits adjustment: Net actuarial gain (loss) (1,028) 274 (754) Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 159 (39) 120 Prior service (credit) cost (61) 15 (46) Settlements 3 (1) 2 Net unrealized gain (loss) on retirement benefits adjustment (927) 249 (678) Total other comprehensive income (loss) $ (1,435) $ 263 $ (1,172) * These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail. |
LEASES
LEASES | 12 Months Ended |
Oct. 31, 2021 | |
LEASES | |
LEASES | 25. LEASES The company is both a lessee and a lessor. The company leases for its own use primarily warehouse facilities, office space, production equipment, information technology equipment, and vehicles. The expected use periods generally range from less than one year to 20 years. The company’s financial services segment leases to users equipment produced or sold by the company, and a limited amount of other equipment. These leases are usually written for periods of less than one year to seven years. The company determines if an arrangement is or contains a lease at the contract inception. Lessee The company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than one year for both operating and finance leases. The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than one year and that do not meet the finance lease criteria are classified as operating leases. Certain real estate leases contain one or more options to terminate or renew , with terms that can generally extend the lease term from one to ten years . Options that the company is reasonably certain to exercise are included in the lease term. The company has elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. Leases with an initial term of one year or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. Variable lease expense primarily includes warehouse facilities leases with payments based on utilization exceeding contractual minimum amounts and leases with payments indexed to inflation when the index changes after lease commencement. The lease expense by type consisted of the following in millions of dollars: 2021 2020 Operating lease expense $ 116 $ 126 Short-term lease expense 29 23 Variable lease expense 53 41 Finance lease: Depreciation expense 26 20 Interest on lease liabilities 1 2 Total lease expense $ 225 $ 212 Operating and finance lease right of use assets and lease liabilities follow in millions of dollars: 2021 2020 Operating leases: Other assets $ 291 $ 324 Accounts payable and accrued expenses 279 305 Finance leases: Property and equipment — net $ 71 $ 63 Short-term borrowings 23 21 Long-term borrowings 38 39 Total finance lease liabilities $ 61 $ 60 The weighted-average remaining lease terms in years and discount rates follows: 2021 2020 Weighted-average remaining lease terms: Operating leases 5 5 Finance leases 2 3 Weighted-average discount rates: Operating leases 2.3% 2.1% Finance leases 2.3% 2.2% Lease payment amounts in each of the next five years at October 31, 2021 follow in millions of dollars: Operating Finance Due in: Leases Leases 2022 $ 83 $ 25 2023 69 19 2024 54 11 2025 32 5 2026 15 1 Later years 41 3 Total lease payments 294 64 Less imputed interest 15 3 Total lease liabilities $ 279 $ 61 Cash paid for amounts included in the measurement of lease liabilities follows in millions of dollars: 2021 2020 Operating cash flows from operating leases $ 104 $ 124 Operating cash flows from finance leases 1 2 Financing cash flows from finance leases 25 17 Right of use assets obtained in exchange for lease liabilities follow in millions of dollars: 2021 2020 Operating leases $ 101 $ 40 Finance leases 27 46 Lessor The company leases equipment manufactured or sold by the company and a limited amount of non-John Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in “Financing receivables - net” on the consolidated balance sheet. Operating leases are reported in “Equipment on operating leases - net” on the consolidated balance sheet. Leases offered by the company may include early termination and renewal options. At the end of a lease, the lessee generally has the option to purchase the underlying equipment for a fixed price or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to the company for remarketing. The company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates change. Lease agreements include usage limits and specifications on machine condition, which allow the company to assess lessees for excess use or damages to the underlying equipment. In 2020 and 2019, the company recorded impairment losses on operating leases of $22 million and $59 million, respectively, due to higher expected equipment return rates and lower estimated values of used construction equipment. Operating lease impairments were recorded in “Other operating expenses.” The company has elected to combine lease and nonlease components. The nonlease components primarily relate to preventative maintenance and extended warranty agreements financed by the retail customer. The company has also elected to report consideration related to sales and value added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in “Finance and interest income” and “Other operating expenses” on the statement of consolidated income. Variable lease revenues primarily relate to property taxes on leased assets in certain markets and late fees. Variable lease revenues also include excess use and damage fees of $7 million and $8 million for 2021 and 2020, respectively, which were reported in “Other income” on the statement of consolidated income. Due to the significant, negative effects of COVID, the company provided short-term relief to lessees during 2020, and to a much lesser extent in 2021. The relief, which included payment deferrals of three months or less, was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief represented approximately 2 percent and 4 percent of the company’s operating lease portfolio at October 31, 2021 and November 1, 2020, respectively. The majority of operating leases granted short-term relief are beyond the deferral period and have resumed making payments. See Note 13 for sales-type and direct financing leases provided payment relief. Lease revenues earned by the company follow in millions of dollars: 2021 2020 Sales-type and direct finance lease revenues $ 145 $ 135 Operating lease revenues 1,423 1,469 Variable lease revenues 30 31 Total lease revenues $ 1,598 $ 1,635 At the time of accepting a lease that qualifies as a sales-type or direct financing lease, the company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method. Sales-type and direct financing lease receivables by market follow in millions of dollars: 2021 2020 Agriculture and turf $ 1,131 $ 985 Construction and forestry 1,284 1,030 Total 2,415 2,015 Guaranteed residual values 394 278 Unguaranteed residual values 70 71 Less unearned finance income (258) (217) Financing lease receivables $ 2,621 $ 2,147 Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at October 31, 2021 follow in millions of dollars: Due in: 2021 2022 $ 1,223 2023 712 2024 461 2025 229 2026 161 Later years 23 Total $ 2,809 Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The cost of equipment on operating leases by market follow in millions of dollars: 2021 2020 Agriculture and turf $ 7,317 $ 7,366 Construction and forestry 1,616 1,921 Total 8,933 9,287 Less accumulated depreciation (1,945) (1,989) Equipment on operating leases - net $ 6,988 $ 7,298 The total operating lease residual values at October 31, 2021 and November 1, 2020 were $5,025 million and $5,254 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $950 million and $757 million at October 31, 2021 and November 1, 2020, respectively. The residual value guarantees at October 31, 2021 and November 1, 2020 include $3 million and $5 million, respectively, of dealer deposits available for potential losses on residual values. The equipment is depreciated on a straight-line basis over the term of the lease. The corresponding depreciation expense was $983 million in 2021, $1,083 million in 2020, and $981 million in 2019. Lease payments for equipment on operating leases at October 31, 2021 were scheduled as follows in millions of dollars: Due in: 2021 2022 $ 1,027 2023 693 2024 409 2025 207 2026 50 Later years 6 Total $ 2,392 Past due balances of operating leases represent the total balance held (net book value plus accrued lease payments) and still accruing financing income with any payment amounts 30 days or more past the contractual payment due date. These amounts were $70 million and $87 million at October 31, 2021 and November 1, 2020, respectively. The delinquency status of operating leases granted relief due to COVID is based on the modified payment schedule. 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 and recorded in “Other assets” at the lower of net book value or estimated fair value of the equipment less costs to sell and is not depreciated. The matured operating lease inventory balances at October 31, 2021 and November 1, 2020 were $30 million and $70 million, respectively. In 2020, the company recorded impairment losses on matured operating lease inventory of $10 million due to lower estimated values of used construction equipment. Impairment losses on matured operating lease inventory were included in “Other operating expenses.” |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Oct. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 26. 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 at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Carrying Fair Carrying Fair Value Value* Value Value* Financing receivables – net: Equipment operations $ 73 $ 68 $ 105 $ 103 Financial services 33,726 33,650 29,645 29,838 Total $ 33,799 $ 33,718 $ 29,750 $ 29,941 Financing receivables securitized – net: Equipment operations $ 10 $ 10 $ 26 $ 26 Financial services 4,649 4,694 4,677 4,773 Total $ 4,659 $ 4,704 $ 4,703 $ 4,799 Short-term securitization borrowings: Equipment operations $ 10 $ 10 $ 26 $ 26 Financial services 4,595 4,600 4,656 4,698 Total $ 4,605 $ 4,610 $ 4,682 $ 4,724 Long-term borrowings due within one year:** Equipment operations $ 1,213 $ 1,222 $ 79 $ 78 Financial services 7,117 7,142 6,870 6,936 Total $ 8,330 $ 8,364 $ 6,949 $ 7,014 Long-term borrowings:** Equipment operations $ 8,877 $ 10,244 $ 10,085 $ 11,837 Financial services 23,973 24,262 22,610 23,170 Total $ 32,850 $ 34,506 $ 32,695 $ 35,007 * 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. ** Values exclude finance lease liabilities that are presented as borrowings (see Note 25). 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 October 31, 2021 and November 1, 2020 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. 2021 2020 Level 1: Marketable securities U.S. equity fund $ 75 $ 62 International equity securities 2 2 U.S. government debt securities 59 55 Total Level 1 marketable securities 136 119 Level 2: Marketable securities U.S. government debt securities 139 113 Municipal debt securities 73 68 Corporate debt securities 224 188 International debt securities 2 2 Mortgage-backed securities* 154 147 Total Level 2 marketable securities 592 518 Other assets Derivatives: Interest rate contracts 239 669 Foreign exchange contracts 31 48 Cross-currency interest rate contracts 5 8 Total Level 2 other assets 275 725 Accounts payable and accrued expenses Derivatives: Interest rate contracts 132 88 Foreign exchange contracts 94 26 Cross-currency interest rate contracts 2 1 Total Level 2 accounts payable and accrued expenses 228 115 Level 3: Marketable securities International debt securities 4 * Primarily issued by U.S. government sponsored enterprises. Fair value, nonrecurring measurements from impairments at October 31, 2021 and November 1, 2020 in millions of dollars follow: Fair Value Losses 2021 2020 2021 2020 2019 Other receivables 1 $ 1 $ 2 Equipment on operating leases – net 2 $ 371 $ 22 $ 59 Property and equipment – net 3 $ 41 $ 135 $ 44 $ 102 Investments in unconsolidated affiliates 4 $ 19 $ 50 Other intangible assets – net $ 2 Other assets 5 $ 1 $ 59 $ 6 $ 16 $ 18 1 Fair value as of August 2, 2020. 2 Fair value as of May 3, 2020. 3 2021 fair value of $41 million at January 31, 2021. 2020 fair value of $70 million at May 3, 2020, $8 million at August 2, 2020, and $57 million at November 1, 2020. 4 Fair value as of November 1, 2020. 5 2021 fair value as of January 31, 2021. 2020 fair value as of May 3, 2020. The following is a description of the valuation methodologies the company uses to measure certain financial instruments on the balance sheet at fair value: Marketable securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities were primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data. Derivatives – The company’s derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Financing receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values (see Note 13). Other receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation (see Note 5). Equipment on operating leases – net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of return rates and equipment sale price at lease maturity. Inputs include historical return rates and realized sales values (see Note 5). 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 5). Investment in unconsolidated affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value or the estimated realization amount, and the carrying value. The fair value for publicly traded entities is the share price multiplied by the shares owned, or the estimated realization amount (see Note 5). Other intangible assets – net – The impairment was measured at the remaining net book value of customer relationships related to a closed factory operation (see Note 5). Other assets – The impairments of the matured operating lease inventory were measured at the fair value of that equipment. The valuations were based on a market approach. The inputs include sales of comparable assets. The impairment of the German lawn mower business was measured at the estimated realizable value. Fair value was based on estimates of the final sale price (see Note 5). |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Oct. 31, 2021 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | 27. DERIVATIVE INSTRUMENTS Cash Flow Hedges Certain interest rate and cross-currency interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at October 31, 2021 and November 1, 2020 were $2,700 million and $1,550 million, respectively. During 2019, the company hedged a portion of its exposure to interest rate changes on a forecasted debt issuance using an interest rate contract with a term of 30 years. The hedge was terminated upon issuance of the debt, resulting in a fair value loss of $70 million. Fair value gains or losses on cash flow hedges were recorded in OCI and are subsequently reclassified into interest expense or other operating expenses (foreign currency exchange) in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate or foreign currency exchange 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 October 31, 2021 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $4 million after-tax. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at October 31, 2021 and November 1, 2020 were $8,043 million and $7,239 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, at October 31, 2021 and November 1, 2020, in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Carrying Included in the Carrying Amount Amount of Active Hedged Hedging Discontinued Item Relationships Relationships Total 2021 Long-term borrowings due within one year* $ 189 $ 3 $ (2) $ 1 Long-term borrowings 8,070 29 223 252 2020 Long-term borrowings due within one year* $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 * Presented in short-term borrowings . Derivatives Not Designated as Hedging Instruments The company has certain interest rate contracts (swaps), foreign currency 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 the interest rate swaps at October 31, 2021 and November 1, 2020 were $10,848 million and $8,514 million, the foreign currency exchange contracts were $7,584 million and $4,903 million, and the cross-currency interest rate contracts were $238 million and $113 million, respectively. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign currency 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 consolidated balance sheet at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Other Assets Designated as hedging instruments: Interest rate contracts $ 166 $ 586 Not designated as hedging instruments: Interest rate contracts 73 83 Foreign exchange contracts 31 48 Cross-currency interest rate contracts 5 8 Total not designated 109 139 Total derivative assets $ 275 $ 725 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 99 $ 14 Not designated as hedging instruments: Interest rate contracts 33 74 Foreign exchange contracts 94 26 Cross-currency interest rate contracts 2 1 Total not designated 129 101 Total derivative liabilities $ 228 $ 115 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: 2021 2020 2019 Fair Value Hedges Interest rate contracts – Interest expense $ (236) $ 496 $ 589 Cash Flow Hedges Recognized in OCI: Interest rate contracts – OCI (pretax) 8 (18) (92) Reclassified from OCI: Interest rate contracts – Interest expense (13) (21) 5 Not Designated as Hedges Interest rate contracts – Net sales $ 13 $ (23) $ (23) Interest rate contracts – Interest expense* 14 (2) (32) Foreign exchange contracts – Cost of sales (101) 93 (18) Foreign exchange contracts – Other operating expenses* (262) 122 97 Total not designated $ (336) $ 190 $ 24 * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. 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 October 31, 2021 and November 1, 2020, was $135 million and $89 million, respectively. In accordance with the limits established in these agreements, the company posted no cash collateral at October 31, 2021 or November 1, 2020. In addition, the company paid $8 million of collateral either in cash or pledged securities that was outstanding at both October 31, 2021 and November 1, 2020 to participate in an international futures market to hedge currency exposure, not included in the table below. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral at October 31, 2021 and November 1, 2020 in millions of dollars follows: Gross Amounts Netting Net Recognized Arrangements Collateral Amount 2021 Assets $ 275 $ (105) $ 170 Liabilities 228 (105) $ (5) 118 2020 Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 |
SEGMENT AND GEOGRAPHIC AREA DAT
SEGMENT AND GEOGRAPHIC AREA DATA | 12 Months Ended |
Oct. 31, 2021 | |
SEGMENT AND GEOGRAPHIC AREA DATA | |
SEGMENT REPORTING | 28. SEGMENT AND GEOGRAPHIC AREA DATA In fiscal year 2021, the company implemented a new 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. This presentation is consistent with how the chief operating decision maker assesses the performance of the segments and makes decisions about resource allocations. The company’s operations are presently organized and reported in four business segments described as follows: The production and precision agriculture segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for production-scale growers of large grains, small grains, cotton, and sugar. Main products include large and certain mid-size tractors, combines, cotton pickers, sugarcane harvesters and loaders, and soil preparation, seeding, application and crop care equipment. The small agriculture and turf segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for dairy and livestock producers, high-value crop producers, and turf and utility customers. The segment’s primary products include certain mid-size and small tractors, as well as hay and forage equipment, riding and commercial lawn equipment, golf course equipment, and utility vehicles. The construction and forestry segment defines, develops, and delivers a broad range of machines and technology solutions organized along the earthmoving, forestry, and roadbuilding production systems. The segment’s primary products include crawler dozers and loaders, four-wheel-drive loaders, excavators, skid-steer loaders, milling machines, and log harvesters. The products and services produced by the segments above are marketed primarily through independent retail dealer networks and major retail outlets, and, as it relates to roadbuilding products in certain markets outside the U.S. and Canada, primarily through company-owned sales and service subsidiaries. The financial services segment primarily finances sales and leases by John Deere dealers of new and used production and precision agriculture equipment, small agriculture and turf equipment, and construction and forestry equipment. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties. Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment and geographic area data. Intersegment sales and revenues represent sales of components and finance charges, which are generally based on market prices. 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. Information relating to operations by operating segment in millions of dollars follows for the years ended October 31, 2021, November 1, 2020 and November 3, 2019. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2021, 2020, and 2019 were as follows: production and precision agriculture net sales of $27 million, $22 million, and $31 million; small agriculture and turf net sales of $11 million, $2 million, and $3 million; construction and forestry had no intersegment sales in 2021, $1 million in 2020, and $1 million in 2019; and financial services revenues of $246 million, $278 million, and $348 million, respectively. OPERATING SEGMENTS 2021 2020 2019 Net sales and revenues Unaffiliated customers: Production & precision ag net sales $ 16,509 $ 12,962 $ 13,364 Small ag & turf net sales 11,860 9,363 10,302 Construction & forestry net sales 11,368 8,947 11,220 Financial services revenues 3,548 3,589 3,621 Other revenues* 739 679 751 Total $ 44,024 $ 35,540 $ 39,258 * Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income. OPERATING SEGMENTS 2021 2020 2019 Operating profit Production & precision ag $ 3,334 $ 1,969 $ 1,729 Small ag & turf 2,045 1,000 777 Construction & forestry 1,489 590 1,215 Financial services* 1,144 746 694 Total operating profit* 8,012 4,305 4,415 Interest income 82 62 85 Interest expense (368) (329) (256) Foreign exchange gains (losses) from equipment operations’ financing activities (45) 17 (22) Pension and OPEB benefit (cost), excluding service cost component 183 31 67 Corporate expenses – net (241) (251) (180) Income taxes (1,658) (1,082) (852) Total (2,047) (1,552) (1,158) Net income 5,965 2,753 3,257 Less: Net income attributable to noncontrolling interests 2 2 4 Net income attributable to Deere & Company $ 5,963 $ 2,751 $ 3,253 * Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses. Interest income* Production & precision ag $ 21 $ 22 $ 16 Small ag & turf 21 16 6 Construction & forestry 10 12 11 Financial services 1,999 2,122 2,316 Corporate 82 62 85 Intercompany (279) (272) (360) Total $ 1,854 $ 1,962 $ 2,074 * Does not include finance rental income for equipment on operating leases. Interest expense Production & precision ag $ 84 $ 76 $ 87 Small ag & turf 87 111 158 Construction & forestry 46 61 91 Financial services 687 942 1,234 Corporate 368 329 256 Intercompany (279) (272) (360) Total $ 993 $ 1,247 $ 1,466 Depreciation* and amortization expense Production & precision ag $ 495 $ 480 $ 475 Small ag & turf 245 247 248 Construction & forestry 303 289 292 Financial services 1,140 1,227 1,135 Intercompany (133) (125) (131) Total $ 2,050 $ 2,118 $ 2,019 * Includes depreciation for equipment on operating leases. (continued) OPERATING SEGMENTS 2021 2020 2019 Equity in income (loss) of unconsolidated affiliates Small ag & turf $ 2 $ 2 $ 6 Construction & forestry 16 (52) 14 Financial services 3 2 1 Total $ 21 $ (48) $ 21 Identifiable operating assets Production & precision ag $ 7,021 $ 5,708 $ 6,149 Small ag & turf 3,959 3,266 3,656 Construction & forestry 6,457 6,322 7,044 Financial services 51,624 48,719 48,483 Corporate* 15,053 11,076 7,679 Total $ 84,114 $ 75,091 $ 73,011 * Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, goodwill, marketable securities, and cash and cash equivalents. Capital additions Production & precision ag $ 458 $ 431 $ 595 Small ag & turf 253 223 264 Construction & forestry 183 157 245 Financial services 3 4 3 Total $ 897 $ 815 $ 1,107 Investments in unconsolidated affiliates Production & precision ag $ 1 $ 1 Small ag & turf $ 31 29 27 Construction & forestry 122 144 171 Financial services 22 19 16 Total $ 175 $ 193 $ 215 The company views and has historically disclosed its operations as consisting of two geographic areas (the U.S. and Canada, and outside the U.S. and Canada) for net sales and revenues and operating profit shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. For property and equipment, a material amount does reside in the country of Germany, separately disclosed below in millions of dollars. GEOGRAPHIC AREAS 2021 2020 2019 Net sales and revenues Unaffiliated customers: U.S. and Canada $ 25,829 $ 21,386 $ 23,746 Outside U.S. and Canada 18,195 14,154 15,512 Total $ 44,024 $ 35,540 $ 39,258 Operating profit U.S. and Canada $ 4,774 $ 2,775 $ 2,841 Outside U.S. and Canada 3,238 1,530 1,574 Total $ 8,012 $ 4,305 $ 4,415 Property and equipment U.S. and Canada $ 3,164 $ 3,178 $ 3,197 Germany 1,096 1,113 1,137 Other countries 1,560 1,526 1,639 Total $ 5,820 $ 5,817 $ 5,973 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENT | 29. SUBSEQUENT EVENTS In November 2021, the company renewed its outstanding bank conduit facility revolving credit agreement, which reduced the facility capacity from $2,000 million to $1,000 million. As a result of the facility renewal at a reduced capacity, the company repurchased $511 million of outstanding short-term securitization borrowings in November 2021, in addition to the normal monthly collection of payments on the retail notes. On November 17, 2021, employees represented by the UAW approved a new collective bargaining agreement and terminated a strike that began on October 14, 2021. The agreement, which has a term of six years, covers the wages, hours, benefits, and other terms and conditions of employment for the company’s UAW-represented employees at 14 U.S. facilities. The labor agreement includes a lump sum ratification bonus payment of $8,500 per eligible employee, totaling $90 million, and an immediate wage increase of 10 percent plus further wage increases over the term of the contract. The lump sum payment will be expensed in the first quarter of 2022. The company remeasured the U.S. hourly pension plan as of November 30, 2021 due to the new collective bargaining agreement, which decreased the plan’s funded status by approximately $495 million and will increase pension expense in 2022 by nearly $80 million. The U.S. hourly pension plan changes will continue to impact pension expense through the remaining term of the contract as well as years beyond the current contract as employees continue to accumulate years of service. The UAW strike is expected to have an adverse effect on the company’s results of operations for the three months ending January 30, 2022 as a result of reduced production and shipments. On November 30, 2021, the company voluntarily contributed $1,000 million to a U.S. OPEB plan. The expected return on this contribution was included in the 2022 pension and OPEB cost estimates in the MD&A. A quarterly dividend of $1.05 per share was declared at the Board of Directors meeting on December 8, 2021, payable on February 8, 2022 to stockholders of record on December 31, 2021. On December 14, 2021, the company announced a definitive agreement to acquire majority ownership in Kreisel Electric, Inc. (Kreisel), a battery technology provider based in Austria. Kreisel has differentiated battery technology for high-performance and off-highway applications as well as charging infrastructure offerings globally and across multiple end markets. This will provide Deere with the high-density battery technology necessary to optimally integrate and efficiently design vehicles and power trains while leveraging Kreisel’s charging technology to build out infrastructure to enable global customer adoption. The transaction is expected to close in the first half of fiscal year 2022, subject to the receipt of certain required regulatory approvals and satisfaction of certain other customary closing conditions. Total cash consideration will be €221 million and paid out of cash on hand. Kreisel will be allocated amongst the company’s production and precision agriculture, small agriculture and turf, and construction and forestry segments. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Consolidation, Policy | The consolidated financial statements represent the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company is the primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. Deere & Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 11). Other investments (less than 20 percent ownership) are recorded at cost. |
