Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2015 | Nov. 30, 2015 | Apr. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | DEERE & CO | ||
Entity Central Index Key | 315,189 | ||
Document Type | 10-K/A | ||
Document Period End Date | Oct. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 30,160,160,199 | ||
Entity Common Stock, Shares Outstanding | 316,700,104 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
STATEMENT OF CONSOLIDATED INCOM
STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Net Sales and Revenues | |||||||||||
Net sales | $ 5,932 | $ 6,839 | $ 7,399 | $ 5,605 | $ 8,043 | $ 8,723 | $ 9,246 | $ 6,949 | $ 25,775.2 | $ 32,960.6 | $ 34,997.9 |
Finance and interest income | 2,381.1 | 2,282.1 | 2,115.1 | ||||||||
Other income | 706.5 | 824.2 | 682.4 | ||||||||
Total | 6,715 | 7,594 | 8,171 | 6,383 | 8,965 | 9,500 | 9,948 | 7,654 | 28,862.8 | 36,066.9 | 37,795.4 |
Costs and Expenses | |||||||||||
Cost of sales | 20,143.2 | 24,775.8 | 25,667.3 | ||||||||
Research and development expenses | 1,425.1 | 1,452 | 1,477.3 | ||||||||
Selling, administrative and general expenses | 2,873.3 | 3,284.4 | 3,605.5 | ||||||||
Interest expense | 680 | 664 | 741.3 | ||||||||
Other operating expenses | 961.1 | 1,093.3 | 820.6 | ||||||||
Total | 26,082.7 | 31,269.5 | 32,312 | ||||||||
Income of Consolidated Group before Income Taxes | 457 | 738 | 1,017 | 568 | 1,076 | 1,292 | 1,464 | 965 | 2,780.1 | 4,797.4 | 5,483.4 |
Provision for income taxes | 840.1 | 1,626.5 | 1,945.9 | ||||||||
Income of Consolidated Group | 1,940 | 3,170.9 | 3,537.5 | ||||||||
Equity in income (loss) of unconsolidated affiliates | 0.9 | (7.6) | 0.1 | ||||||||
Net Income | 1,940.9 | 3,163.3 | 3,537.6 | ||||||||
Less: Net income attributable to noncontrolling interests | 0.9 | 1.6 | 0.3 | ||||||||
Net Income Attributable to Deere & Company | $ 351 | $ 512 | $ 690 | $ 387 | $ 649 | $ 851 | $ 981 | $ 681 | $ 1,940 | $ 3,161.7 | $ 3,537.3 |
Per Share Data | |||||||||||
Basic (in dollars per share) | $ 1.09 | $ 1.54 | $ 2.05 | $ 1.13 | $ 1.84 | $ 2.35 | $ 2.67 | $ 1.83 | $ 5.81 | $ 8.71 | $ 9.18 |
Diluted (in dollars per share) | 1.08 | 1.53 | 2.03 | 1.12 | 1.83 | 2.33 | 2.65 | 1.81 | 5.77 | 8.63 | 9.09 |
Dividends declared (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.51 | $ 0.51 | $ 2.40 | $ 2.22 | $ 1.99 |
Average Shares Outstanding | |||||||||||
Basic (in shares) | 333.6 | 363 | 385.3 | ||||||||
Diluted (in shares) | 336 | 366.1 | 389.2 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | |||
Net Income | $ 1,940.9 | $ 3,163.3 | $ 3,537.6 |
Other Comprehensive Income (Loss), Net of Income Taxes | |||
Retirement benefits adjustment | (7.7) | (684.4) | 1,950 |
Cumulative translation adjustment | (935.1) | (415.5) | (70.9) |
Unrealized gain (loss) on derivatives | (2.5) | 2.8 | 10.7 |
Unrealized gain (loss) on investments | (1.5) | 6.9 | (11.3) |
Other Comprehensive Income (Loss), Net of Income Taxes | (946.8) | (1,090.2) | 1,878.5 |
Comprehensive Income of Consolidated Group | 994.1 | 2,073.1 | 5,416.1 |
Less: Comprehensive income attributable to noncontrolling interests | 0.5 | 1.3 | 0.4 |
Comprehensive Income Attributable to Deere & Company | $ 993.6 | $ 2,071.8 | $ 5,415.7 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
ASSETS | ||||
Cash and cash equivalents | $ 4,162.2 | $ 3,787 | $ 3,504 | $ 4,652.2 |
Marketable securities | 437.4 | 1,215.1 | ||
Receivables from unconsolidated affiliates | 33.3 | 30.2 | ||
Trade accounts and notes receivable - net | 3,051.1 | 3,277.6 | ||
Financing receivables - net | 24,809 | 27,422.2 | ||
Financing receivables securitized - net | 4,834.6 | 4,602.3 | ||
Other receivables | 991.2 | 1,500.3 | ||
Equipment on operating leases - net | 4,970.4 | 4,015.5 | ||
Inventories | 3,817 | 4,209.7 | ||
Property and equipment - net | 5,181.5 | 5,577.8 | 5,467 | |
Investments in unconsolidated affiliates | 303.5 | 303.2 | 221 | |
Goodwill | 726 | 791.2 | 845 | |
Other intangible assets - net | 63.6 | 68.8 | ||
Retirement benefits | 215.6 | 262 | ||
Deferred income taxes | 2,767.3 | 2,776.6 | ||
Other assets | 1,583.9 | 1,496.9 | ||
Total Assets | 57,947.6 | 61,336.4 | 59,521 | |
LIABILITIES | ||||
Short-term borrowings | 8,426.6 | 8,019.2 | ||
Short-term securitization borrowings | 4,590 | 4,558.5 | ||
Payables to unconsolidated affiliates | 80.6 | 101 | ||
Accounts payable and accrued expenses | 7,311.5 | 8,554.1 | ||
Deferred income taxes | 160.8 | 160.9 | ||
Long-term borrowings | 23,832.8 | 24,380.7 | ||
Retirement benefits and other liabilities | 6,787.7 | 6,496.5 | ||
Total liabilities | $ 51,190 | $ 52,270.9 | ||
Commitments and contingencies (Note 22) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2015 and 2014), at paid-in amount | $ 3,825.6 | $ 3,675.4 | 3,524 | 3,352 |
Common stock in treasury, 219,743,893 shares in 2015 and 190,926,805 shares in 2014, at cost | (15,497.6) | (12,834.2) | ||
Retained earnings | 23,144.8 | 22,004.4 | ||
Accumulated other comprehensive income (loss) | (4,729.4) | (3,783) | ||
Total Deere & Company stockholders' equity | 6,743.4 | 9,062.6 | ||
Noncontrolling interests | 14.2 | 2.9 | ||
Total stockholders' equity | 6,757.6 | 9,065.5 | $ 10,267.7 | $ 6,862 |
Total Liabilities and Stockholders' Equity | $ 57,947.6 | $ 61,336.4 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
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 | 536,400,000 | 536,400,000 |
Common stock in treasury, shares | 219,743,893 | 190,926,805 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net income | $ 1,940.9 | $ 3,163.3 | $ 3,537.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 55.4 | 38.1 | 20.5 |
Provision for depreciation and amortization | 1,382.4 | 1,306.5 | 1,140.3 |
Impairment charges | 34.8 | 95.9 | 102 |
Share-based compensation expense | 66.1 | 78.5 | 80.7 |
Undistributed earnings of unconsolidated affiliates | (1) | 9.3 | 9.1 |
Credit for deferred income taxes | (18.4) | (280.1) | (172.6) |
Changes in assets and liabilities: | |||
Trade, notes and financing receivables related to sales | 811.6 | (749) | (1,510.2) |
Insurance receivables | 333.4 | (149.9) | 263.4 |
Inventories | (691.4) | (297.9) | (728.4) |
Accounts payable and accrued expenses | (503.6) | (137.1) | 217.1 |
Accrued income taxes payable/receivable | (137.6) | 342.6 | 80.4 |
Retirement benefits | 427.5 | 336.9 | 262 |
Other | 40.2 | (231.2) | (47.6) |
Net cash provided by operating activities | 3,740.3 | 3,525.9 | 3,254.3 |
Cash Flows from Investing Activities | |||
Collections of receivables (excluding receivables related to sales) | 14,919.7 | 15,319.1 | 14,088 |
Proceeds from maturities and sales of marketable securities | 860.7 | 1,022.5 | 843.9 |
Proceeds from sales of equipment on operating leases | 1,049.4 | 1,091.5 | 936.7 |
Proceeds from sales of businesses, net of cash sold | 149.2 | 345.8 | 22 |
Cost of receivables acquired (excluding receivables related to sales) | (14,996.5) | (17,240.4) | (17,011.7) |
Purchases of marketable securities | (154.9) | (614.6) | (1,026.3) |
Purchases of property and equipment | (694) | (1,048.3) | (1,158.4) |
Cost of equipment on operating leases acquired | (2,132.1) | (1,611) | (1,216.9) |
Acquisitions of businesses, net of cash acquired | (83.5) | ||
Other | (60.2) | (145.6) | (214.5) |
Net cash used for investing activities | (1,058.7) | (2,881) | (4,820.7) |
Cash Flows from Financing Activities | |||
Increase in total short-term borrowings | 501.6 | 89.2 | 2,749.4 |
Proceeds from long-term borrowings | 5,711 | 8,232 | 4,734 |
Payments of long-term borrowings | (4,863.2) | (5,209.1) | (4,958.5) |
Proceeds from issuance of common stock | 172.1 | 149.5 | 174.5 |
Repurchases of common stock | (2,770.7) | (2,731.1) | (1,531.4) |
Dividends paid | (816.3) | (786) | (752.9) |
Excess tax benefits from share-based compensation | 18.5 | 30.8 | 50.7 |
Other | (72.1) | (63.6) | (59.3) |
Net cash (used for) provided by financing activities | (2,119.1) | (288.3) | 406.5 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (187.3) | (73.6) | 11.7 |
Net Increase (Decrease) in Cash and Cash Equivalents | 375.2 | 283 | (1,148.2) |
Cash and Cash Equivalents at Beginning of Year | 3,787 | 3,504 | 4,652.2 |
Cash and Cash Equivalents at End of Year | $ 4,162.2 | $ 3,787 | $ 3,504 |
STATEMENT OF CHANGES IN CONSOLI
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total |
Balance at Oct. 31, 2012 | $ 3,352.2 | $ (8,813.8) | $ 16,875.2 | $ (4,571.5) | $ 19.9 | $ 6,862 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 3,537.3 | 0.3 | 3,537.6 | |||
Other comprehensive income (loss) | 1,878.4 | 0.1 | 1,878.5 | |||
Repurchases of common stock | (1,531.4) | (1,531.4) | ||||
Treasury shares reissued | 134.3 | 134.3 | ||||
Dividends declared | (766.6) | (7.9) | (774.5) | |||
Deconsolidation of variable interest entity | (10.6) | (10.6) | ||||
Stock options and other shareholder transactions | 172 | (0.3) | 0.1 | 171.8 | ||
Balance at Oct. 31, 2013 | 3,524.2 | (10,210.9) | 19,645.6 | (2,693.1) | 1.9 | 10,267.7 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 3,161.7 | 1.6 | 3,163.3 | |||
Other comprehensive income (loss) | (1,089.9) | (0.3) | (1,090.2) | |||
Repurchases of common stock | (2,731.1) | (2,731.1) | ||||
Treasury shares reissued | 107.8 | 107.8 | ||||
Dividends declared | (803.4) | (0.3) | (803.7) | |||
Stock options and other shareholder transactions | 151.2 | 0.5 | 151.7 | |||
Balance at Oct. 31, 2014 | 3,675.4 | (12,834.2) | 22,004.4 | (3,783) | 2.9 | 9,065.5 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 1,940 | 0.9 | 1,940.9 | |||
Other comprehensive income (loss) | (946.4) | (0.4) | (946.8) | |||
Repurchases of common stock | (2,770.7) | (2,770.7) | ||||
Treasury shares reissued | 107.3 | 107.3 | ||||
Dividends declared | (799.5) | (1.3) | (800.8) | |||
Stock options and other shareholder transactions | 150.2 | (0.1) | 12.1 | 162.2 | ||
Balance at Oct. 31, 2015 | $ 3,825.6 | $ (15,497.6) | $ 23,144.8 | $ (4,729.4) | $ 14.2 | $ 6,757.6 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 12 Months Ended |
Oct. 31, 2015 | |
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 which includes data grouped as follows: Equipment Operations – Includes the company’s agriculture and turf operations and construction and forestry operations with financial services reflected on the equity basis. Financial Services – Includes primarily the company’s financing operations. Consolidated – Represents the consolidation of the equipment operations and financial services. References to “Deere & Company” or “the company” refer to the entire enterprise. Principles of Consolidation The consolidated financial statements represent primarily the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company 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 10). Other investments (less than 20 percent ownership) are recorded at cost. Fiscal Year The company has historically and continues to use a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2015, 2014 and 2013 were November 1, 2015, November 2, 2014 and October 27, 2013, respectively. Fiscal year 2014 contained 53 weeks. For ease of presentation, the consolidated financial statements and notes continue to be dated October 31. Variable Interest Entities See Note 13 for VIEs related to securitization of financing receivables . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2015 | |
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. Actual results could differ from those estimates. Revenue Recognition Sales of equipment and service parts are recorded when the sales price is determinable and the risks and rewards of ownership are transferred to independent parties based on the sales agreements in effect. 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. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. In all cases, when a sale is recorded by the company, no significant uncertainty exists surrounding the purchaser’s obligation to pay. No right of return exists on sales of equipment. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The company makes appropriate provisions based on experience for costs such as doubtful receivables, sales incentives and product warranty. Financing revenue is recorded over the lives of related receivables using the interest method. Insurance premiums recorded in other income are generally recognized in proportion to the costs expected to be incurred over the contract period. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue 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 revenue. Sales Incentives At the time a sale is recognized, the company records an estimate of the future sales incentive costs for allowances and financing programs that will be due when a dealer sells the equipment to a retail customer. The estimate is based on historical data, announced incentive programs, field inventory levels and retail sales volumes. Product Warranties At the time a sale is recognized, the company records the estimated future warranty costs. These costs are usually estimated based on historical warranty claims (see Note 22). Sales 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 may include sales, use, value-added and some excise taxes. The company reports the collection of these taxes on a net basis (excluded from revenues). Shipping and Handling Costs Shipping and handling costs related to the sales of the company’s equipment are included in cost of sales. Advertising Costs Advertising costs are charged to expense as incurred. This expense was $157 million in 2015, $174 million in 2014 and $183 million in 2013. Depreciation and Amortization Property and equipment, capitalized software and other intangible assets are 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 13). 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 adjusted for any charge-offs, the allowance for credit losses, and any deferred fees or costs on originated financing receivables. Allowances for credit losses are maintained in amounts considered to be appropriate in relation to the receivables outstanding based on collection experience, economic conditions and credit risk quality. Receivables are written-off to the allowance when the account is considered uncollectible. Impairment of Long-Lived Assets, Goodwill and Other Intangible Assets The company evaluates the carrying value of long-lived assets (including property and equipment, goodwill and other intangible assets) when events or circumstances warrant such a review. Goodwill and intangible assets with indefinite lives are tested for impairment annually at the end of the third fiscal quarter each 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 units, which consist primarily of the operating segments and certain other reporting units. The 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 or 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 Note 5). Derivative Financial Instruments It is the company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The company’s financial services manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling and financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as either a cash flow hedge, a 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 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 to the extent the hedge was effective 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 ineffective changes in derivative fair values are recognized currently in net income. 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, the hedge accounting discussed above 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 other comprehensive income. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange forward contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2015, 2014 and 2013 was $22 million, $(47) million and $(26) million, respectively. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 12 Months Ended |
Oct. 31, 2015 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | 3. NEW ACCOUNTING STANDARDS New Accounting Standards Adopted In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-04, Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets, which amends Accounting Standards Codification (ASC) 715, Compensation – Retirement Benefits. This ASU provides a practical expedient for entities whose fiscal year end does not coincide with a month end. The practical expedient permits defined benefit plan assets and obligations to be measured using the month end that is closest to the entity’s fiscal year end. Early adoption is permitted. The company early adopted this ASU in the fourth quarter of 2015. As a result, pension and other postretirement benefit plan assets and liabilities were measured as of October 31, 2015. The adoption did not have a material effect on the company’s consolidated financial statements. In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which amends ASC 820, Fair Value Measurement. This ASU removes the requirement to categorize within the fair value hierarchy investments without readily determinable fair values in entities that elect to measure fair value using net asset value per share or its equivalent. The ASU requires that these investments continue to be shown in the investment disclosure amount to allow the disclosure to reconcile to the investment amount presented in the balance sheet. The ASU was early adopted in the fourth quarter of fiscal year 2015 and was applied retrospectively (see pension and health care assets in Note 7). The adoption did not have a material effect on the consolidated financial statements. New Accounting Standards to be Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, Deferral of the Effective Date, which amends ASU No. 2014-09. As a result, the effective date will be the first quarter of fiscal year 2019 with early adoption permitted in the first quarter of fiscal year 2018. The adoption will use one of two retrospective application methods. The company has not determined the potential effects on the consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which amends ASC 718, Compensation - Stock Compensation. This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Therefore, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The total compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The effective date will be the first quarter of fiscal year 2017. The adoption will not have a material effect on the company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which amends ASC 835-30, Interest - Imputation of Interest. This ASU requires that debt issuance costs related to borrowings be presented in the balance sheet as a direct deduction from the carrying amount of the borrowing. This treatment is consistent with debt discounts. The ASU does not affect the amount or timing of expenses for debt issuance costs. The effective date will be the first quarter of fiscal year 2017 and will be applied retrospectively. The adoption will not have a material effect on the company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with licenses of other intangible assets. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. The effective date will be the first quarter of fiscal year 2017 and will be adopted prospectively. The adoption will not have a material effect on the company’s consolidated financial statements. In May 2015, the FASB issued ASU No. 2015-09, Disclosures about Short-Duration Contracts, which amends ASC 944, Financial Services - Insurance. This ASU requires disclosure of additional information about unpaid claims and claims adjustment expenses, including a rollforward of the liability of the claims adjustment liability. The effective date will be the fourth quarter of fiscal year 2017. The adoption will not have a material effect on the company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which amends ASC 330, Inventory. This ASU simplifies the subsequent measurement of inventory by using only the lower of cost or net realizable value. The ASU does not apply to inventory measured using the last-in, first-out method. The effective date will be the first quarter of fiscal year 2018 with early adoption permitted. The adoption will not have a material effect on the company’s consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which amends ASC 835-30, Interest - Imputation of Interest. This ASU clarifies the presentation and subsequent measurement of debt issuance costs associated with lines of credit. These costs may be presented as an asset and amortized ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement. The effective date will be the first quarter of fiscal year 2017 and will be applied retrospectively. The adoption will not have a material effect on the company’s consolidated financial statements. |
DISPOSITIONS
DISPOSITIONS | 12 Months Ended |
Oct. 31, 2015 | |
DISPOSITIONS | |
DISPOSITIONS | 4. DISPOSITIONS In March 2015, the company closed the sale of all of the stock of its wholly-owned subsidiaries, John Deere Insurance Company and John Deere Risk Protection, Inc. (collectively the Crop Insurance operations) to Farmers Mutual Hail Insurance Company of Iowa. These operations were included in the company’s financial services operating segment. At January 31, 2015, the total assets of $381 million and liabilities of $267 million were classified as held for sale in the consolidated financial statements, which consisted of $13 million of cash and cash equivalents, $79 million of marketable securities, $265 million of other receivables, $4 million of other intangible assets-net and $20 million of other assets. The related liabilities held for sale consisted of accounts payable and accrued expenses. The total amount of proceeds from the sale was approximately $154 million, including $5 million of cash and cash equivalents sold, with a gain recorded in other income of $42 million pretax and $40 million after-tax. The tax expense was partially offset by a change in a valuation allowance on a capital loss carryforward. The company provided certain business services for a fee during a transition period. In May 2014, the company closed the sale of the stock and certain assets of the entities that compose the company’s Water operations to FIMI Opportunity Funds. The sale was the result of the company’s intention to invest its resources in growing core businesses. At April 30, 2014, the total assets of $85 million and liabilities of $50 million were classified as held for sale in the consolidated financial statements, which consisted of $57 million of trade receivables, $10 million of other receivables, $49 million of inventories and $5 million of other assets less a $36 million asset impairment. The related liabilities held for sale consisted of accounts payable and accrued expenses of $47 million and retirement benefits and other liabilities of $3 million. The total amount of proceeds from the sale was approximately $35 million with a loss recorded in other operating expenses of $10 million pretax and after-tax in addition to the impairments recorded (see Note 5). The company provided certain business services for a fee during a transition period. In December 2013, the company closed the sale of 60 percent of its subsidiary John Deere Landscapes, LLC (Landscapes) to a private equity investment firm affiliated with Clayton, Dubilier & Rice, LLC (CD&R). At October 31, 2013, the total assets of $505 million and liabilities of $120 million for these operations were classified as held for sale in the consolidated financial statements and written down to realizable value, which consisted of $153 million of trade receivables, $219 million of inventories, $37 million of property and equipment, $106 million of goodwill, $25 million of other intangible assets and $10 million of other assets less a $45 million asset impairment. The related liabilities held for sale consisted of accounts payable and accrued expenses. The total amount of proceeds from the sale at closing was approximately $305 million with no significant gain or loss, which consisted of $174 million equity contribution and third party debt raised by Landscapes. The equity contribution was in the form of newly issued cumulative convertible participating preferred units representing 60 percent of the voting rights (on an as converted basis), which rank senior to the company’s investment in Landscapes common stock as to dividends. The preferred units ha d an initial liquidation preference of $174 million and accrue dividends at a rate of 12 percent per annum. The liquidation preference is subject to the company’s rights under the stockholders agreement. Due to preferred dividend payment in additional preferred shares over the first two years, CD&R’s ownership increase d over the two -year period. The company initially retained 40 percent of the Landscapes business in the form of common stock. As of January 2014, the company deconsolidated Landscapes and began reporting the results as an equity investment in unconsolidated affiliates. Due to the company’s continuing involvement through its initial 40 percent interest, Landscapes’ historical operating results are presented in continuing operations. Landscapes was rebranded to SiteOne Landscapes Supply, Inc. during 2015 . |
SPECIAL ITEMS
SPECIAL ITEMS | 12 Months Ended |
Oct. 31, 2015 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | 5. SPECIAL ITEMS Impairments In the fourth quarter of 2014, the company recorded non-cash charges in cost of sales for the impairment of long-lived assets of $18 million and other assets of $16 million pretax and after-tax . The assets are part of the company’s agriculture and turf operations in China. The impairment is the result of a decline in forecasted financial performance that indicated it was probable the future cash flows would not cover the carrying amount of assets used to manufacture agricultural equipment in that country (see Note 26). In 2014, the company recorded non-cash charges of $62 million pretax, or $30 million after-tax, related to the Water operations. In the first quarter, a $26 million pretax and after-tax loss was recorded in cost of sales for the impairment of long-lived assets. In the second quarter, an additional non-cash charge of $36 million pretax, or $4 million after-tax, was recorded in other operating expenses for an impairment to write the Water operations down to fair value less costs to sell. The tax benefits recognized resulted primarily from a change in valuation allowances of the Water operations. These operations were included in the company’s agriculture and turf operating segment (see Note 26). In 2013, the company recorded a non-cash charge for the impairment of long-lived assets of $57 million pretax, or $51 million after-tax. This consists of $50 million pretax, or $44 million after-tax, in the third quarter and $7 million pretax and after-tax in the fourth quarter, related to the company’s Water operations, which were included in the agriculture and turf operating segment. The total pretax impairment loss consisted of $50 million recorded in cost of sales and $7 million in selling, administrative and general expenses. The impairments were due to a decline in the forecasted financial performance and a review of strategic options for the business (see Note 26). In the fourth quarter of 2013 , the company recorded a non-cash charge of $45 million pretax and after-tax in other operating expenses for an impairment to write the Landscapes operations down to realizable value. These operations were included in the agriculture and turf operating segment (see Note 4). |
CASH FLOW INFORMATION
CASH FLOW INFORMATION | 12 Months Ended |
Oct. 31, 2015 | |
CASH FLOW INFORMATION | |