Fiscal Period, Policy | The company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period, which generally occurs in October. An additional week is included in the fourth fiscal quarter every five or six years to realign the company’s fiscal quarters with the calendar. The fiscal year ends for 2021, 2020, and 2019 were October 31, 2021, November 1, 2020, and November 3, 2019, respectively. Fiscal years 2021 and 2020 contained 52 weeks compared to 53 weeks in fiscal year 2019. Unless otherwise stated, references to particular years or quarters refer to the company’s fiscal years and the associated periods in those fiscal years. |
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. |
Revenue Recognition | Sales of equipment and service parts are recognized when each of the following criteria are met: (1) the company and an independent customer approve a contract with commercial substance, (2) the sales price is determinable and collectability of the payments are probable based on the terms outlined in the contract, and (3) control of the goods has transferred to the independent customer. In most situations, the independent customer is a dealer, which subsequently sells the equipment and service parts purchased from the company to a retail customer, who can finance the equipment with the financial services segment or another source of financing. In some situations, the company sells directly to a retail customer. The term “customer” includes both dealers and retail customers to whom the company makes direct sales. Transfer of control generally occurs for equipment and service parts when the good is delivered as specified in the contract and the risks and rewards of ownership are transferred. In the U.S. and most international locations, this transfer occurs primarily when goods are shipped. In Canada and some other international locations, certain goods are shipped to dealers on a consignment basis under which the risks and rewards of ownership are not transferred to the dealer at the time the goods are shipped. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. Generally, no right of return exists on sales of equipment. In limited instances, equipment is transferred to a customer or a financial institution with an obligation to repurchase the equipment for a specified amount, which is exercisable at the customer’s option. When the equipment is expected to be repurchased, those arrangements are accounted for as leases. No sale is recorded at the time of the equipment transfer and the difference between sale price and the specified repurchase amount is recognized as revenue on a straight-line basis until the customer’s option expires. When this equipment is not expected to be repurchased, a sale is recorded with a return obligation. Under the terms of sales agreements with dealers, interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from one until payment is received by the company. Interest charged may not be forgiven and the past due interest rates exceed market rates. In 2020 and to a much lesser extent in 2021, short-term payment relief was provided to dealers due to the economic effects of COVID (see Note 13). Dealers cannot cancel purchases after the company recognizes a sale and are responsible for payment even if the equipment is not sold to retail customers. If the interest-free or below market interest rate period exceeds one year, the company adjusts the expected sales revenue for the effects of the time value of money using a current market interest rate. The revenue related to the financing component is recognized in “Finance and interest income” using the interest method. The company does not adjust the sales price to account for a financing component if the expected interest-free or below market period is one year or less. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The estimated returns are recorded in “Other assets” for the inventory value of estimated returns, adjusted for restocking fees. The estimated dealer refund liability, adjusted for restocking fees, is recorded in “Accounts payable and accrued expenses.” The estimated returns are based on historical return rates, current dealer inventory levels, and current economic conditions. The company remanufactures used engines and components (cores) that are sold to dealers and retail customers for maintenance and repair parts. Revenue for remanufactured components is recognized using the same criteria as other parts sales. When a remanufactured part is sold, the company collects a deposit that is repaid if the customer returns a core that meets certain specifications within a defined time period. The deposit received from the customer is recognized as a liability in “Accounts payable and accrued expenses” and the used component that is expected to be returned is recognized in “Other assets” in the consolidated balance sheet. When a customer returns a core, the deposit is repaid, the liability reversed, and the returned core is recorded in inventory to be remanufactured and sold to another customer. If a core is not returned within the required time, the deposit is recognized as revenue in “Net sales,” and the estimated core return is recorded as an expense in “Cost of sales” in the statement of consolidated income. Certain equipment is sold with precision guidance, telematics, and other information gathering and analyzing capabilities. These technology solutions require hardware, software, and may include an obligation to provide services for a period of time. These solutions are generally bundled with the sale of the equipment but can also be purchased or renewed separately. The revenue related to the hardware and embedded software is generally recognized at the time of the equipment sale and recorded in “Net sales” in the statement of consolidated income. The revenue for the future services is generally deferred and recognized over the service period. The deferred revenue is recorded as a contract liability in “Accounts payable and accrued expenses” in the consolidated balance sheet and is recognized in “Other income” with the associated expenses recognized in “Other operating expenses” in the statement of consolidated income. Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of financing receivables are recognized as a reduction in “Finance and interest income” over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in “Finance and interest income.” Sales Incentives In certain markets, the company provides sales incentives to dealers. These incentives may be based on a dealer’s purchase volume or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. At the time of the sale to a dealer, the company records an estimated cost of these programs as a reduction to the sales price. The estimated cost is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to a retail customer. Actual cost differences from the original cost estimate are recognized in “Net sales.” |
Product Warranties | For most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period. At the time a sale is recognized, the estimated future warranty costs are recorded. The company generally determines its total warranty liability by applying historical warranty 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 with consideration of current quality developments. The company also offers extended warranty arrangements for purchase at the customer’s option. The premiums for extended warranties are recognized in “Other income” in the statement of consolidated income primarily in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in “Accounts payable and accrued expenses” in the consolidated balance sheet (see Note 21). |
Sales and Transaction Taxes | The company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with revenue producing transactions between the company and its customers. These taxes include sales, use, value-added, and some excise taxes. The company elected to exclude these taxes from the determination of the sales price (excluded from revenues). |
Contract Costs | Incremental costs of obtaining an equipment revenue contract are recognized as an expense when incurred since the amortization period would be one year or less. |
Advertising Costs | Advertising costs are charged to expense as incurred. This expense was $212 million in 2021, $196 million in 2020, and $215 million in 2019. |
Depreciation and Amortization | Property and equipment, capitalized software, and other intangible assets are generally stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives generally using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and revised products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are generally charged to expense as incurred. |
Securitization of Receivables | Certain financing receivables are periodically transferred to special purpose entities (SPEs) in securitization transactions (see Note 14). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Financing receivables securitized - net.” The company recognizes finance income over the lives of these receivables using the interest method. |
Receivables and Allowances | All financing and trade receivables are reported on the balance sheet at outstanding principal and accrued interest, adjusted for any write-offs, the allowance for credit losses, and any unamortized deferred fees or costs on originated financing receivables. The company also records an allowance and provision for credit losses related to the receivables from sales (trade receivables and certain financing receivables). The allowance is a reduction to the receivable balances and the provision is recorded in “Selling, administrative and general expenses.” The allowance represents an estimate of the credit losses expected over the life of the receivable portfolio. The company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. 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. Receivables are written-off to the allowance when the account is considered uncollectible (see Note 13). |
Impairment of Long-Lived Assets, Goodwill, and Other Intangible Assets | The company evaluates the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. Goodwill and unamortized intangible assets are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances indicate a reduction in the fair value below the carrying value. Goodwill is allocated and reviewed for impairment by reporting unit. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (see Notes 5 and 26). |
Derivative Financial Instruments | The company’s policy is 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, fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. 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 (see Note 27). |
Foreign Currency Translation | The functional currencies for most of the company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange derivative contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2021, 2020, and 2019 was $(134) million, $18 million, and $(13) million, respectively. |
Cash and Cash Equivalents, Policy | The company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the company’s short-term borrowings, excluding the current maturities of finance lease obligations and long-term borrowings, mature or may require payment within three months or less. |
Pension and Other Postretirement Plans | The spot yield curve approach is used to estimate the service and interest cost components of the net periodic pension and OPEB costs by applying the specific spot rates along the yield curve used to determine the benefit plan obligations to relevant projected cash outflows. The components of net periodic pension and OPEB cost excluding the service component are primarily included in the line item “ Other operating expenses ” in the statement of consolidated income. Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10 percent of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. The company makes any required contributions to the plan assets under applicable regulations and voluntary contributions after evaluating the company’s liquidity position and ability to make tax-deductible contributions. Total company contributions to the plans were $258 million in 2021 and $951 million in 2020, which included both required and voluntary contributions and direct benefit payments. The voluntary contributions to plan assets were $700 million in 2020. The discount rate assumptions used to determine the pension and OPEB obligations for all periods presented were primarily based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which the company’s benefit obligations could effectively be settled at the October 31 measurement dates. The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value. |
Unremitted Earnings in Foreign Investment, Policy | At October 31, 2021, accumulated earnings in certain subsidiaries outside the U.S. totaled $2,155 million. A provision for foreign withholding taxes has no t been made since these earnings are expected to remain indefinitely reinvested outside the U.S. Determination of the amount of a foreign withholding tax liability on these unremitted earnings is not practicable. |
Marketable Securities, Policy | Realized gains or losses from the sales of marketable securities are based on the specific identification method. |
Financing Receivables - Non-Performing, Policy | Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. The company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount 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. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Inventory Valuation, Policy | A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the “last-in, first-out” (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the “first-in, first-out” (FIFO) basis, or net realizable value. |
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. |
Stock Option and Restricted Stock Awards, Policy | The company issues stock options and restricted stock unit awards to key employees under plans approved by stockholders. Restricted stock units are also issued to nonemployee directors for their services as directors under a plan approved by stockholders. Options are awarded with the exercise price equal to the market price and become exercisable in one |
Lessee Lease, Policy | The company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than one year for both operating and finance leases. The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than one year and that do not meet the finance lease criteria are classified as operating leases. Certain real estate leases contain one or more options to terminate or renew , with terms that can generally extend the lease term from one to ten years . Options that the company is reasonably certain to exercise are included in the lease term. |
Lease and Non-lease Components, Policy | The company has elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. |
Short-term lease, Policy | Leases with an initial term of one year or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. |
Lessor Leases, Policy | The company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates change. Lease agreements include usage limits and specifications on machine condition, which allow the company to assess lessees for excess use or damages to the underlying equipment. |
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. |
NEW ACCOUNTING STANDARDS (Table
NEW ACCOUNTING STANDARDS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
NEW ACCOUNTING STANDARDS | |
Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Measurement of Credit Losses on Financial Instruments Guidance | The effects of adopting the ASU on the consolidated balance sheet 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 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Bear Flag | |
Asset and Liability Fair Values at the Acquisition Date | In August 2021, the company acquired Bear Flag Robotics, Inc. (Bear Flag) to further accelerate Deere’s development and delivery of advanced technology. Bear Flag’s technology is complementary to other Deere technology efforts and enables autonomous tractor operations. The total cash purchase price before final adjustments, net of cash acquired of $4 million, was $225 million, with an additional $25 million to be recognized as compensation expense over the four-year post-acquisition service period. In addition to the cash purchase price, $19 million of liabilities were assumed. The preliminary asset and liability fair values at the acquisition date in millions of dollars follow: August 2021 Property and equipment $ 1 Goodwill 189 Other intangible assets 54 Total assets $ 244 Accounts payable and accrued expenses $ 1 Deferred income taxes 18 Total liabilities $ 19 |
Unimil | |
Asset and Liability Fair Values at the Acquisition Date | In September 2020, the company acquired Unimil, a leading Brazilian company in the after-sales service parts business for sugarcane harvesters, which is based in Piracicaba, Brazil. The total cash purchase price, net of cash acquired of $5 million, was $66 million, with $6 million funded to an escrow to secure certain indemnity obligations. In addition to the cash purchase price, $14 million of liabilities were assumed. The asset and liability fair values at the acquisition date in millions of dollars follow: September 2020 Trade accounts and notes receivable $ 5 Other receivables 2 Inventories 10 Property and equipment 22 Goodwill 28 Other intangible assets 13 Total assets $ 80 Accounts payable and accrued expenses $ 5 Deferred income taxes 9 Total liabilities $ 14 |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Schedule of Impairments and Other Charges (Benefits) | In 2021, the company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. The fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and after-tax Expense (benefit): PPA SAT CF Total Gain on sale – Other income $ (27) $ (27) Long-lived asset impairments – Cost of sales $ 5 3 $ 42 50 Brazil indirect tax – Cost of sales (53) (5) (58) Total pretax expense (benefit) $ (48) $ (24) $ 37 $ (35) In 2020, the company closed a factory that produced small agricultural equipment in China, recognized impairments in the fixed assets in an asphalt plant factory in Germany, a construction equipment factory in Brazil, and other international locations, recorded impairments of equipment on operating leases and matured lease inventory, as well as impairments of the investment in certain affiliate companies. See Note 26 for a description of the valuation methodologies used to measure these impairments. PPA SAT CF FS Total Factory closure – Cost of sales $ 20 $ 20 Long-lived asset impairments: Cost of sales 13 $ 80 93 SA&G expenses $ 2 2 4 Other operating expenses $ 32 32 Affiliate company impairments – Equity in loss of unconsolidated affiliates 50 50 Total pretax impairments and closure costs $ 2 $ 35 $ 130 $ 32 $ 199 |
2020 Employee-Separation Programs | |
Schedule of Employee-Separation Programs Pretax Expenses | The programs’ total pretax expenses in 2020 were as follows: PPA SAT CF FS Total Cost of sales $ 51 $ 31 $ 22 $ 104 Research and development expenses 29 18 8 55 Selling, administrative and general expenses 53 43 24 $ 15 135 Total operating profit impact $ 133 $ 92 $ 54 $ 15 294 Non-operating profit impact* 41 Total pretax expense $ 335 * Relates primarily to non-cash charges of $34 million from curtailments in certain OPEB plans (see Note 8) and other corporate expenses, both of which were recorded outside of operating profit . Approximately $6 million of the curtailment charge was recorded by financial services. |
2019 Employee-Separation Programs | |
Schedule of Employee-Separation Programs Pretax Expenses | During 2019, the company also completed certain employee-separation programs designed for specific functions and geographic areas as part of its on-going efforts to create a more efficient organizational structure. These programs provided for cash payments based on years of service. The expenses were recorded in the period the employees irrevocably accepted the separation offer with the following total pretax expenses: PPA SAT CF FS Total Cost of sales $ 3 $ 2 $ 5 Research and development expenses 1 1 Selling, administrative and general expenses 7 6 $ 2 $ 9 24 Total pretax expense $ 11 $ 8 $ 2 $ 9 $ 30 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
REVENUE RECOGNITION | |
Schedule of Revenue Recognition | The company’s net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow: PPA SAT CF FS Total 2021 Primary geographic markets: United States $ 8,223 $ 6,505 $ 5,697 $ 2,389 $ 22,814 Canada 853 498 1,047 617 3,015 Western Europe 2,086 2,433 1,807 103 6,429 Central Europe and CIS 1,322 475 828 39 2,664 Latin America 2,916 456 903 247 4,522 Asia, Africa, Australia, New Zealand, and Middle East 1,417 1,679 1,331 153 4,580 Total $ 16,817 $ 12,046 $ 11,613 $ 3,548 $ 44,024 Major product lines: Production agriculture $ 16,248 $ 16,248 Small agriculture $ 8,619 8,619 Turf 2,853 2,853 Construction $ 4,684 4,684 Compact construction 1,489 1,489 Roadbuilding 3,749 3,749 Forestry 1,280 1,280 Financial products 55 46 20 $ 3,548 3,669 Other 514 528 391 1,433 Total $ 16,817 $ 12,046 $ 11,613 $ 3,548 $ 44,024 Revenue recognized: At a point in time $ 16,659 $ 11,969 $ 11,522 $ 105 $ 40,255 Over time 158 77 91 3,443 3,769 Total $ 16,817 $ 12,046 $ 11,613 $ 3,548 $ 44,024 PPA SAT CF FS Total 2020 Primary geographic markets: United States $ 6,889 $ 5,059 $ 4,548 $ 2,500 $ 18,996 Canada 640 350 802 598 2,390 Western Europe 1,827 1,937 1,479 90 5,333 Central Europe and CIS 898 493 646 35 2,072 Latin America 1,902 334 553 234 3,023 Asia, Africa, Australia, New Zealand, and Middle East 1,119 1,322 1,153 132 3,726 Total $ 13,275 $ 9,495 $ 9,181 $ 3,589 $ 35,540 Major product lines: Production agriculture $ 12,662 $ 12,662 Small agriculture $ 6,827 6,827 Turf 2,390 2,390 Construction $ 3,521 3,521 Compact construction 1,269 1,269 Roadbuilding 2,924 2,924 Forestry 1,100 1,100 Financial products 69 37 25 $ 3,589 3,720 Other 544 241 342 1,127 Total $ 13,275 $ 9,495 $ 9,181 $ 3,589 $ 35,540 Revenue recognized: At a point in time $ 13,106 $ 9,439 $ 9,071 $ 106 $ 31,722 Over time 169 56 110 3,483 3,818 Total $ 13,275 $ 9,495 $ 9,181 $ 3,589 $ 35,540 PPA SAT CF FS Total 2019 Primary geographic markets: United States $ 6,772 $ 5,590 $ 6,082 $ 2,482 $ 20,926 Canada 675 421 1,107 617 2,820 Western Europe 1,813 2,053 1,586 87 5,539 Central Europe and CIS 859 564 749 37 2,209 Latin America 2,527 367 719 272 3,885 Asia, Africa, Australia, New Zealand, and Middle East 1,039 1,449 1,265 126 3,879 Total $ 13,685 $ 10,444 $ 11,508 $ 3,621 $ 39,258 Major product lines: Production agriculture $ 13,001 $ 13,001 Small agriculture $ 7,422 7,422 Turf 2,650 2,650 Construction $ 5,188 5,188 Compact construction 1,279 1,279 Roadbuilding 3,193 3,193 Forestry 1,403 1,403 Financial products 78 22 30 $ 3,621 3,751 Other 606 350 415 1,371 Total $ 13,685 $ 10,444 $ 11,508 $ 3,621 $ 39,258 Revenue recognized: At a point in time $ 13,509 $ 10,406 $ 11,391 $ 111 $ 35,417 Over time 176 38 117 3,510 3,841 Total $ 13,685 $ 10,444 $ 11,508 $ 3,621 $ 39,258 |
CASH FLOW INFORMATION (Tables)
CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
CASH FLOW INFORMATION | |
Restricted Cash Held | The company’s restricted cash held at October 31, 2021, November 1, 2020, and November 3, 2019 was as follows in millions of dollars: 2021 2020 2019 Equipment operations $ 12 $ 11 $ 21 Financial services 96 95 78 Total $ 108 $ 106 $ 99 |
Cash Payments for Interest and Income Taxes | Cash payments for interest and income taxes consisted of the following in millions of dollars: 2021 2020 2019 Interest: Equipment operations $ 584 $ 553 $ 666 Financial services 736 998 1,154 Intercompany eliminations (279) (272) (360) Consolidated $ 1,041 $ 1,279 $ 1,460 Income taxes: Equipment operations $ 1,996 $ 1,000 $ 1,018 Financial services 348 297 (57) Intercompany eliminations (269) (228) 150 Consolidated $ 2,075 $ 1,069 $ 1,111 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
Schedule of Components of Net Periodic Pension and OPEB Cost | The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages: 2021 2020 2019 Pensions Service cost $ 332 $ 321 $ 261 Interest cost 276 347 447 Expected return on plan assets (799) (819) (802) Amortization of actuarial loss 259 256 148 Amortization of prior service cost 12 13 11 Settlements/curtailments 21 25 5 Net cost $ 101 $ 143 $ 70 Weighted-average assumptions Discount rates - service cost 2.5% 2.9% 4.0% Discount rates - interest cost 2.1% 2.7% 4.0% Rate of compensation increase 3.7% 3.8% 3.8% Expected long-term rates of return 6.0% 6.4% 6.5% Interest crediting rate - U.S. cash balance plan 1.7% 2.1% 3.3% The components of net periodic OPEB cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages: 2021 2020 2019 OPEB Service cost $ 48 $ 49 $ 41 Interest cost 102 140 216 Expected return on plan assets (77) (50) (36) Amortization of actuarial loss 27 29 16 Amortization of prior service credit (4) (4) (72) Curtailments 34 Net cost $ 96 $ 198 $ 165 Weighted-average assumptions Discount rates - service cost 3.4% 3.7% 4.8% Discount rates - interest cost 2.1% 2.7% 4.2% Expected long-term rates of return 5.4% 5.7% 5.7% |
Schedule of Benefit Plan Costs Recorded in Net Income and Other Changes in Plan Assets and Benefit Obligations Recorded in Other Comprehensive Income | The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2021 2020 2019 Pensions Net cost $ 101 $ 143 $ 70 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (2,821) 438 887 Amortization of actuarial loss (256) (249) (143) Amortization of prior service cost (12) (11) (11) Settlements (22) (26) (3) Total (gain) loss recognized in other comprehensive (income) loss (3,111) 152 730 Total recognized in comprehensive (income) loss $ (3,010) $ 295 $ 800 The previous OPEB cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2021 2020 2019 OPEB Net cost $ 96 $ 198 $ 165 Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss (671) (136) 141 Amortization of actuarial loss (27) (29) (16) Amortization of prior service credit 4 4 72 Total (gain) loss recognized in other comprehensive (income) loss (694) (161) 197 Total recognized in comprehensive (income) loss $ (598) $ 37 $ 362 |
Schedule of Benefit Plan Obligations, Funded Status and the Assumptions Related to Obligations | The benefit plan obligations, funded status, and the assumptions related to the obligations at October 31, 2021 and November 1, 2020, respectively, in millions of dollars follow: Pensions OPEB 2021 2020 2021 2020 Change in benefit obligations Beginning of year balance $ (15,021) $ (14,250) $ (5,410) $ (5,622) Service cost (332) (321) (48) (49) Interest cost (276) (347) (102) (140) Actuarial gain (loss) 373 (771) 381 119 Benefits paid 755 749 290 297 Health care subsidies (29) (28) Settlements/curtailments 1 15 Foreign exchange and other (25) (96) (12) 13 End of year balance (14,525) (15,021) (4,930) (5,410) Change in plan assets (fair value) Beginning of year balance 14,574 14,024 1,518 936 Actual return on plan assets 3,249 1,144 367 33 Employer contribution 101 108 157 843 Benefits paid (755) (749) (290) (297) Settlements (12) Foreign exchange and other 21 59 3 3 End of year balance 17,190 14,574 1,755 1,518 Funded status $ 2,665 $ (447) $ (3,175) $ (3,892) Weighted-average assumptions Discount rates 2.7% 2.5% 2.8% 2.7% Rate of compensation increase 3.7% 3.7% Interest crediting rate - U.S. cash balance plan 1.8% 1.7% |
Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income - Pretax | The amounts recognized at October 31, 2021 and November 1, 2020, respectively, in millions of dollars consisted of the following: Pensions OPEB 2021 2020 2021 2020 Amounts recognized in balance sheet Noncurrent asset $ 3,601 $ 863 Current liability (51) (72) $ (36) $ (36) Noncurrent liability (885) (1,238) (3,139) (3,856) Total $ 2,665 $ (447) $ (3,175) $ (3,892) Amounts recognized in accumulated other comprehensive income – pretax Net actuarial loss $ 1,376 $ 4,475 $ 49 $ 747 Prior service cost (credit) 9 21 (20) (24) Total $ 1,385 $ 4,496 $ 29 $ 723 |
Schedule of Future Benefits Expected to be Paid from the Benefit Plans | The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars: Pensions OPEB* 2022 $ 730 $ 280 2023 710 279 2024 701 279 2025 693 278 2026 698 278 2027 to 2031 3,426 1,374 * Net of prescription drug group benefit subsidy under Medicare Part D. |