CASH FLOW INFORMATION | 6. CASH FLOW INFORMATION For purposes of the statement of consolidated cash flows, 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 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 12) 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 12) 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 $674 million, $794 million and $659 million in 2015, 2014 and 2013, respectively. The company also had accounts payable related to purchases of property and equipment of $89 million, $128 million and $198 million at October 31, 2015, 2014 and 2013, respectively. Cash payments for interest and income taxes consisted of the following in millions of dollars: 2015 2014 2013 Interest: Equipment operations $ $ $ Financial services Intercompany eliminations Consolidated $ $ $ Income taxes: Equipment operations $ $ $ Financial services Intercompany eliminations Consolidated $ $ $ |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Oct. 31, 2015 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | 7. PENSION AND OTHER POSTRETIREMENT BENEFITS The company has several defined benefit pension plans and postretirement 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 percents: 2015 2014 2013 Pensions Service cost $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service cost Other postemployment benefits Settlements/curtailments Net cost $ $ $ Weighted-average assumptions Discount rates Rate of compensation increase Expected long-term rates of return The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2015 2014 2013 Health care and life insurance Service cost $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service credit Settlements/curtailments Net cost $ $ $ Weighted-average assumptions Discount rates Expected long-term rates of return 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: 2015 2014 2013 Pensions Net cost $ $ $ Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss Prior service (credit) cost Amortization of actuarial loss Amortization of prior service cost Settlements/curtailments Total (gain) loss recognized in other comprehensive (income) loss Total recognized in comprehensive (income) loss $ $ $ The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2015 2014 2013 Health care and life insurance Net cost $ $ $ Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss Prior service credit Amortization of actuarial loss Amortization of prior service credit Settlements/curtailments Total (gain) loss recognized in other comprehensive (income) loss Total recognized in comprehensive (income) loss $ $ $ The benefit plan obligations, funded status and the assumptions related to the obligations at October 31 in millions of dollars follow: Health Care and Pensions Life Insurance 2015 2014 2015 2014 Change in benefit obligations Beginning of year balance $ $ $ $ Service cost Interest cost Actuarial gain (loss) Amendments Benefits paid Health care subsidies Other postemployment benefits Settlements/curtailments Foreign exchange and other End of year balance Change in plan assets (fair value) Beginning of year balance Actual return on plan assets Employer contribution Benefits paid Settlements/curtailments Foreign exchange and other End of year balance Funded status $ $ $ $ Weighted-average assumptions Discount rates Rate of compensation increase In the fourth quarter of 2015, the company decided to transition Medicare eligible wage and certain Medicare eligible salaried retire es to a Medicare Advantage plan offered by a private insurance company. This transition, which will take effect in January 2016, will not affect the participants’ level of benefits and is expected to result in future cost savings for the company. In the fourth quarter of 2015 and 2014, the company updated mortality assumptions based on tables issu ed by the Society of Actuaries. For Medicare eligible salaried retirees that primarily retire after July 1, 1993 and are eligible for postretirement medical benefits, the company’s postretirement benefit plan consists of annual Retiree Medical Credits (RMCs). The RMC is a monetary amount provided to the retirees annually to assist with their medical costs. In October 2014, the RMC plan was modified to change the annual cost sharing provisions. Beginning in 2015 , the annual RMC amount did not increase and the rate of future changes will continue to be set each year by the company. The amounts recognized at October 31 in millions of dollars consist of the following: Health Care and Pensions Life Insurance 2015 2014 2015 2014 Amounts recognized in balance sheet Noncurrent asset $ $ Current liability $ $ Noncurrent liability Total $ $ $ $ Amounts recognized in accumulated other comprehensive income – pretax Net actuarial loss $ $ $ $ Prior service cost (credit) Total $ $ $ $ The total accumulated benefit obligations for all pension plans at October 31, 2015 and 2014 was $11,508 million and $11,425 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 $7,254 million and $6,669 million, respectively, at October 31, 2015 and $1,381 million and $916 million, respectively, at October 31, 2014. The projected benefit obligations and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $8,196 million and $6,958 million, respectively, at October 31, 2015 and $8,213 million and $7,208 million, respectively, at October 31, 2014. The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2016 in millions of dollars follow: Health Care and Pensions Life Insurance Net actuarial loss $ $ Prior service cost (credit) Total $ $ Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10% 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 expects to contribute approximately $73 million to its pension plans and approximately $25 million to its health care and life insurance plans in 2016, which are primarily direct benefit payments for unfunded 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: Health Care and Pensions Life Insurance* 2016 $ $ 2017 2018 2019 2020 2021 to 2025 * 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. At October 31, 2015, the weighted- average composite trend rates for these obligations were assumed to be a .8 percent increase from 2015 to 2016, followed by an increase of 7.9 percent from 2016 to 2017, gradually decreasing to 4.8 percent from 2024 to 202 5 and all future years. The small estimated increase from 2015 to 2016 resulted from the transition to the Medicare Advantage plan in January 2016. The obligations at October 31, 2014 and the cost in 2015 assumed a 6.2 percent increase from 2014 to 2015, gradually decreasing to 5.0 percent from 2022 to 2023 and all future years. An increase of one percentage point in the assumed health care cost trend rate would increase the accumulated postretirement benefit obligations by $807 million and the aggregate of service and interest cost component of net periodic postretirement benefits cost for the year by $45 million. A decrease of one percentage point would decrease the obligations by $619 million and the cost by $34 m illion. The discount rate assumptions used to determine the postretirement obligations at October 31, 2015 and 2014 were 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. Beginning in 2016, the company will change the method used to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs. The new method uses the spot yield curve approach to estimate the service and interest costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows. Previously, those costs were determined using a single weighted-average discount rate. The change does not affect the measurement of the total benefit obligations as the change in service and interest costs offsets in the actuarial gains and losses recorded in other comprehensive income. The new method provides a more precise measure of interest and service costs by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The company will account for this change as a change in estimate prospectively beginning in the first quarter of 2016. See “Postretirement Benefit Obligations” in Critical Accounting Policies for additional details. Fair value measurement levels in the following tables are defined in Note 26. The fair values of the pension plan assets at October 31, 2015 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Derivative contracts - liabilities** Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value***: Short-term investments U.S. equity funds International equity funds Corporate debt funds Fixed income funds Real estate Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $137 million, foreign currency of $17 million, equity of $30 million and other of $6 million. ** Includes contracts for interest rates of $7 million, foreign currency of $15 million and other of $4 million. *** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. The fair values of the health care assets at October 31, 2015 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value**: Short-term investments International equity funds Fixed income funds Real estate funds Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $2 million , foreign currency of $1 million and equity of $1 million . ** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. The fair values of the pension plan assets at October 31, 2014 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities and funds Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Derivative contracts - liabilities** Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value***: Short-term investments U.S. equity funds International equity funds Fixed income funds Real estate funds Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $246 million, foreign currency of $61 million, equity of $11 million and other of $4 million. ** Includes contracts for interest rates of $6 million, foreign currency of $25 million and other of $8 million. *** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. The fair values of the health care assets at October 31, 2014 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Derivative contracts - liabilities** Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value***: Short-term investments International equity funds Fixed income funds Real estate funds Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $3 million and foreign currency of $2 million. ** Includes contracts for foreign currency of $1 million. *** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. Fair values are determined as follows: Cash and Short-Term Investments – Includes accounts that are valued based on the account value, which approximates fair value, and investment funds that are value d on the fund’s net asset value (NAV) based on the fair value of the underlying securities. Also included are securities that are valued 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. Equity Securities and Funds – The values are determined primarily by closing 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 – 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 closing prices in the active market in which the fixed income investment trades. Fixed income funds are valued using the NAV, based on the fair value of the underlying securities or closing prices in the active market in which the investment trades . Real Estate, Venture Capital, Private Equity, Hedge Funds and Other – The investments, which 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 general partner. The general partner values these investments using a combination of NAV, an income approach (primarily estimated cash flows discounted over the expected holding period), or market approach (primarily the valuation of similar securities and properties). Real estate investment trusts are primarily v alued at the closing prices in the active markets in which the investment trades. Real estate investment funds and other investments are primarily valued at NAV, based on the fair value of the underlying securities. Interest Rate, Foreign Currency and Other 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 (closing prices in the active market in which the derivative instrument trades). The primary investment objective for the pension and health care plan s assets is to maximize the growth of these assets to support the projected obligations to the beneficiaries over a long period of time, and to do so in a manner that is consistent with the company’s risk tolerance. 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 since the obligations are long-term in nature. The current target allocations for pension assets are approximately 49 percent for equity securities, 24 percent for debt securities, 5 percent for real estate and 22 percent for other investments. The target allocations for health care assets are approximately 53 percent for equity securities, 28 percent for debt securities, 4 percent for real estate and 15 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 and life insurance plan assets equal 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 8.0 percent during the past ten years and approximately 9.0 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 the 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 $185 million in 2015, $184 million in 2014 and $178 million in 2013 . 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, 2015 | |
INCOME TAXES | |
INCOME TAXES | 8. INCOME TAXES The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars: 2015 2014 2013 Current: U.S.: Federal $ $ $ State Foreign Total current Deferred: U.S.: Federal State Foreign Total deferred Provision for income taxes $ $ $ Based upon the location of the company’s operations, the consolidated income before income taxes in the U.S. in 2015, 2014 and 2013 was $1,838 million, $3,219 million and $4,124 million, respectively, and in foreign countries was $942 million, $1,578 million and $1,359 million, respectively. Certain foreign operations are branches 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: 2015 2014 2013 U.S. federal income tax provision at a statutory rate of 35 percent $ $ $ Increase (decrease) resulting from: State and local income taxes, net of federal income tax benefit German branch deferred tax write-off Differences in taxability of foreign (earnings) losses Nondeductible impairment charges Research and business tax credits Tax rates on foreign earnings Valuation allowance on deferred taxes Other-net Provision for income taxes $ $ $ At October 31, 2015, accumulated earnings in certain subsidiaries outside the U.S. totaled $5,282 million for which no provision for U.S. income taxes or foreign withholding taxes has been made, because it is expected that such earnings will be reinvested outside the U.S. indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. At October 31, 2015, the amount of cash and cash equivalents and marketable securities held by these foreign subsidiaries was $1,588 million. 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 in millions of dollars follows: 2015 2014 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities Other postretirement benefit liabilities $ $ Tax over book depreciation $ $ Accrual for sales allowances Lease transactions Tax loss and tax credit carryforwards Foreign unrealized losses Pension liability - net Accrual for employee benefits Share-based compensation Inventory Goodwill and other intangible assets Allowance for credit losses Deferred gains on distributed foreign earnings Deferred compensation Undistributed foreign earnings Other items Less valuation allowances Deferred income tax assets and liabilities $ $ $ $ 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. At October 31, 2015, certain tax loss and tax credit carryforwards of $604 million, of which $88 million are capital losses, were available with $226 million expiring from 2016 through 2035 and $378 million with an indefinite carryforward period. In March 2013, the company changed the corporate structure of most of its German operations from a branch to a subsidiary of Deere & Company. The change provides the company increased flexibility and efficiency in funding growth in international operations. As a result, the tax status of these operations changed. Formerly, as a branch these earnings were taxable in the U.S. as earned. As a subsidiary, these earnings are now taxable in the U.S. if they are distributed to Deere & Company as dividends, which is the same as the company’s other foreign subsidiaries. The earnings of the new German subsidiary remain taxable in Germany. Due to the change in tax status and the expectation that the German subsidiary’s earnings are indefinitely reinvested, the deferred tax assets and liabilities related to U.S. taxable temporary differences for the previous German branch were written off. The effect of this write-off was a decrease in net deferred tax assets and a charge to the income tax provision of $56 million during the second fiscal quarter of 2013. A reconciliation of the total amounts of unrecognized tax benefits at October 31 in millions of dollars follows: 2015 2014 2013 Beginning of year balance $ $ $ Increases to tax positions taken during the current year Increases to tax positions taken during prior years Decreases to tax positions taken during prior years Decreases due to lapse of statute of limitations Settlements Foreign exchange End of year balance $ $ $ The amount of unrecognized tax benefits at October 31, 2015 that would affect the effective tax rate if the tax benefits were recognized was $79 million. 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 has completed the examination of the company’s federal income tax returns for periods prior to 2009. The years 2009 through 2012 federal income tax returns are currently under examination. Various state and foreign income tax returns, including major tax jurisdictions in Canada and Germany, 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 2015, 2014 and 2013, the total amount of expense from interest and penalties was $23 million, $11 million and $9 million and the interest income was $3 million, $4 million and $4 million, respectively. At October 31, 2015 and 2014, the liability for accrued interest and penalties totaled $69 million and $54 million and the receivable for interest was $2 million and $2 million, respectively. |
OTHER INCOME AND OTHER OPERATIN
OTHER INCOME AND OTHER OPERATING EXPENSES | 12 Months Ended |
Oct. 31, 2015 | |
OTHER INCOME AND OTHER OPERATING EXPENSES | |
OTHER INCOME AND OTHER OPERATING EXPENSES | 9. OTHER INCOME AND OTHER OPERATING EXPENSES The major components of other income and other operating expenses consisted of the following in millions of dollars: 2015 2014 2013 Other income Insurance premiums and fees earned $ $ $ Revenues from services Investment income Other Total $ $ $ Other operating expenses Depreciation of equipment on operating leases $ $ $ Insurance claims and expenses Cost of services Other Total $ $ $ The company offers extended equipment warranties and, p rior to the divestiture of the crop insurance subsidiaries (see Note 4) , issued crop insurance policies. T o limit losses and reduce exposure to crop insurance claims , the company utilized reinsurance . Although reinsurance contracts permit ted recovery of certain claims from reinsurers, the insurance subsidiary was not relieved of its primary obligation to the policyholders. The premiums ceded by the crop insurance subsidiary in 2015, 2014 and 2013 were $54 million, $288 million and $337 million, and claims recoveries on the ceded business were $65 million, $304 million and $294 million, respectively. The amounts from reinsurance are netted against the insurance premiums and fees earned and the insurance claims and expenses in the table above. |
UNCONSOLIDATED AFFILIATED COMPA
UNCONSOLIDATED AFFILIATED COMPANIES | 12 Months Ended |
Oct. 31, 2015 | |
UNCONSOLIDATED AFFILIATED COMPANIES | |
UNCONSOLIDATED AFFILIATED COMPANIES | 10. 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 Bell Equipment Limited ( 32 percent ownership), Deere-Hitachi Construction Machinery Corporation ( 50 percent ownership), Deere-Hitachi Maquinas de Construcao do Brasil S.A. ( 50 percent ownership) and SiteOne Landscapes Supply, LLC. ( 35 percent ownership). The unconsolidated affiliated companies primarily manufacture or market equipment and landscapes products. 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.” 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 2015 2014 2013 Sales $ $ $ Net income Deere & Company’s equity in net income (loss) Financial Position 2015 2014 Total assets $ $ Total external borrowings Total net assets Deere & Company’s share of the net assets Consolidated retained earnings at October 31, 2015 include undistributed earnings of the unconsolidated affiliates of $165 million. Dividends from unconsolidated affiliates were $1 million in 2015, $1 million in 2014 and $10 million in 2013. In the ordinary course of business, the company purchases components and finished goods and sells these products to the unconsolidated affiliated companies. Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow : 2015 2014 2013 Net sales $ $ $ Purchases |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Oct. 31, 2015 | |
MARKETABLE SECURITIES | |
MARKETABLE SECURITIES | 11. MARKETABLE SECURITIES All marketable securities are classified as available-for-sale, with unrealized gains and losses shown as a component of stockholders’ equity. 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 in millions of dollars follow: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2015 Equity fund $ $ $ U.S. government debt securities Municipal debt securities Corporate debt securities $ International debt securities Mortgage-backed securities* Marketable securities $ $ $ $ 2014 Equity fund $ $ $ Fixed income fund U.S. government debt securities $ Municipal debt securities Corporate debt securities Mortgage-backed securities* Marketable securities $ $ $ $ * Primarily issued by U.S. government sponsored enterprises. The contractual maturities of debt securities at October 31, 2015 in millions of dollars follow: Amortized Fair Cost Value Due in one year or less $ $ Due after one through five years Due after five through 10 years Due after 10 years Mortgage-backed securities Debt securities $ $ 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 available-for-sale securities were $120 million in 2015, $6 million in 2014 and $7 million in 2013. 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 2015, 2014 and 2013. Unrealized losses at October 31, 2015 and 2014 were primarily the result of an increase in interest rates and 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, 2015 | |
RECEIVABLES | |
RECEIVABLES | 12. RECEIVABLES Trade Accounts and Notes Receivable Trade accounts and notes receivable at October 31 consisted of the following in millions of dollars: 2015 2014 Trade accounts and notes: Agriculture and turf $ $ Construction and forestry Trade accounts and notes receivable–net $ $ At October 31, 2015 and 2014, dealer notes included in the previous table were $90 million and $61 million, and the allowance for credit losses was $41 million and $55 million, respectively. The equipment operations sell a significant portion of their trade receivables to financial services and provide compensation to these operations at approximate market rates of interest. Trade accounts and notes receivable primarily arise from sales of goods to independent dealers. Under the terms of the sales to dealers, interest is primarily charged to dealers on outstanding balances, from the earlier of the date when goods are sold to retail customers by the dealer or the expiration of certain interest-free periods granted at the time of the sale to the dealer, until payment is received by the company. Dealers cannot cancel purchases after the equipment is shipped and are responsible for payment even if the equipment is not sold to retail customers. The 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 to twelve months for most equipment. Interest-free periods may not be extended. Interest charged may not be forgiven and the past due interest rates exceed market rates. The company evaluates and assesses dealers on an ongoing basis as to their creditworthiness and generally retains a security interest in the goods associated with the trade receivables. 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. Trade accounts and notes receivable have significant concentrations of credit risk in the agriculture and turf sector and construction and forestry sector as shown in the previous table. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. Financing Receivables Financing receivables at October 31 consisted of the following in millions of dollars: 2015 2014 Unrestricted/Securitized Unrestricted/Securitized Retail notes: Equipment: Agriculture and turf $ $ $ $ Construction and forestry Total Wholesale notes Revolving charge accounts Financing leases (direct and sales-type) Total financing receivables Less: Unearned finance income: Equipment notes Financing leases Total Allowance for credit losses Financing receivables – net $ $ $ $ The residual values for investments in financing leases at October 31, 2015 and 2014 totaled $115 million and $112 million, respectively. Financing receivables have significant concentrations of credit risk in the agriculture and turf sector and construction and forestry sector as shown in the previous table. On a geographic basis, there is not a 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 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars: 2015 2014 Unrestricted Unrestricted Retail notes*: Equipment: Agriculture and turf $ $ Construction and forestry Total Wholesale notes Sales-type leases Total Less: Unearned finance income: Equipment notes Sales-type leases Total Financing receivables related to the company’s sales of equipment $ $ * 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 are scheduled as follows in millions of dollars: 2015 2014 Unrestricted/Securitized Unrestricted/Securitized Due in months: 0 – 12 $ $ $ $ 13 – 24 25 – 36 37 – 48 49 – 60 Thereafter Total $ $ $ $ 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 five years, while the average term for wholesale notes is less than twelve months. At October 31, 2015 and 2014, the unpaid balances of receivables administered but not owned were $22 million and $54 million, respectively. At October 31, 2015 and 2014, worldwide financing receivables administered, which include financing receivables administered but not owned, totaled $29,666 million and $32,078 million, respectively. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables at October 31 follows in millions of dollars: 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2015 Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2014 Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars: Revolving Retail Charge Notes Accounts Other Total 2015 Allowance: Beginning of year balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of year balance* $ $ $ $ Financing receivables: End of year balance $ $ $ $ Balance individually evaluated $ $ $ * Individual allowances were not significant. 2014 Allowance: Beginning of year balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of year balance* $ $ $ $ Financing receivables: End of year balance $ $ $ $ Balance individually evaluated $ $ $ * Individual allowances were not significant. 2013 Allowance: Beginning of year balance $ $ $ $ Provision (credit) Write-offs Recoveries Translation adjustments End of year balance* $ $ $ $ Financing receivables: End of year balance $ $ $ $ Balance individually evaluated $ $ $ * Individual allowances were not significant. Past-due amounts over 30 days represented 1.28 percent and .90 percent of the receivables financed at October 31, 2015 and 2014 , respectively . The allowance for credit losses represented .53 percent and .54 percent of financing receivables outstanding at October 31, 2015 and 2014, respectively. In addition, at October 31, 2015 and 2014, the company’s financial services operations had $179 million and $196 million, respectively, of deposits withheld from dealers and merchants available for potential credit losses. Financing receivables are considered impaired when it is probable the company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables, which are impaired, are generally classified as non-performing. An analysis of the impaired financing receivables at October 31 follows in millions of dollars: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment 2015* Receivables with specific allowance** $ $ $ $ Receivables without a specific allowance*** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ 2014* Receivables with specific allowance** $ $ $ $ Receivables without a specific allowance** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During 2015, 2014 and 2013, the company identified 107 , 66 and 92 financing receivable contracts, primarily operating loans and retail notes, as troubled debt restructurings with aggregate balances of $8 million, $3 million and $16 million pre-modification and $7 million, $2 million and $15 million post-modification, respectively. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At October 31, 2015, the company had no significant commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. Other Receivables Other receivables at October 31 consisted of the following in millions of dollars: 2015 2014 Taxes receivable $ $ Reinsurance receivables Insurance premium receivables Other Other receivables $ $ Reinsurance and insurance premium receivables we re associated with the financial services’ crop insurance subsidiary (see Note 9), which was sold in 2015 (see Note 4). |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 12 Months Ended |
Oct. 31, 2015 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | 13. SECURITIZATION OF FINANCING RECEIVABLES The company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or a non-VIE banking operation, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the criteria of sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIE is restricted by terms of the documents governing the securitization transactions. In securitizations of retail notes related to secured borrowings, the retail notes are transferred to certain SPEs or to a non-VIE banking operation, which in turn issue debt to investors. The debt securities issued to the third party investors result in secured borrowings, which are recorded as “Short-term securitization borrowings” on the consolidated balance sheet. The securitized retail notes are recorded as “Financing receivables securitized - net” on the balance sheet. The total restricted assets on the balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs, and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses and other assets) of the consolidated SPEs totaled $3,006 million and $3,011 million at October 31, 2015 and 2014, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,743 million and $2,942 million at October 31, 2015 and 2014, respectively. In the fourth quarter of 2015, as part of a receivable transfer, the company retained $228 million of securitization borrowings, with a balance of $189 million at October 31, 2015. This amount is not shown as a liability above as the borrowing is not outstanding to a third party. The credit holders of these SPEs do not have legal recourse to the company’s general credit. In certain securitizations, the company transfers retail notes to a non-VIE banking operation, which is not consolidated since the company does not have a controlling interest in the entity. The company’s carrying values and interests related to the securitizations with the unconsolidated non-VIE were restricted assets (retail notes securitized, allowance for credit losses and other assets) of $249 million and $368 million at October 31, 2015 and 2014, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $238 million and $351 million at October 31, 2015 and 2014, respectively. In certain securitizations, the company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses and other assets) of $1,689 million and $1,331 million at October 31, 2015 and 2014, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,611 million and $1,267 million at October 31, 2015 and 2014, 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 in millions of dollars: 2015 Carrying value of liabilities $ Maximum exposure to loss The total assets of unconsolidated VIEs related to securitizations were approximately $54 billion at October 31, 2015. The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 31 were as follows in millions of dollars: 2015 2014 Financing receivables securitized (retail notes) $ $ Allowance for credit losses Other assets Total restricted securitized assets $ $ The components of consolidated secured borrowings and other liabilities related to securitizations at October 31 were as follows in millions of dollars: 2015 2014 Short-term securitization borrowings $ $ Accrued interest on borrowings Total liabilities related to restricted securitized assets $ $ The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At October 31, 2015, the maximum remaining term of all securitized retail notes was approximately six years . |
EQUIPMENT ON OPERATING LEASES
EQUIPMENT ON OPERATING LEASES | 12 Months Ended |
Oct. 31, 2015 | |
EQUIPMENT ON OPERATING LEASES | |
EQUIPMENT ON OPERATING LEASES | 14. EQUIPMENT ON OPERATING LEASES Operating leases arise primarily from the leasing of John Deere equipment to retail customers. Initial lease terms generally range from four to 60 months. Net equipment on operating leases at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment on operating lease s : Agriculture and turf $ $ Construction and forestry Equipment on operating lease s - net $ $ The equipment is depreciated on a straight-line basis over the terms of the lease. The accumulated depreciation on this equipment was $793 million and $634 million at October 31, 2015 and 2014, respectively. The corresponding depreciation expense was $577 million in 2015, $494 million in 2014 and $389 million in 2013. Future payments to be received on operating leases totaled $1,704 million at October 31, 2015 and are scheduled in millions of dollars as follows: 2016 - $ 712 , 2017 - $ 508 , 2018 - $ 294 , 2019 - $ 156 and 2020 - $ 34 . |
INVENTORIES
INVENTORIES | 12 Months Ended |
Oct. 31, 2015 | |
INVENTORIES | |
INVENTORIES | 15. INVENTORIES Most inventories 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 market. The value of gross inventories on the LIFO basis represented 66 percent and 65 percent of worldwide gross inventories at FIFO value at October 31, 2015 and 2014 , respectively. The pretax favorable income effect s from the liquidation of LIFO inventory during 2015 and 2014 were approximately $22 million and $13 million, respectively. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions of dollars would have been as follows: 2015 2014 Raw materials and supplies $ $ Work-in-process Finished goods and parts Total FIFO value Less adjustment to LIFO value Inventories $ $ |
PROPERTY AND DEPRECIATION
PROPERTY AND DEPRECIATION | 12 Months Ended |
Oct. 31, 2015 | |
PROPERTY AND DEPRECIATION | |
PROPERTY AND DEPRECIATION | 16. PROPERTY AND DEPRECIATION A summary of property and equipment at October 31 in millions of dollars follows: Useful Lives* (Years) 2015 2014 Equipment Operations Land $ $ Buildings and building equipment 23 Machinery and equipment 11 Dies, patterns, tools, etc. 8 All other 5 Construction in progress Total at cost Less accumulated depreciation Total Financial Services Land Buildings and building equipment 27 All other 6 Total at cost Less accumulated depreciation Total Property and equipment-net $ $ * Weighted-averages Total property and equipment additions in 2015, 2014 and 2013 were $666 million, $1,016 million and $1,158 million and depreciation was $692 million, $696 million and $637 million, respectively. Capitalized interest was $6 million, $6 million and $13 million in the same periods, respectively. The cost of leased property and equipment under capital leases of $27 million and $36 million and accumulated depreciation of $14 million and $15 million at October 31, 2015 and 2014, 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, 2015 and 2014 were $934 million and $912 million, less accumulated amortization of $681 million and $656 million, respectively. Capitalized interest on software was $2 million at October 31, 2015. Amortization of these software costs was $103 million in 2015, $106 million in 2014 and $93 million in 2013. The cost of leased software assets under capital leases amounting to $86 million and $77 million at October 31, 2015 and 2014, respectively, is included in other assets. 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, 2015 | |
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: Agriculture Construction and and Turf Forestry Total Balance at October 31, 2013 $ $ $ Less accumulated impairment losses Net balance Divestiture* Translation adjustments and other Balance at October 31, 2014 Less accumulated impairment losses* Net balance Translation adjustments and other Goodwill at October 31, 2015 $ $ $ * Accumulated impairment losses were also reduced by $60 million related to the sale of the Water operations (see Note 4). The components of other intangible assets are as follows in millions of dollars: Useful Lives* (Years) 2015 2014 Amortized intangible assets: Customer lists and relationships 14 $ $ Technology, patents, trademarks and other 17 Total at cost Less accumulated amortization** Total Unamortized intangible assets: Licenses Other intangible assets-net $ $ * Weighted-averages ** Accumulated amortization at 2015 and 2014 for customer lists and relationships was $10 million and $9 million and technology, patents, trademarks and other was $45 million and $36 million, respectively. Other intangible assets are stated at cost less accumulated amortization. The amortization of other intangible assets in 2015, 2014 and 2013 was $10 million, $11 million and $22 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: 2016 - $12 , 2017 - $12 , 2018 - $8 , 2019 - $5 and 2020 - $5 . |
TOTAL SHORT-TERM BORROWINGS
TOTAL SHORT-TERM BORROWINGS | 12 Months Ended |
Oct. 31, 2015 | |
TOTAL SHORT-TERM BORROWINGS | |
TOTAL SHORT-TERM BORROWINGS | 18. TOTAL SHORT-TERM BORROWINGS Total short-term borrowings at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment Operations Commercial paper $ $ Notes payable to banks Long-term borrowings due within one year Total Financial Services Commercial paper Notes payable to banks Long-term borrowings due within one year* Total Short-term borrowings Financial Services Short-term securitization borrowings Total short-term borrowings $ $ * Includes unamortized fair value adjustments related to interest rate swaps. The short-term securitization borrowings for financial services are secured by financing receivables (retail notes) on the balance sheet (see Note 13). 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 of $4,590 million at October 31, 2015 based on the expected liquidation of the retail notes in millions of dollars is as follows: 2016 - $2,337 , 2017 - $1,413 , 2018 - $661 , 2019 - $157 , 2020 - $21 and 2021 - $1 . The weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings, at October 31, 2015 and 2014 were .9 percent and 1.0 percent, respectively. Lines of credit available from U.S. and foreign banks were $7,205 million at October 31, 2015. At October 31, 2015, $4,031 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 above lines of credit were long-term credit facility agreements for $2,900 million, expiring in April 2019, and $2,900 million, expiring in April 2020. 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, 2015 was $8,835 million. Alternatively under this provision, the equipment operations had the capacity to incur additional debt of $16,408 million at October 31, 2015. All of these requirements of the credit agreements 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. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Oct. 31, 2015 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 19. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment Operations Accounts payable: Trade payables $ $ Dividends payable Other Accrued expenses: Dealer sales discounts Employee benefits Product warranties Unearned revenue Other Total Financial Services Accounts payable: Deposits withheld from dealers and merchants Other Accrued expenses: Unearned revenue Accrued interest Employee benefits Insurance claims reserve* Other Total Eliminations** Accounts payable and accrued expenses $ $ * See Note 9 ** Pri marily trade receivable valuation accounts which are reclassified as accrued expenses by the equipment operations as a result of their trade receivables being sold to financial services . |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 12 Months Ended |
Oct. 31, 2015 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | 20. LONG-TERM BORROWINGS Long-term borrowings at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment Operations Notes and debentures: 4.375% notes due 2019 $ $ 8 -1/2% debentures due 2022 2.60% notes due 2022 6.55% debentures due 2028 5.375% notes due 2029 8.10% debentures due 2030 7.125% notes due 2031 3.90% notes due 2042 Other notes Total Financial Services Notes and debentures: Medium-term notes due 2016 – 2025: (principal $17,610 - 2015, $17,939 - 2014) Average interest rates of 1.4% - 2015, 1.2% - 2014 * * 2.75% senior note due 2022: ($500 principal) Swapped $500 to variable interest rate of 1.1% - 2015, . 9% – 2014 * * Other notes Total Long-term borrowings** $ $ * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year end. The approximate principal amounts of the equipment operations’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2016 - $ 86 , 2017 - $ 48 , 2018 - $ 63 , 2019 - $ 752 and 2020 - $ 2 . The approximate principal amounts of the financial services’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2016 - $ 5,159 , 2017 - $ 5,124 , 2018 - $ 5,124 , 2019 - $ 2,876 and 2020 - $ 2,394 . |
LEASES
LEASES | 12 Months Ended |
Oct. 31, 2015 | |
LEASES | |
LEASES | 21. LEASES At October 31, 2015, future minimum lease payments under capital leases amounted to $ 60 million as follows: 2016 - $ 37 , 2017 - $ 13 , 2018 - $ 4 , 2019 - $ 3 , 2020 - $ 2 , and later years $1 . Total rental expense for operating leases was $200 million in 2015, $205 million in 2014 and $237 million in 2013. At October 31, 2015, future minimum lease payments under operating leases amounted to $354 million as follows: 2016 - $ 98 , 2017 - $ 72 , 2018 - $ 53 , 2019 - $ 40 , 2020 - $ 31 , and later years $60 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 22. COMMITMENTS AND CONTINGENCIES The company generally determines its 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 the company’s 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 ( unearn ed revenue) included in the following table totaled $454 million and $425 million at October 31, 2015 and 2014, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Warranty Liability/ Unearned Premiums 2015 2014 Beginning of year balance $ $ Payments Amortization of premiums received Accruals for warranties Premiums received Foreign exchange End of year balance $ $ At October 31, 2015, the company had approximately $162 million of guarantees issued primarily to banks outside the U.S. 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, 2015, the company had accrued losses of approximately $4 million under these agreements. The maximum remaining term of the receivables guaranteed at October 31, 2015 was approximately four years. At October 31, 2015, the company had commitments of approximately $165 million for the construction and acquisition of property and equipment. At October 31, 2015, the company also had pledged or restricted assets of $99 million, primarily as collateral for borrowings and restricted other assets. In addition, see Note 13 for restricted assets associated with borrowings related to securitizations. The company also had other miscellaneous contingencies totaling approximately $30 million at October 31, 2015, for which it believes the probability for payment is substantially remote. The accrued liability for these contingencies was not material at October 31, 2015. 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, software licensing, patent, trademark and environmental matters. The company believes the reasonably possible range of losses for these unresolved legal actions in addition to the amounts accrued would not have a material effect on its financial statements. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Oct. 31, 2015 | |
CAPITAL STOCK | |
CAPITAL STOCK | 23. CAPITAL STOCK Changes in the common stock account in millions were as follows: Number of Shares Issued Amount Balance at October 31, 2012 536.4 $ Stock options and other Balance at October 31, 2013 536.4 Stock options and other Balance at October 31, 2014 536.4 Stock options and other Balance at October 31, 2015 536.4 $ The number of common shares the company is authorized to issue is 1,200 million. The number of authorized preferred shares, none of which has been issued, is nine million. The Board of Directors at its meeting in December 2013 authorized the repurchase of up to $8,000 million of common stock ( 102.6 million shares based on the October 31, 2015 closing common stock price of $78.00 per share). At October 31, 2015, this repurchase program had $3,461 million (44.4 million shares at the same price) 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: 2015 2014 2013 Net income attributable to Deere & Company $ $ $ Less income allocable to participating securities .8 .9 Income allocable to common stock $ $ $ Average shares outstanding Basic per share $ $ $ Average shares outstanding Effect of dilutive stock options Total potential shares outstanding Diluted per share $ $ $ All stock options outstanding were included in the computation during 2015, 2014 and 2013, except 2.4 million in 2014 and 2.4 million in 2013 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, 2015 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | 24. STOCK OPTION AND RESTRICTED STOCK AWARDS The company issues stock options and restricted stock awards to key employees under plans approved by stockholders. Restricted stock is 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 to three years after grant. Options expire ten years after the date of grant. Restricted stock awards generally vest after three years. The compensation cost for stock options, service based restricted stock units and market/service based restricted stock units, which is based on the fair value at the grant date, is recognized on a straight-line basis over the requisite period the employee is required to render service. The compensation cost for performance/service based units, which is based on the fair value at the grant date, is recognized over the employees’ requisite service period and periodically adjusted for the probable number of shares to be awarded. According to these plans at October 31, 2015, the company is authorized to grant an additional 16.9 million shares related to stock options or restricted stock. 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 and employee termination within the valuation model. The expected term of options granted is derived from the output of the option valuation model and represents the 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: 2015 2014 2013 Risk-free interest rate .04% - 2.3% .03% - 2.9% .04% - 1.7% Expected dividends 2.5% 2.3% 2.3% Expected volatility 23.4% - 25.7% 25.9% - 32.0% 26.6% - 32.5% Weighted-average volatility 25.6% 31.9% 32.4% Expected term (in years) 7.2 - 8.2 7.3 - 7.4 7.3 - 7.9 Stock option activity at October 31, 2015 and changes during 2015 in millions of dollars and shares follow: Remaining Contractual Aggregate Exercise Term Intrinsic Shares Price* (Years) Value Outstanding at beginning of year $ Granted Exercised Expired or forfeited (.2) Outstanding at end of year $ Exercisable at end of year * Weighted-averages The weighted-average grant-date fair values of options granted during 2015, 2014 and 2013 were $19.67 , $24.74 and $23.73 , respectively. The total intrinsic values of options exercised during 2015, 2014 and 2013 were $98 million, $125 million and $183 million, respectively. During 2015, 2014 and 2013, cash received from stock option exercises was $172 million, $149 million and $175 million with tax benefits of $36 million, $46 million and $68 million, respectively. The company granted 248 thousand, 236 thousand and 254 thousand restricted stock units to employees and nonemployee directors in 2015 , 2014 and 2013 , of which 122 thousand, 102 thousand and 110 thousand are subject to service based only conditions, 63 thousand, 67 thousand and 72 thousand are subject to performance/service based conditions, 63 thousand, 67 thousand and 72 thousand are subject to market/service based conditions, respectively. The service based only 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 market/service based units are subject to a market related metric based on total shareholder return, compared to the same benchmark group of companies over the vesting period. The performance/service based units and the market/service based units both 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 based only units at the grant dates during 2015, 2014 and 2013 were $88.66 , $87.16 and $86.88 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 2015, 2014 and 2013 were $81.78 , $81.53 and $80.73 per unit, respectively, based on the market price of a share of underlying common stock excluding dividends. The fair value of the market/service based units at the grant date during 2015, 2014 and 2013 were $113.97 , $116.86 and $106.75 per unit, respectively, based on a lattice valuation model excluding dividends. The company’s nonvested restricted shares at October 31, 2015 and changes during 2015 in millions of shares follow: Grant-Date Shares Fair Value* Service based only Nonvested at beginning of year .3 $ Granted .1 Vested (.1) Nonvested at end of year .3 Performance/service and market/service based Nonvested at beginning of year .4 $ Granted .1 Expired or forfeited (.1) Nonvested at end of year .4 * Weighted-averages During 2015, 2014 and 2013, the total share-based compensation expense was $66 million, $79 million and $81 million, respectively, with recognized income tax benefits of $25 million, $29 million and $30 million, respectively. At October 31, 2015, there was $46 million of total unrecognized compensation cost from share-based compensation arrangements granted under the plans, which is related to nonvested shares. 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 2015, 2014 and 2013 were $74 million, $69 million and $68 million, respectively. The company currently uses shares that have been repurchased through its stock repurchase programs to satisfy share option exercises. At October 31, 2015, the company had 220 million shares in treasury stock and 44 million shares remaining to be repurchased under its current publicly announced repurchase program (see Note 23). |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 12 Months Ended |
Oct. 31, 2015 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | 25. OTHER COMPREHENSIVE INCOME ITEMS The after-tax changes in accumulated other comprehensive income at October 31 in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) 2012 $ $ $ $ $ Period Change 2013 Period Change 2014 Period Change 2015 $ $ $ $ $ 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 2015 Cumulative translation adjustment $ $ $ Unrealized gain (loss) on derivatives: Unrealized hedging (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain Reclassification of realized (gain) loss - Other income Net unrealized (loss) on investments Retirement benefits adjustment: Pensions Net actuarial (loss) and prior service (cost) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service cost Settlements/curtailments Health care and life insurance Net actuarial gain and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service (credit) Settlements/curtailments Net unrealized (loss) on retirement benefits adjustment Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2014 Cumulative translation adjustment: Unrealized (loss) on translation adjustment $ $ $ Reclassification of loss to Other operating expenses* Net unrealized (loss) on translation adjustment Unrealized gain (loss) on derivatives: Unrealized hedging (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized gain on derivatives Unrealized gain (loss) on investments: Unrealized holding gain Net unrealized gain on investments Retirement benefits adjustment: Pensions Net actuarial (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:** Actuarial loss Prior service cost Settlements/curtailments Health care and life insurance Net actuarial (loss) and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:** Actuarial loss Prior service (credit) Settlements/curtailments Net unrealized (loss) on retirement benefits adjustment Total other comprehensive income (loss) $ $ $ * Represents the accumulated translation adjustments related to the foreign subsidiaries of the Water operations that were sold (see Note 4). ** These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2013 Cumulative translation adjustment $ $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized gain on derivatives Unrealized gain (loss) on investments: Unrealized holding (loss) Net unrealized (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service cost Settlements/curtailments Health care and life insurance Net actuarial gain and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service (credit) Net unrealized gain on retirement benefits adjustment Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. The noncontrolling interests’ comprehensive income was $.5 million in 2015, $1.3 million in 2014 and $.4 million in 2013, which consisted of net income of $.9 million in 2015, $1.6 million in 2014 and $.3 million in 2013 and cumulative translation adjustments of $(.4) million in 2015, $(.3) million in 2014 and $.1 million in 2013. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Oct. 31, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 26. FAIR VALUE MEASUREMENTS The fair values of financial instruments that do not approximate the carrying values at October 31 in millions of dollars follow: 2015 2014 Carrying Fair Carrying Fair Value Value* Value Value* Financing receivables – net $ $ $ $ Financing receivables securitized – net $ $ $ $ Short-term securitization borrowings $ $ $ $ Long-term borrowings due within one year: Equipment operations $ $ $ $ Financial services Total $ $ $ $ Long-term borrowings: Equipment operations $ $ $ $ Financial services Total $ $ $ $ * Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. Fair values of 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 at fair value on a recurring basis in millions of dollars follow: 2015* 2014* Marketable securities Equity fund $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities Mortgage-backed securities** Total marketable securities Other assets Derivatives: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total assets*** $ $ Accounts payable and accrued expenses Derivatives: Interest rate contracts $ $ Foreign exchange contracts Total liabilities $ $ * All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $37 million and $741 million at October 31, 2015 and 2014, respectively, and the equity fund of $43 million and $45 million at October 31, 2015 and 2014, respectively, and the fixed income fund of $10 million at October 31, 2014. In addition, $29 million of the international debt securities were Level 3 measurements at October 31, 2015. There were no transfers between Level 1 and Level 2 during 2015 and 2014 . ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. Fair value, recurring, Level 3 measurements from available for sale marketable securities at October 31 in millions of dollars follow: 2015 Beginning of period balance Purchases $ Change in unrealized gain (loss) End of period balance $ Fair value, nonrecurring, Level 3 measurements from impairments at October 31 in millions of dollars follow: Fair Value* Losses* 2015 2014 2015 2014 2013 Equipment on operating leases – net $ $ Property and equipment – net $ $ $ $ $ Other intangible assets – net $ Other assets $ $ $ $ Assets held for sale – Water operations $ * See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the company uses various methods including market and income approaches. The company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. The following is a description of the valuation methodologies the company uses to measure certain financial instruments on the balance sheet and nonmonetary assets at fair value: Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data. Derivatives – The company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency futures, forwards and swaps, and cross-currency interest rate swaps. The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Financing Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values (see Note 12). Equipment on Operating Leases-Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of equipment sale price at lease maturity. Inputs include realized sales values. Property and Equipment-Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on a cost approach. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence. Other Intangible Assets-Net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on an income approach (discounted cash flows). The inputs include estimates of future cash flows. Other Assets – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on a market approach. The inputs include sales of comparable assets. Assets Held For Sale-Water Operations – The impairment of the disposal group was measured at the lower of carrying amount, or fair value less cost to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 5). |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Oct. 31, 2015 | |
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, 2015 and 2014 were $2,800 million and $3,050 million, respectively. The total notional amounts of the cross-currency interest rate contracts were $60 million and $70 million at October 31, 2015 and 2014, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense or other operating expenses (foreign exchange) in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate or foreign currency exchange rate changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as cash flow hedges were recognized currently in interest expense or other operating expenses (foreign exchange) and were not material during any years presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of loss recorded in OCI at October 31, 2015 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. These contracts mature in up to 35 months. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at October 31, 2015 and 2014 were $8,618 million and $8,798 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were a gain of $2 million and loss of $2 million in 2015 and 2014, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars: 2015 2014 Interest rate contracts* $ $ Borrowings** * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $173 million and $168 million during 2015 and 2014, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $274 million and $267 million during 2015 and 2014, respectively. Derivatives Not Designated as Hedging Instruments The company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards and swaps) and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings and purchases or sales of inventory. The total notional amounts of the interest rate swaps at October 31, 2015 and 2014 were $6,333 million and $6,317 million, the foreign exchange contracts were $3,160 million and $3,524 million and the cross-currency interest rate contracts were $76 million and $98 million, respectively. At October 31, 2015 and 2014 , there were also $1,069 million and $1,703 million, respectively, of interest rate caps purchased and the same amounts sold at the same capped interest rate to facilitate borrowings through securitization of retail notes. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows. Fair values of derivative instruments in the consolidated balance sheet at October 31 in millions of dollars follow: 2015 2014 Other Assets Designated as hedging instruments: Interest rate contracts $ $ Cross-currency interest rate contracts Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivative assets $ $ Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ $ Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Total not designated Total derivative liabilities $ $ 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: 2015 2014 2013 Fair Value Hedges Interest rate contracts – Interest expense $ $ $ Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts – OCI (pretax)* Foreign exchange contracts – OCI (pretax)* Reclassified from OCI (Effective Portion): Interest rate contracts – Interest expense* Foreign excha nge contracts – Other expense* Recognized Directly in Income (Ineffective Portion) ** ** ** Not Designated as Hedges Interest rate contracts – Interest expense* $ $ $ Foreign exchange contracts – Cost of sales Foreign exchange contracts – Other expense* Total not designated $ $ $ * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts are not significant. Counterparty Risk and Collateral Certain of the company’s derivative agreements contain credit support provisions that may require the company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at October 31, 2015 and October 31, 2014, was $41 million and $57 million, respectively. The company, due to its credit rating and amounts of net liability position, has not posted any collateral. If the credit-risk-related contingent features were triggered, the company would be required to post collateral up to an amount equal to this liability position, prior to considering applicable netting provisions. Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty and other financial commitments and exposures between the company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid at October 31 in millions of dollars follows: Gross Amounts Netting Collateral Net Recognized Arrangements Received Amount 2015 Assets $ $ $ Liabilities 2014 Assets $ $ $ $ Liabilities |
SEGMENT AND GEOGRAPHIC AREA DAT
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 | 12 Months Ended |
Oct. 31, 2015 | |
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 | |
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 | 28. SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 The company’s operations are presently organized and reported in three major business segments described as follows: The agriculture and turf segment primarily manufactures and distributes a full line of agriculture and turf equipment and related service parts – including large, medium and utility tractors; loaders; combines, corn pickers, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders; tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery; hay and forage equipment, including self-propelled forage harvesters and attachments, balers and mowers; turf and utility equipment, including riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements; integrated agricultural management systems technology and solutions; and other outdoor power products. The construction and forestry segment primarily manufactures and distributes a broad range of machines and service parts used in construction, earthmoving, material handling and timber harvesting – including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders, feller bunchers, log loaders, log forwarders, log harvesters and related attachments. The products and services produced by the segments above are marketed primarily through independent retail dealer networks and major retail outlets. The financial services segment primarily finances sales and leases by John Deere dealers of new and used 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. Information relating to operations by operating segment in millions of dollars follows. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2015, 2014 and 2013 were as follows: agriculture and turf net sales of $49 million, $89 million and $69 million, construction and forestry net sales of $1 million, $1 million and $2 million, and financial services revenues of $225 million, $228 million and $220 million, respectively. OPERATING SEGMENTS 2015 2014 2013 Net sales and revenues Unaffiliated customers: Agriculture and turf net sales $ $ $ Construction and forestry net sales Total net sales Financial services revenues Other revenues* Total $ $ $ * Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income as disclosed in Note 31, net of certain intercompany eliminations. Operating profit Agriculture and turf $ $ $ Construction and forestry Financial services* Total operating profit Interest income Investment income Interest expense Foreign exchange gains (losses) from equipment operations’ financing activities Corporate expenses — net Income taxes Total Net income Less: Net income attributable to noncontrolling interests Net income attributable to Deere & Company $ $ $ * Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses. Interest income* Agriculture and turf $ $ $ Construction and forestry Financial services Corporate Intercompany Total $ $ $ * Does not include finance rental income for equipment on operating leases. Interest expense Agriculture and turf $ $ $ Construction and forestry Financial services Corporate Intercompany Total $ $ $ Depreciation* and amortization expense Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ * Includes depreciation for equipment on operating leases. Equity in income (loss) of unconsolidated affiliates Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ Identifiable operating assets Agriculture and turf $ $ $ Construction and forestry Financial services Corporate* Total $ $ $ * Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, marketable securities and cash and cash equivalents as disclosed in Note 31, net of certain intercompany eliminations. Capital additions Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ Investments in unconsolidated affiliates Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ 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, shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. GEOGRAPHIC AREAS 2015 2014 2013 Net sales and revenues Unaffiliated customers: U.S. and Canada: Equipment operations net sales (87%)* $ $ $ Financial services revenues (78%)* Total Outside U.S. and Canada: Equipment operations net sales Financial services revenues Total Other revenues Total $ $ $ * The percentages indicate the approximate proportion of each amount that relates to the U.S. only and are based upon a three -year average for 2015 , 2014 and 2013. Operating profit U.S. and Canada: Equipment operations $ $ $ Financial services Total Outside U.S. and Canada: Equipment operations Financial services Total Total $ $ $ Property and equipment U.S. $ $ $ Germany Other countries Total $ $ $ |