Fair Values of Pension Plan and Health Care Assets | The fair values of the pension plan assets at October 31, 2021 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 378 $ 355 $ 23 Equity: U.S. equity securities 1,151 1,123 28 International equity securities and funds 951 931 20 Fixed Income: Government and agency securities 1,475 1,159 316 Corporate debt securities 4,841 4,841 Mortgage-backed securities 144 144 Real estate investment trusts 62 55 7 Derivative contracts - assets 116 37 79 Derivative contracts - liabilities (75) (15) (60) Receivables, payables, and other (155) (177) 22 Securities lending collateral 982 107 875 Securities lending liability (982) (107) (875) Securities sold short (139) (128) (11) Total of Level 1 and Level 2 assets 8,749 $ 3,340 $ 5,409 Investments at net asset value: Short-term investments 815 U.S. equity funds 796 International equity funds 528 Fixed income funds 1,701 Real estate funds 566 Hedge funds 751 Private equity 1,385 Venture capital 1,537 Other investments 362 Total net assets $ 17,190 The fair values of the health care assets at October 31, 2021 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 55 $ 55 Equity securities and funds 30 29 $ 1 Fixed Income: Government and agency securities 243 215 28 Corporate debt securities 307 307 Mortgage-backed securities 10 10 Securities lending collateral 64 20 44 Securities lending liability (64) (20) (44) Securities sold short (3) (3) Total of Level 1 and Level 2 assets 642 $ 296 $ 346 Investments at net asset value: Short-term investments 20 U.S. equity funds 619 International equity funds 358 Fixed income funds 18 Real estate funds 42 Hedge funds 13 Private equity 18 Venture capital 20 Other investments 5 Total net assets $ 1,755 The fair values of the pension plan assets at November 1, 2020 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 309 $ 276 $ 33 Equity: U.S. equity securities 1,184 1,135 49 International equity securities 947 937 10 Fixed Income: Government and agency securities 1,133 824 309 Corporate debt securities 3,534 3,534 Mortgage-backed securities 136 136 Real estate investment trusts 49 48 1 Derivative contracts - assets 94 2 92 Derivative contracts - liabilities (79) (43) (36) Receivables, payables, and other (163) (184) 21 Securities lending collateral 449 90 359 Securities lending liability (449) (90) (359) Securities sold short (149) (144) (5) Total of Level 1 and Level 2 assets 6,995 $ 2,851 $ 4,144 Investments at net asset value: Short-term investments 510 U.S. equity funds 1,246 International equity funds 674 Fixed income funds 1,321 Real estate funds 618 Hedge funds 750 Private equity 1,064 Venture capital 974 Other investments 422 Total net assets $ 14,574 The fair values of the health care assets at November 1, 2020 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ 117 $ 117 Equity securities and funds 44 43 $ 1 Fixed Income: Government and agency securities 180 168 12 Corporate debt securities 66 66 Mortgage-backed securities 13 13 Other (1) (1) Securities lending collateral 49 8 41 Securities lending liability (49) (8) (41) Securities sold short (3) (3) Total of Level 1 and Level 2 assets 416 $ 324 $ 92 Investments at net asset value: Short-term investments 9 U.S. equity funds 539 International equity funds 320 Fixed income funds 185 Hedge funds 12 Private equity 13 Venture capital 12 Other investments 12 Total net assets $ 1,518 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
INCOME TAXES | |
Provision for Income Taxes by Taxing Jurisdiction and by Significant Component | The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars: 2021 2020 2019 Current: U.S.: Federal $ 899 $ 400 $ 545 State 183 53 72 Foreign 1,017 640 700 Total current 2,099 1,093 1,317 Deferred: U.S.: Federal (303) (68) (345) State (45) 9 (26) Foreign (93) 48 (94) Total deferred (441) (11) (465) Provision for income taxes $ 1,658 $ 1,082 $ 852 |
Comparison of Statutory and Effective Income Tax Provision | A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follow: 2021 2020 2019 U.S. federal income tax provision at the U.S. statutory rate ( 21 percent) $ 1,597 $ 815 $ 859 State and local taxes, net of federal effect 119 59 47 Other Impacts of Tax Cuts and Jobs Act of 2017 (85) 39 (101) Rate differential on foreign subsidiaries 148 106 89 Research and business tax credits (48) (50) (85) Excess tax benefits on equity compensation (79) (87) (40) Valuation allowances 18 139 28 Other - net (12) 61 55 Provision for income taxes $ 1,658 $ 1,082 $ 852 |
Analysis of the Deferred Income Tax Assets and Liabilities | An analysis of the deferred income tax assets and liabilities at October 31, 2021 and November 1, 2020 in millions of dollars follows: 2021 2020 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities OPEB liabilities $ 676 $ 804 Lessor lease transactions $ 399 $ 489 Tax loss and tax credit carryforwards 1,542 937 Accrual for sales allowances 466 362 Tax over book depreciation 154 196 Goodwill and other intangible assets 337 368 Pension - net 448 316 Allowance for credit losses 78 81 Accrual for employee benefits 298 249 Share-based compensation 53 41 Deferred compensation 49 40 Lessee lease transactions 46 43 56 56 Unearned revenue 172 22 Other items 333 341 344 305 Less valuation allowances (1,530) (858) Deferred income tax assets and liabilities $ 2,183 $ 1,722 $ 2,394 $ 1,414 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follows: 2021 2020 2019 Beginning of year balance $ 668 $ 553 $ 279 Increases to tax positions taken during the current year 81 63 30 Increases to tax positions taken during prior years 100 95 357 Decreases to tax positions taken during prior years (23) (30) (30) Decreases due to lapse of statute of limitations (12) (9) (6) Settlements (3) (1) (75) Foreign exchange (3) (2) End of year balance $ 811 $ 668 $ 553 |
OTHER INCOME AND OTHER OPERAT_2
OTHER INCOME AND OTHER OPERATING EXPENSES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
OTHER INCOME AND OTHER OPERATING EXPENSES | |
Major Components of Other Income and Other Operating Expenses | The major components of other income and other operating expenses consisted of the following in millions of dollars: 2021 2020 2019 Other income Revenues from services $ 322 $ 314 $ 348 Insurance premiums and fees earned* 227 223 214 Trademark licensing income 87 73 66 Operating lease disposition gains 65 Investment income 41 26 25 Other 249 182 226 Total $ 991 $ 818 $ 879 Other operating expenses Depreciation of equipment on operating leases $ 983 $ 1,083 $ 981 Insurance claims and expenses* 235 231 210 Cost of services 202 188 228 Operating lease residual losses and impairments 52 159 Pension and OPEB benefit, excluding service cost component (183) (31) (67) Other 106 89 67 Total $ 1,343 $ 1,612 $ 1,578 * Primarily related to extended warranties (s ee Note 21). |
UNCONSOLIDATED AFFILIATED COM_2
UNCONSOLIDATED AFFILIATED COMPANIES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
UNCONSOLIDATED AFFILIATED COMPANIES | |
Unconsolidated Affiliated Companies | Combined financial information of the unconsolidated affiliated companies in millions of dollars follows: Operations 2021 2020 2019 Sales $ 2,095 $ 1,793 $ 2,483 Net income 51 7 50 Deere & Company’s equity in net income (loss) 21 (48) 21 Financial Position 2021 2020 Total assets $ 1,289 $ 1,541 Total external borrowings 497 540 Total net assets 366 598 Deere & Company’s share of the net assets 175 193 |
Transactions with Unconsolidated Affiliated Companies | Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow: 2021 2020 2019 Net sales $ 78 $ 81 $ 143 Purchases 1,605 1,288 1,937 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
MARKETABLE SECURITIES | |
Amortized Cost and Fair Value of Marketable Securities | The amortized cost and fair value of marketable securities at October 31, 2021 and November 1, 2020 in millions of dollars follow: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2021 U.S. equity fund $ 75 International equity securities 2 Total equity securities 77 U.S. government debt securities $ 196 $ 5 $ 3 198 Municipal debt securities 69 4 73 Corporate debt securities 215 11 2 224 International debt securities 5 3 2 Mortgage-backed securities* 152 3 1 154 Total debt securities $ 637 $ 23 $ 9 651 Marketable securities $ 728 2020 U.S. equity fund $ 62 International equity securities 2 Total equity securities 64 U.S. government debt securities $ 159 $ 10 $ 1 168 Municipal debt securities 63 5 68 Corporate debt securities 173 15 188 International debt securities 9 3 6 Mortgage-backed securities* 140 7 147 Total debt securities $ 544 $ 37 $ 4 577 Marketable securities $ 641 * Primarily issued by U.S. government sponsored enterprises. |
Unrealized Gains on Equity Securities | Unrealized gains on equity securities during 2021 and 2020 in millions of dollars follow: 2021 2020 Net gain recognized on equity securities $ 24 $ 8 Less: Net gain on equity securities sold 2 1 Unrealized gains on equity securities $ 22 $ 7 |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at October 31, 2021 in millions of dollars follow: Amortized Fair Cost Value Due in one year or less $ 28 $ 28 Due after one through five years 80 82 Due after five through 10 years 144 147 Due after 10 years 233 240 Mortgage-backed securities 152 154 Debt securities $ 637 $ 651 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Financing Receivable Installments | Financing receivable installments, including unearned finance income, at October 31, 2021 and November 1, 2020 were scheduled as follows in millions of dollars: 2021 2020 Unrestricted/Securitized Unrestricted/Securitized Due in months: 0 – 12 $ 15,205 $ 1,904 $ 14,983 $ 1,971 13 – 24 7,412 1,323 6,180 1,354 25 – 36 5,629 885 4,556 889 37 – 48 3,991 478 3,145 460 49 – 60 2,397 150 1,794 129 Thereafter 772 13 624 11 Total $ 35,406 $ 4,753 $ 31,282 $ 4,814 |
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: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total 2021 Allowance: Beginning of year balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 44 (13) 31 Provision (credit) (17) (1) (18) Write-offs (60) (28) (88) Recoveries 20 36 56 Translation adjustments 1 1 End of year balance* $ 138 $ 21 $ 7 $ 166 Financing receivables: End of year balance $ 32,233 $ 3,825 $ 2,566 $ 38,624 2020 Allowance: Beginning of year balance $ 107 $ 40 $ 3 $ 150 Provision 81 26 3 110 Write-offs (65) (53) (118) Recoveries 17 30 47 Translation adjustments (7) 2 (5) End of year balance* $ 133 $ 43 $ 8 $ 184 Financing receivables: End of year balance $ 27,206 $ 3,902 $ 3,529 $ 34,637 2019 Allowance: Beginning of year balance $ 129 $ 43 $ 6 $ 178 Provision 6 29 35 Write-offs (47) (58) (105) Recoveries 23 26 49 Translation adjustments (4) (3) (7) End of year balance* $ 107 $ 40 $ 3 $ 150 Financing receivables: End of year balance $ 25,151 $ 3,943 $ 4,634 $ 33,728 * Individual allowances were not significant. |
Schedule of Other Receivables | Other receivables at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Taxes receivable $ 1,436 $ 931 Other 302 289 Other receivables $ 1,738 $ 1,220 |
Retail Customer Receivables | |
Accounts, Notes, Loans and Financing Receivable | |
Credit Quality Analysis | The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) was as follows in millions of dollars at October 31, 2021: Year of Origination 2021 2020 2019 2018 Retail customer receivables: Agriculture and turf Current $ 12,877 $ 6,676 $ 3,463 $ 1,738 30-59 days past due 43 53 29 16 60-89 days past due 16 23 12 6 90+ days past due 1 Non-performing 23 57 53 32 Construction and forestry Current 3,122 1,575 754 273 30-59 days past due 50 40 27 7 60-89 days past due 15 11 9 6 90+ days past due 1 2 3 3 Non-performing 26 56 39 17 Total retail customer receivables $ 16,173 $ 8,494 $ 4,389 $ 2,098 Year of Origination 2017 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 728 $ 211 $ 3,704 $ 29,397 30-59 days past due 7 3 14 165 60-89 days past due 3 1 4 65 90+ days past due 1 Non-performing 17 23 7 212 Construction and forestry Current 57 7 92 5,880 30-59 days past due 4 1 3 132 60-89 days past due 1 1 43 90+ days past due 4 2 15 Non-performing 7 3 148 Total retail customer receivables $ 828 $ 251 $ 3,825 $ 36,058 |
Age Credit Quality Analysis | The credit quality analysis of retail customer receivables was as follows in millions of dollars at November 1, 2020: 2020 Retail Notes & Financing Leases Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 30-59 days past due 135 13 148 60-89 days past due 64 4 68 90+ days past due 2 2 Non-performing 263 6 269 Construction and forestry Current 4,859 88 4,947 30-59 days past due 111 2 113 60-89 days past due 55 1 56 90+ days past due 14 14 Non-performing 106 1 107 Total retail customer receivables $ 27,206 $ 3,902 $ 31,108 |
Wholesale Receivables | |
Accounts, Notes, Loans and Financing Receivable | |
Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at October 31, 2021: Year of Origination 2021 2020 2019 2018 Wholesale receivables: Agriculture and turf Current $ 346 $ 80 $ 22 $ 9 30-59 days past due 60-89 days past due 90+ days past due Non-performing 12 Construction and forestry Current 41 7 7 30-59 days past due 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 387 $ 87 $ 41 $ 9 Year of Origination 2017 Prior Years Revolving Total Wholesale receivables: Agriculture and turf Current $ 3 $ 1,696 $ 2,156 30-59 days past due 60-89 days past due 90+ days past due Non-performing 12 Construction and forestry Current 1 $ 1 340 397 30-59 days past due 60-89 days past due 1 1 90+ days past due Non-performing Total wholesale receivables $ 4 $ 2 $ 2,036 $ 2,566 |
Age Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020: 2020 Wholesale receivables: Agriculture and turf Current $ 3,010 30-59 days past due 60-89 days past due 90+ days past due Non-performing 47 Construction and forestry Current 472 30-59 days past due 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 3,529 |
Trade Accounts and Notes Receivable | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Trade accounts and notes receivable at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Trade accounts and notes receivable: Production & precision ag $ 1,204 $ 1,397 Small ag & turf 1,683 1,484 Construction & forestry 1,321 1,290 Trade accounts and notes receivable – net $ 4,208 $ 4,171 |
Schedule of Allowance for Credit Losses on Trade Accounts and Notes Receivable | The allowance for credit losses on trade accounts and notes receivable at October 31, 2021, November 1, 2020, and November 3, 2019, as well as the related activity, in millions of dollars follow: 2021 2020 2019 Beginning of year balance $ 39 $ 72 $ 70 ASU No. 2016-13 (2) Provision 10 8 Write-offs (7) (23) (14) Recoveries 1 4 Translation adjustments 1 (11) 4 End of year balance $ 41 $ 39 $ 72 |
Financing Receivables | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Financing receivables at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Unrestricted/Securitized Unrestricted/Securitized Retail notes: Agriculture and turf $ 21,736 $ 4,041 $ 17,780 $ 4,134 Construction and forestry 4,334 712 3,629 680 Total 26,070 4,753 21,409 4,814 Wholesale notes 2,577 3,547 Revolving charge accounts 3,880 3,962 Financing leases (direct and sales-type) 2,879 2,364 Total financing receivables 35,406 4,753 31,282 4,814 Less: Unearned finance income : Retail notes 1,131 80 1,066 98 Wholesale notes 11 18 Revolving charge accounts 55 60 Financing leases 258 217 Total 1,455 80 1,361 98 Allowance for credit losses 152 14 171 13 Financing receivables – net $ 33,799 $ 4,659 $ 29,750 $ 4,703 |
Financing Receivables | Related to Sales of Equipment | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Financing receivables at October 31, 2021 and November 1, 2020 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars: 2021 2020 Unrestricted/Securitized Unrestricted/Securitized Retail notes*: Agriculture and turf $ 1,977 $ 1,971 Construction and forestry 368 $ 10 335 $ 27 Total 2,345 10 2,306 27 Wholesale notes 2,577 3,547 Sales-type leases 1,269 1,045 Total 6,191 10 6,898 27 Less: Unearned finance income: Retail notes 159 178 Wholesale notes 11 18 Sales-type leases 98 82 Total 268 278 Financing receivables related to the company’s sales of equipment $ 5,923 $ 10 $ 6,620 $ 27 * These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales. |
SECURITIZATION OF FINANCING R_2
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows at October 31, 2021 in millions of dollars: 2021 Carrying value of liabilities $ 1,113 Maximum exposure to loss 1,176 |
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 at October 31, 2021 and November 1, 2020 were as follows in millions of dollars: 2021 2020 Financing receivables securitized (retail notes) $ 4,673 $ 4,716 Allowance for credit losses (14) (13) Other assets 107 98 Total restricted securitized assets $ 4,766 $ 4,801 The components of consolidated secured borrowings and other liabilities related to securitizations at October 31, 2021 and November 1, 2020 were as follows in millions of dollars: 2021 2020 Short-term securitization borrowings $ 4,605 $ 4,682 Accrued interest on borrowings 2 3 Total liabilities related to restricted securitized assets $ 4,607 $ 4,685 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
INVENTORIES | |
Major Classification of Inventories | If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31, 2021 and November 1, 2020 in millions of dollars would have been as follows: 2021 2020 Raw materials and supplies $ 3,524 $ 1,995 Work-in-process 994 648 Finished goods and parts 4,373 4,006 Total FIFO value 8,891 6,649 Less adjustment to LIFO value 2,110 1,650 Inventories $ 6,781 $ 4,999 |
PROPERTY AND DEPRECIATION (Tabl
PROPERTY AND DEPRECIATION (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
PROPERTY AND DEPRECIATION | |
Schedule of Property and Equipment | A summary of property and equipment at October 31, 2021 and November 1, 2020 in millions of dollars follows: Useful Lives* (Years) 2021 2020 Equipment Operations Land $ 293 $ 282 Buildings and building equipment 22 4,287 4,114 Machinery and equipment 11 6,123 5,936 Dies, patterns, tools, etc. 8 1,679 1,662 All other 5 1,165 1,115 Construction in progress 527 440 Total at cost 14,074 13,549 Less accumulated depreciation 8,291 7,771 Total 5,783 5,778 Financial Services Land 4 4 Buildings and building equipment 26 65 65 All other 6 32 34 Total at cost 101 103 Less accumulated depreciation 64 64 Total 37 39 Property and equipment - net $ 5,820 $ 5,817 * Weighted-averages |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 12 Months Ended |
Oct. 31, 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 November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Acquisitions (Note 4) 28 28 Translation adjustments and other (5) 4 137 136 November 1, 2020 333 268 2,480 3,081 Acquisitions (Note 4) 201 201 Translation adjustments and other 8 (3) 4 9 October 31, 2021 $ 542 $ 265 $ 2,484 $ 3,291 |
Components of Other Intangible Assets | The components of other intangible assets are as follows in millions of dollars: 2021 2020 Amortized intangible assets: Customer lists and relationships $ 542 $ 535 Technology, patents, trademarks, and other 1,104 1,056 Total at cost 1,646 1,591 Less accumulated amortization: Customer lists and relationships 151 113 Technology, patents, trademarks, and other 343 274 Total accumulated amortization 494 387 Amortized intangible assets 1,152 1,204 Unamortized intangible assets: In-process research and development 123 123 Other intangible assets - net $ 1,275 $ 1,327 |
TOTAL SHORT-TERM BORROWINGS (Ta
TOTAL SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
TOTAL SHORT-TERM BORROWINGS | |
Short-Term Borrowings | Total short-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Equipment Operations Notes payable to banks $ 273 $ 192 Finance lease obligations due within one year 23 21 Long-term borrowings due within one year 1,213 79 Total 1,509 292 Financial Services Commercial paper 2,230 1,238 Notes payable to banks 63 182 Long-term borrowings due within one year* 7,117 6,870 Total 9,410 8,290 Short-term borrowings 10,919 8,582 Short-term securitization borrowings Equipment Operations 10 26 Financial Services 4,595 4,656 Total 4,605 4,682 Total short-term borrowings $ 15,524 $ 13,264 * Includes unamortized fair value adjustments related to interest rate swaps. |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Equipment Operations Accounts payable: Trade payables $ 2,967 $ 1,926 Dividends payable 329 244 Operating lease liabilities 279 297 Other 155 251 Accrued expenses: Dealer sales discounts 1,636 1,682 Product warranties 1,312 1,105 Employee benefits 1,448 1,086 Accrued taxes 933 730 Unearned revenue 825 679 Other 1,171 1,114 Total 11,055 9,114 Financial Services Accounts payable: Deposits withheld from dealers and merchants 157 141 Collateral on derivatives 274 Other 210 194 Accrued expenses: Unearned revenue 1,013 968 Accrued interest 165 181 Employee benefits 83 60 Other 387 309 Total 2,015 2,127 Eliminations* 865 1,129 Accounts payable and accrued expenses $ 12,205 $ 10,112 * Pri marily sales incentive accruals with a right of set-off against trade receivables. At October 31, 2021 and November 1, 2020, $836 million and $1,073 million, respectively, of sales incentive accruals were classified as accrued expenses by the equipment operations as the related trade receivables had been sold to financial services. |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
LONG-TERM BORROWINGS | |
Long-Term Borrowings | Long-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars: 2021 2020 Equipment Operations U.S. dollar notes and debentures: 8½% debentures due 2022 $ 105 2.60% notes due 2022 1,000 2.75% notes due 2025 $ 700 700 6.55% debentures due 2028 200 200 5.375% notes due 2029 500 500 3.10% notes due 2030 700 700 8.10% debentures due 2030 250 250 7.125% notes due 2031 300 300 3.90% notes due 2042 1,250 1,250 2.875% notes due 2049 500 500 3.75% notes due 2050 850 850 Euro notes: .5% notes due 2023 (€ 500 principal) 584 584 1.375% notes due 2024 (€ 800 principal) 934 934 1.85% notes due 2028 (€ 600 principal) 701 700 2.20% notes due 2032 (€ 600 principal) 701 700 1.65% notes due 2039 (€ 650 principal) 759 759 Finance lease obligations and other notes 40 153 Less debt issuance costs and debt discounts (54) (61) Total 8,915 10,124 Financial Services Notes and debentures: Medium-term notes due 2022 - 2031: (principal $22,647 - 2021, $20,996 - 2020) Average interest rates of 1.2% - 2021, 1.7% - 2020 22,899 * 21,661 * Other notes 1,138 1,003 Less debt issuance costs and debt discounts (64) (54) Total 23,973 22,610 Long-term borrowings** $ 32,888 $ 32,734 * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year-end. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Reconciliation of the Changes in Warranty Liability and Unearned Premiums | A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Warranty Liability/ Unearned Premiums 2021 2020 Beginning of year balance $ 1,743 $ 1,800 Payments (864) (942) Amortization of premiums received (227) (222) Accruals for warranties 1,071 851 Premiums received 358 276 Foreign exchange 5 (20) End of year balance $ 2,086 $ 1,743 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
CAPITAL STOCK | |
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: 2021 2020 2019 Net income attributable to Deere & Company $ 5,963 $ 2,751 $ 3,253 Average shares outstanding 311.6 313.5 316.5 Basic per share $ 19.14 $ 8.77 $ 10.28 Average shares outstanding 311.6 313.5 316.5 Effect of dilutive stock options 2.4 3.1 4.1 Total potential shares outstanding 314.0 316.6 320.6 Diluted per share $ 18.99 $ 8.69 $ 10.15 |
STOCK OPTION AND RESTRICTED S_2
STOCK OPTION AND RESTRICTED STOCK AWARDS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
Assumptions Used for the Binomial Lattice Model to Determine Fair Value of Options | The assumptions used for the binomial lattice model to determine the fair value of options follow: 2021 2020 2019 Risk-free interest rate* .47% 1.67% 2.85% Expected dividends 1.2% 1.8% 2.0% Volatility* 31.0% 26.0% 30.0% Expected term (in years)* 5.5 5.7 8.2 * Weighted-averages |
Stock Option Activity | Stock option activity at October 31, 2021, and changes during 2021 in millions of dollars and shares follow: Remaining Contractual Aggregate Exercise Term Intrinsic Shares Price* (Years) Value Outstanding at beginning of year 3.7 $ 107.30 Granted .3 254.83 Exercised (1.5) 99.38 Outstanding at end of year 2.5 127.82 5.07 $ 527.3 Exercisable at end of year 1.9 103.25 4.00 445.0 * Weighted-averages |
Restricted Stock Units Activity | The company’s restricted stock units at October 31, 2021 and changes during 2021 in millions of shares follow: Grant-Date Shares Fair Value* Service-only based Nonvested at beginning of year .9 $ 155.47 Granted .2 258.86 Vested (.5) 190.87 Forfeited (.1) 163.16 Nonvested at end of year .5 190.87 Performance/service based Nonvested at beginning of year .2 $ 147.55 Granted .1 245.73 Vested (.2) 145.16 Performance change .1 144.98 Nonvested at end of year .2 171.82 * Weighted-averages |
OTHER COMPREHENSIVE INCOME IT_2
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
Schedule of After-Tax Components of Accumulated Other Comprehensive Income | The after-tax components of accumulated other comprehensive income at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follow: 2021 2020 2019 Retirement benefits adjustment $ (1,034) $ (3,918) $ (3,915) Cumulative translation adjustment (1,478) (1,596) (1,651) Unrealized loss on derivatives (42) (58) (60) Unrealized gain on debt securities 15 33 19 Total accumulated other comprehensive income (loss) $ (2,539) $ (5,539) $ (5,607) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Amount Credit Amount 2021 Cumulative translation adjustment: Unrealized translation gain (loss) $ 112 $ 112 Reclassification of realized (gain) loss to: Equity in (income) loss of unconsolidated affiliates 6 6 Net unrealized translation gain (loss) 118 118 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 8 $ (2) 6 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 13 (3) 10 Net unrealized gain (loss) on derivatives 21 (5) 16 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (21) 3 (18) Net unrealized gain (loss) on debt securities (21) 3 (18) Retirement benefits adjustment: Net actuarial gain (loss) 3,492 (845) 2,647 Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 283 (69) 214 Prior service (credit) cost 8 (2) 6 Settlements 22 (5) 17 Net unrealized gain (loss) on retirement benefits adjustment 3,805 (921) 2,884 Total other comprehensive income (loss) $ 3,923 $ (923) $ 3,000 * These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2020 Cumulative translation adjustment: Unrealized translation gain (loss) $ 18 $ 1 $ 19 Reclassification of realized (gain) loss to: Other operating expenses 13 13 Equity in (income) loss of unconsolidated affiliates 23 23 Net unrealized translation gain (loss) 54 1 55 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (18) 2 (16) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 21 (3) 18 Net unrealized gain (loss) on derivatives 3 (1) 2 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 17 (3) 14 Net unrealized gain (loss) on debt securities 17 (3) 14 Retirement benefits adjustment: Net actuarial gain (loss) (302) 65 (237) Reclassification primarily to other operating expenses through amortization of: * Actuarial (gain) loss 278 (68) 210 Prior service (credit) cost 7 (2) 5 Settlements 26 (7) 19 Net unrealized gain (loss) on retirement benefits adjustment 9 (12) (3) Total other comprehensive income (loss) $ 83 $ (15) $ 68 * These accumulated other comprehensive income amounts are primarily included in net periodic pension and OPEB costs. See Note 8 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2019 Cumulative translation adjustment $ (447) $ (1) $ (448) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (92) 21 (71) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (5) 1 (4) Net unrealized gain (loss) on derivatives (97) 22 (75) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 36 (7) 29 Net unrealized gain (loss) on debt securities 36 (7) 29 Retirement benefits adjustment: Net actuarial gain (loss) (1,028) 274 (754) Reclassification to other operating expenses through amortization of: * Actuarial (gain) loss 159 (39) 120 Prior service (credit) cost (61) 15 (46) Settlements 3 (1) 2 Net unrealized gain (loss) on retirement benefits adjustment (927) 249 (678) Total other comprehensive income (loss) $ (1,435) $ 263 $ (1,172) * These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
LEASES | |
Summary of Lease Expense by Type | The lease expense by type consisted of the following in millions of dollars: 2021 2020 Operating lease expense $ 116 $ 126 Short-term lease expense 29 23 Variable lease expense 53 41 Finance lease: Depreciation expense 26 20 Interest on lease liabilities 1 2 Total lease expense $ 225 $ 212 |
Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Consolidated Balance Sheet | Operating and finance lease right of use assets and lease liabilities follow in millions of dollars: 2021 2020 Operating leases: Other assets $ 291 $ 324 Accounts payable and accrued expenses 279 305 Finance leases: Property and equipment — net $ 71 $ 63 Short-term borrowings 23 21 Long-term borrowings 38 39 Total finance lease liabilities $ 61 $ 60 |
Schedule of Weighted-Average Remaining Lease Terms in Years and Discount Rates | The weighted-average remaining lease terms in years and discount rates follows: 2021 2020 Weighted-average remaining lease terms: Operating leases 5 5 Finance leases 2 3 Weighted-average discount rates: Operating leases 2.3% 2.1% Finance leases 2.3% 2.2% |
Schedule of Operating Lease Payment Amounts | Lease payment amounts in each of the next five years at October 31, 2021 follow in millions of dollars: Operating Finance Due in: Leases Leases 2022 $ 83 $ 25 2023 69 19 2024 54 11 2025 32 5 2026 15 1 Later years 41 3 Total lease payments 294 64 Less imputed interest 15 3 Total lease liabilities $ 279 $ 61 |
Schedule of Finance Lease Payment Amounts | Lease payment amounts in each of the next five years at October 31, 2021 follow in millions of dollars: Operating Finance Due in: Leases Leases 2022 $ 83 $ 25 2023 69 19 2024 54 11 2025 32 5 2026 15 1 Later years 41 3 Total lease payments 294 64 Less imputed interest 15 3 Total lease liabilities $ 279 $ 61 |
Schedule of Cash Paid for Amounts Included in the Measurement of Lease Liabilities and Right of Use Assets Obtained in Exchange for Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities follows in millions of dollars: 2021 2020 Operating cash flows from operating leases $ 104 $ 124 Operating cash flows from finance leases 1 2 Financing cash flows from finance leases 25 17 Right of use assets obtained in exchange for lease liabilities follow in millions of dollars: 2021 2020 Operating leases $ 101 $ 40 Finance leases 27 46 |
Schedule of Lease Revenues Earned | Lease revenues earned by the company follow in millions of dollars: 2021 2020 Sales-type and direct finance lease revenues $ 145 $ 135 Operating lease revenues 1,423 1,469 Variable lease revenues 30 31 Total lease revenues $ 1,598 $ 1,635 |
Schedule of Sales-type and Direct Financing Lease Receivables by Market | Sales-type and direct financing lease receivables by market follow in millions of dollars: 2021 2020 Agriculture and turf $ 1,131 $ 985 Construction and forestry 1,284 1,030 Total 2,415 2,015 Guaranteed residual values 394 278 Unguaranteed residual values 70 71 Less unearned finance income (258) (217) Financing lease receivables $ 2,621 $ 2,147 |
Schedule of Payments, Including Guaranteed Residual Values, on Sales-type and Direct Financing Lease Receivables | Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at October 31, 2021 follow in millions of dollars: Due in: 2021 2022 $ 1,223 2023 712 2024 461 2025 229 2026 161 Later years 23 Total $ 2,809 |
Schedule of Cost of Equipment on Operating Leases by Market | The cost of equipment on operating leases by market follow in millions of dollars: 2021 2020 Agriculture and turf $ 7,317 $ 7,366 Construction and forestry 1,616 1,921 Total 8,933 9,287 Less accumulated depreciation (1,945) (1,989) Equipment on operating leases - net $ 6,988 $ 7,298 |
Schedule of Lease Payments for Equipment on Operating Leases | Lease payments for equipment on operating leases at October 31, 2021 were scheduled as follows in millions of dollars: Due in: 2021 2022 $ 1,027 2023 693 2024 409 2025 207 2026 50 Later years 6 Total $ 2,392 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Carrying Fair Carrying Fair Value Value* Value Value* Financing receivables – net: Equipment operations $ 73 $ 68 $ 105 $ 103 Financial services 33,726 33,650 29,645 29,838 Total $ 33,799 $ 33,718 $ 29,750 $ 29,941 Financing receivables securitized – net: Equipment operations $ 10 $ 10 $ 26 $ 26 Financial services 4,649 4,694 4,677 4,773 Total $ 4,659 $ 4,704 $ 4,703 $ 4,799 Short-term securitization borrowings: Equipment operations $ 10 $ 10 $ 26 $ 26 Financial services 4,595 4,600 4,656 4,698 Total $ 4,605 $ 4,610 $ 4,682 $ 4,724 Long-term borrowings due within one year:** Equipment operations $ 1,213 $ 1,222 $ 79 $ 78 Financial services 7,117 7,142 6,870 6,936 Total $ 8,330 $ 8,364 $ 6,949 $ 7,014 Long-term borrowings:** Equipment operations $ 8,877 $ 10,244 $ 10,085 $ 11,837 Financial services 23,973 24,262 22,610 23,170 Total $ 32,850 $ 34,506 $ 32,695 $ 35,007 * 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. ** Values exclude finance lease liabilities that are presented as borrowings (see Note 25). |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at October 31, 2021 and November 1, 2020 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. 2021 2020 Level 1: Marketable securities U.S. equity fund $ 75 $ 62 International equity securities 2 2 U.S. government debt securities 59 55 Total Level 1 marketable securities 136 119 Level 2: Marketable securities U.S. government debt securities 139 113 Municipal debt securities 73 68 Corporate debt securities 224 188 International debt securities 2 2 Mortgage-backed securities* 154 147 Total Level 2 marketable securities 592 518 Other assets Derivatives: Interest rate contracts 239 669 Foreign exchange contracts 31 48 Cross-currency interest rate contracts 5 8 Total Level 2 other assets 275 725 Accounts payable and accrued expenses Derivatives: Interest rate contracts 132 88 Foreign exchange contracts 94 26 Cross-currency interest rate contracts 2 1 Total Level 2 accounts payable and accrued expenses 228 115 Level 3: Marketable securities International debt securities 4 * Primarily issued by U.S. government sponsored enterprises. |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring measurements from impairments at October 31, 2021 and November 1, 2020 in millions of dollars follow: Fair Value Losses 2021 2020 2021 2020 2019 Other receivables 1 $ 1 $ 2 Equipment on operating leases – net 2 $ 371 $ 22 $ 59 Property and equipment – net 3 $ 41 $ 135 $ 44 $ 102 Investments in unconsolidated affiliates 4 $ 19 $ 50 Other intangible assets – net $ 2 Other assets 5 $ 1 $ 59 $ 6 $ 16 $ 18 1 Fair value as of August 2, 2020. 2 Fair value as of May 3, 2020. 3 2021 fair value of $41 million at January 31, 2021. 2020 fair value of $70 million at May 3, 2020, $8 million at August 2, 2020, and $57 million at November 1, 2020. 4 Fair value as of November 1, 2020. 5 2021 fair value as of January 31, 2021. 2020 fair value as of May 3, 2020. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
DERIVATIVE INSTRUMENTS | |
Amounts Recorded in the Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships | The amounts recorded, at October 31, 2021 and November 1, 2020, in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Carrying Included in the Carrying Amount Amount of Active Hedged Hedging Discontinued Item Relationships Relationships Total 2021 Long-term borrowings due within one year* $ 189 $ 3 $ (2) $ 1 Long-term borrowings 8,070 29 223 252 2020 Long-term borrowings due within one year* $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 * Presented in short-term borrowings . |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet at October 31, 2021 and November 1, 2020 in millions of dollars follow: 2021 2020 Other Assets Designated as hedging instruments: Interest rate contracts $ 166 $ 586 Not designated as hedging instruments: Interest rate contracts 73 83 Foreign exchange contracts 31 48 Cross-currency interest rate contracts 5 8 Total not designated 109 139 Total derivative assets $ 275 $ 725 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 99 $ 14 Not designated as hedging instruments: Interest rate contracts 33 74 Foreign exchange contracts 94 26 Cross-currency interest rate contracts 2 1 Total not designated 129 101 Total derivative liabilities $ 228 $ 115 |
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: 2021 2020 2019 Fair Value Hedges Interest rate contracts – Interest expense $ (236) $ 496 $ 589 Cash Flow Hedges Recognized in OCI: Interest rate contracts – OCI (pretax) 8 (18) (92) Reclassified from OCI: Interest rate contracts – Interest expense (13) (21) 5 Not Designated as Hedges Interest rate contracts – Net sales $ 13 $ (23) $ (23) Interest rate contracts – Interest expense* 14 (2) (32) Foreign exchange contracts – Cost of sales (101) 93 (18) Foreign exchange contracts – Other operating expenses* (262) 122 97 Total not designated $ (336) $ 190 $ 24 * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. |
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | The impact on the derivative assets and liabilities related to netting arrangements and collateral at October 31, 2021 and November 1, 2020 in millions of dollars follows: Gross Amounts Netting Net Recognized Arrangements Collateral Amount 2021 Assets $ 275 $ (105) $ 170 Liabilities 228 (105) $ (5) 118 2020 Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 |
SEGMENT AND GEOGRAPHIC AREA D_2
SEGMENT AND GEOGRAPHIC AREA DATA (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
SEGMENT AND GEOGRAPHIC AREA DATA | |
Schedule of Segment Reporting Information | Information relating to operations by operating segment in millions of dollars follows for the years ended October 31, 2021, November 1, 2020 and November 3, 2019. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2021, 2020, and 2019 were as follows: production and precision agriculture net sales of $27 million, $22 million, and $31 million; small agriculture and turf net sales of $11 million, $2 million, and $3 million; construction and forestry had no intersegment sales in 2021, $1 million in 2020, and $1 million in 2019; and financial services revenues of $246 million, $278 million, and $348 million, respectively. OPERATING SEGMENTS 2021 2020 2019 Net sales and revenues Unaffiliated customers: Production & precision ag net sales $ 16,509 $ 12,962 $ 13,364 Small ag & turf net sales 11,860 9,363 10,302 Construction & forestry net sales 11,368 8,947 11,220 Financial services revenues 3,548 3,589 3,621 Other revenues* 739 679 751 Total $ 44,024 $ 35,540 $ 39,258 * Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income. OPERATING SEGMENTS 2021 2020 2019 Operating profit Production & precision ag $ 3,334 $ 1,969 $ 1,729 Small ag & turf 2,045 1,000 777 Construction & forestry 1,489 590 1,215 Financial services* 1,144 746 694 Total operating profit* 8,012 4,305 4,415 Interest income 82 62 85 Interest expense (368) (329) (256) Foreign exchange gains (losses) from equipment operations’ financing activities (45) 17 (22) Pension and OPEB benefit (cost), excluding service cost component 183 31 67 Corporate expenses – net (241) (251) (180) Income taxes (1,658) (1,082) (852) Total (2,047) (1,552) (1,158) Net income 5,965 2,753 3,257 Less: Net income attributable to noncontrolling interests 2 2 4 Net income attributable to Deere & Company $ 5,963 $ 2,751 $ 3,253 * Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses. Interest income* Production & precision ag $ 21 $ 22 $ 16 Small ag & turf 21 16 6 Construction & forestry 10 12 11 Financial services 1,999 2,122 2,316 Corporate 82 62 85 Intercompany (279) (272) (360) Total $ 1,854 $ 1,962 $ 2,074 * Does not include finance rental income for equipment on operating leases. Interest expense Production & precision ag $ 84 $ 76 $ 87 Small ag & turf 87 111 158 Construction & forestry 46 61 91 Financial services 687 942 1,234 Corporate 368 329 256 Intercompany (279) (272) (360) Total $ 993 $ 1,247 $ 1,466 Depreciation* and amortization expense Production & precision ag $ 495 $ 480 $ 475 Small ag & turf 245 247 248 Construction & forestry 303 289 292 Financial services 1,140 1,227 1,135 Intercompany (133) (125) (131) Total $ 2,050 $ 2,118 $ 2,019 * Includes depreciation for equipment on operating leases. (continued) OPERATING SEGMENTS 2021 2020 2019 Equity in income (loss) of unconsolidated affiliates Small ag & turf $ 2 $ 2 $ 6 Construction & forestry 16 (52) 14 Financial services 3 2 1 Total $ 21 $ (48) $ 21 Identifiable operating assets Production & precision ag $ 7,021 $ 5,708 $ 6,149 Small ag & turf 3,959 3,266 3,656 Construction & forestry 6,457 6,322 7,044 Financial services 51,624 48,719 48,483 Corporate* 15,053 11,076 7,679 Total $ 84,114 $ 75,091 $ 73,011 * Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, goodwill, marketable securities, and cash and cash equivalents. Capital additions Production & precision ag $ 458 $ 431 $ 595 Small ag & turf 253 223 264 Construction & forestry 183 157 245 Financial services 3 4 3 Total $ 897 $ 815 $ 1,107 Investments in unconsolidated affiliates Production & precision ag $ 1 $ 1 Small ag & turf $ 31 29 27 Construction & forestry 122 144 171 Financial services 22 19 16 Total $ 175 $ 193 $ 215 |
Schedule of Geographic Area Reporting Information | The company views and has historically disclosed its operations as consisting of two geographic areas (the U.S. and Canada, and outside the U.S. and Canada) for net sales and revenues and operating profit shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. For property and equipment, a material amount does reside in the country of Germany, separately disclosed below in millions of dollars. GEOGRAPHIC AREAS 2021 2020 2019 Net sales and revenues Unaffiliated customers: U.S. and Canada $ 25,829 $ 21,386 $ 23,746 Outside U.S. and Canada 18,195 14,154 15,512 Total $ 44,024 $ 35,540 $ 39,258 Operating profit U.S. and Canada $ 4,774 $ 2,775 $ 2,841 Outside U.S. and Canada 3,238 1,530 1,574 Total $ 8,012 $ 4,305 $ 4,415 Property and equipment U.S. and Canada $ 3,164 $ 3,178 $ 3,197 Germany 1,096 1,113 1,137 Other countries 1,560 1,526 1,639 Total $ 5,820 $ 5,817 $ 5,973 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Fiscal year duration | 364 days | 364 days | 371 days |
VIE-Not Primary Beneficiary | |||
Maximum Exposure to Losses | |||
Maximum exposure to loss | $ 1,176 | ||
VIE-Not Primary Beneficiary | Brazilian Construction Equipment Manufacturer Joint Venture | |||
Maximum Exposure to Losses | |||
Maximum exposure to loss | 9 | $ 5 | |
Argentine Peso | |||
Argentina | |||
Net Peso Exposure | 3 | ||
Argentina | |||
Argentina | |||
Net investment | $ 578 | ||
Net sales and revenues (as a percent) | 1.00% | ||
Wirtgen Group Holding GmbH (Wirtgen) | |||
Net sales | $ 270 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Revenue Recognition | |||
Interest-free periods granted at the time of sale to the dealer, low end of range | 1 month | ||
Interest-free periods granted at the time of sale to the dealer, high end of range | 12 months | ||
Revenue, Practical Expedient, Financing Component [true false] | true | ||
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | ||
Historical claims rate, review period | 5 years | ||
Advertising Costs | |||
Advertising costs | $ 212 | $ 196 | $ 215 |
Foreign Currency Translation | |||
Foreign exchange pretax net gain (loss) | $ (134) | $ 18 | $ (13) |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | |
Assets | |||
Trade accounts and notes receivable - net | $ 4,208 | $ 4,173 | $ 4,171 |
Financing receivables - net | 33,799 | 29,723 | 29,750 |
Financing receivables securitized - net | 4,659 | 4,699 | 4,703 |
Deferred income taxes | 1,037 | 1,500 | 1,499 |
Liabilities | |||
Accounts payable and accrued expenses | 12,205 | 10,126 | 10,112 |
Deferred income taxes | 576 | 512 | 519 |
Stockholders' Equity | |||
Retained earnings | $ 36,449 | $ 31,611 | 31,646 |
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 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Hitachi Construction Machinery Co., Ltd Joint Venture (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
May 01, 2022 | Oct. 31, 2021 | Nov. 01, 2020 | |
Acquisitions | |||
Cash purchase price, net of cash acquired | $ 244 | $ 66 | |
Hitachi Construction Machinery Co., Ltd Joint Venture | Forecasted | |||
Acquisitions | |||
Cash purchase price, net of cash acquired | $ 275 | ||
Hitachi Construction Machinery Co., Ltd Joint Venture | Forecasted | John Deere-branded Excavators, Components, and Service Parts | Minimum | |||
Acquisitions | |||
Supply agreement period | 5 years | ||
Hitachi Construction Machinery Co., Ltd Joint Venture | Forecasted | John Deere-branded Excavators, Components, and Service Parts | Maximum | |||
Acquisitions | |||
Supply agreement period | 30 years |
ACQUISITIONS AND DISPOSITIONS_2
ACQUISITIONS AND DISPOSITIONS - Bear Flag Robotics, Inc (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 29, 2021 | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Acquisitions | ||||
Cash purchase price, net of cash acquired | $ 244 | $ 66 | ||
Asset and Liability Fair Values at the Acquisition Date | ||||
Goodwill | $ 3,291 | $ 3,081 | $ 2,917 | |
Bear Flag | ||||
Acquisitions | ||||
Cash acquired | $ 4 | |||
Cash purchase price, net of cash acquired | 225 | |||
Compensation expense to be recognized | $ 25 | |||
Post-acquisition service period | 4 years | |||
Liabilities assumed | $ 19 | |||
Asset and Liability Fair Values at the Acquisition Date | ||||
Property and equipment | 1 | |||
Goodwill | 189 | |||
Other intangible assets | 54 | |||
Total assets | 244 | |||
Accounts payable and accrued expenses | 1 | |||
Deferred income taxes | 18 | |||
Total liabilities | $ 19 | |||
Identifiable Intangible Assets | ||||
Weighted-average useful lives (in years) | 7 years |
ACQUISITIONS AND DISPOSITIONS_3
ACQUISITIONS AND DISPOSITIONS - Unimil Purchase Price and Asset and Liability Fair Values at the Acquisition Date (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 27, 2020 | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Acquisitions | ||||
Cash purchase price, net of cash acquired | $ 244 | $ 66 | ||
Asset and Liability Fair Values at the Acquisition Date | ||||
Goodwill | $ 3,291 | $ 3,081 | $ 2,917 | |
Unimil | ||||
Acquisitions | ||||
Cash acquired | $ 5 | |||
Cash purchase price, net of cash acquired | 66 | |||
Escrow to secure indemnity obligations | 6 | |||
Liabilities assumed | 14 | |||
Asset and Liability Fair Values at the Acquisition Date | ||||
Trade accounts and notes receivable | 5 | |||
Other receivables | 2 | |||
Inventories | 10 | |||
Property and equipment | 22 | |||
Goodwill | 28 | |||
Other intangible assets | 13 | |||
Total assets | 80 | |||
Accounts payable and accrued expenses | 5 | |||
Deferred income taxes | 9 | |||
Total liabilities | $ 14 | |||
Identifiable Intangible Assets | ||||
Weighted-average useful lives (in years) | 9 years |
ACQUISITIONS AND DISPOSITIONS_4
ACQUISITIONS AND DISPOSITIONS - Dispositions (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Sep. 27, 2020 | Nov. 03, 2019 | Nov. 03, 2019 | |
Sale of Assets and Liabilities | |||
Proceeds received from sale | $ 93 | ||
Sale Of German Walk-behind Lawn Mower Business | |||
Sale of Assets and Liabilities | |||
Total assets | $ 26 | ||
Liabilities | 5 | ||
Proceeds received from sale | 0 | ||
Gain (loss) from sale, after-tax | (24) | ||
Sale Of German Walk-behind Lawn Mower Business | Other Operating Expenses | Small Ag & Turf (SAT) | |||
Sale of Assets and Liabilities | |||
Gain (loss) from sale, pretax | $ (24) | ||
Sale of Construction and Forestry Retail Locations in Canada | |||
Sale of Assets and Liabilities | |||
Total assets | $ 187 | 187 | |
Inventory | 138 | 138 | |
Property and equipment - net | 24 | 24 | |
Other assets | 3 | 3 | |
Goodwill | 22 | 22 | |
Accounts payable and accrued expenses | 10 | 10 | |
Accrued transaction expenses and related costs | 15 | 15 | |
Total proceeds from sale | $ 187 | 187 | |
Proceeds received from sale | $ 93 | ||
Sale of Construction and Forestry Retail Locations in Canada | Minimum | |||
Sale of Assets and Liabilities | |||
Remaining sales price terms | 12 months | ||
Sale of Construction and Forestry Retail Locations in Canada | Maximum | |||
Sale of Assets and Liabilities | |||
Remaining sales price terms | 5 years | ||
Sale of Construction and Forestry Retail Locations in Canada | Other Operating Expenses | Construction & Forestry (CF) | |||
Sale of Assets and Liabilities | |||
Gain (loss) from sale, pretax | $ (5) |
SPECIAL ITEMS - Impairments and
SPECIAL ITEMS - Impairments and Other Charges (Benefits) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Nov. 03, 2019 | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | $ 50 | $ 194 | $ 77 | |
Other Operating Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Equipment on operating leases impairment, pretax | 22 | $ 59 | ||
Matured operating lease inventory impairment, pretax | 10 | |||
Financial Services (FS) | Other Operating Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Equipment on operating leases impairment, pretax | $ 59 | |||
Matured operating lease inventory impairment, pretax | $ 18 | |||
Impairments and Other Benefits | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax expense (benefit) | (35) | |||
Impairments and Other Benefits | Foreign Tax Authority | Brazil | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Indirect tax benefit, pretax | (58) | |||
Impairments and Other Benefits | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 50 | |||
Indirect tax benefit, pretax | (58) | |||
Impairments and Other Benefits | Other Income | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Gain on sale, pretax | (27) | |||
Impairments and Other Benefits | Production & Precision Ag (PPA) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax expense (benefit) | (48) | |||
Impairments and Other Benefits | Production & Precision Ag (PPA) | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 5 | |||
Indirect tax benefit, pretax | (53) | |||
Impairments and Other Benefits | Small Ag & Turf (SAT) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax expense (benefit) | (24) | |||
Impairments and Other Benefits | Small Ag & Turf (SAT) | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 3 | |||
Impairments and Other Benefits | Small Ag & Turf (SAT) | Other Income | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Gain on sale, pretax | (27) | |||
Impairments and Other Benefits | Construction & Forestry (CF) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax expense (benefit) | 37 | |||
Impairments and Other Benefits | Construction & Forestry (CF) | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 42 | |||
Indirect tax benefit, pretax | (5) | |||
Impairments and Other Benefits | German Asphalt Plant Factory | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 38 | |||
Fixed asset impairment, after-tax | 38 | |||
Impairments and Other Benefits | Manufacturing Locations | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | $ 12 | |||
Impairments and Closure Costs | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax impairments and closure costs | 199 | |||
Impairments and Closure Costs | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Factory closure, pretax | 20 | |||
Long-lived asset impairments, pretax | 93 | |||
Impairments and Closure Costs | Selling, Administrative and General Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 4 | |||
Impairments and Closure Costs | Equity in (Income) Loss of Unconsolidated Affiliates | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Affiliate company impairments | 50 | |||
Impairments and Closure Costs | Other Operating Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Impairments of equipment on operating leases & matured lease inventory, pretax | 32 | |||
Impairments and Closure Costs | Production & Precision Ag (PPA) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax impairments and closure costs | 2 | |||
Impairments and Closure Costs | Production & Precision Ag (PPA) | Selling, Administrative and General Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 2 | |||
Impairments and Closure Costs | Small Ag & Turf (SAT) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax impairments and closure costs | 35 | |||
Impairments and Closure Costs | Small Ag & Turf (SAT) | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Factory closure, pretax | 20 | |||
Long-lived asset impairments, pretax | 13 | |||
Impairments and Closure Costs | Small Ag & Turf (SAT) | Selling, Administrative and General Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 2 | |||
Impairments and Closure Costs | Construction & Forestry (CF) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax impairments and closure costs | 130 | |||
Impairments and Closure Costs | Construction & Forestry (CF) | Cost of Sales | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Long-lived asset impairments, pretax | 80 | |||
Impairments and Closure Costs | Construction & Forestry (CF) | Equity in (Income) Loss of Unconsolidated Affiliates | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Affiliate company impairments | 50 | |||
Impairments and Closure Costs | Financial Services (FS) | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Total pretax impairments and closure costs | 32 | |||
Impairments and Closure Costs | Financial Services (FS) | Other Operating Expenses | ||||
Pretax Impairments and Other Charges (Benefits) | ||||
Impairments of equipment on operating leases & matured lease inventory, pretax | $ 32 |
SPECIAL ITEMS - Employee-Separa
SPECIAL ITEMS - Employee-Separation Programs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
OPEB | ||
Employee-Separation Programs | ||
Curtailment expense | $ 34 | |
2020 Employee-Separation Programs | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 335 | |
2020 Employee-Separation Programs | OPEB | ||
Employee-Separation Programs | ||
Curtailment expense | $ 34 | |
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' pretax expenses | $ 104 | |
2020 Employee-Separation Programs | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 55 | |
2020 Employee-Separation Programs | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 135 | |
2020 Employee-Separation Programs | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 294 | |
2020 Employee-Separation Programs | Non-operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 41 | |
2020 Employee-Separation Programs | Production & Precision Ag (PPA) | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 51 | |
2020 Employee-Separation Programs | Production & Precision Ag (PPA) | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 29 | |
2020 Employee-Separation Programs | Production & Precision Ag (PPA) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 53 | |
2020 Employee-Separation Programs | Production & Precision Ag (PPA) | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 133 | |
2020 Employee-Separation Programs | Small Ag & Turf (SAT) | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 31 | |
2020 Employee-Separation Programs | Small Ag & Turf (SAT) | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 18 | |
2020 Employee-Separation Programs | Small Ag & Turf (SAT) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 43 | |
2020 Employee-Separation Programs | Small Ag & Turf (SAT) | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 92 | |
2020 Employee-Separation Programs | Construction & Forestry (CF) | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 22 | |
2020 Employee-Separation Programs | Construction & Forestry (CF) | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 8 | |
2020 Employee-Separation Programs | Construction & Forestry (CF) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 24 | |
2020 Employee-Separation Programs | Construction & Forestry (CF) | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 54 | |
2020 Employee-Separation Programs | Financial Services (FS) | OPEB | ||
Employee-Separation Programs | ||
Curtailment expense | 6 | |
2020 Employee-Separation Programs | Financial Services (FS) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 15 | |
2020 Employee-Separation Programs | Financial Services (FS) | Operating Profit | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | $ 15 | |
2019 Employee-Separation Programs | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | $ 30 | |
2019 Employee-Separation Programs | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 5 | |
2019 Employee-Separation Programs | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 1 | |
2019 Employee-Separation Programs | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 24 | |
2019 Employee-Separation Programs | Production & Precision Ag (PPA) | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 11 | |
2019 Employee-Separation Programs | Production & Precision Ag (PPA) | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 3 | |
2019 Employee-Separation Programs | Production & Precision Ag (PPA) | Research and Development | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 1 | |
2019 Employee-Separation Programs | Production & Precision Ag (PPA) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 7 | |