SUPPLEMENTAL INFORMATION (UNAUD
SUPPLEMENTAL INFORMATION (UNAUDITED) | 12 Months Ended |
Oct. 31, 2015 | |
SUPPLEMENTAL INFORMATION (UNAUDITED) | |
SUPPLEMENTAL INFORMATION (UNAUDITED) | 29. SUPPLEMENTAL INFORMATION (UNAUDITED) Common stock per share sales prices from New York Stock Exchange composite transactions quotations follow: First Second Third Fourth Quarter Quarter Quarter Quarter 2015 Market price High $ $ $ $ Low $ $ $ $ 2014 Market price High $ $ $ $ Low $ $ $ $ At October 31, 2015, there were 23,415 holders of record of the company’s $1 par value common stock. Quarterly information with respect to net sales and revenues and earnings is shown in the following schedule. The company’s fiscal year ends in October and its interim periods (quarters) end in January, April and July. Such information is shown in millions of dollars except for per share amounts. First Second Third Fourth Quarter Quarter Quarter Quarter 2015 Net sales and revenues $ $ $ $ Net sales Gross profit Income before income taxes Net income attributable to Deere & Company Per share data: Basic Diluted Dividends declared .60 .60 .60 .60 Dividends paid .60 .60 .60 .60 2014* Net sales and revenues $ $ $ $ Net sales Gross profit Income before income taxes Net income attributable to Deere & Company Per share data: Basic Diluted Dividends declared .51 .51 .60 .60 Dividends paid .51 .51 .51 .60 Net income per share for each quarter must be computed independently. As a result, their sum may not equal the total net income per share for the year. * See Note 5 for “Special Items .” |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 30. SUBSEQUENT EVENTS A quarterly dividend of $. 6 0 per share was declared at the Board of Directors meeting on December 2, 2015, payable on February 1, 2016 to stockholders of record on December 31, 2015 . |
SUPPLEMENTAL CONSOLIDATING DATA
SUPPLEMENTAL CONSOLIDATING DATA | 12 Months Ended |
Oct. 31, 2015 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
SUPPLEMENTAL CONSOLIDATING DATA | d 31. SUPPLEMENTAL CONSOLIDATING DATA INCOME STATEMENT For the Years Ended October 31, 2015, 2014 and 2013 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2015 2014 2013 2015 2014 2013 Net Sales and Revenues Net sales $ $ $ Finance and interest income $ $ $ Other income Total Costs and Expenses Cost of sales Research and development expenses Selling, administrative and general expenses Interest expense Interest compensation to Financial Services Other operating expenses Total Income of Consolidated Group before Income Taxes Provision for income taxes Income of Consolidated Group Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services Other (.3) Total Net Income Less: Net income attributable to noncontrolling interests .9 .3 Net Income Attributable to Deere & Company $ $ $ $ $ $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. The consolidated group data in the “Equipment Operations” income statement reflect the results of the agriculture and turf operations and construction and forestry operations. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. 31. SUPPLEMENTAL CONSOLIDATING DATA (continued) BALANCE SHEET As of October 31, 2015 and 2014 (In millions of dollars except per share amounts) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2015 2014 2015 2014 ASSETS Cash and cash equivalents $ $ $ $ Marketable securities Receivables from unconsolidated subsidiaries and affiliates Trade accounts and notes receivable - net Financing receivables - net .9 Financing receivables securitized - net Other receivables Equipment on operating leases - net Inventories Property and equipment - net Investments in unconsolidated subsidiaries and affiliates Goodwill Other intangible assets - net Retirement benefits Deferred income taxes Other assets Total Assets $ $ $ $ LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Short-term borrowings $ $ $ $ Short-term securitization borrowings Payables to unconsolidated subsidiaries and affiliates Accounts payable and accrued expenses Deferred income taxes Long-term borrowings Retirement benefits and other liabilities Total liabilities Commitments and contingencies (Note 22) STOCKHOLDERS’ EQUITY Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2015 and 2014), at paid-in amount Common stock in treasury, 219,743,893 shares in 2015 and 190,926,805 shares in 2014, at cost Retained earnings Accumulated other comprehensive income (loss) Total Deere & Company stockholders’ equity Noncontrolling interests Total stockholders’ equity Total Liabilities and Stockholders’ Equity $ $ $ $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. 31. SUPPLEMENTAL CONSOLIDATING DATA (continued) STATEMENT OF CASH FLOWS For the Years Ended October 31, 2015, 2014 and 2013 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2015 2014 2013 2015 2014 2013 Cash Flows from Operating Activities Net income $ $ $ $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses Provision for depreciation and amortization Impairment charges Undistributed earnings of unconsolidated subsidiaries and affiliates (.9) Provision (credit) for deferred income taxes Changes in assets and liabilities: Trade receivables Insurance receivables Inventories Accounts payable and accrued expenses Accrued income taxes payable/receivable Retirement benefits Other Net cash provided by operating activities Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) Proceeds from maturities and sales of marketable securities Proceeds from sales of equipment on operating leases Proceeds from sales of businesses, net of cash sold Cost of receivables acquired (excluding trade and wholesale) Purchases of marketable securities Purchases of property and equipment Cost of equipment on operating leases acquired Increase in investment in Financial Services Acquisitions of businesses, net of cash acquired Decrease (increase) in trade and wholesale receivables Other Net cash used for investing activities Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings Change in intercompany receivables/payables Proceeds from long-term borrowings Payments of long-term borrowings Proceeds from issuance of common stock Repurchases of common stock Capital investment from Equipment Operations Dividends paid Excess tax benefits from share-based compensation Other Net cash provided by (used for) financing activities Effect of Exchange Rate Changes on Cash and Cash Equivalents Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year $ $ $ $ $ $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements . |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates in Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Revenue Recognition | Sales of equipment and service parts are recorded when the sales price is determinable and the risks and rewards of ownership are transferred to independent parties based on the sales agreements in effect. 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. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. In all cases, when a sale is recorded by the company, no significant uncertainty exists surrounding the purchaser’s obligation to pay. No right of return exists on sales of equipment. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The company makes appropriate provisions based on experience for costs such as doubtful receivables, sales incentives and product warranty. Financing revenue is recorded over the lives of related receivables using the interest method. Insurance premiums recorded in other income are generally recognized in proportion to the costs expected to be incurred over the contract period. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue 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 revenue. |
Sales Incentives | At the time a sale is recognized, the company records an estimate of the future sales incentive costs for allowances and financing programs that will be due when a dealer sells the equipment to a retail customer. The estimate is based on historical data, announced incentive programs, field inventory levels and retail sales volumes. |
Product Warranties | At the time a sale is recognized, the company records the estimated future warranty costs. These costs are usually estimated based on historical warranty claims (see Note 22). |
Sales 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 may include sales, use, value-added and some excise taxes. The company reports the collection of these taxes on a net basis (excluded from revenues). |
Shipping and Handling Costs | Shipping and handling costs related to the sales of the company’s equipment are included in cost of sales. |
Advertising Costs | Advertising costs are charged to expense as incurred. This expense was $157 million in 2015, $174 million in 2014 and $183 million in 2013. |
Depreciation and Amortization | Property and equipment, capitalized software and other intangible assets are 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 13). 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 adjusted for any charge-offs, the allowance for credit losses, and any deferred fees or costs on originated financing receivables. Allowances for credit losses are maintained in amounts considered to be appropriate in relation to the receivables outstanding based on collection experience, economic conditions and credit risk quality. Receivables are written-off to the allowance when the account is considered uncollectible. |
Impairment of Long-Lived Assets, Goodwill and Other Intangible Assets | The company evaluates the carrying value of long-lived assets (including property and equipment, goodwill and other intangible assets) when events or circumstances warrant such a review. Goodwill and intangible assets with indefinite lives are tested for impairment annually at the end of the third fiscal quarter each 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 units, which consist primarily of the operating segments and certain other reporting units. The 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 or 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 Note 5). |
Derivative Financial Instruments | It is the company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The company’s financial services manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling and financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as either a cash flow hedge, a 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 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 to the extent the hedge was effective 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 ineffective changes in derivative fair values are recognized currently in net income. 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, the hedge accounting discussed above 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 other comprehensive income. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange forward contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2015, 2014 and 2013 was $22 million, $(47) million and $(26) million, respectively. |
Consolidation, Policy | The consolidated financial statements represent primarily the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company 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 10). Other investments (less than 20 percent ownership) are recorded at cost. |
Fiscal Period, Policy | The company has historically and continues to use a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2015, 2014 and 2013 were November 1, 2015, November 2, 2014 and October 27, 2013, respectively. Fiscal year 2014 contained 53 weeks. For ease of presentation, the consolidated financial statements and notes continue to be dated October 31. |
Cash and Cash Equivalents, Policy | For purposes of the statement of consolidated cash flows, 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 long-term borrowings, mature or may require payment within three months or less. |
Pension and Other Postretirement Plans | Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10% 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 discount rate assumptions used to determine the postretirement obligations at October 31, 2015 and 2014 were 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. 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 and life insurance plan assets equal fair value. |
Unremitted Earnings in Foreign Investment, Policy | At October 31, 2015, accumulated earnings in certain subsidiaries outside the U.S. totaled $5,282 million for which no provision for U.S. income taxes or foreign withholding taxes has been made, because it is expected that such earnings will be reinvested outside the U.S. indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. At October 31, 2015, the amount of cash and cash equivalents and marketable securities held by these foreign subsidiaries was $1,588 million. |
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. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. Financing receivables are considered impaired when it is probable the company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables, which are impaired, are generally classified as non-performing. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Inventory Valuation, Policy | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries 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 market. |
Extended Product Warranty, Policy | The premiums for the company’s 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 awards to key employees under plans approved by stockholders. Restricted stock is 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 to three years after grant. Options expire ten years after the date of grant. Restricted stock awards generally vest after three years. The compensation cost for stock options, service based restricted stock units and market/service based restricted stock units, which is based on the fair value at the grant date, is recognized on a straight-line basis over the requisite period the employee is required to render service. The compensation cost for performance/service based units, which is based on the fair value at the grant date, is recognized over the employees’ requisite service period and periodically adjusted for the probable number of shares to be awarded. |
Fair Value of Financial Instruments, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the company uses various methods including market and income approaches. The company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. |
CASH FLOW INFORMATION (Tables)
CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
CASH FLOW INFORMATION | |
Cash Payments for Interest and Income Taxes | Cash payments for interest and income taxes consisted of the following in millions of dollars: 2015 2014 2013 Interest: Equipment operations $ $ $ Financial services Intercompany eliminations Consolidated $ $ $ Income taxes: Equipment operations $ $ $ Financial services Intercompany eliminations Consolidated $ $ $ |
PENSION AND OTHER POSTRETIREM41
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
Components of Pension and Postretirement Benefit Costs | The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2015 2014 2013 Pensions Service cost $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service cost Other postemployment benefits Settlements/curtailments Net cost $ $ $ Weighted-average assumptions Discount rates Rate of compensation increase Expected long-term rates of return The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents: 2015 2014 2013 Health care and life insurance Service cost $ $ $ Interest cost Expected return on plan assets Amortization of actuarial loss Amortization of prior service credit Settlements/curtailments Net cost $ $ $ Weighted-average assumptions Discount rates Expected long-term rates of return |
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: 2015 2014 2013 Pensions Net cost $ $ $ Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss Prior service (credit) cost Amortization of actuarial loss Amortization of prior service cost Settlements/curtailments Total (gain) loss recognized in other comprehensive (income) loss Total recognized in comprehensive (income) loss $ $ $ The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows: 2015 2014 2013 Health care and life insurance Net cost $ $ $ Retirement benefit adjustments included in other comprehensive (income) loss: Net actuarial (gain) loss Prior service credit Amortization of actuarial loss Amortization of prior service credit Settlements/curtailments Total (gain) loss recognized in other comprehensive (income) loss Total recognized in comprehensive (income) loss $ $ $ |
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 in millions of dollars follow: Health Care and Pensions Life Insurance 2015 2014 2015 2014 Change in benefit obligations Beginning of year balance $ $ $ $ Service cost Interest cost Actuarial gain (loss) Amendments Benefits paid Health care subsidies Other postemployment benefits Settlements/curtailments Foreign exchange and other End of year balance Change in plan assets (fair value) Beginning of year balance Actual return on plan assets Employer contribution Benefits paid Settlements/curtailments Foreign exchange and other End of year balance Funded status $ $ $ $ Weighted-average assumptions Discount rates Rate of compensation increase |
Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income - Pretax | The amounts recognized at October 31 in millions of dollars consist of the following: Health Care and Pensions Life Insurance 2015 2014 2015 2014 Amounts recognized in balance sheet Noncurrent asset $ $ Current liability $ $ Noncurrent liability Total $ $ $ $ Amounts recognized in accumulated other comprehensive income – pretax Net actuarial loss $ $ $ $ Prior service cost (credit) Total $ $ $ $ |
Schedule of Accumulated Other Comprehensive Income Expected to be Amortized as Net Expense (Income) During Fiscal 2015 | The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2016 in millions of dollars follow: Health Care and Pensions Life Insurance Net actuarial loss $ $ Prior service cost (credit) Total $ $ |
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: Health Care and Pensions Life Insurance* 2016 $ $ 2017 2018 2019 2020 2021 to 2025 * 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, 2015 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Derivative contracts - liabilities** Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value***: Short-term investments U.S. equity funds International equity funds Corporate debt funds Fixed income funds Real estate Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $137 million, foreign currency of $17 million, equity of $30 million and other of $6 million. ** Includes contracts for interest rates of $7 million, foreign currency of $15 million and other of $4 million. *** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. The fair values of the health care assets at October 31, 2015 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value**: Short-term investments International equity funds Fixed income funds Real estate funds Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $2 million , foreign currency of $1 million and equity of $1 million . ** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. The fair values of the pension plan assets at October 31, 2014 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities and funds Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Derivative contracts - liabilities** Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value***: Short-term investments U.S. equity funds International equity funds Fixed income funds Real estate funds Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $246 million, foreign currency of $61 million, equity of $11 million and other of $4 million. ** Includes contracts for interest rates of $6 million, foreign currency of $25 million and other of $8 million. *** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. The fair values of the health care assets at October 31, 2014 follow in millions of dollars: Total Level 1 Level 2 Cash and short-term investments $ $ $ Equity: U.S. equity securities and funds International equity securities Fixed Income: Government and agency securities Corporate debt securities Mortgage-backed securities Fixed income funds Real estate Derivative contracts - assets* Derivative contracts - liabilities** Receivables, payables and other Securities lending collateral Securities lending liability Securities sold short Total of Level 1 and Level 2 assets $ $ Investments at net asset value***: Short-term investments International equity funds Fixed income funds Real estate funds Hedge funds Private equity/venture capital Other investments Total net assets $ * Includes contracts for interest rates of $3 million and foreign currency of $2 million. ** Includes contracts for foreign currency of $1 million. *** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
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: 2015 2014 2013 Current: U.S.: Federal $ $ $ State Foreign Total current Deferred: U.S.: Federal State Foreign Total deferred Provision for income taxes $ $ $ |
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: 2015 2014 2013 U.S. federal income tax provision at a statutory rate of 35 percent $ $ $ Increase (decrease) resulting from: State and local income taxes, net of federal income tax benefit German branch deferred tax write-off Differences in taxability of foreign (earnings) losses Nondeductible impairment charges Research and business tax credits Tax rates on foreign earnings Valuation allowance on deferred taxes Other-net Provision for income taxes $ $ $ |
Analysis of the Deferred Income Tax Assets and Liabilities | An analysis of the deferred income tax assets and liabilities at October 31 in millions of dollars follows: 2015 2014 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities Other postretirement benefit liabilities $ $ Tax over book depreciation $ $ Accrual for sales allowances Lease transactions Tax loss and tax credit carryforwards Foreign unrealized losses Pension liability - net Accrual for employee benefits Share-based compensation Inventory Goodwill and other intangible assets Allowance for credit losses Deferred gains on distributed foreign earnings Deferred compensation Undistributed foreign earnings Other items Less valuation allowances Deferred income tax assets and liabilities $ $ $ $ |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at October 31 in millions of dollars follows: 2015 2014 2013 Beginning of year balance $ $ $ Increases to tax positions taken during the current year Increases to tax positions taken during prior years Decreases to tax positions taken during prior years Decreases due to lapse of statute of limitations Settlements Foreign exchange End of year balance $ $ $ |
OTHER INCOME AND OTHER OPERAT43
OTHER INCOME AND OTHER OPERATING EXPENSES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
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: 2015 2014 2013 Other income Insurance premiums and fees earned $ $ $ Revenues from services Investment income Other Total $ $ $ Other operating expenses Depreciation of equipment on operating leases $ $ $ Insurance claims and expenses Cost of services Other Total $ $ $ |
UNCONSOLIDATED AFFILIATED COM44
UNCONSOLIDATED AFFILIATED COMPANIES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
UNCONSOLIDATED AFFILIATED COMPANIES | |
Unconsolidated Affiliated Companies | Combined financial information of the unconsolidated affiliated companies in millions of dollars follows: Operations 2015 2014 2013 Sales $ $ $ Net income Deere & Company’s equity in net income (loss) Financial Position 2015 2014 Total assets $ $ Total external borrowings Total net assets Deere & Company’s share of the net assets |
Transactions with Unconsolidated Affiliated Companies | Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow : 2015 2014 2013 Net sales $ $ $ Purchases |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
MARKETABLE SECURITIES | |
Amortized Cost and Fair Value of Marketable Securities | The amortized cost and fair value of marketable securities at October 31 in millions of dollars follow: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2015 Equity fund $ $ $ U.S. government debt securities Municipal debt securities Corporate debt securities $ International debt securities Mortgage-backed securities* Marketable securities $ $ $ $ 2014 Equity fund $ $ $ Fixed income fund U.S. government debt securities $ Municipal debt securities Corporate debt securities Mortgage-backed securities* Marketable securities $ $ $ $ * Primarily issued by U.S. government sponsored enterprises. |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at October 31, 2015 in millions of dollars follow: Amortized Fair Cost Value Due in one year or less $ $ Due after one through five years Due after five through 10 years Due after 10 years Mortgage-backed securities Debt securities $ $ |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable | |
Schedule of Financing Receivable Installments | Financing receivable installments, including unearned finance income, at October 31 are scheduled as follows in millions of dollars: 2015 2014 Unrestricted/Securitized Unrestricted/Securitized Due in months: 0 – 12 $ $ $ $ 13 – 24 25 – 36 37 – 48 49 – 60 Thereafter Total $ $ $ $ |
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables at October 31 follows in millions of dollars: 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2015 Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ 30-59 60-89 90 Days Days Days or Greater Total Past Due Past Due Past Due Past Due 2014 Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ $ Total Total Total Non- Financing Past Due Performing Current Receivables Retail Notes: Agriculture and turf $ $ $ $ Construction and forestry Other: Agriculture and turf Construction and forestry Total $ $ $ Less allowance for credit losses Total financing receivables - net $ |
Analysis of the Allowance for Credit Losses and Investment in Financing Receivables | An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars: Revolving Retail Charge Notes Accounts Other Total 2015 Allowance: Beginning of year balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of year balance* $ $ $ $ Financing receivables: End of year balance $ $ $ $ Balance individually evaluated $ $ $ * Individual allowances were not significant. 2014 Allowance: Beginning of year balance $ $ $ $ Provision Write-offs Recoveries Translation adjustments End of year balance* $ $ $ $ Financing receivables: End of year balance $ $ $ $ Balance individually evaluated $ $ $ * Individual allowances were not significant. 2013 Allowance: Beginning of year balance $ $ $ $ Provision (credit) Write-offs Recoveries Translation adjustments End of year balance* $ $ $ $ Financing receivables: End of year balance $ $ $ $ Balance individually evaluated $ $ $ * Individual allowances were not significant. |
Analysis of the Impaired Financing Receivables | An analysis of the impaired financing receivables at October 31 follows in millions of dollars: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment 2015* Receivables with specific allowance** $ $ $ $ Receivables without a specific allowance*** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ 2014* Receivables with specific allowance** $ $ $ $ Receivables without a specific allowance** Total $ $ $ $ Agriculture and turf $ $ $ $ Construction and forestry $ $ $ * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. |
Schedule of Other Receivables | Other receivables at October 31 consisted of the following in millions of dollars: 2015 2014 Taxes receivable $ $ Reinsurance receivables Insurance premium receivables Other Other receivables $ $ |
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 consisted of the following in millions of dollars: 2015 2014 Trade accounts and notes: Agriculture and turf $ $ Construction and forestry Trade accounts and notes receivable–net $ $ |
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 consisted of the following in millions of dollars: 2015 2014 Unrestricted/Securitized Unrestricted/Securitized Retail notes: Equipment: Agriculture and turf $ $ $ $ Construction and forestry Total Wholesale notes Revolving charge accounts Financing leases (direct and sales-type) Total financing receivables Less: Unearned finance income: Equipment notes Financing leases Total Allowance for credit losses Financing receivables – net $ $ $ $ |
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 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars: 2015 2014 Unrestricted Unrestricted Retail notes*: Equipment: Agriculture and turf $ $ Construction and forestry Total Wholesale notes Sales-type leases Total Less: Unearned finance income: Equipment notes Sales-type leases Total Financing receivables related to the company’s sales of equipment $ $ * These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales. |
SECURITIZATION OF FINANCING R47
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
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 in millions of dollars: 2015 Carrying value of liabilities $ Maximum exposure to loss |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 31 were as follows in millions of dollars: 2015 2014 Financing receivables securitized (retail notes) $ $ Allowance for credit losses Other assets Total restricted securitized assets $ $ The components of consolidated secured borrowings and other liabilities related to securitizations at October 31 were as follows in millions of dollars: 2015 2014 Short-term securitization borrowings $ $ Accrued interest on borrowings Total liabilities related to restricted securitized assets $ $ |
EQUIPMENT ON OPERATING LEASES (
EQUIPMENT ON OPERATING LEASES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
EQUIPMENT ON OPERATING LEASES | |
Equipment on Operating Leases - Net | Net equipment on operating leases at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment on operating lease s : Agriculture and turf $ $ Construction and forestry Equipment on operating lease s - net $ $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
INVENTORIES | |
Major Classification of Inventories | If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions of dollars would have been as follows: 2015 2014 Raw materials and supplies $ $ Work-in-process Finished goods and parts Total FIFO value Less adjustment to LIFO value Inventories $ $ |
PROPERTY AND DEPRECIATION (Tabl
PROPERTY AND DEPRECIATION (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
PROPERTY AND DEPRECIATION | |
Schedule of Property and Equipment | A summary of property and equipment at October 31 in millions of dollars follows: Useful Lives* (Years) 2015 2014 Equipment Operations Land $ $ Buildings and building equipment 23 Machinery and equipment 11 Dies, patterns, tools, etc. 8 All other 5 Construction in progress Total at cost Less accumulated depreciation Total Financial Services Land Buildings and building equipment 27 All other 6 Total at cost Less accumulated depreciation Total Property and equipment-net $ $ * Weighted-averages |
GOODWILL AND OTHER INTANGIBLE51
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and and Turf Forestry Total Balance at October 31, 2013 $ $ $ Less accumulated impairment losses Net balance Divestiture* Translation adjustments and other Balance at October 31, 2014 Less accumulated impairment losses* Net balance Translation adjustments and other Goodwill at October 31, 2015 $ $ $ * Accumulated impairment losses were also reduced by $60 million related to the sale of the Water operations (see Note 4). |
Components of Other Intangible Assets | The components of other intangible assets are as follows in millions of dollars: Useful Lives* (Years) 2015 2014 Amortized intangible assets: Customer lists and relationships 14 $ $ Technology, patents, trademarks and other 17 Total at cost Less accumulated amortization** Total Unamortized intangible assets: Licenses Other intangible assets-net $ $ * Weighted-averages ** Accumulated amortization at 2015 and 2014 for customer lists and relationships was $10 million and $9 million and technology, patents, trademarks and other was $45 million and $36 million, respectively. |
TOTAL SHORT-TERM BORROWINGS (Ta
TOTAL SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
TOTAL SHORT-TERM BORROWINGS | |
Short-Term Borrowings | Total short-term borrowings at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment Operations Commercial paper $ $ Notes payable to banks Long-term borrowings due within one year Total Financial Services Commercial paper Notes payable to banks Long-term borrowings due within one year* Total Short-term borrowings Financial Services Short-term securitization borrowings Total short-term borrowings $ $ * Includes unamortized fair value adjustments related to interest rate swaps. |
ACCOUNTS PAYABLE AND ACCRUED 53
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment Operations Accounts payable: Trade payables $ $ Dividends payable Other Accrued expenses: Dealer sales discounts Employee benefits Product warranties Unearned revenue Other Total Financial Services Accounts payable: Deposits withheld from dealers and merchants Other Accrued expenses: Unearned revenue Accrued interest Employee benefits Insurance claims reserve* Other Total Eliminations** Accounts payable and accrued expenses $ $ * See Note 9 ** Pri marily trade receivable valuation accounts which are reclassified as accrued expenses by the equipment operations as a result of their trade receivables being sold to financial services . |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
LONG-TERM BORROWINGS | |
Long-Term Borrowings | Long-term borrowings at October 31 consisted of the following in millions of dollars: 2015 2014 Equipment Operations Notes and debentures: 4.375% notes due 2019 $ $ 8 -1/2% debentures due 2022 2.60% notes due 2022 6.55% debentures due 2028 5.375% notes due 2029 8.10% debentures due 2030 7.125% notes due 2031 3.90% notes due 2042 Other notes Total Financial Services Notes and debentures: Medium-term notes due 2016 – 2025: (principal $17,610 - 2015, $17,939 - 2014) Average interest rates of 1.4% - 2015, 1.2% - 2014 * * 2.75% senior note due 2022: ($500 principal) Swapped $500 to variable interest rate of 1.1% - 2015, . 9% – 2014 * * Other notes Total Long-term borrowings** $ $ * 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, 2015 | |
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 2015 2014 Beginning of year balance $ $ Payments Amortization of premiums received Accruals for warranties Premiums received Foreign exchange End of year balance $ $ |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
CAPITAL STOCK | |
Changes in the Common Stock Account | Changes in the common stock account in millions were as follows: Number of Shares Issued Amount Balance at October 31, 2012 536.4 $ Stock options and other Balance at October 31, 2013 536.4 Stock options and other Balance at October 31, 2014 536.4 Stock options and other Balance at October 31, 2015 536.4 $ |
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: 2015 2014 2013 Net income attributable to Deere & Company $ $ $ Less income allocable to participating securities .8 .9 Income allocable to common stock $ $ $ Average shares outstanding Basic per share $ $ $ Average shares outstanding Effect of dilutive stock options Total potential shares outstanding Diluted per share $ $ $ |
STOCK OPTION AND RESTRICTED S57
STOCK OPTION AND RESTRICTED STOCK AWARDS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
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: 2015 2014 2013 Risk-free interest rate .04% - 2.3% .03% - 2.9% .04% - 1.7% Expected dividends 2.5% 2.3% 2.3% Expected volatility 23.4% - 25.7% 25.9% - 32.0% 26.6% - 32.5% Weighted-average volatility 25.6% 31.9% 32.4% Expected term (in years) 7.2 - 8.2 7.3 - 7.4 7.3 - 7.9 |
Stock Option Activity | Stock option activity at October 31, 2015 and changes during 2015 in millions of dollars and shares follow: Remaining Contractual Aggregate Exercise Term Intrinsic Shares Price* (Years) Value Outstanding at beginning of year $ Granted Exercised Expired or forfeited (.2) Outstanding at end of year $ Exercisable at end of year * Weighted-averages |
Nonvested Restricted Share Activity | The company’s nonvested restricted shares at October 31, 2015 and changes during 2015 in millions of shares follow: Grant-Date Shares Fair Value* Service based only Nonvested at beginning of year .3 $ Granted .1 Vested (.1) Nonvested at end of year .3 Performance/service and market/service based Nonvested at beginning of year .4 $ Granted .1 Expired or forfeited (.1) Nonvested at end of year .4 * Weighted-averages |
OTHER COMPREHENSIVE INCOME IT58
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income at October 31 in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) 2012 $ $ $ $ $ Period Change 2013 Period Change 2014 Period Change 2015 $ $ $ $ $ |
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 2015 Cumulative translation adjustment $ $ $ Unrealized gain (loss) on derivatives: Unrealized hedging (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain Reclassification of realized (gain) loss - Other income Net unrealized (loss) on investments Retirement benefits adjustment: Pensions Net actuarial (loss) and prior service (cost) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service cost Settlements/curtailments Health care and life insurance Net actuarial gain and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service (credit) Settlements/curtailments Net unrealized (loss) on retirement benefits adjustment Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2014 Cumulative translation adjustment: Unrealized (loss) on translation adjustment $ $ $ Reclassification of loss to Other operating expenses* Net unrealized (loss) on translation adjustment Unrealized gain (loss) on derivatives: Unrealized hedging (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized gain on derivatives Unrealized gain (loss) on investments: Unrealized holding gain Net unrealized gain on investments Retirement benefits adjustment: Pensions Net actuarial (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:** Actuarial loss Prior service cost Settlements/curtailments Health care and life insurance Net actuarial (loss) and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:** Actuarial loss Prior service (credit) Settlements/curtailments Net unrealized (loss) on retirement benefits adjustment Total other comprehensive income (loss) $ $ $ * Represents the accumulated translation adjustments related to the foreign subsidiaries of the Water operations that were sold (see Note 4). ** These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Amount Credit Amount 2013 Cumulative translation adjustment $ $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized gain on derivatives Unrealized gain (loss) on investments: Unrealized holding (loss) Net unrealized (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service cost Settlements/curtailments Health care and life insurance Net actuarial gain and prior service credit Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to net income:* Actuarial loss Prior service (credit) Net unrealized gain on retirement benefits adjustment Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic postretirement costs. See Note 7 for additional detail. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at October 31 in millions of dollars follow: 2015 2014 Carrying Fair Carrying Fair Value Value* Value Value* Financing receivables – net $ $ $ $ Financing receivables securitized – net $ $ $ $ Short-term securitization borrowings $ $ $ $ Long-term borrowings due within one year: Equipment operations $ $ $ $ Financial services Total $ $ $ $ Long-term borrowings: Equipment operations $ $ $ $ Financial services Total $ $ $ $ * Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at October 31 at fair value on a recurring basis in millions of dollars follow: 2015* 2014* Marketable securities Equity fund $ $ Fixed income fund U.S. government debt securities Municipal debt securities Corporate debt securities International debt securities Mortgage-backed securities** Total marketable securities Other assets Derivatives: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total assets*** $ $ Accounts payable and accrued expenses Derivatives: Interest rate contracts $ $ Foreign exchange contracts Total liabilities $ $ * All measurements above were Level 2 measurements except for Level 1 measurements of U.S. government debt securities of $37 million and $741 million at October 31, 2015 and 2014, respectively, and the equity fund of $43 million and $45 million at October 31, 2015 and 2014, respectively, and the fixed income fund of $10 million at October 31, 2014. In addition, $29 million of the international debt securities were Level 3 measurements at October 31, 2015. There were no transfers between Level 1 and Level 2 during 2015 and 2014 . ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. |
Fair Value, Recurring, Level 3 Measurements | Fair value, recurring, Level 3 measurements from available for sale marketable securities at October 31 in millions of dollars follow: 2015 Beginning of period balance Purchases $ Change in unrealized gain (loss) End of period balance $ |
Fair Value, Nonrecurring, Level 3 Measurements | Fair value, nonrecurring, Level 3 measurements from impairments at October 31 in millions of dollars follow: Fair Value* Losses* 2015 2014 2015 2014 2013 Equipment on operating leases – net $ $ Property and equipment – net $ $ $ $ $ Other intangible assets – net $ Other assets $ $ $ $ Assets held for sale – Water operations $ * See financing receivables with specific allowances in Note 12 that were not significant. See Note 5 for impairments. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
DERIVATIVE INSTRUMENTS | |
Fair Value Hedge Interest Rate Contracts and Underlying Borrowings | The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars: 2015 2014 Interest rate contracts* $ $ Borrowings** * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $173 million and $168 million during 2015 and 2014, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $274 million and $267 million during 2015 and 2014, respectively. |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet at October 31 in millions of dollars follow: 2015 2014 Other Assets Designated as hedging instruments: Interest rate contracts $ $ Cross-currency interest rate contracts Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Cross-currency interest rate contracts Total not designated Total derivative assets $ $ Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ $ Total designated Not designated as hedging instruments: Interest rate contracts Foreign exchange contracts Total not designated Total derivative liabilities $ $ |
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: 2015 2014 2013 Fair Value Hedges Interest rate contracts – Interest expense $ $ $ Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts – OCI (pretax)* Foreign exchange contracts – OCI (pretax)* Reclassified from OCI (Effective Portion): Interest rate contracts – Interest expense* Foreign excha nge contracts – Other expense* Recognized Directly in Income (Ineffective Portion) ** ** ** Not Designated as Hedges Interest rate contracts – Interest expense* $ $ $ Foreign exchange contracts – Cost of sales Foreign exchange contracts – Other expense* Total not designated $ $ $ * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts are not significant. |
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid at October 31 in millions of dollars follows: Gross Amounts Netting Collateral Net Recognized Arrangements Received Amount 2015 Assets $ $ $ Liabilities 2014 Assets $ $ $ $ Liabilities |
SEGMENT AND GEOGRAPHIC AREA D61
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 | |
Schedule of Segment Reporting Information by Segment | Information relating to operations by operating segment in millions of dollars follows. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2015, 2014 and 2013 were as follows: agriculture and turf net sales of $49 million, $89 million and $69 million, construction and forestry net sales of $1 million, $1 million and $2 million, and financial services revenues of $225 million, $228 million and $220 million, respectively. OPERATING SEGMENTS 2015 2014 2013 Net sales and revenues Unaffiliated customers: Agriculture and turf net sales $ $ $ Construction and forestry net sales Total net sales Financial services revenues Other revenues* Total $ $ $ * Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income as disclosed in Note 31, net of certain intercompany eliminations. Operating profit Agriculture and turf $ $ $ Construction and forestry Financial services* Total operating profit Interest income Investment income Interest expense Foreign exchange gains (losses) from equipment operations’ financing activities Corporate expenses — net Income taxes Total Net income Less: Net income attributable to noncontrolling interests Net income attributable to Deere & Company $ $ $ * Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses. Interest income* Agriculture and turf $ $ $ Construction and forestry Financial services Corporate Intercompany Total $ $ $ * Does not include finance rental income for equipment on operating leases. Interest expense Agriculture and turf $ $ $ Construction and forestry Financial services Corporate Intercompany Total $ $ $ Depreciation* and amortization expense Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ * Includes depreciation for equipment on operating leases. Equity in income (loss) of unconsolidated affiliates Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ Identifiable operating assets Agriculture and turf $ $ $ Construction and forestry Financial services Corporate* Total $ $ $ * Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, marketable securities and cash and cash equivalents as disclosed in Note 31, net of certain intercompany eliminations. Capital additions Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ Investments in unconsolidated affiliates Agriculture and turf $ $ $ Construction and forestry Financial services Total $ $ $ |
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, shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. GEOGRAPHIC AREAS 2015 2014 2013 Net sales and revenues Unaffiliated customers: U.S. and Canada: Equipment operations net sales (87%)* $ $ $ Financial services revenues (78%)* Total Outside U.S. and Canada: Equipment operations net sales Financial services revenues Total Other revenues Total $ $ $ * The percentages indicate the approximate proportion of each amount that relates to the U.S. only and are based upon a three -year average for 2015 , 2014 and 2013. Operating profit U.S. and Canada: Equipment operations $ $ $ Financial services Total Outside U.S. and Canada: Equipment operations Financial services Total Total $ $ $ Property and equipment U.S. $ $ $ Germany Other countries Total $ $ $ |
SUPPLEMENTAL INFORMATION (UNA62
SUPPLEMENTAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
SUPPLEMENTAL INFORMATION (UNAUDITED) | |
Quarterly Common Stock Per Share Sales Prices | Common stock per share sales prices from New York Stock Exchange composite transactions quotations follow: First Second Third Fourth Quarter Quarter Quarter Quarter 2015 Market price High $ $ $ $ Low $ $ $ $ 2014 Market price High $ $ $ $ Low $ $ $ $ |
Quarterly Financial Information | The company’s fiscal year ends in October and its interim periods (quarters) end in January, April and July. Such information is shown in millions of dollars except for per share amounts. First Second Third Fourth Quarter Quarter Quarter Quarter 2015 Net sales and revenues $ $ $ $ Net sales Gross profit Income before income taxes Net income attributable to Deere & Company Per share data: Basic Diluted Dividends declared .60 .60 .60 .60 Dividends paid .60 .60 .60 .60 2014* Net sales and revenues $ $ $ $ Net sales Gross profit Income before income taxes Net income attributable to Deere & Company Per share data: Basic Diluted Dividends declared .51 .51 .60 .60 Dividends paid .51 .51 .51 .60 Net income per share for each quarter must be computed independently. As a result, their sum may not equal the total net income per share for the year. * See Note 5 for “Special Items |
SUPPLEMENTAL CONSOLIDATING DA63
SUPPLEMENTAL CONSOLIDATING DATA (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
Supplemental Consolidating Data Income Statement | INCOME STATEMENT For the Years Ended October 31, 2015, 2014 and 2013 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2015 2014 2013 2015 2014 2013 Net Sales and Revenues Net sales $ $ $ Finance and interest income $ $ $ Other income Total Costs and Expenses Cost of sales Research and development expenses Selling, administrative and general expenses Interest expense Interest compensation to Financial Services Other operating expenses Total Income of Consolidated Group before Income Taxes Provision for income taxes Income of Consolidated Group Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Financial Services Other (.3) Total Net Income Less: Net income attributable to noncontrolling interests .9 .3 Net Income Attributable to Deere & Company $ $ $ $ $ $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. The consolidated group data in the “Equipment Operations” income statement reflect the results of the agriculture and turf operations and construction and forestry operations. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
Supplemental Consolidating Data Balance Sheet | BALANCE SHEET As of October 31, 2015 and 2014 (In millions of dollars except per share amounts) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2015 2014 2015 2014 ASSETS Cash and cash equivalents $ $ $ $ Marketable securities Receivables from unconsolidated subsidiaries and affiliates Trade accounts and notes receivable - net Financing receivables - net .9 Financing receivables securitized - net Other receivables Equipment on operating leases - net Inventories Property and equipment - net Investments in unconsolidated subsidiaries and affiliates Goodwill Other intangible assets - net Retirement benefits Deferred income taxes Other assets Total Assets $ $ $ $ LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Short-term borrowings $ $ $ $ Short-term securitization borrowings Payables to unconsolidated subsidiaries and affiliates Accounts payable and accrued expenses Deferred income taxes Long-term borrowings Retirement benefits and other liabilities Total liabilities Commitments and contingencies (Note 22) STOCKHOLDERS’ EQUITY Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2015 and 2014), at paid-in amount Common stock in treasury, 219,743,893 shares in 2015 and 190,926,805 shares in 2014, at cost Retained earnings Accumulated other comprehensive income (loss) Total Deere & Company stockholders’ equity Noncontrolling interests Total stockholders’ equity Total Liabilities and Stockholders’ Equity $ $ $ $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
Supplemental Consolidating Data Statement of Cash Flows | STATEMENT OF CASH FLOWS For the Years Ended October 31, 2015, 2014 and 2013 (In millions of dollars) EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2015 2014 2013 2015 2014 2013 Cash Flows from Operating Activities Net income $ $ $ $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses Provision for depreciation and amortization Impairment charges Undistributed earnings of unconsolidated subsidiaries and affiliates (.9) Provision (credit) for deferred income taxes Changes in assets and liabilities: Trade receivables Insurance receivables Inventories Accounts payable and accrued expenses Accrued income taxes payable/receivable Retirement benefits Other Net cash provided by operating activities Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) Proceeds from maturities and sales of marketable securities Proceeds from sales of equipment on operating leases Proceeds from sales of businesses, net of cash sold Cost of receivables acquired (excluding trade and wholesale) Purchases of marketable securities Purchases of property and equipment Cost of equipment on operating leases acquired Increase in investment in Financial Services Acquisitions of businesses, net of cash acquired Decrease (increase) in trade and wholesale receivables Other Net cash used for investing activities Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings Change in intercompany receivables/payables Proceeds from long-term borrowings Payments of long-term borrowings Proceeds from issuance of common stock Repurchases of common stock Capital investment from Equipment Operations Dividends paid Excess tax benefits from share-based compensation Other Net cash provided by (used for) financing activities Effect of Exchange Rate Changes on Cash and Cash Equivalents Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year $ $ $ $ $ $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. The “Equipment Operations” reflect the basis of consolidation described in Note 1 to the consolidated financial statements. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements |
SUMMARY OF SIGNIFICANT ACCOUN64
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising costs | $ 157 | $ 174 | $ 183 |
Foreign exchange pretax net gains (losses) | $ 22 | $ (47) | $ (26) |
DISPOSITIONS (Details)
DISPOSITIONS (Details) - Disposal Group - USD ($) $ in Millions | Dec. 23, 2013 | Mar. 31, 2015 | May. 31, 2014 | Jan. 31, 2015 | Apr. 30, 2014 | Oct. 31, 2013 |
Crop Insurance Operations | ||||||
Assets and liabilities classified as held for sale | ||||||
Total assets held for sale | $ 381 | |||||
Total liabilities held for sale | 267 | |||||
Cash and cash equivalents | 13 | |||||
Marketable securities | 79 | |||||
Other receivables | 265 | |||||
Other intangible assets | 4 | |||||
Other assets | $ 20 | |||||
Proceeds from sale of operations | $ 154 | |||||
Cash and cash equivalents sold | 5 | |||||
Gain from sale of Crop Insurance Operations, pretax, recorded in other income | 42 | |||||
Gain from sale of Crop Insurance Operations, after-tax, recorded in other income | $ 40 | |||||
Water Operations | ||||||
Assets and liabilities classified as held for sale | ||||||
Total assets held for sale | $ 85 | |||||
Total liabilities held for sale | 50 | |||||
Trade receivables | 57 | |||||
Other receivables | 10 | |||||
Inventories | 49 | |||||
Other assets | 5 | |||||
Asset impairment | 36 | |||||
Accounts payable and accrued expenses | 47 | |||||
Retirement benefits and other liabilities | $ 3 | |||||
Proceeds from sale of operations | $ 35 | |||||
Loss from sale of Water Operations, pretax and after-tax | $ (10) | |||||
John Deere Landscapes | ||||||
Dispositions | ||||||
Percentage of ownership interest sold | 60.00% | |||||
Assets and liabilities classified as held for sale | ||||||
Total assets held for sale | $ 505 | |||||
Total liabilities held for sale | 120 | |||||
Trade receivables | 153 | |||||
Inventories | 219 | |||||
Property and equipment | 37 | |||||
Goodwill | 106 | |||||
Other intangible assets | 25 | |||||
Other assets | 10 | |||||
Asset impairment | $ 45 | |||||
Proceeds from sale of business including sales price adjustments for net asset adjustments | $ 305 | |||||
Amount of private equity contribution received by John Deere Landscapes | $ 174 | |||||
Preferred units, percentage of voting rights sold | 60.00% | |||||
Preferred units, liquidation preference | $ 174 | |||||
Preferred units, dividend rate (as a percent) | 12.00% | |||||
Period which CD&R's ownership interest will increase due to preferred dividend payment in additional preferred shares | 2 years | |||||
Equity Method Investments | ||||||
Equity investment retained (as a percent) | 40.00% |
DISPOSITIONS (Details 2)
DISPOSITIONS (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2015 | Oct. 31, 2014 | |
DISPOSITIONS | |||
Approximate total consideration | $ 83.5 | ||
Goodwill | $ 845 | $ 726 | $ 791.2 |
SPECIAL ITEMS (Details)
SPECIAL ITEMS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Long-lived Asset Impairment | ||||||||
Non-cash charge for impairment of long-lived assets, pretax | $ 34.8 | $ 95.9 | $ 102 | |||||
Water Operations | Disposal Group | ||||||||
Long-lived Asset Impairment | ||||||||
Non-cash charge for impairment of long-lived assets, pretax | $ 7 | $ 50 | 62 | 57 | ||||
Non-cash charge for impairment of long-lived assets, after-tax | $ 7 | $ 44 | $ 30 | 51 | ||||
Water Operations | Cost of Sales | Disposal Group | ||||||||
Long-lived Asset Impairment | ||||||||
Non-cash charge for impairment of long-lived assets, pretax | $ 26 | 50 | ||||||
Non-cash charge for impairment of long-lived assets, after-tax | $ 26 | |||||||
Water Operations | Selling, Administrative, and General Expenses | Disposal Group | ||||||||
Long-lived Asset Impairment | ||||||||
Non-cash charge for impairment of long-lived assets, pretax | $ 7 | |||||||
Water Operations | Other Operating Expense | Disposal Group | ||||||||
Long-lived Asset Impairment | ||||||||
Non-cash charge for impairment of long-lived assets, pretax | $ 36 | |||||||
Non-cash charge for impairment of long-lived assets, after-tax | $ 4 | |||||||
Agriculture and Turf | Cost of Sales | ||||||||
Long-lived Asset Impairment | ||||||||
Non-cash charge for impairment of long-lived assets, pretax | $ 18 | |||||||
Non-cash charge for impairment of long-lived assets, after-tax | 18 | |||||||
Non-cash charge for impairment of other assets, pretax | 16 | |||||||
Non-cash charge for impairment of other assets, after-tax | $ 16 |
SPECIAL ITEMS (Details 2)
SPECIAL ITEMS (Details 2) - John Deere Landscapes - Disposal Group $ in Millions | 3 Months Ended |
Oct. 31, 2013USD ($) | |
Impairments | |
Non-cash charge in other operating expenses for an impairment to write-down assets held for sale to realizable value, pretax | $ 45 |
Non-cash charge in other operating expenses for an impairment to write-down assets held for sale to realizable value, after-tax | $ 45 |
CASH FLOW INFORMATION (Details)
CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
CASH FLOW INFORMATION | |||
Cash equivalents, maturity period | 3 months | 3 months | 3 months |
Short-term borrowings, maturity period | 3 months | 3 months | 3 months |
Transfer of inventory to equipment on operating leases | $ 674 | $ 794 | $ 659 |
Accounts payable related to purchases of property and equipment | 89 | 128 | 198 |
Interest: | |||
Interest | 661 | 692 | 766 |
Income taxes: | |||
Income taxes | 901 | 1,720 | 1,954 |
Equipment Operations | |||
Interest: | |||
Interest | 471 | 506 | 511 |
Income taxes: | |||
Income taxes | 828 | 1,640 | 1,863 |
Financial Services | |||
Interest: | |||
Interest | 443 | 454 | 502 |
Income taxes: | |||
Income taxes | 190 | 333 | 270 |
Intercompany Eliminations | |||
Interest: | |||
Interest | (253) | (268) | (247) |
Income taxes: | |||
Income taxes | $ (117) | $ (253) | $ (179) |
PENSION AND OTHER POSTRETIREM70
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Pensions | |||
Net Periodic Cost | |||
Service cost | $ 282 | $ 244 | $ 273 |
Interest cost | 474 | 480 | 439 |
Expected return on plan assets | (769) | (776) | (778) |
Amortization of actuarial (gain) loss | 223 | 177 | 265 |
Amortization of prior service (credit) cost | 25 | 25 | 12 |
Other postemployment benefits | 1 | 5 | |
Settlements/curtailments | 11 | 9 | 2 |
Net cost | $ 247 | $ 164 | $ 213 |
Weighted-Average Assumptions | |||
Discount rates (as a percent) | 4.00% | 4.50% | 3.80% |
Rate of compensation increase (as a percent) | 3.80% | 3.80% | 3.90% |
Expected long-term rates of return (as a percent) | 7.30% | 7.50% | 7.80% |
Health Care and Life Insurance | |||
Net Periodic Cost | |||
Service cost | $ 46 | $ 44 | $ 58 |
Interest cost | 259 | 267 | 255 |
Expected return on plan assets | (55) | (72) | (84) |
Amortization of actuarial (gain) loss | 91 | 33 | 141 |
Amortization of prior service (credit) cost | (77) | (3) | (8) |
Settlements/curtailments | 1 | (1) | |
Net cost | $ 265 | $ 268 | $ 362 |
Weighted-Average Assumptions | |||
Discount rates (as a percent) | 4.20% | 4.70% | 3.80% |
Expected long-term rates of return (as a percent) | 7.00% | 7.20% | 7.50% |
PENSION AND OTHER POSTRETIREM71
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Pensions | |||
Benefit Plan Costs Recognized in Other Comprehensive Income | |||
Net cost | $ 247 | $ 164 | $ 213 |
Retirement Benefits Adjustments Included in Other Comprehensive (Income) Loss: | |||
Net actuarial (gain) loss | 361 | 940 | (1,481) |
Prior service (credit) cost | 66 | (26) | |
Amortization of actuarial (loss) gain | (223) | (177) | (265) |
Amortization of prior service (cost) credit | (25) | (25) | (12) |
Settlements/curtailments | (11) | (9) | (2) |
Total (gain) loss recognized in other comprehensive (income) loss | 168 | 729 | (1,786) |
Total recognized in comprehensive (income) loss | 415 | 893 | (1,573) |
Health Care and Life Insurance | |||
Benefit Plan Costs Recognized in Other Comprehensive Income | |||
Net cost | 265 | 268 | 362 |
Retirement Benefits Adjustments Included in Other Comprehensive (Income) Loss: | |||
Net actuarial (gain) loss | (141) | 748 | (1,165) |
Prior service (credit) cost | (3) | (370) | (2) |
Amortization of actuarial (loss) gain | (91) | (33) | (141) |
Amortization of prior service (cost) credit | 77 | 3 | 8 |
Settlements/curtailments | (2) | 1 | |
Total (gain) loss recognized in other comprehensive (income) loss | (160) | 349 | (1,300) |
Total recognized in comprehensive (income) loss | $ 105 | $ 617 | $ (938) |
PENSION AND OTHER POSTRETIREM72
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Pensions | |||