2019 Employee-Separation Programs | Small Ag & Turf (SAT) | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 8 | |
2019 Employee-Separation Programs | Small Ag & Turf (SAT) | Cost of Sales | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 2 | |
2019 Employee-Separation Programs | Small Ag & Turf (SAT) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 6 | |
2019 Employee-Separation Programs | Construction & Forestry (CF) | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 2 | |
2019 Employee-Separation Programs | Construction & Forestry (CF) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 2 | |
2019 Employee-Separation Programs | Financial Services (FS) | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | 9 | |
2019 Employee-Separation Programs | Financial Services (FS) | Selling, Administrative and General Expenses | ||
Employee-Separation Programs | ||
Total employee-separation programs' pretax expenses | $ 9 |
SPECIAL ITEMS - Redeemable Nonc
SPECIAL ITEMS - Redeemable Noncontrolling Interest (Details) $ in Millions | 12 Months Ended |
Nov. 01, 2020USD ($) | |
Redeemable Noncontrolling Interest | |
Noncontrolling interest redemption | $ 14 |
Production & Precision Ag (PPA) | |
Redeemable Noncontrolling Interest | |
Noncontrolling interest redemption (as a percent) | 20.00% |
Noncontrolling interest redemption | $ 14 |
Noncontrolling interest redemption gain or loss | $ 0 |
REVENUE RECOGNITION - Primary G
REVENUE RECOGNITION - Primary Geographic Market, Major Product Lines, and Timing (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Revenue Recognition | |||
Net sales and revenues | $ 44,024 | $ 35,540 | $ 39,258 |
Revenue Recognized at a Point in Time | |||
Revenue Recognition | |||
Net sales and revenues | 40,255 | 31,722 | 35,417 |
Revenue Recognized Over Time | |||
Revenue Recognition | |||
Net sales and revenues | 3,769 | 3,818 | 3,841 |
Production Agriculture | |||
Revenue Recognition | |||
Net sales | 16,248 | 12,662 | 13,001 |
Small Agriculture | |||
Revenue Recognition | |||
Net sales | 8,619 | 6,827 | 7,422 |
Turf | |||
Revenue Recognition | |||
Net sales | 2,853 | 2,390 | 2,650 |
Construction | |||
Revenue Recognition | |||
Net sales | 4,684 | 3,521 | 5,188 |
Compact Construction | |||
Revenue Recognition | |||
Net sales | 1,489 | 1,269 | 1,279 |
Roadbuilding | |||
Revenue Recognition | |||
Net sales | 3,749 | 2,924 | 3,193 |
Forestry | |||
Revenue Recognition | |||
Net sales | 1,280 | 1,100 | 1,403 |
Financial Products | |||
Revenue Recognition | |||
Financial | 3,669 | 3,720 | 3,751 |
Other income | |||
Revenue Recognition | |||
Other net sales and revenues | 1,433 | 1,127 | 1,371 |
United States | |||
Revenue Recognition | |||
Net sales and revenues | 22,814 | 18,996 | 20,926 |
Canada | |||
Revenue Recognition | |||
Net sales and revenues | 3,015 | 2,390 | 2,820 |
Western Europe | |||
Revenue Recognition | |||
Net sales and revenues | 6,429 | 5,333 | 5,539 |
Central Europe and CIS | |||
Revenue Recognition | |||
Net sales and revenues | 2,664 | 2,072 | 2,209 |
Latin America | |||
Revenue Recognition | |||
Net sales and revenues | 4,522 | 3,023 | 3,885 |
Asia, Africa, Australia, New Zealand, and Middle East | |||
Revenue Recognition | |||
Net sales and revenues | 4,580 | 3,726 | 3,879 |
Production & Precision Ag (PPA) | |||
Revenue Recognition | |||
Net sales and revenues | 16,817 | 13,275 | 13,685 |
Production & Precision Ag (PPA) | Revenue Recognized at a Point in Time | |||
Revenue Recognition | |||
Net sales and revenues | 16,659 | 13,106 | 13,509 |
Production & Precision Ag (PPA) | Revenue Recognized Over Time | |||
Revenue Recognition | |||
Net sales and revenues | 158 | 169 | 176 |
Production & Precision Ag (PPA) | Production Agriculture | |||
Revenue Recognition | |||
Net sales | 16,248 | 12,662 | 13,001 |
Production & Precision Ag (PPA) | Financial Products | |||
Revenue Recognition | |||
Financial | 55 | 69 | 78 |
Production & Precision Ag (PPA) | Other income | |||
Revenue Recognition | |||
Other net sales and revenues | 514 | 544 | 606 |
Production & Precision Ag (PPA) | United States | |||
Revenue Recognition | |||
Net sales and revenues | 8,223 | 6,889 | 6,772 |
Production & Precision Ag (PPA) | Canada | |||
Revenue Recognition | |||
Net sales and revenues | 853 | 640 | 675 |
Production & Precision Ag (PPA) | Western Europe | |||
Revenue Recognition | |||
Net sales and revenues | 2,086 | 1,827 | 1,813 |
Production & Precision Ag (PPA) | Central Europe and CIS | |||
Revenue Recognition | |||
Net sales and revenues | 1,322 | 898 | 859 |
Production & Precision Ag (PPA) | Latin America | |||
Revenue Recognition | |||
Net sales and revenues | 2,916 | 1,902 | 2,527 |
Production & Precision Ag (PPA) | Asia, Africa, Australia, New Zealand, and Middle East | |||
Revenue Recognition | |||
Net sales and revenues | 1,417 | 1,119 | 1,039 |
Small Ag & Turf (SAT) | |||
Revenue Recognition | |||
Net sales and revenues | 12,046 | 9,495 | 10,444 |
Small Ag & Turf (SAT) | Revenue Recognized at a Point in Time | |||
Revenue Recognition | |||
Net sales and revenues | 11,969 | 9,439 | 10,406 |
Small Ag & Turf (SAT) | Revenue Recognized Over Time | |||
Revenue Recognition | |||
Net sales and revenues | 77 | 56 | 38 |
Small Ag & Turf (SAT) | Small Agriculture | |||
Revenue Recognition | |||
Net sales | 8,619 | 6,827 | 7,422 |
Small Ag & Turf (SAT) | Turf | |||
Revenue Recognition | |||
Net sales | 2,853 | 2,390 | 2,650 |
Small Ag & Turf (SAT) | Financial Products | |||
Revenue Recognition | |||
Financial | 46 | 37 | 22 |
Small Ag & Turf (SAT) | Other income | |||
Revenue Recognition | |||
Other net sales and revenues | 528 | 241 | 350 |
Small Ag & Turf (SAT) | United States | |||
Revenue Recognition | |||
Net sales and revenues | 6,505 | 5,059 | 5,590 |
Small Ag & Turf (SAT) | Canada | |||
Revenue Recognition | |||
Net sales and revenues | 498 | 350 | 421 |
Small Ag & Turf (SAT) | Western Europe | |||
Revenue Recognition | |||
Net sales and revenues | 2,433 | 1,937 | 2,053 |
Small Ag & Turf (SAT) | Central Europe and CIS | |||
Revenue Recognition | |||
Net sales and revenues | 475 | 493 | 564 |
Small Ag & Turf (SAT) | Latin America | |||
Revenue Recognition | |||
Net sales and revenues | 456 | 334 | 367 |
Small Ag & Turf (SAT) | Asia, Africa, Australia, New Zealand, and Middle East | |||
Revenue Recognition | |||
Net sales and revenues | 1,679 | 1,322 | 1,449 |
Construction & Forestry (CF) | |||
Revenue Recognition | |||
Net sales and revenues | 11,613 | 9,181 | 11,508 |
Construction & Forestry (CF) | Revenue Recognized at a Point in Time | |||
Revenue Recognition | |||
Net sales and revenues | 11,522 | 9,071 | 11,391 |
Construction & Forestry (CF) | Revenue Recognized Over Time | |||
Revenue Recognition | |||
Net sales and revenues | 91 | 110 | 117 |
Construction & Forestry (CF) | Construction | |||
Revenue Recognition | |||
Net sales | 4,684 | 3,521 | 5,188 |
Construction & Forestry (CF) | Compact Construction | |||
Revenue Recognition | |||
Net sales | 1,489 | 1,269 | 1,279 |
Construction & Forestry (CF) | Roadbuilding | |||
Revenue Recognition | |||
Net sales | 3,749 | 2,924 | 3,193 |
Construction & Forestry (CF) | Forestry | |||
Revenue Recognition | |||
Net sales | 1,280 | 1,100 | 1,403 |
Construction & Forestry (CF) | Financial Products | |||
Revenue Recognition | |||
Financial | 20 | 25 | 30 |
Construction & Forestry (CF) | Other income | |||
Revenue Recognition | |||
Other net sales and revenues | 391 | 342 | 415 |
Construction & Forestry (CF) | United States | |||
Revenue Recognition | |||
Net sales and revenues | 5,697 | 4,548 | 6,082 |
Construction & Forestry (CF) | Canada | |||
Revenue Recognition | |||
Net sales and revenues | 1,047 | 802 | 1,107 |
Construction & Forestry (CF) | Western Europe | |||
Revenue Recognition | |||
Net sales and revenues | 1,807 | 1,479 | 1,586 |
Construction & Forestry (CF) | Central Europe and CIS | |||
Revenue Recognition | |||
Net sales and revenues | 828 | 646 | 749 |
Construction & Forestry (CF) | Latin America | |||
Revenue Recognition | |||
Net sales and revenues | 903 | 553 | 719 |
Construction & Forestry (CF) | Asia, Africa, Australia, New Zealand, and Middle East | |||
Revenue Recognition | |||
Net sales and revenues | 1,331 | 1,153 | 1,265 |
Financial Services (FS) | |||
Revenue Recognition | |||
Financial | 3,548 | 3,589 | 3,621 |
Financial Services (FS) | Revenue Recognized at a Point in Time | |||
Revenue Recognition | |||
Financial | 105 | 106 | 111 |
Financial Services (FS) | Revenue Recognized Over Time | |||
Revenue Recognition | |||
Financial | 3,443 | 3,483 | 3,510 |
Financial Services (FS) | Financial Products | |||
Revenue Recognition | |||
Financial | 3,548 | 3,589 | 3,621 |
Financial Services (FS) | United States | |||
Revenue Recognition | |||
Financial | 2,389 | 2,500 | 2,482 |
Financial Services (FS) | Canada | |||
Revenue Recognition | |||
Financial | 617 | 598 | 617 |
Financial Services (FS) | Western Europe | |||
Revenue Recognition | |||
Financial | 103 | 90 | 87 |
Financial Services (FS) | Central Europe and CIS | |||
Revenue Recognition | |||
Financial | 39 | 35 | 37 |
Financial Services (FS) | Latin America | |||
Revenue Recognition | |||
Financial | 247 | 234 | 272 |
Financial Services (FS) | Asia, Africa, Australia, New Zealand, and Middle East | |||
Revenue Recognition | |||
Financial | $ 153 | $ 132 | $ 126 |
REVENUE RECOGNITION - Advanced
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Advanced customer payments | |||
Deferred revenue received | $ 1,344 | $ 1,090 | |
Revenue recognized from deferred revenue | $ 485 | $ 425 | $ 444 |
REVENUE RECOGNITION - Unsatisfi
REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions | Oct. 31, 2021USD ($) |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 1,062 |
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 | $ 339 |
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 | $ 289 |
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 | $ 199 |
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 | $ 101 |
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 | $ 64 |
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 | $ 70 |
Period estimated revenue to be recognized | 24 months |
CASH FLOW INFORMATION (Details)
CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Cash Flow Information | |||
Transfer of inventory to equipment on operating leases | $ 662 | $ 614 | $ 678 |
Accounts payable related to purchases of property and equipment | 121 | 98 | 152 |
Restricted cash | |||
Restricted cash | 108 | 106 | 99 |
Interest: | |||
Interest | 1,041 | 1,279 | 1,460 |
Income taxes: | |||
Income taxes | 2,075 | 1,069 | 1,111 |
Intercompany Eliminations | |||
Interest: | |||
Interest | (279) | (272) | (360) |
Income taxes: | |||
Income taxes | (269) | (228) | 150 |
Equipment Operations | |||
Restricted cash | |||
Restricted cash | 12 | 11 | 21 |
Interest: | |||
Interest | 584 | 553 | 666 |
Income taxes: | |||
Income taxes | 1,996 | 1,000 | 1,018 |
Financial Services | |||
Restricted cash | |||
Restricted cash | 96 | 95 | 78 |
Interest: | |||
Interest | 736 | 998 | 1,154 |
Income taxes: | |||
Income taxes | $ 348 | $ 297 | $ (57) |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Net Periodic Cost | |||
Location of costs excluding the service component | Other | Other | Other |
Pensions | |||
Net Periodic Cost | |||
Service cost | $ 332 | $ 321 | $ 261 |
Interest cost | 276 | 347 | 447 |
Expected return on plan assets | (799) | (819) | (802) |
Amortization of actuarial loss | 259 | 256 | 148 |
Amortization of prior service (credit) cost | 12 | 13 | 11 |
Settlements/curtailments | 21 | 25 | 5 |
Net cost | $ 101 | $ 143 | $ 70 |
Weighted-Average Assumptions | |||
Discount rates - service cost (as a percent) | 2.50% | 2.90% | 4.00% |
Discount rates - interest cost (as a percent) | 2.10% | 2.70% | 4.00% |
Rate of compensation increase (as a percent) | 3.70% | 3.80% | 3.80% |
Expected long-term rates of return (as a percent) | 6.00% | 6.40% | 6.50% |
Pensions | United States | |||
Weighted-Average Assumptions | |||
Interest crediting rate - U.S. cash balance plan (as a percent) | 1.70% | 2.10% | 3.30% |
OPEB | |||
Net Periodic Cost | |||
Service cost | $ 48 | $ 49 | $ 41 |
Interest cost | 102 | 140 | 216 |
Expected return on plan assets | (77) | (50) | (36) |
Amortization of actuarial loss | 27 | 29 | 16 |
Amortization of prior service (credit) cost | (4) | (4) | (72) |
Curtailments | 34 | ||
Net cost | $ 96 | $ 198 | $ 165 |
Weighted-Average Assumptions | |||
Discount rates - service cost (as a percent) | 3.40% | 3.70% | 4.80% |
Discount rates - interest cost (as a percent) | 2.10% | 2.70% | 4.20% |
Expected long-term rates of return (as a percent) | 5.40% | 5.70% | 5.70% |
OPEB | 2020 Employee-Separation Programs | |||
Net Periodic Cost | |||
Curtailments | $ 34 |
PENSION AND OTHER POSTRETIREM_4
PENSION AND OTHER POSTRETIREMENT BENEFITS - Cost in Net Income and Changes in Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Pensions | |||
Previous Net Periodic Benefit Cost and Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||
Net cost | $ 101 | $ 143 | $ 70 |
Retirement Benefits Adjustments Included in Other Comprehensive (Income) Loss: | |||
Net actuarial (gain) loss | (2,821) | 438 | 887 |
Amortization of actuarial loss | (256) | (249) | (143) |
Amortization of prior service (cost) credit | (12) | (11) | (11) |
Settlements | (22) | (26) | (3) |
Total (gain) loss recognized in other comprehensive (income) loss | (3,111) | 152 | 730 |
Total recognized in comprehensive (income) loss | (3,010) | 295 | 800 |
OPEB | |||
Previous Net Periodic Benefit Cost and Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||
Net cost | 96 | 198 | 165 |
Retirement Benefits Adjustments Included in Other Comprehensive (Income) Loss: | |||
Net actuarial (gain) loss | (671) | (136) | 141 |
Amortization of actuarial loss | (27) | (29) | (16) |
Amortization of prior service (cost) credit | 4 | 4 | 72 |
Total (gain) loss recognized in other comprehensive (income) loss | (694) | (161) | 197 |
Total recognized in comprehensive (income) loss | $ (598) | $ 37 | $ 362 |
PENSION AND OTHER POSTRETIREM_5
PENSION AND OTHER POSTRETIREMENT BENEFITS - Benefit Plan Obligations, Funded Status, and Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Change in Plan Assets (Fair Value) | |||
Employer contribution | $ 258 | $ 951 | |
Pensions | |||
Change in Benefit Obligations | |||
Beginning of year balance | (15,021) | (14,250) | |
Service cost | (332) | (321) | $ (261) |
Interest cost | (276) | (347) | (447) |
Actuarial gain (loss) | 373 | (771) | |
Benefits paid | 755 | 749 | |
Settlements/curtailments | 1 | 15 | |
Foreign exchange and other | (25) | (96) | |
End of year balance | (14,525) | (15,021) | (14,250) |
Change in Plan Assets (Fair Value) | |||
Beginning of year balance | 14,574 | 14,024 | |
Actual return on plan assets | 3,249 | 1,144 | |
Employer contribution | 101 | 108 | |
Benefits paid | (755) | (749) | |
Settlements | (12) | ||
Foreign exchange and other | 21 | ||
Foreign exchange and other | 59 | ||
End of year balance | 17,190 | 14,574 | 14,024 |
Funded (unfunded) status | $ 2,665 | $ (447) | |
Weighted-Average Assumptions | |||
Discount rates (as a percent) | 2.70% | 2.50% | |
Rate of compensation increase (as a percent) | 3.70% | 3.70% | |
Pensions | United States | |||
Weighted-Average Assumptions | |||
Interest crediting rate - U.S. cash balance plan (as a percent) | 1.80% | 1.70% | |
OPEB | |||
Change in Benefit Obligations | |||
Beginning of year balance | $ (5,410) | $ (5,622) | |
Service cost | (48) | (49) | (41) |
Interest cost | (102) | (140) | (216) |
Actuarial gain (loss) | 381 | 119 | |
Benefits paid | 290 | 297 | |
Health care subsidies | (29) | (28) | |
Foreign exchange and other | (12) | 13 | |
End of year balance | (4,930) | (5,410) | (5,622) |
Change in Plan Assets (Fair Value) | |||
Beginning of year balance | 1,518 | 936 | |
Actual return on plan assets | 367 | 33 | |
Employer contribution | 157 | 843 | |
Benefits paid | (290) | (297) | |
Foreign exchange and other | 3 | 3 | |
End of year balance | 1,755 | 1,518 | $ 936 |
Funded (unfunded) status | $ (3,175) | $ (3,892) | |
Weighted-Average Assumptions | |||
Discount rates (as a percent) | 2.80% | 2.70% |
PENSION AND OTHER POSTRETIREM_6
PENSION AND OTHER POSTRETIREMENT BENEFITS - Other (Details) - USD ($) $ in Millions | Nov. 30, 2021 | Oct. 31, 2021 | Nov. 01, 2020 |
Amounts Recognized in Balance Sheet | |||
Noncurrent asset | $ 3,601 | $ 863 | |
Employer Contributions | |||
Defined benefit plan employer contributions | 258 | 951 | |
Pensions | |||
Amounts Recognized in Balance Sheet | |||
Noncurrent asset | 3,601 | 863 | |
Current liability | (51) | (72) | |
Noncurrent liability | (885) | (1,238) | |
Funded (unfunded) status | 2,665 | (447) | |
Amounts Recognized in Accumulated Other Comprehensive Income - Pretax | |||
Net actuarial loss | 1,376 | 4,475 | |
Prior service cost (credit) | 9 | 21 | |
Total | 1,385 | 4,496 | |
Accumulated Benefit Obligations - Additional Disclosures | |||
Accumulated benefit obligation for pension plans | 13,787 | 14,257 | |
Accumulated Benefit Obligations in Excess of Plan Assets | |||
Defined benefit plan, pension plans with accumulated benefit obligations in excess of plan assets, accumulated benefit obligations | 2,012 | 2,107 | |
Defined benefit plan, pension plans with accumulated benefit obligations in excess of plan assets, plan assets | 1,207 | 1,100 | |
Projected Pension Benefit Obligations in Excess of Plan Assets | |||
Defined benefit plan, pension plans with projected benefit obligations in excess of plan assets, projected benefit obligations | 2,163 | 10,792 | |
Defined benefit plan, pension plans with projected benefit obligations in excess of plan assets, plan assets | 1,227 | 9,482 | |
Employer Contributions | |||
Defined benefit plan employer contributions | 101 | 108 | |
Expected future employer contributions towards defined benefit plans | 100 | ||
Benefits Expected to be Paid from the Benefit Plans, which Reflect Expected Future Years of Service | |||
Defined benefit plan, expected future benefit payments, next twelve months | 730 | ||
Defined benefit plan, expected future benefit payments, year two | 710 | ||
Defined benefit plan, expected future benefit payments, year three | 701 | ||
Defined benefit plan, expected future benefit payments, year four | 693 | ||
Defined benefit plan, expected future benefit payments, year five | 698 | ||
Defined benefit plan, expected future benefit payments, five fiscal years thereafter | 3,426 | ||
OPEB | |||
Amounts Recognized in Balance Sheet | |||
Current liability | (36) | (36) | |
Noncurrent liability | (3,139) | (3,856) | |
Funded (unfunded) status | (3,175) | (3,892) | |
Amounts Recognized in Accumulated Other Comprehensive Income - Pretax | |||
Net actuarial loss | 49 | 747 | |
Prior service cost (credit) | (20) | (24) | |
Total | 29 | 723 | |
Employer Contributions | |||
Defined benefit plan employer contributions | 157 | 843 | |
Defined benefit plan employer voluntary contributions | $ 700 | ||
Expected future employer contributions towards defined benefit plans | 1,150 | ||
Benefits Expected to be Paid from the Benefit Plans, which Reflect Expected Future Years of Service | |||
Defined benefit plan, expected future benefit payments, next twelve months | 280 | ||
Defined benefit plan, expected future benefit payments, year two | 279 | ||
Defined benefit plan, expected future benefit payments, year three | 279 | ||
Defined benefit plan, expected future benefit payments, year four | 278 | ||
Defined benefit plan, expected future benefit payments, year five | 278 | ||
Defined benefit plan, expected future benefit payments, five fiscal years thereafter | $ 1,374 | ||
OPEB | United States | Subsequent Event | |||
Employer Contributions | |||
Defined benefit plan employer voluntary contributions | $ 1,000 |
PENSION AND OTHER POSTRETIREM_7
PENSION AND OTHER POSTRETIREMENT BENEFITS - Assumptions (Details) - Health Care | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Health care costs trend rates | ||
Weighted-average health care cost trend rate, next fiscal year (as a percent) | 2.10% | 4.00% |
Weighted-average health care cost trend rate, second fiscal year (as a percent) | 8.40% | 7.60% |
Ultimate weighted-average health care cost trend rate (as a percent) | 4.70% | 4.70% |
Year that weighted-average health care cost trend rate reaches ultimate rate (year) | 2028 2029 | 2027 2028 |
PENSION AND OTHER POSTRETIREM_8
PENSION AND OTHER POSTRETIREMENT BENEFITS - Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Pensions | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | $ 17,190 | $ 14,574 | $ 14,024 |
Pensions | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 8,749 | 6,995 | |
Pensions | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3,340 | 2,851 | |
Pensions | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 5,409 | 4,144 | |
Pensions | Cash and Short-term Investments | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 378 | 309 | |
Pensions | Cash and Short-term Investments | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 355 | 276 | |
Pensions | Cash and Short-term Investments | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 23 | 33 | |
Pensions | Short-term Investments | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 815 | 510 | |
Pensions | U.S. Equity Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,151 | 1,184 | |
Pensions | U.S. Equity Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,123 | 1,135 | |
Pensions | U.S. Equity Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 28 | 49 | |
Pensions | U.S. Equity Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 796 | 1,246 | |
Pensions | International Equity Securities and Funds | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 951 | ||
Pensions | International Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 931 | ||
Pensions | International Equity Securities and Funds | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 20 | ||
Pensions | International Equity Securities Member | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 947 | ||
Pensions | International Equity Securities Member | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 937 | ||
Pensions | International Equity Securities Member | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | ||
Pensions | International Equity Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 528 | 674 | |
Pensions | Government and Agency Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,475 | 1,133 | |
Pensions | Government and Agency Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,159 | 824 | |
Pensions | Government and Agency Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 316 | 309 | |
Pensions | Corporate Debt Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4,841 | 3,534 | |
Pensions | Corporate Debt Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4,841 | 3,534 | |
Pensions | Mortgage-backed Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 144 | 136 | |
Pensions | Mortgage-backed Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 144 | 136 | |
Pensions | Fixed Income Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,701 | 1,321 | |
Pensions | Real Estate Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 566 | 618 | |
Pensions | Real Estate Investment Trusts | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 62 | 49 | |
Pensions | Real Estate Investment Trusts | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 55 | 48 | |
Pensions | Real Estate Investment Trusts | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 7 | 1 | |
Pensions | Hedge Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 751 | 750 | |
Pensions | Private Equity | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,385 | 1,064 | |
Pensions | Venture Capital | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,537 | 974 | |
Pensions | Derivative Contracts - Assets | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 116 | 94 | |
Pensions | Derivative Contracts - Assets | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 37 | 2 | |
Pensions | Derivative Contracts - Assets | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 79 | 92 | |
Pensions | Derivative Contracts - Liabilities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (75) | (79) | |
Pensions | Derivative Contracts - Liabilities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (15) | (43) | |
Pensions | Derivative Contracts - Liabilities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (60) | (36) | |
Pensions | Receivables, Payables, and Other | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (155) | (163) | |
Pensions | Receivables, Payables, and Other | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (177) | (184) | |
Pensions | Receivables, Payables, and Other | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 22 | 21 | |
Pensions | Securities Lending Collateral | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 982 | 449 | |
Pensions | Securities Lending Collateral | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 107 | 90 | |
Pensions | Securities Lending Collateral | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 875 | 359 | |
Pensions | Securities Lending Liability | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (982) | (449) | |
Pensions | Securities Lending Liability | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (107) | (90) | |
Pensions | Securities Lending Liability | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (875) | (359) | |
Pensions | Securities Sold Short | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (139) | (149) | |
Pensions | Securities Sold Short | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (128) | (144) | |
Pensions | Securities Sold Short | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (11) | (5) | |
Pensions | Other Investments | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 362 | 422 | |
Health Care | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,755 | 1,518 | |
Health Care | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 642 | 416 | |
Health Care | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 296 | 324 | |
Health Care | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 346 | 92 | |
Health Care | Cash and Short-term Investments | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 55 | 117 | |
Health Care | Cash and Short-term Investments | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 55 | 117 | |
Health Care | Short-term Investments | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 20 | 9 | |
Health Care | U.S. Equity Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 619 | 539 | |
Health Care | Equity Securities and Funds | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 30 | 44 | |
Health Care | Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 29 | 43 | |
Health Care | Equity Securities and Funds | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Health Care | International Equity Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 358 | 320 | |
Health Care | Government and Agency Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 243 | 180 | |
Health Care | Government and Agency Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 215 | 168 | |
Health Care | Government and Agency Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 28 | 12 | |
Health Care | Corporate Debt Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 307 | 66 | |
Health Care | Corporate Debt Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 307 | 66 | |
Health Care | Mortgage-backed Securities | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | 13 | |
Health Care | Mortgage-backed Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | 13 | |
Health Care | Fixed Income Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 18 | 185 | |
Health Care | Real Estate Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 42 | ||
Health Care | Hedge Funds | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 13 | 12 | |
Health Care | Private Equity | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 18 | 13 | |
Health Care | Venture Capital | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 20 | 12 | |
Health Care | Other Plan Assets | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (1) | ||
Health Care | Other Plan Assets | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (1) | ||
Health Care | Securities Lending Collateral | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 64 | 49 | |
Health Care | Securities Lending Collateral | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 20 | 8 | |
Health Care | Securities Lending Collateral | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 44 | 41 | |
Health Care | Securities Lending Liability | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (64) | (49) | |