Change in benefit obligations | |||
Beginning of year balance | $ (12,190) | $ (10,968) | |
Service cost | (282) | (244) | $ (273) |
Interest cost | (474) | (480) | (439) |
Actuarial gain (loss) | (174) | (1,306) | |
Amendments | (66) | ||
Benefits paid | 781 | 675 | |
Other postemployment benefits | (1) | (5) | |
Settlements/curtailments | 2 | 2 | |
Foreign exchange and other | 218 | 136 | |
End of year balance | (12,186) | (12,190) | (10,968) |
Change in plan assets (fair value) | |||
Beginning of year balance | 11,447 | 11,008 | |
Actual return on plan assets | 582 | 1,132 | |
Employer contribution | 83 | 87 | |
Benefits paid | (781) | (675) | |
Settlements/curtailments | (2) | (2) | |
Foreign exchange and other | (165) | (103) | |
End of year balance | 11,164 | 11,447 | 11,008 |
Funded status | $ (1,022) | $ (743) | |
Weighted-average assumptions | |||
Discount rates (as a percent) | 4.10% | 4.00% | |
Rate of compensation increase (as a percent) | 3.80% | 3.80% | |
Health Care and Life Insurance | |||
Change in benefit obligations | |||
Beginning of year balance | $ (6,304) | $ (5,926) | |
Service cost | (46) | (44) | (58) |
Interest cost | (259) | (267) | (255) |
Actuarial gain (loss) | 172 | (757) | |
Amendments | 3 | 370 | |
Benefits paid | 344 | 336 | |
Health care subsidies | (20) | (22) | |
Settlements/curtailments | 1 | ||
Foreign exchange and other | 25 | 6 | |
End of year balance | (6,084) | (6,304) | (5,926) |
Change in plan assets (fair value) | |||
Beginning of year balance | 957 | 1,157 | |
Actual return on plan assets | 24 | 81 | |
Employer contribution | 48 | 51 | |
Benefits paid | (344) | (336) | |
Foreign exchange and other | 4 | 4 | |
End of year balance | 689 | 957 | $ 1,157 |
Funded status | $ (5,395) | $ (5,347) | |
Weighted-average assumptions | |||
Discount rates (as a percent) | 4.30% | 4.20% |
PENSION AND OTHER POSTRETIREM73
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details 4) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Amounts recognized in balance sheet | ||
Noncurrent asset | $ 215.6 | $ 262 |
Pensions | ||
Amounts recognized in balance sheet | ||
Noncurrent asset | 216 | 262 |
Current liability | (44) | (51) |
Noncurrent liability | (1,194) | (954) |
Funded status | (1,022) | (743) |
Amounts recognized in accumulated other comprehensive income - pretax | ||
Net actuarial loss | 4,393 | 4,266 |
Prior service cost (credit) | 83 | 42 |
Total | 4,476 | 4,308 |
Accumulated Benefit Obligations - Additional Disclosures | ||
Accumulated benefit obligation for pension plans | 11,508 | 11,425 |
Accumulated Benefit Obligations in Excess of Plan Assets | ||
Accumulated benefit obligations for pension plans with accumulated benefit obligations in excess of plan assets | 7,254 | 1,381 |
Fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets | 6,669 | 916 |
Projected Benefit Obligations in Excess of Plan Assets | ||
Projected benefit obligations for pension plans with projected benefit obligations in excess of plan assets | 8,196 | 8,213 |
Fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets | 6,958 | 7,208 |
Amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2016 | ||
Net actuarial loss | 208 | |
Prior service cost (credit) | 16 | |
Total | 224 | |
Expected future employer contributions towards defined benefit plans, which are primarily direct benefit payments for unfunded plans | 73 | |
Benefits expected to be paid from the benefit plans, which reflect expected future years of service | ||
2,016 | 697 | |
2,017 | 688 | |
2,018 | 685 | |
2,019 | 690 | |
2,020 | 694 | |
2021 to 2025 | 3,484 | |
Health Care and Life Insurance | ||
Amounts recognized in balance sheet | ||
Current liability | (20) | (21) |
Noncurrent liability | (5,375) | (5,326) |
Funded status | (5,395) | (5,347) |
Amounts recognized in accumulated other comprehensive income - pretax | ||
Net actuarial loss | 1,442 | 1,675 |
Prior service cost (credit) | (334) | (407) |
Total | 1,108 | $ 1,268 |
Amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2016 | ||
Net actuarial loss | 75 | |
Prior service cost (credit) | (78) | |
Total | (3) | |
Expected future employer contributions towards defined benefit plans, which are primarily direct benefit payments for unfunded plans | 25 | |
Benefits expected to be paid from the benefit plans, which reflect expected future years of service | ||
2,016 | 317 | |
2,017 | 333 | |
2,018 | 339 | |
2,019 | 342 | |
2,020 | 344 | |
2021 to 2025 | $ 1,766 |
PENSION AND OTHER POSTRETIREM74
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details 5) - Health Care and Life Insurance - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Health care costs trend rates | ||
Weighted average composite trend rate for first fiscal year following balance sheet date (as a percent) | 0.80% | 6.20% |
Weighted average composite trend rate for second fiscal year following balance sheet date (as a percent) | 7.90% | |
Ultimate weighted-average composite trend rate (as a percent) | 4.80% | 5.00% |
Year that weighted-average composite trend rate reaches ultimate rate (year) | 2,024 | 2,022 |
The changes in the accumulated postretirement benefit obligation and the aggregate of service and interest cost components of net periodic postretirement benefits cost due to one percentage point change in the assumed health care cost trend rate | ||
Increase in accumulated postretirement benefit obligations due to one percentage point increase in the assumed health care cost trend rate | $ 807 | |
Increase in aggregate of service and interest cost components of net periodic postretirement benefits cost for the year due to one percentage point increase in the assumed health care cost trend rate | 45 | |
Decrease in accumulated postretirement benefit obligations due to one percentage point decrease in the assumed health care cost trend rate | 619 | |
Decrease in aggregate of service and interest cost components of net periodic postretirement benefits cost for the year due to one percentage point decrease in the assumed health care cost trend rate | $ 34 |
PENSION AND OTHER POSTRETIREM75
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details 6) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 |
Pensions | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | $ 11,164 | $ 11,447 | $ 11,008 |
Pensions | Level 1 and 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 6,821 | 7,029 | |
Pensions | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 5,124 | 5,771 | |
Pensions | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,697 | 1,258 | |
Pensions | Cash and Short-term Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 867 | 977 | |
Pensions | Cash and Short-term Investments | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 378 | 426 | |
Pensions | Cash and Short-term Investments | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 489 | 551 | |
Pensions | U.S. Equity Securities and Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3,075 | 3,088 | |
Pensions | U.S. Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3,053 | 3,088 | |
Pensions | U.S. Equity Securities and Funds | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 22 | ||
Pensions | International Equity Securities and Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 2,046 | ||
Pensions | International Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 2,046 | ||
Pensions | International Equity Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,802 | ||
Pensions | International Equity Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,781 | ||
Pensions | International Equity Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 21 | ||
Pensions | Government and Agency Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 386 | 434 | |
Pensions | Government and Agency Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 197 | 412 | |
Pensions | Government and Agency Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 189 | 22 | |
Pensions | Corporate Debt Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 751 | 322 | |
Pensions | Corporate Debt Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Pensions | Corporate Debt Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 750 | 321 | |
Pensions | Mortgage-Backed Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 83 | 96 | |
Pensions | Mortgage-Backed Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 11 | ||
Pensions | Mortgage-Backed Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 83 | 85 | |
Pensions | Fixed Income Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 26 | 127 | |
Pensions | Fixed Income Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 26 | 127 | |
Pensions | Real Estate | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 133 | 132 | |
Pensions | Real Estate | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 130 | 132 | |
Pensions | Real Estate | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3 | ||
Pensions | Derivative Contracts - Assets | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 190 | 322 | |
Pensions | Derivative Contracts - Assets | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 25 | 14 | |
Pensions | Derivative Contracts - Assets | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 165 | 308 | |
Pensions | Derivative Contracts - Assets | Interest Rate Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 137 | 246 | |
Pensions | Derivative Contracts - Assets | Foreign Exchange Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 17 | 61 | |
Pensions | Derivative Contracts - Assets | Equity Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 30 | 11 | |
Pensions | Derivative Contracts - Assets | Other Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 6 | 4 | |
Pensions | Derivative Contracts - Liabilities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (26) | (39) | |
Pensions | Derivative Contracts - Liabilities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (4) | (9) | |
Pensions | Derivative Contracts - Liabilities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (22) | (30) | |
Pensions | Derivative Contracts - Liabilities | Interest Rate Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (7) | (6) | |
Pensions | Derivative Contracts - Liabilities | Foreign Exchange Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (15) | (25) | |
Pensions | Derivative Contracts - Liabilities | Other Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (4) | (8) | |
Pensions | Receivables, Payables and Other | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 1 | |
Pensions | Receivables, Payables and Other | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3 | ||
Pensions | Receivables, Payables and Other | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Pensions | Securities Lending Collateral | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 745 | 847 | |
Pensions | Securities Lending Collateral | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 92 | ||
Pensions | Securities Lending Collateral | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 653 | 847 | |
Pensions | Securities Lending Liability | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (745) | (847) | |
Pensions | Securities Lending Liability | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (92) | ||
Pensions | Securities Lending Liability | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (653) | (847) | |
Pensions | Securities Sold Short | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (470) | (477) | |
Pensions | Securities Sold Short | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (466) | (477) | |
Pensions | Securities Sold Short | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (4) | ||
Pensions | Investments at Net Asset Value - Short-Term Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 195 | 108 | |
Pensions | Investments at Net Asset Value - U.S. Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 33 | 38 | |
Pensions | Investments at Net Asset Value - International Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 540 | 382 | |
Pensions | Investments at Net Asset Value - Corporate Debt Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 26 | ||
Pensions | Investments at Net Asset Value - Fixed Income Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 495 | 957 | |
Pensions | Investments at Net Asset Value - Real Estate | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 501 | ||
Pensions | Investments at Net Asset Value - Real Estate Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 442 | ||
Pensions | Investments at Net Asset Value - Hedge Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 625 | 593 | |
Pensions | Investments at Net Asset Value - Private Equity/Venture Capital | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1,604 | 1,578 | |
Pensions | Investments at Net Asset Value - Other Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 324 | 320 | |
Health Care and Life Insurance | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 689 | 957 | $ 1,157 |
Health Care and Life Insurance | Level 1 and 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 435 | 627 | |
Health Care and Life Insurance | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 368 | 557 | |
Health Care and Life Insurance | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 67 | 70 | |
Health Care and Life Insurance | Cash and Short-term Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 35 | 52 | |
Health Care and Life Insurance | Cash and Short-term Investments | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 25 | 37 | |
Health Care and Life Insurance | Cash and Short-term Investments | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | 15 | |
Health Care and Life Insurance | U.S. Equity Securities and Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 229 | 310 | |
Health Care and Life Insurance | U.S. Equity Securities and Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 229 | 310 | |
Health Care and Life Insurance | International Equity Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 39 | 57 | |
Health Care and Life Insurance | International Equity Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 39 | 57 | |
Health Care and Life Insurance | Government and Agency Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 84 | 164 | |
Health Care and Life Insurance | Government and Agency Securities | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 78 | 159 | |
Health Care and Life Insurance | Government and Agency Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 6 | 5 | |
Health Care and Life Insurance | Corporate Debt Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 35 | 33 | |
Health Care and Life Insurance | Corporate Debt Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 35 | 33 | |
Health Care and Life Insurance | Mortgage-Backed Securities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 13 | 13 | |
Health Care and Life Insurance | Mortgage-Backed Securities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 13 | 13 | |
Health Care and Life Insurance | Fixed Income Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Health Care and Life Insurance | Fixed Income Funds | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Health Care and Life Insurance | Real Estate | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 5 | |
Health Care and Life Insurance | Real Estate | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 5 | |
Health Care and Life Insurance | Derivative Contracts - Assets | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 5 | |
Health Care and Life Insurance | Derivative Contracts - Assets | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | ||
Health Care and Life Insurance | Derivative Contracts - Assets | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 3 | 5 | |
Health Care and Life Insurance | Derivative Contracts - Assets | Interest Rate Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 2 | 3 | |
Health Care and Life Insurance | Derivative Contracts - Assets | Foreign Exchange Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 2 | |
Health Care and Life Insurance | Derivative Contracts - Assets | Equity Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | ||
Health Care and Life Insurance | Derivative Contracts - Liabilities | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (1) | ||
Health Care and Life Insurance | Derivative Contracts - Liabilities | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (1) | ||
Health Care and Life Insurance | Derivative Contracts - Liabilities | Foreign Exchange Contracts | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (1) | ||
Health Care and Life Insurance | Receivables, Payables and Other | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Health Care and Life Insurance | Receivables, Payables and Other | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 1 | 1 | |
Health Care and Life Insurance | Securities Lending Collateral | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 65 | 126 | |
Health Care and Life Insurance | Securities Lending Collateral | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 9 | ||
Health Care and Life Insurance | Securities Lending Collateral | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 56 | 126 | |
Health Care and Life Insurance | Securities Lending Liability | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (65) | (126) | |
Health Care and Life Insurance | Securities Lending Liability | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (9) | ||
Health Care and Life Insurance | Securities Lending Liability | Level 2 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (56) | (126) | |
Health Care and Life Insurance | Securities Sold Short | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (10) | (13) | |
Health Care and Life Insurance | Securities Sold Short | Level 1 | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | (10) | (13) | |
Health Care and Life Insurance | Investments at Net Asset Value - Short-Term Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 4 | 3 | |
Health Care and Life Insurance | Investments at Net Asset Value - International Equity Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 103 | 121 | |
Health Care and Life Insurance | Investments at Net Asset Value - Fixed Income Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 47 | 69 | |
Health Care and Life Insurance | Investments at Net Asset Value - Real Estate Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 10 | 12 | |
Health Care and Life Insurance | Investments at Net Asset Value - Hedge Funds | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 50 | 72 | |
Health Care and Life Insurance | Investments at Net Asset Value - Private Equity/Venture Capital | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | 34 | 44 | |
Health Care and Life Insurance | Investments at Net Asset Value - Other Investments | |||
Fair Values of Pension Plan and Health Care Assets by Category | |||
Total net assets | $ 6 | $ 9 |
PENSION AND OTHER POSTRETIREM76
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details 7) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Actual pension asset returns | |||
Extended period of time used to determine if fundamental changes in capital markets affect plan asset return assumptions, low end of range | 10 years | ||
Extended period of time used to determine if fundamental changes in capital markets affect plan asset return assumptions, high end of range | 20 years | ||
Average annual return of company's U.S. pension fund over past 10 years (as a percent) | 8.00% | ||
Average annual return of company's U.S. pension fund over past 20 years (as a percent) | 9.00% | ||
Defined contribution plans related to employee investment and savings primarily in the U.S. | |||
Defined contribution plans employer contributions and costs (primarily in the U.S.) | $ 185 | $ 184 | $ 178 |
Pensions | |||
Actual pension asset returns | |||
Market related value period | 5 years | ||
Pensions | Real Estate | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 5.00% | ||
Pensions | Equity Securities | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 49.00% | ||
Pensions | Debt Securities | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 24.00% | ||
Pensions | Other Investments | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 22.00% | ||
Health Care and Life Insurance | Real Estate | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 4.00% | ||
Health Care and Life Insurance | Equity Securities | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 53.00% | ||
Health Care and Life Insurance | Debt Securities | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 28.00% | ||
Health Care and Life Insurance | Other Investments | |||
Target asset allocations, pension and health care plan assets | |||
Target allocation percentage | 15.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Current: | |||
U.S. - Federal | $ 377 | $ 1,217 | $ 1,405 |
U.S. - State | 32 | 126 | 145 |
Foreign | 449 | 564 | 569 |
Total current | 858 | 1,907 | 2,119 |
Deferred: | |||
U.S. - Federal | 21 | (189) | (117) |
U.S. - State | 4 | (11) | (11) |
Foreign | (43) | (80) | (45) |
Total deferred | (18.4) | (280.1) | (172.6) |
Provision for income taxes | 840.1 | 1,626.5 | 1,945.9 |
Consolidated income before income taxes, U.S. | 1,838 | 3,219 | 4,124 |
Consolidated income before income taxes, foreign | $ 942 | $ 1,578 | $ 1,359 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Comparison of the statutory and effective income tax provision | |||
U.S. federal income tax provision statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
U.S. federal income tax provision at a statutory rate of 35 percent | $ 973 | $ 1,679 | $ 1,919 |
Increase (decrease) resulting from: | |||
State and local income taxes, net of federal income tax benefit | 23 | 75 | 87 |
German branch deferred tax write-off | 56 | ||
Differences in taxability of foreign (earnings) losses | (449) | (305) | 43 |
Nondeductible impairment charges | 32 | 29 | |
Research and business tax credits | (76) | (99) | (56) |
Tax rates on foreign activities | (36) | (71) | (34) |
Valuation allowance on deferred taxes | 384 | 454 | (14) |
Other - net | 21 | (138) | (84) |
Provision for income taxes | 840.1 | $ 1,626.5 | $ 1,945.9 |
Accumulated earnings of certain foreign subsidiaries for which no provision for U.S. income or foreign withholding taxes has been made | 5,282 | ||
Determination of the amount of unrecognized deferred tax liability on unremitted earnings | 0 | ||
Cash and cash equivalents and marketable securities held by foreign subsidiaries | $ 1,588 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 30, 2013 | Oct. 31, 2015 | Oct. 31, 2014 | |
Deferred Tax Assets | |||
Other postretirement benefit liabilities | $ 1,972 | $ 1,968 | |
Accrual for sales allowances | 618 | 654 | |
Tax loss and tax credit carryforwards | 604 | 514 | |
Foreign unrealized losses | 458 | 146 | |
Pension liabilities - net | 315 | 160 | |
Accrual for employee benefits | 172 | 229 | |
Share-based compensation | 141 | 145 | |
Inventory | 22 | ||
Allowance for credit losses | 72 | 73 | |
Deferred gains on distributed foreign earnings | 33 | 32 | |
Deferred compensation | 51 | 47 | |
Other items, assets | 436 | 440 | |
Less valuation allowances | (940) | (637) | |
Deferred income tax, assets | 3,932 | 3,793 | |
Deferred Tax Liabilities | |||
Tax over book depreciation | 574 | 542 | |
Lease transactions | 528 | 404 | |
Goodwill and other intangible assets | 80 | 89 | |
Undistributed foreign earnings | 25 | 26 | |
Other items, liabilities | 119 | 116 | |
Deferred income tax, liabilities | 1,326 | $ 1,177 | |
Additional Deferred Income Tax Information | |||
Capital losses | 88 | ||
Tax loss and tax credit carryforwards, expiring from 2016 through 2035 | 226 | ||
Tax loss and tax credit carryforwards with an indefinite carryforward period | $ 378 | ||
Write-off of net deferred tax assets related to German operations restructure | $ 56 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Reconciliation of the Total Amounts of Unrecognized Tax Benefits | |||
Beginning of year balance | $ 213 | $ 272 | $ 265 |
Increases to tax positions taken during the current year | 32 | 28 | 30 |
Increases to tax positions taken during prior years | 29 | 20 | 24 |
Decreases to tax positions taken during prior years | (15) | (84) | (51) |
Decreases due to lapse of statute of limitations | (11) | (4) | (5) |
Settlements | (6) | ||
Foreign exchange | (13) | (19) | 9 |
End of year balance | 229 | 213 | 272 |
Unrecognized tax benefits affecting effective tax rate if recognized | 79 | ||
Total amount of expense from interest and penalties | 23 | 11 | 9 |
Interest income on income tax examination | 3 | 4 | $ 4 |
Accrued interest and penalties on income tax | 69 | 54 | |
Interest income receivable on income tax examination | $ 2 | $ 2 |
OTHER INCOME AND OTHER OPERAT81
OTHER INCOME AND OTHER OPERATING EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Other Income | |||
Insurance premiums and fees earned | $ 173 | $ 297 | $ 252 |
Revenues from services | 280 | 276 | 256 |
Investment income | 26 | 17 | 15 |
Other | 228 | 234 | 159 |
Total | $ 706.5 | $ 824.2 | $ 682.4 |
OTHER INCOME AND OTHER OPERAT82
OTHER INCOME AND OTHER OPERATING EXPENSES (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Other Operating Expenses | |||
Depreciation of equipment on operating leases | $ 577 | $ 494 | $ 389 |
Insurance claims and expenses | 183 | 324 | 204 |
Cost of services | 160 | 151 | 143 |
Other | 41 | 124 | 85 |
Total | 961.1 | 1,093.3 | 820.6 |
Premiums ceded by the crop insurance subsidiary | 54 | 288 | 337 |
Claims recoveries | $ 65 | $ 304 | $ 294 |
UNCONSOLIDATED AFFILIATED COM83
UNCONSOLIDATED AFFILIATED COMPANIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Operations | |||
Sales | $ 3,290 | $ 3,082 | $ 2,299 |
Net income (loss) | 23 | 1 | 10 |
Deere & Company's equity in net income (loss) | 0.9 | (7.6) | 0.1 |
Financial Position | |||
Total assets | 2,139 | 2,101 | |
Total external borrowings | 660 | 648 | |
Total net assets | 878 | 842 | |
Deere & Company's share of the net assets | 303.5 | 303.2 | 221 |
Transactions with Unconsolidated Affiliated Companies | |||
Net Sales | 37 | 39 | 54 |
Purchases | 1,284 | 1,415 | 1,427 |
Undistributed earnings of the unconsolidated affiliates included in consolidated retained earnings | 165 | ||
Dividends from unconsolidated affiliates | $ 1 | $ 1 | $ 10 |
Bell Equipment Limited | |||
Equity Method Investments | |||
Ownership percentage in equity method investee | 32.00% | ||
Deere-Hitachi Construction Machinery Corporation | |||
Equity Method Investments | |||
Ownership percentage in equity method investee | 50.00% | ||
Deere-Hitachi Maquinas de Construcao do Brasil S.A. | |||
Equity Method Investments | |||
Ownership percentage in equity method investee | 50.00% | ||
SiteOne Landscapes Supply, LLC | |||
Equity Method Investments | |||
Ownership percentage in equity method investee | 35.00% |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Amortized cost and fair value of marketable securities | ||
Amortized Cost | $ 423 | $ 1,198 |
Gross Unrealized Gains | 17 | 22 |
Gross Unrealized Losses | 3 | 5 |
Fair Value | 437.4 | 1,215.1 |
Equity Fund | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 38 | 39 |
Gross Unrealized Gains | 5 | 6 |
Fair Value | 43 | 45 |
Fixed Income Funds | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 10 | |
Fair Value | 10 | |
U.S. Government Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 79 | 806 |
Gross Unrealized Gains | 3 | 3 |
Gross Unrealized Losses | 1 | |
Fair Value | 82 | 808 |
Municipal Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 29 | 31 |
Gross Unrealized Gains | 2 | 3 |
Fair Value | 31 | 34 |
Corporate Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 121 | 167 |
Gross Unrealized Gains | 4 | 7 |
Gross Unrealized Losses | 1 | 2 |
Fair Value | 124 | 172 |
International Debt Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 48 | |
Gross Unrealized Losses | 1 | |
Fair Value | 47 | |
Mortgage-Backed Securities | ||
Amortized cost and fair value of marketable securities | ||
Amortized Cost | 108 | 145 |
Gross Unrealized Gains | 3 | 3 |
Gross Unrealized Losses | 1 | 2 |
Fair Value | $ 110 | $ 146 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Contractual Maturities of Debt Securities, Amortized Cost | |||
Amortized cost, due in one year or less | $ 51 | ||
Amortized cost, due after one through five years | 88 | ||
Amortized cost, due after five through 10 years | 99 | ||
Amortized cost, due after 10 years | 40 | ||
Amortized cost, mortgage-backed securities | 108 | ||
Amortized cost, debt securities | 386 | ||
Contractual Maturities of Debt Securities, Fair Value | |||
Fair value, due in one year or less | 50 | ||
Fair value, due after one through five years | 91 | ||
Fair value, due after five through 10 years | 101 | ||
Fair value, due after 10 years | 42 | ||
Fair value, mortgage-backed securities | 110 | ||
Fair value, debt securities | 394 | ||
Proceeds from the sales of available-for-sale securities | 120 | $ 6 | $ 7 |
Losses related to impairment write-downs | $ 0 | $ 0 | $ 0 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Trade Accounts and Notes Receivable | ||
Trade accounts and notes receivable - net | $ 3,051.1 | $ 3,277.6 |
Dealer notes receivable | 90 | 61 |
Allowance for credit losses | $ 41 | 55 |
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 | |
Agriculture and Turf | ||
Trade Accounts and Notes Receivable | ||
Trade accounts and notes receivable - net | $ 2,278 | 2,633 |
Construction and Forestry | ||
Trade Accounts and Notes Receivable | ||
Trade accounts and notes receivable - net | $ 773 | $ 645 |
RECEIVABLES (Details 2)
RECEIVABLES (Details 2) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Financing receivables, Unrestricted | ||
Financing receivables, gross | $ 25,787 | $ 28,472 |
Unearned finance income | 834 | 889 |
Allowance for credit losses | 144 | 161 |
Financing receivables - net | 24,809 | 27,422.2 |
Residual values for investments in financing leases | 115 | 112 |
Financing Receivables, Securitized | ||
Financing receivables, gross | 4,922 | 4,672 |
Unearned finance income | 74 | 56 |
Allowance for credit losses | 13 | 14 |
Financing receivables-net | 4,834.6 | 4,602.3 |
Related to Sales of Equipment | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 7,107 | 8,762 |
Unearned finance income | 223 | 269 |
Financing receivables - net | 6,884 | 8,493 |
Retail Notes | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 17,445 | 18,921 |
Financing Receivables, Securitized | ||
Financing receivables, gross | 4,922 | 4,672 |
Equipment Notes | ||
Financing receivables, Unrestricted | ||
Unearned finance income | 726 | 753 |
Financing Receivables, Securitized | ||
Unearned finance income | 74 | 56 |
Equipment Notes | Related to Sales of Equipment | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 2,148 | 2,528 |
Unearned finance income | 178 | 212 |
Equipment Notes | Agriculture and Turf | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 15,359 | 16,970 |
Financing Receivables, Securitized | ||
Financing receivables, gross | 4,236 | 3,975 |
Equipment Notes | Agriculture and Turf | Related to Sales of Equipment | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 1,792 | 2,125 |
Equipment Notes | Construction and Forestry | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 2,086 | 1,951 |
Financing Receivables, Securitized | ||
Financing receivables, gross | 686 | 697 |
Equipment Notes | Construction and Forestry | Related to Sales of Equipment | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 356 | 403 |
Wholesale Notes | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 4,269 | 5,390 |
Wholesale Notes | Related to Sales of Equipment | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 4,269 | 5,390 |
Revolving Charge Accounts | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 2,740 | 2,603 |
Financing Leases | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 1,333 | 1,558 |
Unearned finance income | 108 | 136 |
Sales-type Leases | Related to Sales of Equipment | ||
Financing receivables, Unrestricted | ||
Financing receivables, gross | 690 | 844 |
Unearned finance income | $ 45 | $ 57 |
RECEIVABLES (Details 3)
RECEIVABLES (Details 3) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Financing Receivable Installments, Unrestricted | ||
Financing receivables, Due in months: 0 - 12 | $ 13,006 | $ 14,357 |
Financing receivables, Due in months: 13 - 24 | 4,987 | 5,254 |
Financing receivables, Due in months: 25 - 36 | 3,719 | 4,053 |
Financing receivables, Due in months: 37 - 48 | 2,444 | 2,819 |
Financing receivables, Due in months: 49 - 60 | 1,283 | 1,575 |
Financing receivables, Due in months: Thereafter (greater than 60 months) | 348 | 414 |
Financing receivables - gross | 25,787 | 28,472 |
Financing Receivable Installments, Securitized | ||
Financing receivables, Due in months: 0 - 12 | 2,057 | 1,878 |
Financing receivables, Due in months: 13 - 24 | 1,418 | 1,331 |
Financing receivables, Due in months: 25 - 36 | 921 | 880 |
Financing receivables, Due in months: 37 - 48 | 426 | 457 |
Financing receivables, Due in months: 49 - 60 | 95 | 120 |
Financing receivables, Due in months: Thereafter (greater than 60 months) | 5 | 6 |
Financing receivables - gross | 4,922 | 4,672 |
Financing Receivables - Other Disclosures | ||
Unpaid balances of receivables administered but not owned | 22 | 54 |
Financing receivables administered | 29,666 | 32,078 |
Retail Notes | ||
Financing Receivable Installments, Unrestricted | ||
Financing receivables - gross | 17,445 | 18,921 |
Financing Receivable Installments, Securitized | ||
Financing receivables - gross | $ 4,922 | 4,672 |
Retail Notes | Agriculture and Turf | ||
Financing Receivables - Other Disclosures | ||
Maximum terms for notes and financing leases | 7 years | |
Retail Notes | Construction and Forestry | ||
Financing Receivables - Other Disclosures | ||
Maximum terms for notes and financing leases | 5 years | |
Wholesale Notes | ||
Financing Receivable Installments, Unrestricted | ||
Financing receivables - gross | $ 4,269 | 5,390 |
Financing Receivables - Other Disclosures | ||
Term that the average term for wholesale notes is less than | 12 months | |
Financing Leases | ||
Financing Receivable Installments, Unrestricted | ||
Financing receivables - gross | $ 1,333 | $ 1,558 |
Financing Receivables - Other Disclosures | ||
Maximum terms for notes and financing leases | 5 years |
RECEIVABLES (Details 4)
RECEIVABLES (Details 4) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
RECEIVABLES | ||||
Minimum number of days for a financing receivable to be considered past due | 30 days | |||
Generally the number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | |||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | $ 381 | $ 288 | ||
Total Non-Performing | 142 | 141 | ||
Current | 29,278 | 31,770 | ||
Total Financing Receivables | 29,801 | 32,199 | $ 29,959 | |
Less allowance for credit losses | 157 | 175 | 173 | $ 177 |
Total financing receivables - net | 29,644 | 32,024 | ||
30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 215 | 182 | ||
60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 100 | 65 | ||
90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 66 | 41 | ||
Retail Notes | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Financing Receivables | 21,567 | 22,784 | 21,160 | |
Less allowance for credit losses | 95 | 109 | $ 101 | $ 110 |
Retail Notes | Agriculture and Turf | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 213 | 155 | ||
Total Non-Performing | 98 | 107 | ||
Current | 18,574 | 19,966 | ||
Total Financing Receivables | 18,885 | 20,228 | ||
Retail Notes | Agriculture and Turf | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 112 | 93 | ||
Retail Notes | Agriculture and Turf | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 54 | 34 | ||
Retail Notes | Agriculture and Turf | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 47 | 28 | ||
Retail Notes | Construction and Forestry | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 105 | 77 | ||
Total Non-Performing | 21 | 17 | ||
Current | 2,556 | 2,462 | ||
Total Financing Receivables | 2,682 | 2,556 | ||
Retail Notes | Construction and Forestry | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 64 | 54 | ||
Retail Notes | Construction and Forestry | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 29 | 16 | ||
Retail Notes | Construction and Forestry | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 12 | 7 | ||
Other Financing Receivables | Agriculture and Turf | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 42 | 37 | ||
Total Non-Performing | 13 | 15 | ||
Current | 7,175 | 8,208 | ||
Total Financing Receivables | 7,230 | 8,260 | ||
Other Financing Receivables | Agriculture and Turf | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 26 | 23 | ||
Other Financing Receivables | Agriculture and Turf | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 12 | 12 | ||
Other Financing Receivables | Agriculture and Turf | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 4 | 2 | ||
Other Financing Receivables | Construction and Forestry | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 21 | 19 | ||
Total Non-Performing | 10 | 2 | ||
Current | 973 | 1,134 | ||
Total Financing Receivables | 1,004 | 1,155 | ||
Other Financing Receivables | Construction and Forestry | 30-59 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 13 | 12 | ||
Other Financing Receivables | Construction and Forestry | 60-89 Days Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | 5 | 3 | ||
Other Financing Receivables | Construction and Forestry | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||
Total Past Due | $ 3 | $ 4 |
RECEIVABLES (Details 5)
RECEIVABLES (Details 5) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Allowance: | |||
Beginning of year balance | $ 175 | $ 173 | $ 177 |
Provision (credit) | 46 | 31 | 10 |
Write-offs | (67) | (49) | (35) |
Recoveries | 26 | 26 | 27 |
Translation adjustments | (23) | (6) | (6) |
End of year balance | 157 | 175 | 173 |
Financing receivables: | |||
End of year balance | 29,801 | 32,199 | 29,959 |
Balance individually evaluated | 46 | 27 | 54 |
Retail Notes | |||
Allowance: | |||
Beginning of year balance | 109 | 101 | 110 |
Provision (credit) | 22 | 18 | (2) |
Write-offs | (26) | (16) | (11) |
Recoveries | 10 | 11 | 9 |
Translation adjustments | (20) | (5) | (5) |
End of year balance | 95 | 109 | 101 |
Financing receivables: | |||
End of year balance | 21,567 | 22,784 | 21,160 |
Balance individually evaluated | 40 | 26 | 21 |
Revolving Charge Accounts | |||
Allowance: | |||
Beginning of year balance | 41 | 41 | 40 |
Provision (credit) | 21 | 11 | 5 |
Write-offs | (37) | (26) | (21) |
Recoveries | 15 | 15 | 17 |
End of year balance | 40 | 41 | 41 |
Financing receivables: | |||
End of year balance | 2,740 | 2,603 | 2,593 |
Other Financing Receivables | |||
Allowance: | |||
Beginning of year balance | 25 | 31 | 27 |
Provision (credit) | 3 | 2 | 7 |
Write-offs | (4) | (7) | (3) |
Recoveries | 1 | 1 | |
Translation adjustments | (3) | (1) | (1) |
End of year balance | 22 | 25 | 31 |
Financing receivables: | |||
End of year balance | 5,494 | 6,812 | 6,206 |
Balance individually evaluated | $ 6 | $ 1 | $ 33 |
RECEIVABLES (Details 6)
RECEIVABLES (Details 6) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Analysis of Impaired Financing Receivables | ||
Recorded investment, with specific allowance | $ 14 | $ 9 |
Recorded investment, without specific allowance | 14 | 6 |
Recorded Investment | 28 | 15 |
Unpaid principal balance, with specific allowance | 13 | 9 |
Unpaid principal balance, without specific allowance | 14 | 6 |
Unpaid Principal Balance | 27 | 15 |
Specific allowance, with allowance | 2 | 2 |
Specific Allowance | 2 | 2 |
Average recorded investment, with specific allowance | 13 | 10 |
Average recorded investment, without specific allowance | 20 | 7 |
Average Recorded Investment | $ 33 | $ 17 |
Additional Financing Receivable Information | ||
Period for a financing receivable to be considered past due | 30 days | |
Percentage of past-due amounts to total financing receivables | 1.28% | 0.90% |
Allowance for credit losses as a percentage of financing receivables outstanding | 0.53% | 0.54% |
Financial Services | ||
Additional Financing Receivable Information | ||
Deposits withheld from dealers and merchants available for potential credit losses | $ 179 | $ 196 |
Agriculture and Turf | ||
Analysis of Impaired Financing Receivables | ||
Recorded Investment | 19 | 12 |
Unpaid Principal Balance | 18 | 12 |
Specific Allowance | 2 | 2 |
Average Recorded Investment | 20 | 13 |
Construction and Forestry | ||
Analysis of Impaired Financing Receivables | ||
Recorded Investment | 9 | 3 |
Unpaid Principal Balance | 9 | 3 |
Average Recorded Investment | $ 13 | $ 4 |
RECEIVABLES (Details 7)
RECEIVABLES (Details 7) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($)item | Oct. 31, 2013USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | |||
Financing receivable contracts in troubled debt restructuring, number | item | 107 | 66 | 92 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 8 | $ 3 | $ 16 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | $ 7 | 2 | $ 15 |
Number of troubled debt restructurings that subsequently defaulted | item | 0 | ||
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 | ||
Other Receivables: | |||
Taxes receivable | 720 | 697 | |
Reinsurance receivables | 502 | ||
Insurance premium receivables | 23 | ||
Other | 271 | 278 | |
Other receivables | $ 991.2 | $ 1,500.3 |
SECURITIZATION OF FINANCING R93
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Aug. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Securitization Transactions | ||||
Unconsolidated conduits, carrying value of liabilities | $ 1,611 | |||
Unconsolidated conduits, maximum exposure to loss | 1,689 | |||
Total Assets | 57,947.6 | $ 61,336.4 | $ 59,521 | |
Financing receivables securitized (retail notes) | 4,848 | 4,616 | ||
Allowance for credit losses - securitization transactions | (13) | (14) | ||
Other assets - securitization transactions | 109 | 108 | ||
Total restricted securitized assets - securitization transactions | 4,944 | 4,710 | ||
Short-term securitization borrowings | 4,590 | 4,558.5 | ||
Accrued interest on borrowings - securitization transactions | 2 | 1 | ||
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,592 | 4,560 | ||
Maximum remaining term of all restricted securitized retail notes | 6 years | |||
VIE-Primary Beneficiary | ||||
Securitization Transactions | ||||
Total restricted securitized assets - securitization transactions | $ 3,006 | 3,011 | ||
Restricted securitized assets - securitization transaction retained | 189 | $ 228 | ||
Total liabilities related to restricted securitized assets - securitization transactions | 2,743 | 2,942 | ||
Non-VIE Banking Operation | ||||
Securitization Transactions | ||||
Total restricted securitized assets - securitization transactions | 249 | 368 | ||
Total liabilities related to restricted securitized assets - securitization transactions | 238 | 351 | ||
VIE-Not Primary Beneficiary | ||||
Securitization Transactions | ||||
Total Assets | 54,000 | |||
Total restricted securitized assets - securitization transactions | 1,689 | 1,331 | ||
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,611 | $ 1,267 |
EQUIPMENT ON OPERATING LEASES94
EQUIPMENT ON OPERATING LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Initial lease terms, operating, low end of range | 4 months | ||
Initial lease terms, operating, high end of range | 60 months | ||
Equipment on operating leases - net | $ 4,970.4 | $ 4,015.5 | |
Accumulated depreciation for equipment on operating leases | 793 | 634 | |
Depreciation expense for equipment on operating leases | 577 | 494 | $ 389 |
Future payments to be received on operating leases | |||
Future payments receivable, operating leases, total | 1,704 | ||
Future payments receivable, operating leases, 2016 | 712 | ||
Future payments receivable, operating leases, 2017 | 508 | ||
Future payments receivable, operating leases, 2018 | 294 | ||
Future payments receivable, operating leases, 2019 | 156 | ||
Future payments receivable, operating leases, 2020 | 34 | ||
Agriculture and Turf | |||
Equipment on operating leases - net | 3,909 | 3,261 | |
Construction and Forestry | |||
Equipment on operating leases - net | $ 1,061 | $ 755 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
INVENTORIES | ||
Gross inventories on LIFO basis expressed as percentage of worldwide gross inventories at FIFO | 66.00% | 65.00% |
Pretax favorable income effect from the liquidation of LIFO inventory | $ 22 | $ 13 |
Raw materials and supplies | 1,559 | 1,724 |
Work-in-process | 450 | 654 |
Finished goods and parts | 3,234 | 3,360 |
Total FIFO value | 5,243 | 5,738 |
Less adjustment to LIFO value | 1,426 | 1,528 |
Inventories | $ 3,817 | $ 4,209.7 |
PROPERTY AND DEPRECIATION (Deta
PROPERTY AND DEPRECIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Summary of property and equipment | |||
Property and equipment-net | $ 5,181.5 | $ 5,577.8 | $ 5,467 |
Property and equipment, additions | 666 | 1,016 | 1,158 |
Depreciation | 692 | 696 | 637 |
Capitalized interest | 6 | 6 | 13 |
Leased property and equipment under capital leases, at cost | 27 | 36 | |
Accumulated depreciation on leased property and equipment under capital leases | $ 14 | 15 | |
Capitalized computer software estimated useful life | 3 years | ||
Capitalized software costs, including purchased and internally developed software | $ 934 | 912 | |
Capitalized software, accumulated amortization | 681 | 656 | |
Capitalized interest on software | 2 | ||
Amortization of capitalized computer software costs | 103 | 106 | $ 93 |
Leased software assets under capital leases | 86 | 77 | |
Equipment Operations | |||
Summary of property and equipment | |||
Total property and equipment at cost | 10,972 | 11,217 | |
Less accumulated depreciation | 5,846 | 5,694 | |
Property and equipment-net | 5,126.2 | 5,522.5 | |
Equipment Operations | Land | |||
Summary of property and equipment | |||
Total property and equipment at cost | $ 114 | 120 | |
Equipment Operations | Buildings and Building Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 23 years | ||
Total property and equipment at cost | $ 3,016 | 3,037 | |
Equipment Operations | Machinery and Equipment | |||
Summary of property and equipment | |||
Weighted-average useful lives | 11 years | ||
Total property and equipment at cost | $ 5,055 | 5,089 | |
Equipment Operations | Dies, Patterns, Tools, etc | |||
Summary of property and equipment | |||
Weighted-average useful lives | 8 years | ||
Total property and equipment at cost | $ 1,567 | 1,552 | |
Equipment Operations | All Other | |||
Summary of property and equipment | |||
Weighted-average useful lives | 5 years | ||
Total property and equipment at cost | $ 875 | 889 | |
Equipment Operations | Construction in Progress | |||
Summary of property and equipment | |||
Total property and equipment at cost | 345 | 530 | |
Financial Services | |||
Summary of property and equipment | |||
Total property and equipment at cost | 113 | 112 | |
Less accumulated depreciation | 58 | 57 | |
Property and equipment-net | 55.3 | 55.3 | |
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 | 27 years | ||
Total property and equipment at cost | $ 73 | 71 | |
Financial Services | All Other | |||
Summary of property and equipment | |||
Weighted-average useful lives | 6 years | ||
Total property and equipment at cost | $ 36 | $ 37 |
GOODWILL AND OTHER INTANGIBLE97
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Changes in Amounts of Goodwill | ||
Goodwill - gross, beginning balance | $ 791 | $ 905 |
Less accumulated impairment losses, beginning balance | 60 | |
Goodwill - net, beginning balance | 791.2 | 845 |
Divestiture | (60) | |
Translation adjustments and other | (65) | (54) |
Goodwill - gross, ending balance | 791 | |
Goodwill - net, ending balance | 726 | 791.2 |
Water Operations | Disposal Group | ||
Changes in Amounts of Goodwill | ||
Decrease in accumulated impairment losses | 60 | |
Agriculture and Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - gross, beginning balance | 235 | 302 |
Less accumulated impairment losses, beginning balance | 60 | |
Goodwill - net, beginning balance | 235 | 242 |
Divestiture | (60) | |
Translation adjustments and other | (8) | (7) |
Goodwill - gross, ending balance | 235 | |
Goodwill - net, ending balance | 227 | 235 |
Construction and Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - gross, beginning balance | 556 | 603 |
Goodwill - net, beginning balance | 556 | 603 |
Translation adjustments and other | (57) | (47) |
Goodwill - gross, ending balance | 556 | |
Goodwill - net, ending balance | $ 499 | $ 556 |
GOODWILL AND OTHER INTANGIBLE98
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Amortized Intangible Assets: | ||
Total at cost | $ 119 | $ 110 |
Less accumulated amortization | 55 | 45 |
Total amortized intangible assets - net | 64 | 65 |
Unamortized intangible assets: | ||
Licenses | 4 | |
Intangible assets - net (excluding goodwill) | ||
Other intangible assets - net | 63.6 | 68.8 |
Customer Lists and Relationships | ||
Amortized Intangible Assets: | ||
Total at cost | 23 | 20 |
Less accumulated amortization | $ 10 | 9 |
Useful Lives (weighted averages) | 14 years | |
Technology, Patents, Trademarks and Other | ||
Amortized Intangible Assets: | ||
Total at cost | $ 96 | 90 |
Less accumulated amortization | $ 45 | $ 36 |
Useful Lives (weighted averages) | 17 years |
GOODWILL AND OTHER INTANGIBLE99
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Amortized Intangible Assets: | |||
Amortization expense of other intangible assets | $ 10 | $ 11 | $ 22 |
Amortization expense of other intangible assets - 2016 | 12 | ||
Amortization expense of other intangible assets - 2017 | 12 | ||
Amortization expense of other intangible assets - 2018 | 8 | ||
Amortization expense of other intangible assets - 2019 | 5 | ||
Amortization expense of other intangible assets - 2020 | $ 5 |
TOTAL SHORT-TERM BORROWINGS (De
TOTAL SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Short-term borrowings | ||
Short-term borrowings | $ 8,426.6 | $ 8,019.2 |
Short-term securitization borrowings | 4,590 | 4,558.5 |
Total short-term borrowings | $ 13,017 | $ 12,578 |
Weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings (as a percent) | 0.90% | 1.00% |
Equipment Operations | ||
Short-term borrowings | ||
Short-term borrowings | $ 464.3 | $ 434.1 |
Equipment Operations | Commercial Paper | ||
Short-term borrowings | ||
Short-term borrowings | 225 | 45 |
Equipment Operations | Notes Payable to Banks | ||
Short-term borrowings | ||
Short-term borrowings | 154 | 146 |
Equipment Operations | Long-term Borrowings Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | 86 | 243 |
Financial Services | ||
Short-term borrowings | ||
Short-term borrowings | 7,962.3 | 7,585.1 |
Short-term securitization borrowings | 4,590 | 4,558.5 |
Financial Services | Commercial Paper | ||
Short-term borrowings | ||
Short-term borrowings | 2,743 | 2,588 |
Financial Services | Notes Payable to Banks | ||
Short-term borrowings | ||
Short-term borrowings | 52 | 267 |
Financial Services | Short-term securitization borrowings | ||
Short-term borrowings | ||
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2016 | 2,337 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2017 | 1,413 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2018 | 661 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2019 | 157 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2020 | 21 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2021 | 1 | |
Financial Services | Long-term Borrowings Due Within One Year | ||
Short-term borrowings | ||
Short-term borrowings | $ 5,167 | $ 4,730 |
TOTAL SHORT-TERM BORROWINGS 101
TOTAL SHORT-TERM BORROWINGS (Details 2) $ in Millions | 12 Months Ended |
Oct. 31, 2015USD ($) | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 7,205 |
Lines of credit unused | $ 4,031 |
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 |
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 | $ 8,835 |
Additional debt capacity | 16,408 |
Line of Credit Facilities Expiring April, 2019 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 2,900 |
Line of Credit Facilities Expiring April, 2020 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 2,900 |
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 |
ACCOUNTS PAYABLE AND ACCRUED102
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Accrued expenses: | ||
Total | $ 7,311.5 | $ 8,554.1 |
Eliminations | ||
Accrued expenses: | ||
Total | (1,001) | (991) |
Equipment Operations | ||
Accounts payable: | ||
Trade payables | 1,435 | 1,661 |
Dividends payable | 193 | 210 |
Other | 186 | 208 |
Accrued expenses: | ||
Dealer sales discounts | 1,423 | 1,551 |
Employee benefits | 1,122 | 1,350 |
Product warranties | 807 | 809 |
Unearned revenue | 379 | 355 |
Other | 1,256 | 1,374 |
Total | 6,801.2 | 7,518.4 |
Financial Services | ||
Accounts payable: | ||
Deposits withheld from dealers and merchants | 179 | 196 |
Other | 258 | 468 |
Accrued expenses: | ||
Employee benefits | 71 | 87 |
Unearned revenue | 671 | 647 |
Accrued interest | 111 | 103 |
Insurance claims reserve | 29 | 247 |
Other | 192 | 279 |
Total | $ 1,511.2 | $ 2,027 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Notes and debentures | ||
Long-term borrowings | $ 23,832.8 | $ 24,380.7 |
Equipment Operations | ||
Notes and debentures | ||
Long-term borrowings | 4,460.6 | 4,642.5 |
Principal Amounts of Long-Term Borrowings Maturing In Next Five Years | ||
2,016 | 86 | |
2,017 | 48 | |
2,018 | 63 | |
2,019 | 752 | |
2,020 | 2 | |
Equipment Operations | 4.375% Notes Due 2019 | ||
Notes and debentures | ||
Long-term borrowings | $ 750 | $ 750 |
Debt instrument, stated interest rate | 4.375% | 4.375% |
Equipment Operations | 8-1/2% Debentures Due 2022 | ||
Notes and debentures | ||
Long-term borrowings | $ 105 | $ 105 |
Debt instrument, stated interest rate | 8.50% | 8.50% |
Equipment Operations | 2.60% Notes Due 2022 | ||
Notes and debentures | ||
Long-term borrowings | $ 1,000 | $ 1,000 |
Debt instrument, stated interest rate | 2.60% | 2.60% |
Equipment Operations | 6.55% Debentures Due 2028 | ||
Notes and debentures | ||
Long-term borrowings | $ 200 | $ 200 |
Debt instrument, stated interest rate | 6.55% | 6.55% |
Equipment Operations | 5.375% Notes Due 2029 | ||
Notes and debentures | ||
Long-term borrowings | $ 500 | $ 500 |
Debt instrument, stated interest rate | 5.375% | 5.375% |
Equipment Operations | 8.10% Debentures Due 2030 | ||
Notes and debentures | ||
Long-term borrowings | $ 250 | $ 250 |
Debt instrument, stated interest rate | 8.10% | 8.10% |
Equipment Operations | 7.125% Notes Due 2031 | ||
Notes and debentures | ||
Long-term borrowings | $ 300 | $ 300 |
Debt instrument, stated interest rate | 7.125% | 7.125% |
Equipment Operations | 3.90% Notes Due 2042 | ||
Notes and debentures | ||
Long-term borrowings | $ 1,250 | $ 1,250 |
Debt instrument, stated interest rate | 3.90% | 3.90% |
Equipment Operations | Other Notes | ||
Notes and debentures | ||
Long-term borrowings | $ 106 | $ 288 |
Financial Services | ||
Notes and debentures | ||
Long-term borrowings | 19,372.2 | 19,738.2 |
Principal Amounts of Long-Term Borrowings Maturing In Next Five Years | ||
2,016 | 5,159 | |
2,017 | 5,124 | |
2,018 | 5,124 | |
2,019 | 2,876 | |
2,020 | 2,394 | |
Financial Services | Medium-term notes due 2016 - 2025 | ||
Notes and debentures | ||
Long-term borrowings | 17,857 | 18,141 |
Principal amount | $ 17,610 | $ 17,939 |
Average interest rates | 1.40% | 1.20% |
Financial Services | 2.75% Senior Note Due 2022 | ||
Notes and debentures | ||
Long-term borrowings | $ 512 | $ 498 |
Debt instrument, stated interest rate | 2.75% | 2.75% |
Principal amount | $ 500 | $ 500 |
Portion of debt swapped to variable interest rates, amount | $ 500 | $ 500 |
Variable interest rates, debt swaps | 1.10% | 0.90% |
Financial Services | Other Notes | ||
Notes and debentures | ||
Long-term borrowings | $ 1,003 | $ 1,099 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Capital leases, future minimum lease payments | |||
Future minimum lease payments under capital leases | $ 60 | ||
2,016 | 37 | ||
2,017 | 13 | ||
2,018 | 4 | ||
2,019 | 3 | ||
2,020 | 2 | ||
Later years | 1 | ||
Operating leases, total rent expense | |||
Total rental expense for operating leases | 200 | $ 205 | $ 237 |
Operating leases, future minimum lease payments | |||
Future minimum lease payments under operating leases | 354 | ||
2,016 | 98 | ||
2,017 | 72 | ||
2,018 | 53 | ||
2,019 | 40 | ||
2,020 | 31 | ||
Later years | $ 60 |
COMMITMENTS AND CONTINGENCIE105
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | ||
Historical claims rate, review period | 5 years | |
Unamortized extended warranty premiums (deferred revenue) | $ 454 | $ 425 |
Change in Warranty Liability and Unearned Premiums | ||
Beginning of year balance | 1,234 | 1,164 |
Payments | (779) | (792) |
Amortization of premiums received | (161) | (142) |
Accruals for warranties | 810 | 797 |
Premiums received | 209 | 228 |
Foreign exchange | (52) | (21) |
End of year balance | $ 1,261 | $ 1,234 |
COMMITMENTS AND CONTINGENCIE106
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Millions | 12 Months Ended |
Oct. 31, 2015USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Commitments for the construction and acquisition of property and equipment | $ 165 |
Other restricted assets | 99 |
Miscellaneous contingent liabilities | 30 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 162 |
Guarantee obligations accrued losses | $ 4 |
Guarantee obligations term | P4Y |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Changes in common stock | |||||||||||
Common stock, beginning of period (in shares) | 536,431,204 | 536,400,000 | 536,431,204 | 536,400,000 | 536,400,000 | ||||||
Common stock, end of period (in shares) | 536,431,204 | 536,431,204 | 536,431,204 | 536,431,204 | 536,400,000 | ||||||
Common stock, beginning of period | $ 3,675.4 | $ 3,524 | $ 3,675.4 | $ 3,524 | $ 3,352 | ||||||
Stock options and other | 151 | 151 | 172 | ||||||||
Common stock, end of period | $ 3,825.6 | $ 3,675.4 | $ 3,825.6 | $ 3,675.4 | 3,524 | ||||||
Common stock, authorized (in shares) | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | |||||||
Preferred stock, authorized (in shares) | 9,000,000 | 9,000,000 | |||||||||
Preferred stock, issued (in shares) | 0 | 0 | |||||||||
Common stock repurchase plans | |||||||||||
Repurchase of common stock shares, December 2013 plan maximum authorization (in dollars) | $ 8,000 | $ 8,000 | |||||||||
Repurchase of common stock shares, December 2013 plan maximum authorization (in shares) | 102,600,000 | 102,600,000 | |||||||||
Closing common stock price (in dollars per share) | $ 78 | $ 78 | |||||||||
Common stock shares remaining to be repurchased under repurchase plan (in dollars) | $ 3,461 | $ 3,461 | |||||||||
Common stock shares remaining to be repurchased under repurchase plan (in shares) | 44,400,000 | 44,400,000 | |||||||||
Reconciliation of Basic and Diluted Net Income Per Share | |||||||||||
Net income attributable to Deere & Company (in dollars) | $ 351 | $ 512 | $ 690 | $ 387 | $ 649 | $ 851 | $ 981 | $ 681 | $ 1,940 | $ 3,161.7 | 3,537.3 |
Less income allocable to participating securities (in dollars) | 0.8 | 1 | 0.9 | ||||||||
Income allocable to common stock (in dollars) | $ 1,939.2 | $ 3,160.7 | $ 3,536.4 | ||||||||
Average shares outstanding | 333,600,000 | 363,000,000 | 385,300,000 | ||||||||
Basic per share (in dollars per share) | $ 1.09 | $ 1.54 | $ 2.05 | $ 1.13 | $ 1.84 | $ 2.35 | $ 2.67 | $ 1.83 | $ 5.81 | $ 8.71 | $ 9.18 |
Diluted Earnings Per Share | |||||||||||
Average shares outstanding | 333,600,000 | 363,000,000 | 385,300,000 | ||||||||
Effect of dilutive stock options (in shares) | 2,400,000 | 3,100,000 | 3,900,000 | ||||||||
Total potential shares outstanding | 336,000,000 | 366,100,000 | 389,200,000 | ||||||||
Diluted per share (in dollars per share) | $ 1.08 | $ 1.53 | $ 2.03 | $ 1.12 | $ 1.83 | $ 2.33 | $ 2.65 | $ 1.81 | $ 5.77 | $ 8.63 | $ 9.09 |
Antidilutive incremental shares related to share-based compensation excluded from computation of earnings per share | 2,400,000 | 2,400,000 |
STOCK OPTION AND RESTRICTED 108
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Number of additional shares authorized for grant related to stock options or restricted stock | 16.9 | ||
Stock Option Activity - Aggregate Intrinsic Value | |||
Cash received from stock option exercises | $ 172.1 | $ 149.5 | $ 174.5 |
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, low end of range (as a percent) | 0.04% | 0.03% | 0.04% |
Risk-free interest rate, high end of range (as a percent) | 2.30% | 2.90% | 1.70% |
Expected dividends (as a percent) | 2.50% | 2.30% | 2.30% |
Expected volatility, low end of range (as a percent) | 23.40% | 25.90% | 26.60% |
Expected volatility, high end of range (as a percent) | 25.70% | 32.00% | 32.50% |
Weighted-average volatility (as a percent) | 25.60% | 31.90% | 32.40% |
Stock Option Activity - Shares | |||
Outstanding at beginning of year (in shares) | 14.9 | ||
Granted (in shares) | 3 | ||
Exercised (in shares) | (2.9) | ||
Expired or forfeited (in shares) | (0.2) | ||
Outstanding at end of year (in shares) | 14.8 | 14.9 | |
Exercisable at end of year (in shares) | 9.3 | ||
Stock Option Activity - Exercise Price, Weighted-averages | |||
Outstanding, weighted average exercise price at beginning of year (in dollars per share) | $ 71.64 | ||
Granted, weighted average exercise price (in dollars per share) | 88.19 | ||
Exercised, weighted average exercise price (in dollars per share) | 58.65 | ||
Expired or Forfeited, weighted average exercise price (in dollars per share) | 87.44 | ||
Outstanding, weighted average exercise price at end of year (in dollars per share) | 77.39 | $ 71.64 | |
Exercisable, weighted average exercise price at end of year (in dollars per share) | $ 72.78 | ||
Stock Option Activity - Remaining Contractual Term (Years) | |||
Outstanding at end of year, Remaining Contractual Term | 6 years 2 months 16 days | ||
Exercisable at end of year, Remaining Contractual Term | 5 years 2 months 9 days | ||
Stock Option Activity - Aggregate Intrinsic Value | |||
Outstanding at end of year, Aggregate Intrinsic Value | $ 94.5 | ||
Exercisable at end of year, Aggregate Intrinsic Value | $ 84.8 | ||
Weighted-average grant-date fair values of options granted (in dollars per share) | $ 19.67 | $ 24.74 | $ 23.73 |