Health Care | Securities Lending Liability | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (20) | (8) | |
Health Care | Securities Lending Liability | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (44) | (41) | |
Health Care | Securities Sold Short | Level 1, Level 2, Level 3 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (3) | (3) | |
Health Care | Securities Sold Short | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (3) | (3) | |
Health Care | Other Investments | Investments at Net Asset Value: | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | $ 5 | $ 12 |
PENSION AND OTHER POSTRETIREM_9
PENSION AND OTHER POSTRETIREMENT BENEFITS - Plan Asset Information (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Pensions | |
Expected Return on Plan Assets | |
Market related value period | 5 years |
Pensions | United States | |
Average Annual Return | |
Average annual return over past 10 years (as a percent) | 11.00% |
Average annual return over past 20 years (as a percent) | 9.30% |
Pensions | Minimum | United States | |
Average Annual Return | |
Time period for fundamental changes in capital markets affecting return expectations | 10 years |
Pensions | Maximum | United States | |
Average Annual Return | |
Time period for fundamental changes in capital markets affecting return expectations | 20 years |
Pensions | Equity Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 26.00% |
Pensions | Debt Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 55.00% |
Pensions | Real Estate Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 4.00% |
Pensions | Other Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 15.00% |
Health Care | Equity Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 58.00% |
Health Care | Debt Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 35.00% |
Health Care | Real Estate Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 2.00% |
Health Care | Other Investments | |
Target Asset Allocations, Pension and Health Care Plan Assets | |
Target allocation percentage for plan assets | 5.00% |
PENSION AND OTHER POSTRETIRE_10
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Contributions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |||
Defined contribution plans employer contributions and costs (primarily in the U.S.) | $ 207 | $ 160 | $ 192 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes and Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Current: | |||
U.S. - Federal | $ 899 | $ 400 | $ 545 |
U.S. - State | 183 | 53 | 72 |
Foreign | 1,017 | 640 | 700 |
Total current | 2,099 | 1,093 | 1,317 |
Deferred: | |||
U.S. - Federal | (303) | (68) | (345) |
U.S. - State | (45) | 9 | (26) |
Foreign | (93) | 48 | (94) |
Total deferred | (441) | (11) | (465) |
Provision for income taxes | 1,658 | 1,082 | 852 |
Consolidated income before income taxes, U.S. | 4,061 | 2,082 | 2,166 |
Consolidated income before income taxes, foreign | $ 3,541 | $ 1,801 | $ 1,922 |
INCOME TAXES - Statutory and Ef
INCOME TAXES - Statutory and Effective (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Comparison of the statutory and effective income tax provision | |||
Federal corporate statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
U.S. federal income tax provision at the U.S. statutory rate (21 percent) | $ 1,597 | $ 815 | $ 859 |
State and local taxes, net of federal tax effect | 119 | 59 | 47 |
Other Impacts of Tax Cuts and Jobs Act of 2017 | (85) | 39 | (101) |
Rate differential on foreign subsidiaries | 148 | 106 | 89 |
Research and business tax credits | (48) | (50) | (85) |
Excess tax benefits on equity compensation | (79) | (87) | (40) |
Valuation allowances | 18 | 139 | 28 |
Other - net | (12) | 61 | 55 |
Provision for income taxes | 1,658 | $ 1,082 | $ 852 |
Accumulated earnings of certain foreign subsidiaries for which no provision for U.S. income or foreign withholding taxes has been made | 2,155 | ||
Provision for foreign withholding taxes for earnings expected to remain indefinitely reinvested outside the U.S. | $ 0 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Deferred Tax Assets | ||
OPEB liabilities | $ 676 | $ 804 |
Tax loss and tax credit carryforwards | 1,542 | 937 |
Accrual for sales allowances | 466 | 362 |
Pension - net | 316 | |
Allowance for credit losses | 78 | 81 |
Accrual for employee benefits | 298 | 249 |
Share-based compensation | 53 | 41 |
Deferred compensation | 49 | 40 |
Lessee lease transactions | 46 | 56 |
Unearned revenue | 172 | 22 |
Other items, assets | 333 | 344 |
Less valuation allowances | (1,530) | (858) |
Deferred income tax, assets | 2,183 | 2,394 |
Deferred Tax Liabilities | ||
Lessor lease transactions | 399 | 489 |
Tax over book depreciation | 154 | 196 |
Goodwill and other intangible assets | 337 | 368 |
Pension - net | 448 | |
Lessee lease transactions | 43 | 56 |
Other items, liabilities | 341 | 305 |
Deferred income tax, liabilities | $ 1,722 | $ 1,414 |
INCOME TAXES - Additional Defer
INCOME TAXES - Additional Deferred Income Tax Information (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Additional Deferred Income Tax Information | ||
Tax loss and tax credit carryforwards | $ 1,542 | $ 937 |
Tax loss and tax credit carryforwards, expiring from 2022 through 2041 | 1,068 | |
Tax loss and tax credit carryforwards with an indefinite carryforward period | $ 474 |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Reconciliation of the Total Amounts of Unrecognized Tax Benefits | |||
Beginning of year balance | $ 668 | $ 553 | $ 279 |
Increases to tax positions taken during the current year | 81 | 63 | 30 |
Increases to tax positions taken during prior years | 100 | 95 | 357 |
Decreases to tax positions taken during prior years | (23) | (30) | (30) |
Decreases due to lapse of statute of limitations | (12) | (9) | (6) |
Settlements | (3) | (1) | (75) |
Foreign exchange | (3) | (2) | |
End of year balance | 811 | 668 | 553 |
Unrecognized tax benefits affecting effective tax rate if recognized | 227 | 134 | |
Total amount of expense from interest and penalties | 7 | 13 | |
Net tax benefit from tax positions settled | 3 | ||
Interest income on income tax examination | 8 | 11 | $ 25 |
Accrued interest and penalties on income tax | 75 | 72 | |
Interest income receivable on income tax examination | $ 11 | $ 6 |
OTHER INCOME AND OTHER OPERAT_3
OTHER INCOME AND OTHER OPERATING EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Other Income | |||
Total | $ 44,024 | $ 35,540 | $ 39,258 |
Other operating expenses | |||
Depreciation of equipment on operating leases | 983 | 1,083 | 981 |
Other | |||
Other Income | |||
Revenues from services | 322 | 314 | 348 |
Insurance premiums and fees earned | 227 | 223 | 214 |
Trademark licensing income | 87 | 73 | 66 |
Operating lease disposition gains | 65 | ||
Investment income | 41 | 26 | 25 |
Other | 249 | 182 | 226 |
Total | 991 | 818 | 879 |
Other operating expenses | |||
Depreciation of equipment on operating leases | 983 | 1,083 | 981 |
Insurance claims and expenses | 235 | 231 | 210 |
Cost of services | 202 | 188 | 228 |
Operating lease residual losses and impairments | 52 | 159 | |
Pension and OPEB benefit, excluding service cost component | (183) | (31) | (67) |
Other | 106 | 89 | 67 |
Total | $ 1,343 | $ 1,612 | $ 1,578 |
UNCONSOLIDATED AFFILIATED COM_3
UNCONSOLIDATED AFFILIATED COMPANIES (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Operations | ||||
Sales | $ 44,024 | $ 35,540 | $ 39,258 | |
Net income | 5,965 | 2,753 | 3,257 | |
Deere & Company's equity in net income (loss) | 21 | (48) | 21 | |
Financial Position | ||||
Total Assets | 84,114 | 75,091 | 73,011 | |
Total net assets | 18,434 | 12,944 | 11,417 | $ 11,291 |
Deere & Company's share of the net assets | 175 | 193 | 215 | |
Transactions with Unconsolidated Affiliated Companies | ||||
Net Sales | 78 | 81 | 143 | |
Purchases | 1,605 | 1,288 | 1,937 | |
Unconsolidated Affiliated Companies | ||||
Operations | ||||
Sales | 2,095 | 1,793 | 2,483 | |
Net income | 51 | 7 | 50 | |
Deere & Company's equity in net income (loss) | 21 | (48) | 21 | |
Financial Position | ||||
Total Assets | 1,289 | 1,541 | ||
Total external borrowings | 497 | 540 | ||
Total net assets | 366 | 598 | ||
Deere & Company's share of the net assets | 175 | 193 | ||
Undistributed earnings of the unconsolidated affiliates included in consolidated retained earnings | 48 | |||
Dividends from unconsolidated affiliates | $ 21 | $ 0 | $ 30 | |
Deere-Hitachi Construction Machinery Corporation | ||||
Equity Method Investments | ||||
Ownership interest in equity method investee (as a percent) | 50.00% | |||
Deere-Hitachi Maquinas de Construcao do Brasil S.A. | ||||
Equity Method Investments | ||||
Ownership interest in equity method investee (as a percent) | 50.00% |
MARKETABLE SECURITIES - Amortiz
MARKETABLE SECURITIES - Amortized Cost and Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Amortized cost and fair value of marketable securities | ||
Fair Value | $ 728 | $ 641 |
Equity Securities | ||
Net gain recognized on equity securities | 24 | 8 |
Less: Net gain on equity securities sold | 2 | 1 |
Unrealized gains on equity securities | 22 | 7 |
Equity Securities | ||
Amortized cost and fair value of marketable securities | ||
Fair Value | 77 | 64 |
U.S. Equity Fund | ||
Amortized cost and fair value of marketable securities | ||
Fair Value | 75 | 62 |
International Equity Securities | ||
Amortized cost and fair value of marketable securities | ||
Fair Value | 2 | 2 |
Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 637 | 544 |
Gross Unrealized Gains | 23 | 37 |
Gross Unrealized Losses | 9 | 4 |
Fair Value | 651 | 577 |
U.S. Government Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 196 | 159 |
Gross Unrealized Gains | 5 | 10 |
Gross Unrealized Losses | 3 | 1 |
Fair Value | 198 | 168 |
Municipal Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 69 | 63 |
Gross Unrealized Gains | 4 | 5 |
Fair Value | 73 | 68 |
Corporate Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 215 | 173 |
Gross Unrealized Gains | 11 | 15 |
Gross Unrealized Losses | 2 | |
Fair Value | 224 | 188 |
International Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 5 | 9 |
Gross Unrealized Losses | 3 | 3 |
Fair Value | 2 | 6 |
Mortgage-backed Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 152 | 140 |
Gross Unrealized Gains | 3 | 7 |
Gross Unrealized Losses | 1 | |
Fair Value | $ 154 | $ 147 |
MARKETABLE SECURITIES - Contrac
MARKETABLE SECURITIES - Contractual Maturities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Contractual Maturities of Debt Securities, Amortized Cost | |||
Amortized cost, due in one year or less | $ 28 | ||
Amortized cost, due after one through five years | 80 | ||
Amortized cost, due after five through 10 years | 144 | ||
Amortized cost, due after 10 years | 233 | ||
Amortized cost, mortgage-backed securities | 152 | ||
Amortized cost, debt securities | 637 | ||
Contractual Maturities of Debt Securities, Fair Value | |||
Fair value, due in one year or less | 28 | ||
Fair value, due after one through five years | 82 | ||
Fair value, due after five through 10 years | 147 | ||
Fair value, due after 10 years | 240 | ||
Fair value, mortgage-backed securities | 154 | ||
Fair value, debt securities | 651 | ||
Losses related to impairment write-downs | $ 0 | $ 0 | $ 0 |
RECEIVABLES - Trade Accounts an
RECEIVABLES - Trade Accounts and Notes Receivable (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Nov. 01, 2020 | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | Nov. 02, 2020 | |
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | $ 4,171 | $ 4,208 | $ 4,171 | $ 4,173 | |
Provision | (6) | 110 | $ 43 | ||
Cumulative Effect from Adoption | ASU 2016-13 | |||||
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | 2 | 2 | |||
Trade Accounts and Notes Receivable | |||||
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | 4,171 | 4,208 | 4,171 | ||
Beginning of year balance | 39 | 72 | 70 | ||
Provision | 10 | 8 | |||
Write-offs | (7) | (23) | (14) | ||
Recoveries | 1 | 4 | |||
Translation adjustments | 1 | (11) | 4 | ||
End of year balance | 39 | 41 | 39 | $ 72 | |
Trade Accounts and Notes Receivable | COVID-19 | |||||
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | $ 75 | $ 75 | |||
Outstanding trade receivable balance granted relief (as a percent) | 2.00% | 2.00% | |||
Trade Accounts and Notes Receivable | COVID-19 | Maximum | |||||
Trade Accounts and Notes Receivable | |||||
Payment deferral period | 3 months | ||||
Extension of interest-free period | 3 months | ||||
Total interest-free period | 1 year | ||||
Interest rate reduction period | 3 months | ||||
Trade Accounts and Notes Receivable | Cumulative Effect from Adoption | ASU 2016-13 | |||||
Trade Accounts and Notes Receivable | |||||
Beginning of year balance | (2) | ||||
End of year balance | $ (2) | $ (2) | |||
Production & Precision Ag (PPA) | Trade Accounts and Notes Receivable | |||||
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | 1,397 | 1,204 | 1,397 | ||
Small Ag & Turf (SAT) | Trade Accounts and Notes Receivable | |||||
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | 1,484 | 1,683 | 1,484 | ||
Construction & Forestry (CF) | Trade Accounts and Notes Receivable | |||||
Trade Accounts and Notes Receivable | |||||
Trade accounts and notes receivable - net | $ 1,290 | $ 1,321 | $ 1,290 |
RECEIVABLES - Financing Receiva
RECEIVABLES - Financing Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | |
Financing receivables | |||
Financing receivables - net | $ 33,799 | $ 29,723 | $ 29,750 |
Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | 35,406 | 31,282 | |
Unearned finance income | 1,455 | 1,361 | |
Allowance for credit losses | 152 | 171 | |
Financing receivables - net | 33,799 | 29,750 | |
Unrestricted | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 6,191 | 6,898 | |
Unearned finance income | 268 | 278 | |
Financing receivables - net | 5,923 | 6,620 | |
Securitized | |||
Financing receivables | |||
Financing receivables, gross | 4,753 | 4,814 | |
Unearned finance income | 80 | 98 | |
Allowance for credit losses | 14 | 13 | |
Financing receivables - net | 4,659 | 4,703 | |
Securitized | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 10 | 27 | |
Financing receivables - net | 10 | 27 | |
Retail Notes | Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | 26,070 | 21,409 | |
Unearned finance income | 1,131 | 1,066 | |
Retail Notes | Unrestricted | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 2,345 | 2,306 | |
Unearned finance income | 159 | 178 | |
Retail Notes | Securitized | |||
Financing receivables | |||
Financing receivables, gross | 4,753 | 4,814 | |
Unearned finance income | 80 | 98 | |
Retail Notes | Securitized | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | $ 10 | 27 | |
Retail Notes | Agriculture and Turf | |||
Financing Receivables - Other Disclosures | |||
Maximum terms for notes and financing leases | 7 years | ||
Retail Notes | Agriculture and Turf | Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | $ 21,736 | 17,780 | |
Retail Notes | Agriculture and Turf | Unrestricted | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 1,977 | 1,971 | |
Retail Notes | Agriculture and Turf | Securitized | |||
Financing receivables | |||
Financing receivables, gross | $ 4,041 | 4,134 | |
Retail Notes | Construction and Forestry | |||
Financing Receivables - Other Disclosures | |||
Maximum terms for notes and financing leases | 5 years | ||
Retail Notes | Construction and Forestry | Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | $ 4,334 | 3,629 | |
Retail Notes | Construction and Forestry | Unrestricted | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 368 | 335 | |
Retail Notes | Construction and Forestry | Securitized | |||
Financing receivables | |||
Financing receivables, gross | 712 | 680 | |
Retail Notes | Construction and Forestry | Securitized | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | $ 10 | 27 | |
Wholesale Notes | |||
Financing Receivables - Other Disclosures | |||
Term that the average term for wholesale notes is less than | 12 months | ||
Wholesale Notes | Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | $ 2,577 | 3,547 | |
Unearned finance income | 11 | 18 | |
Wholesale Notes | Unrestricted | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 2,577 | 3,547 | |
Unearned finance income | 11 | 18 | |
Sales-type Leases | Unrestricted | Related to Sales of Equipment | |||
Financing receivables | |||
Financing receivables, gross | 1,269 | 1,045 | |
Unearned finance income | 98 | 82 | |
Revolving Charge Accounts | Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | 3,880 | 3,962 | |
Unearned finance income | $ 55 | 60 | |
Financing Leases | |||
Financing Receivables - Other Disclosures | |||
Maximum terms for notes and financing leases | 7 years | ||
Financing Leases | Unrestricted | |||
Financing receivables | |||
Financing receivables, gross | $ 2,879 | 2,364 | |
Unearned finance income | $ 258 | $ 217 |
RECEIVABLES - Financing Recei_2
RECEIVABLES - Financing Receivable Installments (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Unrestricted | ||
Financing receivable installments, due in months: | ||
Financing receivables, Due in months: 0 - 12 | $ 15,205 | $ 14,983 |
Financing receivables, Due in months: 13 - 24 | 7,412 | 6,180 |
Financing receivables, Due in months: 25 - 36 | 5,629 | 4,556 |
Financing receivables, Due in months: 37 - 48 | 3,991 | 3,145 |
Financing receivables, Due in months: 49 - 60 | 2,397 | 1,794 |
Financing receivables, Due in months: Thereafter (greater than 60 months) | 772 | 624 |
Financing receivables - gross | 35,406 | 31,282 |
Securitized | ||
Financing receivable installments, due in months: | ||
Financing receivables, Due in months: 0 - 12 | 1,904 | 1,971 |
Financing receivables, Due in months: 13 - 24 | 1,323 | 1,354 |
Financing receivables, Due in months: 25 - 36 | 885 | 889 |
Financing receivables, Due in months: 37 - 48 | 478 | 460 |
Financing receivables, Due in months: 49 - 60 | 150 | 129 |
Financing receivables, Due in months: Thereafter (greater than 60 months) | 13 | 11 |
Financing receivables - gross | $ 4,753 | $ 4,814 |
RECEIVABLES - Financing Recei_3
RECEIVABLES - Financing Receivables Past Due (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Nov. 01, 2020 | Oct. 31, 2021 | |
Financing Receivable, Past Due | ||
Minimum number of days for a financing receivable to be considered past due | 30 days | |
Generally the number of days for a financing receivable to be considered non-performing | 90 days | |
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off | 120 days | |
Percentage of past-due amounts to total financing receivables | 1.16% | 1.09% |
Percentage of non-performing receivables to total financing receivables | 1.22% | 0.96% |
Financial Services | ||
Financing Receivable, Past Due | ||
Deposits primarily withheld from dealers and merchants as credit enhancements | $ 136 | $ 154 |
COVID-19 | ||
Financing Receivable, Past Due | ||
Financing receivables balance granted relief (as a percent) | 4.00% | 3.00% |
COVID-19 | Maximum | ||
Financing Receivable, Past Due | ||
Payment deferral or reduced financing rates period | 3 months | 3 months |
RECEIVABLES - Retail Notes, Fin
RECEIVABLES - Retail Notes, Financing Leases, and Revolving Charge Accounts Credit Quality Analysis (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Credit Quality Analysis | |||
Total retail customer receivables | $ 38,624 | $ 34,637 | $ 33,728 |
Retail Customer Receivables | |||
Credit Quality Analysis | |||
2021 | 16,173 | ||
2020 | 8,494 | ||
2019 | 4,389 | ||
2018 | 2,098 | ||
2017 | 828 | ||
Prior Years | 251 | ||
Revolving | 3,825 | ||
Total retail customer receivables | 36,058 | 31,108 | |
Retail Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 43 | ||
2020 | 53 | ||
2019 | 29 | ||
2018 | 16 | ||
2017 | 7 | ||
Prior Years | 3 | ||
Revolving | 14 | ||
Total retail customer receivables | 165 | 148 | |
Retail Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 16 | ||
2020 | 23 | ||
2019 | 12 | ||
2018 | 6 | ||
2017 | 3 | ||
Prior Years | 1 | ||
Revolving | 4 | ||
Total retail customer receivables | 65 | 68 | |
Retail Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2020 | 1 | ||
Total retail customer receivables | 1 | 2 | |
Retail Customer Receivables | Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 12,877 | ||
2020 | 6,676 | ||
2019 | 3,463 | ||
2018 | 1,738 | ||
2017 | 728 | ||
Prior Years | 211 | ||
Revolving | 3,704 | ||
Total retail customer receivables | 29,397 | ||
Retail Customer Receivables | Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2021 | 23 | ||
2020 | 57 | ||
2019 | 53 | ||
2018 | 32 | ||
2017 | 17 | ||
Prior Years | 23 | ||
Revolving | 7 | ||
Total retail customer receivables | 212 | ||
Retail Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 50 | ||
2020 | 40 | ||
2019 | 27 | ||
2018 | 7 | ||
2017 | 4 | ||
Prior Years | 1 | ||
Revolving | 3 | ||
Total retail customer receivables | 132 | 113 | |
Retail Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 15 | ||
2020 | 11 | ||
2019 | 9 | ||
2018 | 6 | ||
2017 | 1 | ||
Revolving | 1 | ||
Total retail customer receivables | 43 | 56 | |
Retail Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2021 | 1 | ||
2020 | 2 | ||
2019 | 3 | ||
2018 | 3 | ||
2017 | 4 | ||
Prior Years | 2 | ||
Total retail customer receivables | 15 | $ 14 | |
Retail Customer Receivables | Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 3,122 | ||
2020 | 1,575 | ||
2019 | 754 | ||
2018 | 273 | ||
2017 | 57 | ||
Prior Years | 7 | ||
Revolving | 92 | ||
Total retail customer receivables | 5,880 | ||
Retail Customer Receivables | Construction and Forestry | Non-performing | |||
Credit Quality Analysis | |||
2021 | 26 | ||
2020 | 56 | ||
2019 | 39 | ||
2018 | 17 | ||
2017 | 7 | ||
Prior Years | 3 | ||
Total retail customer receivables | $ 148 |
RECEIVABLES - Retail Customer R
RECEIVABLES - Retail Customer Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Age Credit Quality Analysis | |||
Total retail customer receivables | $ 38,624 | $ 34,637 | $ 33,728 |
Retail Customer Receivables | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 36,058 | 31,108 | |
Retail Customer Receivables | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 269 | ||
Retail Customer Receivables | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 25,384 | ||
Retail Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 165 | 148 | |
Retail Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 65 | 68 | |
Retail Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 1 | 2 | |
Retail Customer Receivables | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 107 | ||
Retail Customer Receivables | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 4,947 | ||
Retail Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 132 | 113 | |
Retail Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 43 | 56 | |
Retail Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 15 | 14 | |
Retail Notes and Financing Leases | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 32,233 | 27,206 | 25,151 |
Retail Notes and Financing Leases | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 263 | ||
Retail Notes and Financing Leases | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 21,597 | ||
Retail Notes and Financing Leases | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 135 | ||
Retail Notes and Financing Leases | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 64 | ||
Retail Notes and Financing Leases | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 2 | ||
Retail Notes and Financing Leases | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 106 | ||
Retail Notes and Financing Leases | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 4,859 | ||
Retail Notes and Financing Leases | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 111 | ||
Retail Notes and Financing Leases | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 55 | ||
Retail Notes and Financing Leases | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 14 | ||
Revolving Charge Accounts | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | $ 3,825 | 3,902 | $ 3,943 |
Revolving Charge Accounts | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 6 | ||
Revolving Charge Accounts | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 3,787 | ||
Revolving Charge Accounts | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 13 | ||
Revolving Charge Accounts | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 4 | ||
Revolving Charge Accounts | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 1 | ||
Revolving Charge Accounts | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 88 | ||
Revolving Charge Accounts | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | 2 | ||
Revolving Charge Accounts | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total retail customer receivables | $ 1 |
RECEIVABLES - Wholesale Receiva
RECEIVABLES - Wholesale Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Credit Quality Analysis | |||
Total wholesale receivables | $ 38,624 | $ 34,637 | $ 33,728 |
Wholesale Receivables | |||
Credit Quality Analysis | |||
2021 | 387 | ||
2020 | 87 | ||
2019 | 41 | ||
2018 | 9 | ||
2017 | 4 | ||
Prior Years | 2 | ||
Revolving | 2,036 | ||
Total wholesale receivables | 2,566 | $ 3,529 | $ 4,634 |
Wholesale Receivables | Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 346 | ||
2020 | 80 | ||
2019 | 22 | ||
2018 | 9 | ||
2017 | 3 | ||
Revolving | 1,696 | ||
Total wholesale receivables | 2,156 | ||
Wholesale Receivables | Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2019 | 12 | ||
Total wholesale receivables | 12 | ||
Wholesale Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
Prior Years | 1 | ||
Total wholesale receivables | 1 | ||
Wholesale Receivables | Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 41 | ||
2020 | 7 | ||
2019 | 7 | ||
2017 | 1 | ||
Prior Years | 1 | ||
Revolving | 340 | ||
Total wholesale receivables | $ 397 |
RECEIVABLES - Wholesale Recei_2
RECEIVABLES - Wholesale Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 38,624 | $ 34,637 | $ 33,728 |
Wholesale Receivables | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | 2,566 | 3,529 | $ 4,634 |
Wholesale Receivables | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 47 | ||
Wholesale Receivables | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | 3,010 | ||
Wholesale Receivables | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 472 | ||
Wholesale Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 1 |
RECEIVABLES - Allowance for Cre
RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Allowance: | |||
Beginning of year balance | $ 184 | $ 150 | $ 178 |
Provision (credit) | (18) | ||
Provision | 110 | 35 | |
Write-offs | (88) | (118) | (105) |
Recoveries | 56 | 47 | 49 |
Translation adjustments | 1 | ||
Translation adjustments | (5) | (7) | |
End of year balance | 166 | 184 | 150 |
Financing receivables: | |||
End of year balance | $ 38,624 | $ 34,637 | 33,728 |
Allowance for credit losses as a percentage of financing receivables outstanding | 0.43% | 0.53% | |
Cumulative Effect from Adoption | ASU 2016-13 | |||
Allowance: | |||
Beginning of year balance | $ 31 | ||
End of year balance | $ 31 | ||
Retail Customer Receivables | |||
Financing receivables: | |||
End of year balance | 36,058 | 31,108 | |
Retail Notes and Financing Leases | |||
Allowance: | |||
Beginning of year balance | 133 | 107 | 129 |
Provision | 81 | 6 | |
Write-offs | (60) | (65) | (47) |
Recoveries | 20 | 17 | 23 |
Translation adjustments | 1 | ||
Translation adjustments | (7) | (4) | |
End of year balance | 138 | 133 | 107 |
Financing receivables: | |||
End of year balance | 32,233 | 27,206 | 25,151 |
Retail Notes and Financing Leases | Cumulative Effect from Adoption | ASU 2016-13 | |||
Allowance: | |||
Beginning of year balance | 44 | ||
End of year balance | 44 | ||
Revolving Charge Accounts | |||
Allowance: | |||
Beginning of year balance | 43 | 40 | 43 |
Provision (credit) | (17) | ||
Provision | 26 | 29 | |
Write-offs | (28) | (53) | (58) |
Recoveries | 36 | 30 | 26 |
End of year balance | 21 | 43 | 40 |
Financing receivables: | |||
End of year balance | 3,825 | 3,902 | 3,943 |
Revolving Charge Accounts | Cumulative Effect from Adoption | ASU 2016-13 | |||
Allowance: | |||
Beginning of year balance | (13) | ||
End of year balance | (13) | ||
Wholesale Receivables | |||
Allowance: | |||
Beginning of year balance | 8 | 3 | 6 |
Provision (credit) | (1) | ||
Provision | 3 | ||
Translation adjustments | 2 | (3) | |
End of year balance | 7 | 8 | 3 |
Financing receivables: | |||
End of year balance | $ 2,566 | $ 3,529 | $ 4,634 |
RECEIVABLES - Troubled Debt Res
RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021USD ($)item | Nov. 01, 2020USD ($)item | Nov. 03, 2019USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | |||
Financing receivable contracts in troubled debt restructuring, number | item | 397 | 574 | 522 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 18 | $ 108 | $ 36 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 17 | $ 95 | $ 35 |
Commitments to lend additional funds to customers whose accounts were modified in troubled debt restructurings | $ 0 |
RECEIVABLES - Other (Details)
RECEIVABLES - Other (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Other Receivables: | ||
Taxes receivable | $ 1,436 | $ 931 |
Other | 302 | 289 |
Other receivables | $ 1,738 | $ 1,220 |
SECURITIZATION OF FINANCING R_3
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 28, 2021 | Oct. 31, 2021 | Nov. 01, 2020 | |
Securitization Transactions | |||
Short-term securitization borrowings | $ 4,605 | $ 4,682 | |
Accrued interest on borrowings - securitization transactions | 2 | 3 | |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,607 | 4,685 | |
Maximum remaining term of all restricted securitized retail notes | 7 years | ||
Unconsolidated conduits, carrying value of liabilities | $ 65,680 | 62,147 | |
Securitized | |||
Securitization Transactions | |||
Financing receivables securitized (retail notes) | 4,673 | 4,716 | |
Allowance for credit losses - securitization transactions | (14) | (13) | |
Other assets - securitization transactions | 107 | 98 | |
Total restricted securitized assets - securitization transactions | 4,766 | 4,801 | |
Bank Conduit Facility Revolving Credit Agreement | |||
Securitization Transactions | |||
Bank conduit facility capacity | 2,000 | ||
Subsequent Event | Bank Conduit Facility Revolving Credit Agreement | |||
Securitization Transactions | |||
Bank conduit facility capacity | $ 1,000 | ||
Repurchase of short-term securitization borrowings | $ 511 | ||
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 3,094 | 2,898 | |
Total liabilities related to restricted securitized assets - securitization transactions | 3,024 | 2,856 | |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 496 | 576 | |
Total liabilities related to restricted securitized assets - securitization transactions | 470 | 554 | |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 1,176 | 1,327 | |
Total liabilities related to restricted securitized assets - securitization transactions | 1,113 | $ 1,275 | |
Unconsolidated conduits, carrying value of liabilities | 1,113 | ||
Unconsolidated conduits, maximum exposure to loss | 1,176 | ||
Total Assets | $ 40,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Oct. 31, 2021 | |
INVENTORIES | ||
Gross inventories on LIFO basis expressed as percentage of worldwide gross inventories at FIFO | 52.00% | 54.00% |
Pretax favorable income effect from the liquidation of LIFO inventory | $ 33 | |
Raw materials and supplies | 1,995 | $ 3,524 |
Work-in-process | 648 | 994 |
Finished goods and parts | 4,006 | 4,373 |
Total FIFO value | 6,649 | 8,891 |
Less adjustment to LIFO value | 1,650 | 2,110 |
Inventories | $ 4,999 | $ 6,781 |
PROPERTY AND DEPRECIATION (Deta
PROPERTY AND DEPRECIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Summary of property and equipment | |||
Property and equipment - net | $ 5,820 | $ 5,817 | $ 5,973 |
Property and equipment, additions | 897 | 815 | 1,107 |
Depreciation | 830 | 800 | 779 |
Capitalized interest | 3 | 6 | 7 |
Leased property and equipment under finance leases, at cost | 131 | 99 | |
Accumulated depreciation on leased property and equipment under finance leases | $ 60 | 36 | |
Capitalized computer software estimated useful life | 3 years | ||
Capitalized software costs, including purchased and internally developed software | $ 1,326 | 1,339 | |
Capitalized software, accumulated amortization | 1,044 | 1,070 | |
Capitalized interest on software | 2 | 3 | |
Amortization of capitalized computer software costs | 121 | 133 | $ 150 |
Equipment Operations | |||
Summary of property and equipment | |||
Total property and equipment at cost | 14,074 | 13,549 | |
Less accumulated depreciation | 8,291 | 7,771 | |
Property and equipment - net | 5,783 | 5,778 | |
Equipment Operations | Land | |||
Summary of property and equipment | |||
Total property and equipment at cost | $ 293 | 282 | |
Equipment Operations | Buildings and Building Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 22 years | ||
Total property and equipment at cost | $ 4,287 | 4,114 | |
Equipment Operations | Machinery and Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 11 years | ||
Total property and equipment at cost | $ 6,123 | 5,936 | |
Equipment Operations | Dies, Patterns, Tools, etc | |||
Summary of property and equipment | |||
Weighted-average useful lives | 8 years | ||
Total property and equipment at cost | $ 1,679 | 1,662 | |
Equipment Operations | All Other | |||
Summary of property and equipment | |||
Weighted-average useful lives | 5 years | ||
Total property and equipment at cost | $ 1,165 | 1,115 | |
Equipment Operations | Construction in Progress | |||
Summary of property and equipment | |||
Total property and equipment at cost | 527 | 440 | |
Financial Services | |||
Summary of property and equipment | |||
Total property and equipment at cost | 101 | 103 | |
Less accumulated depreciation | 64 | 64 | |
Property and equipment - net | 37 | 39 | |
Financial Services | Land | |||
Summary of property and equipment | |||
Total property and equipment at cost | $ 4 | 4 | |
Financial Services | Buildings and Building Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 26 years | ||
Total property and equipment at cost | $ 65 | 65 | |
Financial Services | All Other | |||
Summary of property and equipment | |||
Weighted-average useful lives | 6 years | ||
Total property and equipment at cost | $ 32 | $ 34 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 3,081 | $ 2,917 |
Acquisitions (Note 4) | 201 | 28 |
Translation adjustments and other | 9 | 136 |
Goodwill - net, ending balance | 3,291 | 3,081 |
Accumulated goodwill impairment losses | 0 | 0 |
Production & Precision Ag (PPA) | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 333 | 310 |
Acquisitions (Note 4) | 201 | 28 |
Translation adjustments and other | 8 | (5) |
Goodwill - net, ending balance | 542 | 333 |
Small Ag & Turf (SAT) | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 268 | 264 |
Translation adjustments and other | (3) | 4 |
Goodwill - net, ending balance | 265 | 268 |
Construction & Forestry (CF) | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 2,480 | 2,343 |
Translation adjustments and other | 4 | 137 |
Goodwill - net, ending balance | $ 2,484 | $ 2,480 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Amortized intangible assets: | ||
Total at cost | $ 1,646 | $ 1,591 |
Total accumulated amortization | 494 | 387 |
Amortized intangible assets - net | 1,152 | 1,204 |
Unamortized intangible assets: | ||
Other intangible assets - net | 1,275 | 1,327 |
Customer Lists and Relationships | ||
Amortized intangible assets: | ||
Total at cost | 542 | 535 |
Total accumulated amortization | 151 | 113 |
Technology, Patents, Trademarks and Other | ||
Amortized intangible assets: | ||
Total at cost | 1,104 | 1,056 |
Total accumulated amortization | 343 | 274 |
In-process Research and Development | ||
Unamortized intangible assets: | ||
Unamortized intangible assets | $ 123 | $ 123 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Amortized Intangible Assets: | |||
Amortization expense of other intangible assets | $ 116 | $ 102 | $ 109 |
Amortization expense of other intangible assets - 2022 | 113 | ||
Amortization expense of other intangible assets - 2023 | 112 | ||
Amortization expense of other intangible assets - 2024 | 108 | ||
Amortization expense of other intangible assets - 2025 | 105 | ||
Amortization expense of other intangible assets - 2026 | $ 103 |
TOTAL SHORT-TERM BORROWINGS (De
TOTAL SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Short-term borrowings | ||
Short-term borrowings | $ 10,919 | $ 8,582 |
Short-term securitization borrowings | 4,605 | 4,682 |
Total short-term borrowings | $ 15,524 | $ 13,264 |
Weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings (as a percent) | 0.90% | 1.60% |
Equipment Operations | ||
Short-term borrowings | ||
Short-term borrowings | $ 1,509 | $ 292 |
Short-term securitization borrowings | 10 | 26 |
Equipment Operations | Notes Payable to Banks | ||
Short-term borrowings | ||
Short-term borrowings | 273 | 192 |
Equipment Operations | Finance Lease Obligations Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | 23 | 21 |
Equipment Operations | Long-term Borrowings Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | 1,213 | 79 |
Financial Services | ||
Short-term borrowings | ||
Short-term borrowings | 9,410 | 8,290 |
Short-term securitization borrowings | 4,595 | 4,656 |
Financial Services | Commercial Paper | ||
Short-term borrowings | ||
Short-term borrowings | 2,230 | 1,238 |
Financial Services | Notes Payable to Banks | ||
Short-term borrowings | ||
Short-term borrowings | 63 | 182 |
Financial Services | Long-term Borrowings Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | 7,117 | $ 6,870 |
Financial Services | Short-term securitization borrowings | ||
Short-term borrowings | ||
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2022 | 2,556 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2023 | 1,150 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2024 | 623 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2025 | 231 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2026 | 44 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, later years | $ 6 |
TOTAL SHORT-TERM BORROWINGS - O
TOTAL SHORT-TERM BORROWINGS - Other (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2021USD ($) | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 8,336 |
Lines of credit unused | $ 5,770 |
Agreement with Capital Corporation | |
Minimum ownership percentage of Capital Corporation's capital stock | 51.00% |
Minimum consolidated tangible net worth of Capital Corporation to be maintained | $ 50 |
Minimum ratio of earnings to fixed charges to be maintained (as a percent) | 1.05 |
Ownership percentage of Capital Corporation's capital stock | 100.00% |
Consolidated tangible net worth of Capital Corporation | $ 4,524 |
Capital Corporation | |
Line of Credit Facility | |
Consolidated ratio of earnings to fixed charges required by the credit agreements, minimum at the end of each fiscal quarter (as a percent) | 1.05 |
Ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder's equity excluding accumulated other comprehensive income (loss)) required by the credit agreements, maximum at the end of any fiscal quarter (as a percent) | 11 |
Equipment Operations | |
Line of Credit Facility | |
Ratio of total debt to total capital (total debt and stockholders' equity excluding accumulated other comprehensive income (loss)) required by the credit agreements, maximum at the end of each fiscal quarter (as a percent) | 65.00% |
Excess equity capacity and retained earnings balance free of restriction | $ 15,388 |
Additional debt capacity | 28,579 |
364-Day Credit Facilities Expiring April, 2022 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 3,000 |
Line of Credit Facilities Expiring April, 2025 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 2,500 |
Line of Credit Facilities Expiring March , 2026 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 2,500 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 02, 2020 | Nov. 01, 2020 |
Accounts payable: | |||
Operating lease liabilities | $ 279 | $ 305 | |
Collateral on derivatives | 274 | ||
Accrued expenses: | |||
Unearned revenue | 1,344 | 1,090 | |
Total | 12,205 | $ 10,126 | 10,112 |
Eliminations | |||
Accrued expenses: | |||
Total | (865) | (1,129) | |
Eliminations | Trade Accounts and Notes Receivable | |||
Accrued expenses: | |||
Trade receivable valuation accounts related to sales incentive accruals | (836) | (1,073) | |
Equipment Operations | |||
Accounts payable: | |||
Trade payables | 2,967 | 1,926 | |
Dividends payable | 329 | 244 | |
Operating lease liabilities | 279 | 297 | |
Other | 155 | 251 | |
Accrued expenses: | |||
Dealer sales discounts | 1,636 | 1,682 | |
Product warranties | 1,312 | 1,105 | |
Unearned revenue | 825 | 679 | |
Employee benefits | 1,448 | 1,086 | |
Accrued taxes | 933 | 730 | |
Other | 1,171 | 1,114 | |
Total | 11,055 | 9,114 | |
Financial Services | |||
Accounts payable: | |||
Deposits withheld from dealers and merchants | 157 | 141 | |
Collateral on derivatives | 274 | ||
Other | 210 | 194 | |
Accrued expenses: | |||
Accrued interest | 165 | 181 | |
Unearned revenue | 1,013 | 968 | |
Employee benefits | 83 | 60 | |
Other | 387 | 309 | |
Total | $ 2,015 | $ 2,127 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) € in Millions, $ in Millions | Oct. 31, 2021USD ($) | Oct. 31, 2021EUR (€) | Nov. 01, 2020USD ($) | Nov. 01, 2020EUR (€) |
Long-term borrowings | ||||
Total long-term borrowings | $ 32,888 | $ 32,734 | ||
Equipment Operations | ||||
Long-term borrowings | ||||
Less debt issuance costs and debt discounts | (54) | (61) | ||
Total long-term borrowings | 8,915 | 10,124 | ||
Principal Amounts of Long-Term Borrowings Maturing In Next Five Years | ||||
2022 | 1,214 | |||
2023 | 585 | |||
2024 | 935 | |||
2025 | 700 | |||
2026 | 0 | |||
Equipment Operations | 8-1/2% Debentures Due 2022 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 105 | |||
Debt instrument, stated interest rate | 8.50% | 8.50% | ||
Equipment Operations | 2.60% Notes Due 2022 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 1,000 | |||
Debt instrument, stated interest rate | 2.60% | 2.60% | ||
Equipment Operations | 2.75% Notes Due 2025 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 700 | $ 700 | ||
Debt instrument, stated interest rate | 2.75% | 2.75% | 2.75% | 2.75% |
Equipment Operations | 6.55% Debentures Due 2028 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 200 | $ 200 | ||
Debt instrument, stated interest rate | 6.55% | 6.55% | 6.55% | 6.55% |
Equipment Operations | 5.375% Notes Due 2029 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 500 | $ 500 | ||
Debt instrument, stated interest rate | 5.375% | 5.375% | 5.375% | 5.375% |
Equipment Operations | 3.10% Notes Due 2030 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 700 | $ 700 | ||
Debt instrument, stated interest rate | 3.10% | 3.10% | 3.10% | 3.10% |
Equipment Operations | 8.10% Debentures Due 2030 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 250 | $ 250 | ||
Debt instrument, stated interest rate | 8.10% | 8.10% | 8.10% | 8.10% |
Equipment Operations | 7.125% Notes Due 2031 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 300 | $ 300 | ||
Debt instrument, stated interest rate | 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 | ||
Debt instrument, stated interest rate | 3.90% | 3.90% | 3.90% | 3.90% |
Equipment Operations | 2.875% Notes Due 2049 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 500 | $ 500 | ||
Debt instrument, stated interest rate | 2.875% | 2.875% | 2.875% | 2.875% |
Equipment Operations | 3.75% Notes Due 2050 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 850 | $ 850 | ||
Debt instrument, stated interest rate | 3.75% | 3.75% | 3.75% | 3.75% |
Equipment Operations | .5% Notes Due 2023 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 584 | $ 584 | ||
Debt instrument, stated interest rate | 0.50% | 0.50% | 0.50% | 0.50% |
Principal amount | € | € 500 | € 500 | ||
Equipment Operations | 1.375% Notes Due 2024 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 934 | $ 934 | ||
Debt instrument, stated interest rate | 1.375% | 1.375% | 1.375% | 1.375% |
Principal amount | € | € 800 | € 800 | ||
Equipment Operations | 1.85% Notes Due 2028 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 701 | $ 700 | ||
Debt instrument, stated interest rate | 1.85% | 1.85% | 1.85% | 1.85% |
Principal amount | € | € 600 | € 600 | ||
Equipment Operations | 2.20% Notes Due 2032 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 701 | $ 700 | ||
Debt instrument, stated interest rate | 2.20% | 2.20% | 2.20% | 2.20% |
Principal amount | € | € 600 | € 600 | ||
Equipment Operations | 1.65% Notes Due 2039 | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 759 | $ 759 | ||
Debt instrument, stated interest rate | 1.65% | 1.65% | 1.65% | 1.65% |
Principal amount | € | € 650 | € 650 | ||
Equipment Operations | Other Notes | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 40 | $ 153 | ||
Financial Services | ||||
Long-term borrowings | ||||
Less debt issuance costs and debt discounts | (64) | (54) | ||
Total long-term borrowings | 23,973 | 22,610 | ||
Principal Amounts of Long-Term Borrowings Maturing In Next Five Years | ||||
2022 | 7,120 | |||
2023 | 6,834 | |||
2024 | 6,089 | |||
2025 | 2,305 | |||
2026 | 3,373 | |||
Financial Services | Medium-term notes | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | 22,899 | 21,661 | ||
Principal amount | $ 22,647 | $ 20,996 | ||
Average interest rates | 1.20% | 1.20% | 1.70% | 1.70% |
Financial Services | Other Notes | ||||
Long-term borrowings | ||||
Long-term borrowings, gross | $ 1,138 | $ 1,003 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
Historical claims rate, review period | 5 years | |
Unamortized extended warranty premiums (deferred revenue) | $ 774 | $ 638 |
Change in Warranty Liability and Unearned Premiums | ||
Beginning of year balance | 1,743 | 1,800 |
Payments | (864) | (942) |
Amortization of premiums received | (227) | (222) |
Accruals for warranties | 1,071 | 851 |
Premiums received | 358 | 276 |
Foreign exchange | 5 | (20) |
End of year balance | $ 2,086 | $ 1,743 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2021USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 254 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 68 |
Miscellaneous contingent liabilities | 75 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 409 |
Guarantee obligations accrued losses | $ 6 |
Guarantee obligations term | 6 years |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Commitments to Extend Credit (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2021USD ($) | |
Commitments to Extend Credit | |
Provision for credit losses | $ (18) |
Commitments to Extend Credit | |
Commitments to Extend Credit | |
Provision for credit losses | 2 |
Wholesale Receivables | |
Commitments to Extend Credit | |
Unused commitments to extend credit | 14,000 |
Provision for credit losses | (1) |
Retail Customer Receivables | |
Commitments to Extend Credit | |
Unused commitments to extend credit | $ 30,000 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 31, 2021USD ($)item$ / sharesshares | Nov. 01, 2020USD ($)$ / sharesshares | Nov. 03, 2019USD ($)$ / sharesshares | |
Common stock | |||
Common stock, par value (in dollars per share) | $ / shares | $ 1 | $ 1 | |
Number of holders of record of the company's $1 par value common stock | item | 18,466 | ||
Common stock, authorized (in shares) | 1,200,000,000 | 1,200,000,000 | |
Common stock, issued (in shares) | 536,431,204 | 536,431,204 | 536,400,000 |
Preferred Shares | |||
Preferred stock, issued (in shares) | 0 | ||
Preferred stock, authorized (in shares) | 9,000,000 | ||
Common stock repurchase plans | |||
Common stock shares remaining to be repurchased under repurchase plan (in dollars) | $ | $ 5,811 | ||
Common stock shares remaining to be repurchased under repurchase plan (in shares) | 17,000,000 | ||
Price per share (in dollars per share) | $ / shares | $ 342.31 | ||
Reconciliation of Basic and Diluted Net Income Per Share | |||
Net income attributable to Deere & Company | $ | $ 5,963 | $ 2,751 | $ 3,253 |
Average shares outstanding | 311,600,000 | 313,500,000 | 316,500,000 |
Basic per share (in dollars per share) | $ / shares | $ 19.14 | $ 8.77 | $ 10.28 |
Diluted Earnings Per Share | |||
Average shares outstanding | 311,600,000 | 313,500,000 | 316,500,000 |
Effect of dilutive stock options (in shares) | 2,400,000 | 3,100,000 | 4,100,000 |
Total potential shares outstanding | 314,000,000 | 316,600,000 | 320,600,000 |
Diluted per share (in dollars per share) | $ / shares | $ 18.99 | $ 8.69 | $ 10.15 |
Antidilutive incremental shares related to share-based compensation excluded from computation of earnings per share | 600,000 | 700,000 | |
December 2019 Plan | |||
Common stock repurchase plans | |||
Repurchase of common stock shares, maximum authorization (in dollars) | $ | $ 8,000 |
STOCK OPTION AND RESTRICTED S_3
STOCK OPTION AND RESTRICTED STOCK AWARDS - Stock Option Activity and Assumptions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Number of additional shares authorized for grant related to stock options or restricted stock | 17.7 | ||
Stock Option Activity - Aggregate Intrinsic Value | |||
Cash received from stock option exercises | $ 148 | $ 331 | $ 178 |
Stock Options | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Options term after date of grant | 10 years | ||
Assumptions used for the binomial lattice model to determine the fair value of options | |||
Risk-free interest rate, (as a percent) | 0.47% | 1.67% | 2.85% |
Expected dividends (as a percent) | 1.20% | 1.80% | 2.00% |
Weighted-average volatility (as a percent) | 31.00% | 26.00% | 30.00% |
Expected term | 5 years 6 months | 5 years 8 months 12 days | 8 years 2 months 12 days |
Stock Option Activity - Shares | |||
Outstanding at beginning of year (in shares) | 3.7 | ||
Granted (in shares) | 0.3 | ||
Exercised (in shares) | (1.5) | ||
Outstanding at end of year (in shares) | 2.5 | 3.7 | |
Exercisable at end of year (in shares) | 1.9 | ||
Stock Option Activity - Exercise Price, Weighted-averages | |||
Outstanding, weighted average exercise price at beginning of year (in dollars per share) | $ 107.30 | ||
Granted, weighted average exercise price (in dollars per share) | 254.83 | ||
Exercised, weighted average exercise price (in dollars per share) | 99.38 | ||
Outstanding, weighted average exercise price at end of year (in dollars per share) | 127.82 | $ 107.30 | |
Exercisable, weighted average exercise price at end of year (in dollars per share) | $ 103.25 | ||
Stock Option Activity - Remaining Contractual Term (Years) | |||
Outstanding at end of year, Remaining Contractual Term | 5 years 25 days | ||
Exercisable at end of year, Remaining Contractual Term | 4 years | ||
Stock Option Activity - Aggregate Intrinsic Value | |||
Outstanding at end of year, Aggregate Intrinsic Value | $ 527.3 | ||
Exercisable at end of year, Aggregate Intrinsic Value | $ 445 | ||
Weighted-average grant-date fair values of options granted (in dollars per share) | $ 62.73 | $ 35.83 | $ 46.96 |
Total intrinsic values of options exercised | $ 318 | $ 398 | $ 186 |
Cash received from stock option exercises | 148 | 331 | 178 |
Tax benefits, exercise of stock options | $ 71 | $ 93 | $ 44 |
Stock Options | Minimum | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 1 year | ||
Stock Options | Maximum | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 3 years | ||
Restricted Stock Units | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 3 years |
STOCK OPTION AND RESTRICTED S_4
STOCK OPTION AND RESTRICTED STOCK AWARDS - Other (Details) - $ / shares shares in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Restricted Stock Units Subject to Service-based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 0.2 | ||
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 258.86 | $ 168.94 | $ 149.54 |
Restricted Stock Units Subject to Performance/Service-based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 0.1 | ||
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 245.73 | $ 160.81 | $ 140.49 |
Restricted Stock Units Subject to Performance/Service-based Conditions | Minimum | |||
Share-based Compensation, Aggregate Disclosures | |||
Percent of common stock that may be awarded based on metric | 0.00% | ||
Restricted Stock Units Subject to Performance/Service-based Conditions | Maximum | |||
Share-based Compensation, Aggregate Disclosures | |||
Percent of common stock that may be awarded based on metric | 200.00% |
STOCK OPTION AND RESTRICTED S_5
STOCK OPTION AND RESTRICTED STOCK AWARDS - Restricted Stock Units and Changes (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Share-based Compensation - General Disclosures | |||
Total share-based compensation expense | $ 82 | $ 81 | $ 82 |
Recognized income tax benefits | 16 | 19 | 20 |
Total unrecognized compensation cost from share-based compensation related to restricted shares and options | $ 63 | ||
Weighted-average period during which unrecognized compensation is expected to be recognized | 2 years | ||
Total grant-date fair values of stock options and restricted shares vested | $ 93 | $ 79 | $ 66 |
Restricted Stock Units Subject to Service-based Conditions | |||
Restricted Shares - Shares | |||
Nonvested at beginning of year (in shares) | 0.9 | ||
Granted (in shares) | 0.2 | ||
Vested (in shares) | (0.5) | ||
Forfeited (in shares) | (0.1) | ||
Nonvested at end of year (in shares) | 0.5 | 0.9 | |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Nonvested weighted-average grant-date fair value, at beginning of year (in dollars per share) | $ 155.47 | ||
Granted, weighted-average grant-date fair value (in dollars per share) | 258.86 | $ 168.94 | $ 149.54 |
Vested, weighted-average grant-date fair value (in dollars per share) | 190.87 | ||
Forfeited, weighted average grant-date fair value (in dollars per share) | 163.16 | ||
Nonvested weighted-average grant-date fair value, at end of year (in dollars per share) | $ 190.87 | $ 155.47 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | |||
Restricted Shares - Shares | |||
Nonvested at beginning of year (in shares) | 0.2 | ||
Granted (in shares) | 0.1 | ||
Vested (in shares) | (0.2) | ||
Performance change (in shares) | 0.1 | ||
Nonvested at end of year (in shares) | 0.2 | 0.2 | |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Nonvested weighted-average grant-date fair value, at beginning of year (in dollars per share) | $ 147.55 | ||
Granted, weighted-average grant-date fair value (in dollars per share) | 245.73 | $ 160.81 | $ 140.49 |
Vested, weighted-average grant-date fair value (in dollars per share) | 145.16 | ||
Performance change, weighted-average grant-date fair value (in dollars per share) | 144.98 | ||
Nonvested weighted-average grant-date fair value, at end of year (in dollars per share) | $ 171.82 | $ 147.55 |
OTHER COMPREHENSIVE INCOME IT_3
OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Components (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | $ 18,431 | $ 12,937 | |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (2,539) | (5,539) | $ (5,607) |
Retirement Benefits Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (1,034) | (3,918) | (3,915) |
Cumulative Translation Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (1,478) | (1,596) | (1,651) |
Unrealized Gain (Loss) on Derivatives | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (42) | (58) | (60) |
Unrealized Gain (Loss) on Debt Securities | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | $ 15 | $ 33 | $ 19 |
OTHER COMPREHENSIVE INCOME IT_4
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Other Comprehensive Income (Loss), Before Tax | |||
Interest expense | $ (993) | $ (1,247) | $ (1,466) |
Equity in (income) loss of unconsolidated affiliates | 21 | (48) | 21 |
Total other comprehensive income (loss), before tax | 3,923 | 83 | (1,435) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Total other comprehensive income (loss), tax (expense) credit | (923) | (15) | 263 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss), net of income taxes | 3,000 | 68 | (1,172) |
Cumulative Translation Adjustment | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 112 | 18 | |
Total other comprehensive income (loss), before tax | 118 | 54 | (447) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 1 | ||
Total other comprehensive income (loss), tax (expense) credit | 1 | (1) | |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 112 | 19 | |
Other comprehensive income (loss), net of income taxes | 118 | 55 | (448) |
Cumulative Translation Adjustment | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other Operating Expenses | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expenses | 13 | ||
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 13 | ||
Cumulative Translation Adjustment | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Equity in (Income) Loss of Unconsolidated Affiliates | |||
Other Comprehensive Income (Loss), Before Tax | |||
Equity in (income) loss of unconsolidated affiliates | 6 | 23 | |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 6 | 23 | |
Unrealized Gain (Loss) on Derivatives | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 8 | (18) | (92) |
Total other comprehensive income (loss), before tax | 21 | 3 | (97) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (2) | 2 | 21 |
Total other comprehensive income (loss), tax (expense) credit | (5) | (1) | 22 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 6 | (16) | (71) |
Other comprehensive income (loss), net of income taxes | 16 | 2 | (75) |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Interest expense | 13 | 21 | (5) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (3) | (3) | 1 |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 10 | 18 | (4) |
Unrealized Gain (Loss) on Debt Securities | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | (21) | 17 | 36 |
Total other comprehensive income (loss), before tax | (21) | 17 | 36 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 3 | (3) | (7) |
Total other comprehensive income (loss), tax (expense) credit | 3 | (3) | (7) |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | (18) | 14 | 29 |
Other comprehensive income (loss), net of income taxes | (18) | 14 | 29 |
Retirement Benefits Adjustment | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 3,492 | (302) | (1,028) |
Total other comprehensive income (loss), before tax | 3,805 | 9 | (927) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (845) | 65 | 274 |
Total other comprehensive income (loss), tax (expense) credit | (921) | (12) | 249 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 2,647 | (237) | (754) |
Other comprehensive income (loss), net of income taxes | 2,884 | (3) | (678) |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expenses | 283 | 278 | 159 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (69) | (68) | (39) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 214 | 210 | 120 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expenses | 8 | 7 | (61) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (2) | (2) | 15 |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 6 | 5 | (46) |
Settlements | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expenses | 22 | 26 | 3 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (5) | (7) | (1) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | $ 17 | $ 19 | $ 2 |
LEASES - Lease Terms (Details)
LEASES - Lease Terms (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Lessee | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Lessee, Finance Lease, Existence of Option to Extend [true false] | true |
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
Lessee, Finance Lease, Existence of Option to Terminate [true false] | true |
Minimum | |
Lessee | |
Expected use period under lease | 1 year |
Renewal Term | 1 year |
Lessor | |
Financial Services segment lease period | 1 year |
Maximum | |
Lessee | |
Expected use period under lease | 20 years |
Renewal Term | 10 years |
Lessor | |
Financial Services segment lease period | 7 years |
LEASES - Lease Expense By Type
LEASES - Lease Expense By Type - (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Lease Expense by Type | ||
Operating lease expense | $ 116 | $ 126 |
Short-term lease expense | 29 | 23 |
Variable lease expense | 53 | 41 |
Finance lease: | ||
Depreciation expense | 26 | 20 |
Interest on lease liabilities | 1 | 2 |
Total lease expense | $ 225 | $ 212 |
LEASES - Lease Right of Use Ass
LEASES - Lease Right of Use Assets and Liabilities - (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Lessee | ||
Operating leases - Other assets | $ 291 | $ 324 |
Operating lease, right-of-use asset, Consolidated Balance Sheet location | Other assets | Other assets |
Operating leases - Accounts payable and accrued expenses | $ 279 | $ 305 |
Operating lease, liability, Consolidated Balance Sheet location | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Finance leases - Property and equipment - net | $ 71 | $ 63 |
Finance lease, right-of-use asset, Consolidated Balance Sheet location | Property and equipment - net | Property and equipment - net |
Finance leases - Short-term borrowings | $ 23 | $ 21 |
Finance lease, liability, short-term, Consolidated Balance Sheet location | Short-term borrowings | Short-term borrowings |
Finance leases - Long-term borrowings | $ 38 | $ 39 |
Finance lease, liability, long-term, Consolidated Balance Sheet location | Long-term borrowings | Long-term borrowings |
Total finance lease liabilities | $ 61 | $ 60 |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term and Discount Rates - (Details) | Oct. 31, 2021 | Nov. 01, 2020 |
Lessee | ||
Weighted-average remaining lease term - operating leases | 5 years | 5 years |
Weighted-average remaining lease term - finance leases | 2 years | 3 years |
Weighted-average discount rate - operating leases (as a percent) | 2.30% | 2.10% |
Weighted-average discount rate - finance leases (as a percent) | 2.30% | 2.20% |
LEASES - Lease Payments - (Deta
LEASES - Lease Payments - (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Operating Leases | ||
2022 | $ 83 | |
2023 | 69 | |
2024 | 54 | |
2025 | 32 | |
2026 | 15 | |
Later years | 41 | |
Total lease payments | 294 | |
Less imputed interest | 15 | |
Total operating lease liabilities | 279 | $ 305 |
Finance Leases | ||
2022 | 25 | |
2023 | 19 | |
2024 | 11 | |
2025 | 5 | |
2026 | 1 | |
Later years | 3 | |
Total lease payments | 64 | |
Less imputed interest | 3 | |
Total finance lease liabilities | $ 61 | $ 60 |
LEASES - Right of Use Assets Ob
LEASES - Right of Use Assets Obtained in Exchange for Lease Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Cash Paid Amounts Included in the Measurement of Lease Liabilities | ||
Operating cash flows from operating leases | $ 104 | $ 124 |
Operating cash flows from finance leases | 1 | 2 |
Financing cash flows from finance leases | 25 | 17 |
Right of Use Assets Obtained in Exchange for Lease Liabilities | ||
Operating leases | 101 | 40 |
Finance leases | $ 27 | $ 46 |
LEASES - Lessor Lease Terms (De
LEASES - Lessor Lease Terms (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Nov. 01, 2020 | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Lessor | ||||
Sales-type lease early termination options | true | |||
Sales-type lease renewal options | true | |||
Sales-type lease option to purchase the underlying equipment | true | |||
Direct financing lease early termination options | true | |||
Direct financing lease renewal options | true | |||
Direct financing lease option to purchase the underlying equipment | true | |||
Operating lease early termination options | true | |||
Operating lease renewal options | true | |||
Operating lease option to purchase the underlying equipment | true | |||
Elected to combine lease and nonlease components | true | |||
Elected to report consideration related to sales and value added taxes net of the related tax expense | true | |||
COVID-19 | ||||
Lessor | ||||
Operating lease portfolio granted relief (as a percent) | 4.00% | 2.00% | 4.00% | |
Maximum | COVID-19 | ||||
Lessor | ||||
Lease payment deferral period | 3 months | |||
Other Operating Expenses | ||||
Lessor | ||||
Equipment on operating leases impairment, pretax | $ 22 | $ 59 | ||
Other Income | ||||
Lessor | ||||
Excess use and damage fees | $ 7 | $ 8 |
LEASES - Lease Revenues (Detail
LEASES - Lease Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Lessor | ||
Sales-type and direct finance lease revenues | $ 145 | $ 135 |
Operating lease revenues | 1,423 | 1,469 |
Variable lease revenues | 30 | 31 |
Total lease revenues | $ 1,598 | $ 1,635 |
LEASES - Sales-type and Direct
LEASES - Sales-type and Direct Financing Lease Receivables (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Sales-type and Direct Financing Lease Receivables | ||
Total sales-type and direct financing lease receivables | $ 2,415 | $ 2,015 |
Guaranteed residual values | 394 | 278 |
Unguaranteed residual values | 70 | 71 |
Less unearned finance income | (258) | (217) |
Financing lease receivables | 2,621 | 2,147 |
Agriculture and Turf | ||
Sales-type and Direct Financing Lease Receivables | ||
Total sales-type and direct financing lease receivables | 1,131 | 985 |
Construction and Forestry | ||
Sales-type and Direct Financing Lease Receivables | ||
Total sales-type and direct financing lease receivables | $ 1,284 | $ 1,030 |
LEASES - Scheduled Payments on
LEASES - Scheduled Payments on Sales-type and Direct Financing Leases Receivables (Details) $ in Millions | Oct. 31, 2021USD ($) |
Payments on Sales-type and Direct Financing Leases Receivables | |
2022 | $ 1,223 |
2023 | 712 |
2024 | 461 |
2025 | 229 |
2026 | 161 |
Later years | 23 |
Total | $ 2,809 |
LEASES - Cost of Equipment on O
LEASES - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | $ 8,933 | $ 9,287 | |
Less accumulated depreciation | (1,945) | (1,989) | |
Equipment on operating leases - net | 6,988 | 7,298 | |
Operating lease residual value | 5,025 | 5,254 | |
Operating lease residual value guarantees | 950 | 757 | |
Dealer deposits available for potential losses on residual values | 3 | 5 | |
Depreciation expense for equipment on operating leases | 983 | 1,083 | $ 981 |
Agriculture and Turf | |||
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | 7,317 | 7,366 | |
Construction and Forestry | |||
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | $ 1,616 | $ 1,921 |
LEASES - Lease Payments for Equ
LEASES - Lease Payments for Equipment on Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Lease Payments for Equipment on Operating Leases | ||
2022 | $ 1,027 | |
2023 | 693 | |
2024 | 409 | |
2025 | 207 | |
2026 | 50 | |
Later years | 6 | |
Total | $ 2,392 | |
Minimum number of days for an operating lease receivable to be considered past due | 30 days | |
Operating leases past due | $ 70 | $ 87 |
Matured operating lease inventory | $ 30 | 70 |
Other Operating Expenses | ||
Lease Payments for Equipment on Operating Leases | ||
Impairment losses on matured operating lease inventory | $ 10 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 02, 2020 | Nov. 01, 2020 |
Fair Values of Financial Instruments | |||
Financing receivables - net | $ 33,799 | $ 29,723 | $ 29,750 |
Financing receivables securitized - net | 4,659 | $ 4,699 | 4,703 |
Short-term securitization borrowings | 4,605 | 4,682 | |
Long-term borrowings | 32,888 | 32,734 | |
Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 8,364 | 7,014 | |
Long-term borrowings | 34,506 | 35,007 | |
Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 33,718 | 29,941 | |
Financing receivables securitized - net | 4,704 | 4,799 | |
Level 2 and Level 3 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,610 | 4,724 | |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 33,799 | 29,750 | |
Financing receivables securitized - net | 4,659 | 4,703 | |
Short-term securitization borrowings | 4,605 | 4,682 | |
Long-term borrowings due within one year | 8,330 | 6,949 | |
Long-term borrowings | 32,850 | 32,695 | |
Equipment Operations | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 10 | 26 | |
Long-term borrowings | 8,915 | 10,124 | |
Equipment Operations | Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 1,222 | 78 | |
Long-term borrowings | 10,244 | 11,837 | |
Equipment Operations | Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 68 | 103 | |
Financing receivables securitized - net | 10 | 26 | |
Short-term securitization borrowings | 10 | 26 | |
Equipment Operations | Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 73 | 105 | |
Financing receivables securitized - net | 10 | 26 | |
Short-term securitization borrowings | 10 | 26 | |
Long-term borrowings due within one year | 1,213 | 79 | |
Long-term borrowings | 8,877 | 10,085 | |
Financial Services | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,595 | 4,656 | |
Long-term borrowings | 23,973 | 22,610 | |
Financial Services | Level 2 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,600 | 4,698 | |
Long-term borrowings due within one year | 7,142 | 6,936 | |
Long-term borrowings | 24,262 | 23,170 | |
Financial Services | Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 33,650 | 29,838 | |
Financing receivables securitized - net | 4,694 | 4,773 | |
Financial Services | Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 33,726 | 29,645 | |
Financing receivables securitized - net | 4,649 | 4,677 | |
Short-term securitization borrowings | 4,595 | 4,656 | |
Long-term borrowings due within one year | 7,117 | 6,870 | |
Long-term borrowings | $ 23,973 | $ 22,610 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2021 | Nov. 01, 2020 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | $ 728 | $ 641 |
Derivative assets | 275 | 725 |
Derivative liabilities | 228 | 115 |
Unrealized gains on equity securities | 22 | 7 |
Other Assets Member | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 275 | 725 |
Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative liabilities | 228 | 115 |
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 | 136 | 119 |
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 | 75 | 62 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | International Equity Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 2 | 2 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 59 | 55 |
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 | 592 | 518 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Other Assets Member | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 275 | 725 |
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 | 228 | 115 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets Member | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 239 | 669 |
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 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets Member | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 31 | 48 |
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 | 94 | 26 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets Member | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 5 | 8 |
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 | 139 | 113 |
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 | 73 | 68 |
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 | 224 | 188 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Marketable securities | 2 | 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 | $ 154 | 147 |
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 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | Jan. 31, 2021 | Aug. 02, 2020 | May 03, 2020 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||||
Other receivables | $ 1,738 | $ 1,220 | ||||
Equipment on operating leases - net | 6,988 | 7,298 | ||||
Fair Value, Nonrecurring Measurements | Level 3 | ||||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||||
Other receivables | $ 1 | |||||
Losses, Other receivables | 2 | |||||
Equipment on operating leases - net | $ 371 | |||||
Losses, Equipment on operating leases - net | 22 | $ 59 | ||||
Property and equipment - net | 135 | $ 41 | ||||
Losses, Property and equipment - net | 44 | 102 | ||||
Property and Equipment - net, alternate measurement date value | 57 | 41 | $ 8 | 70 | ||
Investments in unconsolidated affiliates | 19 | |||||
Losses, Investments in unconsolidated affiliates | 50 | |||||
Losses, Other intangible assets - net | 2 | |||||
Other assets | $ 1 | $ 59 | ||||
Losses, Other assets | $ 6 | $ 16 | $ 18 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
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 | |||
Cash flow hedges, recognized in OCI | 8 | $ (18) | $ (92) |
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | $ 2,700 | $ 1,550 | |
Interest Rate Contracts | 2.875% Notes Due 2049 | |||
Cash Flow Hedges | |||
Maximum maturity of terminated cash flow interest rate contract | 30 years | ||
Cash flow hedges, recognized in OCI | $ (70) |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Fair Value Hedges Member | Designated as Hedging Instruments | ||
Fair Value Hedges | ||
Notional amount of interest rate fair value hedge derivatives | $ 8,043 | $ 7,239 |
Long-term Borrowings Due in One Year | ||
Borrowings Designated in Fair Value Hedging Relationships | ||
Carrying Amount of Hedged Item | 189 | 155 |
Active Hedging Relationships | 3 | 2 |
Discontinued Relationships | (2) | 3 |
Total | 1 | 5 |
Long-term Borrowings | ||
Borrowings Designated in Fair Value Hedging Relationships | ||
Carrying Amount of Hedged Item | 8,070 | 7,725 |
Active Hedging Relationships | 29 | 543 |
Discontinued Relationships | 223 | 122 |
Total | $ 252 | $ 665 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Interest Rate Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 10,848 | $ 8,514 |
Foreign Exchange Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 7,584 | 4,903 |
Cross-Currency Interest Rate Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 238 | $ 113 |
DERIVATIVE INSTRUMENTS - Fair_2
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Fair Value of Derivative Instruments | ||
Total derivative assets | $ 275 | $ 725 |
Total derivative liabilities | 228 | 115 |
Other Assets Member | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 275 | 725 |
Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 228 | 115 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets Member | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 166 | 586 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 99 | 14 |
Not Designated as Hedging Instruments | Other Assets Member | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 109 | 139 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 129 | 101 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets Member | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 73 | 83 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 33 | 74 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets Member | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 31 | 48 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 94 | 26 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets Member | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 5 | 8 |
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 | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ (336) | $ 190 | $ 24 |
Interest Rate Contracts | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI | 8 | (18) | (92) |
Interest Rate Contracts | Net Sales Related to Derivative Instruments | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | 13 | (23) | (23) |
Interest Rate Contracts | Interest Expense Member | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Fair value hedges, gains (losses) | (236) | 496 | 589 |
Cash flow hedges, reclassified from OCI | (13) | (21) | 5 |
Not designated as hedges, gains (losses) | 14 | (2) | (32) |
Foreign Exchange Contracts | Cost of Sales | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | (101) | 93 | (18) |
Foreign Exchange Contracts | Other Operating Expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ (262) | $ 122 | $ 97 |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 |
Derivative instruments | ||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 135 | $ 89 |
Cash collateral posted | 0 | 0 |
Derivative Assets | ||
Gross amounts recognized | 275 | 725 |
Netting arrangements | (105) | (93) |
Collateral received | (274) | |
Net amount | 170 | 358 |
Derivative Liabilities | ||
Gross amounts recognized | 228 | 115 |
Netting arrangements | (105) | (93) |
Collateral paid | (5) | |
Net amount | 118 | 22 |
International Futures Market | ||
Derivative instruments | ||
Collateral to participate in an international futures market | $ 8 | $ 8 |
SEGMENT AND GEOGRAPHIC AREA D_3
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Net Sales and Revenues (Details) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021USD ($)item | Nov. 01, 2020USD ($) | Nov. 03, 2019USD ($) | |
Operating Segments | |||
Number of major business segments | item | 4 | ||
Net Sales and Revenues | |||
Net sales and revenues | $ 44,024 | $ 35,540 | $ 39,258 |
Net Sales | |||
Net Sales and Revenues | |||
Net sales and revenues | 39,737 | 31,272 | 34,886 |
Other Revenues | |||
Net Sales and Revenues | |||
Other revenues | 739 | 679 | 751 |
Production & Precision Ag (PPA) | |||
Net Sales and Revenues | |||
Intersegment sales and revenues | 27 | 22 | 31 |
Net sales and revenues | 16,817 | 13,275 | 13,685 |
Production & Precision Ag (PPA) | Net Sales | |||
Net Sales and Revenues | |||
Net sales | 16,509 | 12,962 | 13,364 |
Small Ag & Turf (SAT) | |||
Net Sales and Revenues | |||
Intersegment sales and revenues | 11 | 2 | 3 |
Net sales and revenues | 12,046 | 9,495 | 10,444 |
Small Ag & Turf (SAT) | Net Sales | |||
Net Sales and Revenues | |||
Net sales | 11,860 | 9,363 | 10,302 |
Construction & Forestry (CF) | |||
Net Sales and Revenues | |||
Intersegment sales and revenues | 0 | 1 | 1 |
Net sales and revenues | 11,613 | 9,181 | 11,508 |
Construction & Forestry (CF) | Net Sales | |||
Net Sales and Revenues | |||
Net sales | 11,368 | 8,947 | 11,220 |
Financial Services (FS) | |||
Net Sales and Revenues | |||
Intersegment sales and revenues | 246 | 278 | 348 |
Financial revenues | $ 3,548 | $ 3,589 | $ 3,621 |
SEGMENT AND GEOGRAPHIC AREA D_4
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Operating Profit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Operating Profit (Loss) | |||
Operating profit | $ 8,012 | $ 4,305 | $ 4,415 |
Interest income | 1,854 | 1,962 | 2,074 |
Interest expense | (993) | (1,247) | (1,466) |
Income taxes | (1,658) | (1,082) | (852) |
Net Income | 5,965 | 2,753 | 3,257 |
Less: Net income attributable to noncontrolling interests | 2 | 2 | 4 |
Net Income Attributable to Deere & Company | 5,963 | 2,751 | 3,253 |
Production & Precision Ag (PPA) | |||
Operating Profit (Loss) | |||
Operating profit | 3,334 | 1,969 | 1,729 |
Small Ag & Turf (SAT) | |||
Operating Profit (Loss) | |||
Operating profit | 2,045 | 1,000 | 777 |
Construction & Forestry (CF) | |||
Operating Profit (Loss) | |||
Operating profit | 1,489 | 590 | 1,215 |
Financial Services (FS) | |||
Operating Profit (Loss) | |||
Operating profit | 1,144 | 746 | 694 |
Corporate | |||
Operating Profit (Loss) | |||
Interest income | 82 | 62 | 85 |
Interest expense | (368) | (329) | (256) |
Foreign exchange gain (loss) from equipment operations' financing activities | (45) | 17 | (22) |
Pension and OPEB benefit (costs), excluding service cost component | 183 | 31 | 67 |
Corporate expenses - net | (241) | (251) | (180) |
Income taxes | (1,658) | (1,082) | (852) |
Total | $ (2,047) | $ (1,552) | $ (1,158) |
SEGMENT AND GEOGRAPHIC AREA D_5
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Interest Income and Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Operating Segments | |||
Interest income | $ 1,854 | $ 1,962 | $ 2,074 |
Interest expense | 993 | 1,247 | 1,466 |
Operating Segment | Production & Precision Ag (PPA) | |||
Operating Segments | |||
Interest income | 21 | 22 | 16 |
Interest expense | 84 | 76 | 87 |
Operating Segment | Small Ag & Turf (SAT) | |||
Operating Segments | |||
Interest income | 21 | 16 | 6 |
Interest expense | 87 | 111 | 158 |
Operating Segment | Construction & Forestry (CF) | |||
Operating Segments | |||
Interest income | 10 | 12 | 11 |
Interest expense | 46 | 61 | 91 |
Operating Segment | Financial Services (FS) | |||
Operating Segments | |||
Interest income | 1,999 | 2,122 | 2,316 |
Interest expense | 687 | 942 | 1,234 |
Corporate | |||
Operating Segments | |||
Interest income | 82 | 62 | 85 |
Interest expense | 368 | 329 | 256 |
Intercompany Eliminations | |||
Operating Segments | |||
Interest income | (279) | (272) | (360) |
Interest expense | $ (279) | $ (272) | $ (360) |
SEGMENT AND GEOGRAPHIC AREA D_6
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Other Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Operating Segments | |||
Depreciation and amortization expense | $ 2,050 | $ 2,118 | $ 2,019 |
Equity in income (loss) of unconsolidated affiliates | 21 | (48) | 21 |
Identifiable operating assets | 84,114 | 75,091 | 73,011 |
Capital additions | 897 | 815 | 1,107 |
Investments in unconsolidated affiliates | 175 | 193 | 215 |
Production & Precision Ag (PPA) | |||
Operating Segments | |||
Depreciation and amortization expense | 495 | 480 | 475 |
Identifiable operating assets | 7,021 | 5,708 | 6,149 |
Capital additions | 458 | 431 | 595 |
Investments in unconsolidated affiliates | 1 | 1 | |
Small Ag & Turf (SAT) | |||
Operating Segments | |||
Depreciation and amortization expense | 245 | 247 | 248 |
Equity in income (loss) of unconsolidated affiliates | 2 | 2 | 6 |
Identifiable operating assets | 3,959 | 3,266 | 3,656 |
Capital additions | 253 | 223 | 264 |
Investments in unconsolidated affiliates | 31 | 29 | 27 |
Construction & Forestry (CF) | |||
Operating Segments | |||
Depreciation and amortization expense | 303 | 289 | 292 |
Equity in income (loss) of unconsolidated affiliates | 16 | (52) | 14 |
Identifiable operating assets | 6,457 | 6,322 | 7,044 |
Capital additions | 183 | 157 | 245 |
Investments in unconsolidated affiliates | 122 | 144 | 171 |
Financial Services (FS) | |||
Operating Segments | |||
Depreciation and amortization expense | 1,140 | 1,227 | 1,135 |
Equity in income (loss) of unconsolidated affiliates | 3 | 2 | 1 |
Identifiable operating assets | 51,624 | 48,719 | 48,483 |
Capital additions | 3 | 4 | 3 |
Investments in unconsolidated affiliates | 22 | 19 | 16 |
Intercompany Eliminations | |||
Operating Segments | |||
Depreciation and amortization expense | (133) | (125) | (131) |
Corporate | |||
Operating Segments | |||
Identifiable operating assets | $ 15,053 | $ 11,076 | $ 7,679 |
SEGMENT AND GEOGRAPHIC AREA D_7
SEGMENT AND GEOGRAPHIC AREA DATA - Geographic Areas Net Sales and Revenue and Operating Profit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 | |
Geographic Area Information | |||
Net sales and revenues | $ 44,024 | $ 35,540 | $ 39,258 |
Operating profit | 8,012 | 4,305 | 4,415 |
U.S. and Canada | |||
Geographic Area Information | |||
Net sales and revenues | 25,829 | 21,386 | 23,746 |
Operating profit | 4,774 | 2,775 | 2,841 |
Outside U.S. and Canada | |||
Geographic Area Information | |||
Net sales and revenues | 18,195 | 14,154 | 15,512 |
Operating profit | $ 3,238 | $ 1,530 | $ 1,574 |
SEGMENT AND GEOGRAPHIC AREA D_8
SEGMENT AND GEOGRAPHIC AREA DATA - Geographic Areas Property and Equipment (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Geographic Area Information | |||
Property and equipment | $ 5,820 | $ 5,817 | $ 5,973 |
U.S. and Canada | |||
Geographic Area Information | |||
Property and equipment | 3,164 | 3,178 | 3,197 |
Germany | |||
Geographic Area Information | |||
Property and equipment | 1,096 | 1,113 | 1,137 |
Other Countries | |||
Geographic Area Information | |||
Property and equipment | $ 1,560 | $ 1,526 | $ 1,639 |
SUBSEQUENT EVENTS - Securitizat
SUBSEQUENT EVENTS - Securitization Borrowings (Details) - Bank Conduit Facility Revolving Credit Agreement - USD ($) $ in Millions | 1 Months Ended | |
Nov. 28, 2021 | Oct. 31, 2021 | |
Subsequent Events | ||
Bank conduit facility capacity | $ 2,000 | |
Subsequent Event | ||
Subsequent Events | ||
Bank conduit facility capacity | $ 1,000 | |
Repurchase of short-term securitization borrowings | $ 511 |
SUBSEQUENT EVENTS - Collective
SUBSEQUENT EVENTS - Collective Bargaining Agreement (Details) - Subsequent Events - UAW Collective Bargaining Arrangement | Nov. 30, 2021USD ($) | Nov. 17, 2021USD ($)facility | Oct. 30, 2022USD ($) |
Subsequent Events | |||
Term of collective bargaining agreement | 6 years | ||
Ratification bonus payment per eligible employee | $ 8,500 | ||
Total ratification bonus amount | $ 90,000,000 | ||
Immediate wage increase (as a percent) | 10.00% | ||
Pensions | United States | |||
Subsequent Events | |||
Decrease in plan's funded status due to remeasurement | $ (495,000,000) | ||
Pension expense increase | $ 80,000,000 | ||
United States | |||
Subsequent Events | |||
Number of facilities represented under collective bargaining agreement | facility | 14 |
SUBSEQUENT EVENTS - Voluntary C
SUBSEQUENT EVENTS - Voluntary Contribution (Details) - OPEB - USD ($) $ in Millions | Nov. 30, 2021 | Nov. 01, 2020 |
Subsequent Events | ||
Defined benefit plan employer voluntary contributions | $ 700 | |
Subsequent Events | United States | ||
Subsequent Events | ||
Defined benefit plan employer voluntary contributions | $ 1,000 |
SUBSEQUENT EVENTS - Quarterly D
SUBSEQUENT EVENTS - Quarterly Dividend (Details) - $ / shares | Dec. 08, 2021 | Oct. 31, 2021 | Nov. 01, 2020 | Nov. 03, 2019 |
Subsequent Events | ||||
Quarterly dividend declared (in dollars per share) | $ 3.61 | $ 3.04 | $ 3.04 | |
Subsequent Event | ||||
Subsequent Events | ||||
Quarterly dividend declared (in dollars per share) | $ 1.05 |
SUBSEQUENT EVENTS - Kreisel Ele
SUBSEQUENT EVENTS - Kreisel Electric, Inc (Details) € in Millions | 6 Months Ended |
May 01, 2022EUR (€) | |
Subsequent Event | Kreisel | |
Subsequent Events | |
Total cash consideration | € 221 |