Total intrinsic values of options exercised | $ 98 | $ 125 | $ 183 |
Cash received from stock option exercises | 172 | 149 | 175 |
Tax benefits, exercise of stock options | $ 36 | $ 46 | $ 68 |
Stock Options | Minimum | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 1 year | ||
Assumptions used for the binomial lattice model to determine the fair value of options | |||
Expected term | 7 years 2 months 12 days | 7 years 3 months 18 days | 7 years 3 months 18 days |
Stock Options | Maximum | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 3 years | ||
Assumptions used for the binomial lattice model to determine the fair value of options | |||
Expected term | 8 years 2 months 12 days | 7 years 4 months 24 days | 7 years 10 months 24 days |
Restricted Stock Units | |||
Employee Service Share-based Compensation, Aggregate Disclosures | |||
Vesting period under share-based incentive plans | 3 years |
STOCK OPTION AND RESTRICTED 109
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details 2) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Share-based Compensation - General Disclosures | |||
Total share-based compensation expense | $ 66 | $ 79 | $ 81 |
Income tax benefit recognized | 25 | 29 | 30 |
Unrecognized compensation cost from share-based compensation related to nonvested shares | $ 46 | ||
Weighted-average period during which unrecognized compensation is expected to be recognized | 2 years | ||
Total fair values of stock options and restricted shares vested | $ 74 | $ 69 | $ 68 |
Shares in Treasury Stock | 219,743,893 | 190,926,805 | |
Shares remaining to be repurchased under current publicly announced repurchase program | 44,400,000 | ||
Restricted Stock Units | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 248,000 | 236,000 | 254,000 |
Nonvested Restricted Shares - Shares | |||
Granted (in shares) | 248,000 | 236,000 | 254,000 |
Restricted Stock Units Subject to Service-based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 122,000 | 102,000 | 110,000 |
Common shares awarded for each unit of restricted stock at the end of vesting period | one share of common stock | ||
Restricted stock units granted, fair value (in dollars per unit) | $ 88.66 | $ 87.16 | $ 86.88 |
Nonvested Restricted Shares - Shares | |||
Nonvested at beginning of year (in shares) | 300,000 | ||
Granted (in shares) | 122,000 | 102,000 | 110,000 |
Vested (in shares) | (100,000) | ||
Nonvested at end of year (in shares) | 300,000 | 300,000 | |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Nonvested weighted average grant-date fair value, at beginning of year (in dollars per share) | $ 83 | ||
Granted, weighted average grant-date fair value (in dollars per share) | 88.66 | $ 87.16 | $ 86.88 |
Vested, weighted average grant-date fair value (in dollars per share) | 76.37 | ||
Nonvested weighted average grant-date fair value, at end of year (in dollars per share) | $ 87.58 | $ 83 | |
Restricted Stock Units Subject to Performance/Service and Market/Service Based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 100,000 | ||
Restricted stock units granted, fair value (in dollars per unit) | $ 97.88 | ||
Nonvested Restricted Shares - Shares | |||
Nonvested at beginning of year (in shares) | 400,000 | ||
Granted (in shares) | 100,000 | ||
Expired or forfeited (in shares) | (100,000) | ||
Nonvested at end of year (in shares) | 400,000 | 400,000 | |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Nonvested weighted average grant-date fair value, at beginning of year (in dollars per share) | $ 91.30 | ||
Granted, weighted average grant-date fair value (in dollars per share) | 97.88 | ||
Expired or forfeited, weighted average grant-date fair value (in dollars per share) | 93.31 | ||
Nonvested weighted average grant-date fair value, at end of year (in dollars per share) | $ 96.87 | $ 91.30 | |
Restricted Stock Units Subject to Performance/Service and Market/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 and Market/Service Based Conditions | Maximum | |||
Share-based Compensation, Aggregate Disclosures | |||
Percent of common stock that may be awarded based on metric | 200.00% | ||
Restricted Stock Units Subject to Performance/Service-based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 63,000 | 67,000 | 72,000 |
Restricted stock units granted, fair value (in dollars per unit) | $ 81.78 | $ 81.53 | $ 80.73 |
Nonvested Restricted Shares - Shares | |||
Granted (in shares) | 63,000 | 67,000 | 72,000 |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Granted, weighted average grant-date fair value (in dollars per share) | $ 81.78 | $ 81.53 | $ 80.73 |
Restricted Stock Units Subject to Market/Service-based Conditions | |||
Share-based Compensation, Aggregate Disclosures | |||
Restricted stock units granted (in shares) | 63,000 | 67,000 | 72,000 |
Restricted stock units granted, fair value (in dollars per unit) | $ 113.97 | $ 116.86 | $ 106.75 |
Fair value assumptions method used | lattice valuation model | ||
Nonvested Restricted Shares - Shares | |||
Granted (in shares) | 63,000 | 67,000 | 72,000 |
Nonvested Restricted Shares - Grant-Date Fair Value, Weighted-averages | |||
Granted, weighted average grant-date fair value (in dollars per share) | $ 113.97 | $ 116.86 | $ 106.75 |
OTHER COMPREHENSIVE INCOME I110
OTHER COMPREHENSIVE INCOME ITEMS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Accumulated other comprehensive income (loss) | |||
Balance | $ 9,065.5 | $ 10,267.7 | $ 6,862 |
Period Change | (946.8) | (1,090.2) | 1,878.5 |
Balance | 6,757.6 | 9,065.5 | 10,267.7 |
Total Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Balance | (3,783) | (2,693) | (4,572) |
Period Change | (946) | (1,090) | 1,879 |
Balance | (4,729) | (3,783) | (2,693) |
Retirement Benefits Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Balance | (3,493) | (2,809) | (4,759) |
Period Change | (8) | (684) | 1,950 |
Balance | (3,501) | (3,493) | (2,809) |
Cumulative Translation Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Balance | (303) | 113 | 184 |
Period Change | (935) | (416) | (71) |
Balance | (1,238) | (303) | 113 |
Unrealized Gain (Loss) on Derivatives | |||
Accumulated other comprehensive income (loss) | |||
Balance | (3) | (14) | |
Period Change | (2) | 3 | 11 |
Balance | (2) | (3) | |
Unrealized Gain (Loss) on Investments | |||
Accumulated other comprehensive income (loss) | |||
Balance | 13 | 6 | 17 |
Period Change | (1) | 7 | (11) |
Balance | $ 12 | $ 13 | $ 6 |
OTHER COMPREHENSIVE INCOME I111
OTHER COMPREHENSIVE INCOME ITEMS (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Other Comprehensive Income (Loss), Before Tax | |||
Interest expense | $ (680) | $ (664) | $ (741.3) |
Other operating expense | (961.1) | (1,093.3) | (820.6) |
Other income | 706.5 | 824.2 | 682.4 |
Total other comprehensive income (loss), before tax | (952) | (1,481) | 3,011 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Total other comprehensive income (loss), tax (expense) credit | 6 | 391 | (1,132) |
Other Comprehensive Income (Loss), After Tax | |||
Other Comprehensive Income (Loss), Net of Income Taxes | (946.8) | (1,090.2) | 1,878.5 |
Cumulative Translation Adjustment | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | (427) | ||
Total other comprehensive income (loss), before tax | (938) | (418) | (74) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 2 | ||
Total other comprehensive income (loss), tax (expense) credit | 3 | 2 | 3 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | (425) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | (935) | (416) | (71) |
Cumulative Translation Adjustment | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expense | 9 | ||
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 9 | ||
Unrealized Gain (Loss) on Derivatives | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | (12) | (14) | 43 |
Total other comprehensive income (loss), before tax | (4) | 5 | 16 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 4 | 5 | (14) |
Total other comprehensive income (loss), tax (expense) credit | 2 | (2) | (5) |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | (8) | (9) | 29 |
Other Comprehensive Income (Loss), Net of Income Taxes | (2) | 3 | 11 |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Interest expense | 12 | 13 | 22 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (4) | (5) | (8) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 8 | 8 | 14 |
Unrealized Gain (Loss) on Derivatives | Foreign Exchange Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other operating expense | (4) | 6 | (49) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 2 | (2) | 17 |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | (2) | 4 | (32) |
Unrealized Gain (Loss) on Investments | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 12 | 10 | (17) |
Total other comprehensive income (loss), before tax | (2) | 10 | (17) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (4) | (3) | 6 |
Total other comprehensive income (loss), tax (expense) credit | 1 | (3) | 6 |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 8 | 7 | (11) |
Other Comprehensive Income (Loss), Net of Income Taxes | (1) | 7 | (11) |
Retirement Benefits Adjustment | |||
Other Comprehensive Income (Loss), Before Tax | |||
Total other comprehensive income (loss), before tax | (8) | (1,078) | 3,086 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Total other comprehensive income (loss), tax (expense) credit | 394 | (1,136) | |
Other Comprehensive Income (Loss), After Tax | |||
Other Comprehensive Income (Loss), Net of Income Taxes | (8) | (684) | 1,950 |
Retirement Benefits Adjustment | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | (427) | (940) | 1,507 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 151 | 343 | (552) |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | (276) | (597) | 955 |
Retirement Benefits Adjustment | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Other comprehensive income (loss) before reclassification, before tax | 145 | (378) | 1,167 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (52) | 138 | (426) |
Other Comprehensive Income (Loss), After Tax | |||
Other comprehensive income (loss) before reclassification, after tax | 93 | (240) | 741 |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 223 | 177 | 265 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (81) | (64) | (101) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 142 | 113 | 164 |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 91 | 33 | 141 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (34) | (12) | (54) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 57 | 21 | 87 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 25 | 25 | 12 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (9) | (9) | (6) |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 16 | 16 | 6 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | (77) | (3) | (8) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 29 | 1 | 3 |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | (48) | (2) | (5) |
Settlements/Curtailments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 11 | 9 | 2 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | |||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (4) | (3) | |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | 7 | 6 | $ 2 |
Settlements/Curtailments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Health Care and Life Insurance | |||
Other Comprehensive Income (Loss), Before Tax | |||
Reclassification from accumulated other comprehensive income, before tax | 1 | (1) | |
Other Comprehensive Income (Loss), After Tax | |||
Reclassification from accumulated other comprehensive income, after tax | $ 1 | $ (1) |
OTHER COMPREHENSIVE INCOME I112
OTHER COMPREHENSIVE INCOME ITEMS (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | |||
Comprehensive income (loss) attributable to noncontrolling interests | $ 0.5 | $ 1.3 | $ 0.4 |
Net income (loss) attributable to noncontrolling interests | 0.9 | 1.6 | 0.3 |
Cumulative translation adjustments attributable to noncontrolling interests | $ (0.4) | $ (0.3) | $ 0.1 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Fair Values of Financial Instruments | ||
Financing receivables - net | $ 24,809 | $ 27,422.2 |
Financing receivables securitized - net | 4,834.6 | 4,602.3 |
Short-term securitization borrowings | 4,590 | 4,558.5 |
Long-term borrowings | 23,832.8 | 24,380.7 |
Level 2 | ||
Fair Values of Financial Instruments | ||
Short-term securitization borrowings | 4,590 | 4,562 |
Long-term borrowings due within one year | 5,245 | 4,976 |
Long-term borrowings | 24,183 | 24,981 |
Level 3 | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 24,719 | 27,337 |
Financing receivables securitized - net | 4,820 | 4,573 |
Carrying Value | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 24,809 | 27,422 |
Financing receivables securitized - net | 4,835 | 4,602 |
Short-term securitization borrowings | 4,590 | 4,559 |
Long-term borrowings due within one year | 5,253 | 4,973 |
Long-term borrowings | 23,833 | 24,381 |
Equipment Operations | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 0.9 | 18.5 |
Long-term borrowings | 4,460.6 | 4,642.5 |
Equipment Operations | Level 2 | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 78 | 233 |
Long-term borrowings | 4,835 | 5,095 |
Equipment Operations | Carrying Value | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 86 | 243 |
Long-term borrowings | 4,461 | 4,643 |
Financial Services | ||
Fair Values of Financial Instruments | ||
Financing receivables - net | 24,808.1 | 27,403.7 |
Financing receivables securitized - net | 4,834.6 | 4,602.3 |
Short-term securitization borrowings | 4,590 | 4,558.5 |
Long-term borrowings | 19,372.2 | 19,738.2 |
Financial Services | Level 2 | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 5,167 | 4,743 |
Long-term borrowings | 19,348 | 19,886 |
Financial Services | Carrying Value | ||
Fair Values of Financial Instruments | ||
Long-term borrowings due within one year | 5,167 | 4,730 |
Long-term borrowings | $ 19,372 | $ 19,738 |
FAIR VALUE MEASUREMENTS (Det114
FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | $ 437.4 | $ 1,215.1 |
Derivative assets | 428 | 353 |
Derivative liabilities | 78 | 110 |
Transfer from Level 1 to Level 2, assets | 0 | 0 |
Transfer from Level 2 to Level 1, assets | 0 | 0 |
Transfer from Level 1 to Level 2, liabilities | 0 | 0 |
Transfer from Level 2 to Level 1, liabilities | 0 | 0 |
Other Assets | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 428 | 353 |
Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | 78 | 110 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 and 2 | U.S. Government Debt Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 82 | 808 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 43 | 45 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Fixed Income Funds | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 10 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 37 | 741 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Total liabilities | 78 | 110 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 353 | 319 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | 60 | 81 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 50 | 18 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | 18 | 29 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 25 | 16 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 31 | 34 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 124 | 172 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-Backed Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 110 | 146 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 and 3 | International Debt Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 47 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 29 | |
Total Estimated Fair Value | Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | 437 | 1,215 |
Total assets | $ 865 | $ 1,568 |
FAIR VALUE MEASUREMENTS (Det115
FAIR VALUE MEASUREMENTS (Details 3) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 $ in Millions | 12 Months Ended |
Oct. 31, 2015USD ($) | |
Fair Value, Recurring, Level 3 Measurements from Available for Sale Marketable Securities | |
Purchases | $ 30 |
Change in unrealized gain (loss) | (1) |
End of period balance | $ 29 |
FAIR VALUE MEASUREMENTS (Det116
FAIR VALUE MEASUREMENTS (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Equipment on operating leases - net | $ 4,970.4 | $ 4,015.5 | |
Fair Value, Nonrecurring Measurements | Level 3 | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Equipment on operating leases - net | 479 | ||
Losses, Equipment on operating leases - net | 10 | ||
Property and equipment - net | 33 | 53 | |
Losses, Property and equipment - net | 10 | 44 | $ 48 |
Losses, Other intangible assets - net | $ 9 | ||
Other assets | 112 | 15 | |
Losses, Other assets | $ 15 | 16 | |
Losses, Assets held for sale - Water operations | $ 36 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Cash Flow Hedges | ||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ 4 | |
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 35 months | |
Gains or losses reclassified from OCI to earnings | $ 0 | |
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | ||
Cash Flow Hedges | ||
Notional amount of cash flow hedge derivatives | 2,800 | $ 3,050 |
Cross-Currency Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | ||
Cash Flow Hedges | ||
Notional amount of cash flow hedge derivatives | $ 60 | $ 70 |
DERIVATIVE INSTRUMENTS (Deta118
DERIVATIVE INSTRUMENTS (Details 2) - Interest Rate Contracts - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Fair Value Hedges | ||
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives | $ 2 | $ (2) |
Gain (Loss) on Fair Value Hedges | ||
Gains (losses) on interest rate contracts | 104 | (13) |
Net accrued interest income on interest rate contracts | 173 | 168 |
Gains (losses) on borrowings | (102) | 11 |
Accrued interest expense on borrowings | 274 | 267 |
Fair Value Hedges | Designated as Hedging Instruments | ||
Fair Value Hedges | ||
Notional amount of interest rate fair value hedge derivatives | $ 8,618 | $ 8,798 |
DERIVATIVE INSTRUMENTS (Deta119
DERIVATIVE INSTRUMENTS (Details 3) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Interest Rate Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 6,333 | $ 6,317 |
Interest Rate Contracts | Purchased | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,069 | 1,703 |
Interest Rate Contracts | Sold | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,069 | 1,703 |
Foreign Exchange Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 3,160 | 3,524 |
Cross-Currency Interest Rate Contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 76 | $ 98 |
DERIVATIVE INSTRUMENTS (Deta120
DERIVATIVE INSTRUMENTS (Details 4) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Fair Value of Derivative Instruments | ||
Total derivative assets | $ 428 | $ 353 |
Total derivative liabilities | 78 | 110 |
Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 428 | 353 |
Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 78 | 110 |
Designated as Hedging Instruments | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 313 | 279 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 8 | 35 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 299 | 266 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 8 | 35 |
Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 14 | 13 |
Not Designated as Hedging Instruments | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 115 | 74 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 70 | 75 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 54 | 53 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 52 | 46 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 50 | 18 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 18 | 29 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | $ 11 | $ 3 |
DERIVATIVE INSTRUMENTS (Deta121
DERIVATIVE INSTRUMENTS (Details 5) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ 384 | $ 107 | $ 49 |
Interest Rate Contracts | OCI | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | (16) | (10) | (15) |
Interest Rate Contracts | Interest Expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Fair value hedges, gains (losses) | 277 | 155 | (89) |
Not designated as hedges, gains (losses) | (17) | 3 | (6) |
Interest Rate Contracts | Interest Expense | Cash Flow Hedges Member | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | (12) | (13) | (22) |
Foreign Exchange Contracts | OCI | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | 4 | (4) | 58 |
Foreign Exchange Contracts | Cost of Sales | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | 97 | 25 | 35 |
Foreign Exchange Contracts | Other Operating Expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | 304 | 79 | 20 |
Foreign Exchange Contracts | Other Operating Expense | Cash Flow Hedges Member | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | $ 4 | $ (6) | $ 49 |
DERIVATIVE INSTRUMENTS (Deta122
DERIVATIVE INSTRUMENTS (Details 6) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
DERIVATIVE INSTRUMENTS | ||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 41 | $ 57 |
Derivative Assets | ||
Gross amounts recognized | 428 | 353 |
Netting arrangements | (62) | (76) |
Collateral received | (5) | |
Net amount | 366 | 272 |
Derivative Liabilities | ||
Gross amounts recognized | 78 | 110 |
Netting arrangements | (62) | (76) |
Net amount | $ 16 | $ 34 |
SEGMENT AND GEOGRAPHIC AREA 123
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015USD ($) | Jul. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Jan. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Jul. 31, 2014USD ($) | Apr. 30, 2014USD ($) | Jan. 31, 2014USD ($) | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) | |
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 | |||||||||||
Number of major business segments | item | 3 | ||||||||||
Net Sales and Revenues | |||||||||||
Total net sales | $ 5,932 | $ 6,839 | $ 7,399 | $ 5,605 | $ 8,043 | $ 8,723 | $ 9,246 | $ 6,949 | $ 25,775.2 | $ 32,960.6 | $ 34,997.9 |
Total | $ 6,715 | $ 7,594 | $ 8,171 | $ 6,383 | $ 8,965 | $ 9,500 | $ 9,948 | $ 7,654 | 28,862.8 | 36,066.9 | 37,795.4 |
Other Revenues | |||||||||||
Net Sales and Revenues | |||||||||||
Total | 497 | 529 | 448 | ||||||||
Agriculture and Turf | |||||||||||
Net Sales and Revenues | |||||||||||
Total net sales | 19,812 | 26,380 | 29,132 | ||||||||
Agriculture and Turf | Intersegment Sales and Revenue | |||||||||||
Net Sales and Revenues | |||||||||||
Total | 49 | 89 | 69 | ||||||||
Construction and Forestry | |||||||||||
Net Sales and Revenues | |||||||||||
Total net sales | 5,963 | 6,581 | 5,866 | ||||||||
Construction and Forestry | Intersegment Sales and Revenue | |||||||||||
Net Sales and Revenues | |||||||||||
Total | 1 | 1 | 2 | ||||||||
Financial Services | |||||||||||
Net Sales and Revenues | |||||||||||
Total | 2,591 | 2,577 | 2,349 | ||||||||
Financial Services | Intersegment Sales and Revenue | |||||||||||
Net Sales and Revenues | |||||||||||
Total | $ 225 | $ 228 | $ 220 |
SEGMENT AND GEOGRAPHIC AREA 124
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | $ 3,140 | $ 5,218 | $ 5,928 | ||||||||
Interest income | 1,511 | 1,561 | 1,502 | ||||||||
Interest expense | (680) | (664) | (741.3) | ||||||||
Income taxes | (840.1) | (1,626.5) | (1,945.9) | ||||||||
Net Income | 1,940.9 | 3,163.3 | 3,537.6 | ||||||||
Less: Net income attributable to noncontrolling interests | 0.9 | 1.6 | 0.3 | ||||||||
Net Income Attributable to Deere & Company | $ 351 | $ 512 | $ 690 | $ 387 | $ 649 | $ 851 | $ 981 | $ 681 | 1,940 | 3,161.7 | 3,537.3 |
Agriculture and Turf | |||||||||||
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | 1,649 | 3,649 | 4,680 | ||||||||
Construction and Forestry | |||||||||||
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | 528 | 648 | 378 | ||||||||
Financial Services | |||||||||||
Operating Profit (Loss) | |||||||||||
Operating profit (loss) | 963 | 921 | 870 | ||||||||
Corporate | |||||||||||
Operating Profit (Loss) | |||||||||||
Interest income | 61 | 57 | 55 | ||||||||
Investment income | 2 | 2 | |||||||||
Interest expense | (273) | (289) | (297) | ||||||||
Foreign exchange gain (loss) from equipment operations' financing activities | 13 | (2) | (8) | ||||||||
Corporate expenses - net | (160) | (196) | (197) | ||||||||
Income taxes | (840) | (1,627) | (1,946) | ||||||||
Total | $ (1,199) | $ (2,055) | $ (2,391) |
SEGMENT AND GEOGRAPHIC AREA 125
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Operating Segments | |||
Interest income | $ 1,511 | $ 1,561 | $ 1,502 |
Interest expense | 680 | 664 | 741.3 |
Operating Segment | Agriculture and Turf | |||
Operating Segments | |||
Interest income | 14 | 17 | 24 |
Interest expense | 160 | 175 | 167 |
Operating Segment | Construction and Forestry | |||
Operating Segments | |||
Interest income | 2 | 1 | 2 |
Interest expense | 45 | 37 | 36 |
Operating Segment | Financial Services | |||
Operating Segments | |||
Interest income | 1,687 | 1,754 | 1,668 |
Interest expense | 455 | 431 | 488 |
Corporate | |||
Operating Segments | |||
Interest income | 61 | 57 | 55 |
Interest expense | 273 | 289 | 297 |
Intercompany Eliminations | |||
Operating Segments | |||
Interest income | (253) | (268) | (247) |
Interest expense | $ (253) | $ (268) | $ (247) |
SEGMENT AND GEOGRAPHIC AREA 126
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Operating Segments | |||
Depreciation and amortization expense | $ 1,382.4 | $ 1,306.5 | $ 1,140.3 |
Equity in income (loss) of unconsolidated affiliates | 0.9 | (7.6) | 0.1 |
Identifiable operating assets | 57,947.6 | 61,336.4 | 59,521 |
Capital additions | 666 | 1,016 | 1,158 |
Investments in unconsolidated affiliates | 303.5 | 303.2 | 221 |
Agriculture and Turf | |||
Operating Segments | |||
Depreciation and amortization expense | 659 | 681 | 627 |
Equity in income (loss) of unconsolidated affiliates | 7 | 8 | (1) |
Identifiable operating assets | 8,332 | 9,442 | 10,799 |
Capital additions | 522 | 868 | 981 |
Investments in unconsolidated affiliates | 116 | 110 | 24 |
Construction and Forestry | |||
Operating Segments | |||
Depreciation and amortization expense | 133 | 115 | 106 |
Equity in income (loss) of unconsolidated affiliates | (7) | (18) | |
Identifiable operating assets | 3,295 | 3,405 | 3,461 |
Capital additions | 138 | 145 | 174 |
Investments in unconsolidated affiliates | 177 | 182 | 187 |
Financial Services | |||
Operating Segments | |||
Depreciation and amortization expense | 590 | 511 | 407 |
Equity in income (loss) of unconsolidated affiliates | 1 | 2 | 1 |
Identifiable operating assets | 40,909 | 42,784 | 38,646 |
Capital additions | 6 | 3 | 3 |
Investments in unconsolidated affiliates | 10 | 11 | 10 |
Corporate | |||
Operating Segments | |||
Identifiable operating assets | $ 5,412 | $ 5,705 | $ 6,615 |
SEGMENT AND GEOGRAPHIC AREA 127
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Details 5) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015USD ($) | Jul. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Jan. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Jul. 31, 2014USD ($) | Apr. 30, 2014USD ($) | Jan. 31, 2014USD ($) | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) | |
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 | |||||||||||
Number of geographic areas for which operations are historically disclosed (in segments) | item | 2 | ||||||||||
Geographic Area Information | |||||||||||
Net sales | $ 5,932 | $ 6,839 | $ 7,399 | $ 5,605 | $ 8,043 | $ 8,723 | $ 9,246 | $ 6,949 | $ 25,775.2 | $ 32,960.6 | $ 34,997.9 |
Revenues | $ 6,715 | $ 7,594 | $ 8,171 | $ 6,383 | $ 8,965 | $ 9,500 | $ 9,948 | $ 7,654 | 28,862.8 | 36,066.9 | 37,795.4 |
Operating profit (loss) | 3,140 | 5,218 | 5,928 | ||||||||
Equipment Operations | |||||||||||
Geographic Area Information | |||||||||||
Net sales | 25,775.2 | 32,960.6 | 34,997.9 | ||||||||
Revenues | 26,454.9 | 33,659.7 | 35,627.8 | ||||||||
Financial Services | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 2,815.9 | 2,805.2 | 2,568.9 | ||||||||
U.S. and Canada: | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 18,750 | 22,391 | 23,852 | ||||||||
Operating profit (loss) | 2,445 | 4,038 | 4,768 | ||||||||
U.S. and Canada: | Equipment Operations | |||||||||||
Geographic Area Information | |||||||||||
Net sales | $ 16,498 | 20,171 | 21,821 | ||||||||
Approximate percentage of net sales and revenues that relates to the U.S. only, based on three-year average | 87.00% | ||||||||||
Operating profit (loss) | $ 1,643 | 3,311 | 4,062 | ||||||||
Number of years used in average percentage of U.S. only as a proportion of the combined U.S. and Canada net sales and revenues | 3 years | ||||||||||
U.S. and Canada: | Financial Services | |||||||||||
Geographic Area Information | |||||||||||
Revenues | $ 2,252 | 2,220 | 2,031 | ||||||||
Approximate percentage of net sales and revenues that relates to the U.S. only, based on three-year average | 78.00% | ||||||||||
Operating profit (loss) | $ 802 | 727 | 706 | ||||||||
Outside U.S. and Canada: | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 9,616 | 13,147 | 13,495 | ||||||||
Operating profit (loss) | 695 | 1,180 | 1,160 | ||||||||
Outside U.S. and Canada: | Equipment Operations | |||||||||||
Geographic Area Information | |||||||||||
Net sales | 9,277 | 12,790 | 13,177 | ||||||||
Operating profit (loss) | 534 | 986 | 996 | ||||||||
Outside U.S. and Canada: | Financial Services | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 339 | 357 | 318 | ||||||||
Operating profit (loss) | 161 | 194 | 164 | ||||||||
Other Revenues | |||||||||||
Geographic Area Information | |||||||||||
Revenues | $ 497 | $ 529 | $ 448 |
SEGMENT AND GEOGRAPHIC AREA 128
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2015, 2014 AND 2013 (Details 6) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 |
Geographic Area Information | |||
Property and equipment | $ 5,181.5 | $ 5,577.8 | $ 5,467 |
U.S. | |||
Geographic Area Information | |||
Property and equipment | 3,098 | 3,154 | 2,997 |
Germany | |||
Geographic Area Information | |||
Property and equipment | 568 | 640 | 647 |
Other Countries | |||
Geographic Area Information | |||
Property and equipment | $ 1,515 | $ 1,784 | $ 1,823 |
SUPPLEMENTAL INFORMATION (UN129
SUPPLEMENTAL INFORMATION (UNAUDITED) (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015USD ($)item$ / shares | Jul. 31, 2015USD ($)$ / shares | Apr. 30, 2015USD ($)$ / shares | Jan. 31, 2015USD ($)$ / shares | Oct. 31, 2014USD ($)$ / shares | Jul. 31, 2014USD ($)$ / shares | Apr. 30, 2014USD ($)$ / shares | Jan. 31, 2014USD ($)$ / shares | Oct. 31, 2015USD ($)item$ / shares | Oct. 31, 2014USD ($)$ / shares | Oct. 31, 2013USD ($)$ / shares | |
Market price of shares | |||||||||||
Share price | $ 78 | $ 78 | |||||||||
Number of common stockholders | |||||||||||
Number of holders of record of the company's $1 par value common stock | item | 23,415 | 23,415 | |||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 | |||||||
Quarterly information with respect to net sales and revenues and earnings | |||||||||||
Net sales and revenues | $ | $ 6,715 | $ 7,594 | $ 8,171 | $ 6,383 | $ 8,965 | $ 9,500 | $ 9,948 | $ 7,654 | $ 28,862.8 | $ 36,066.9 | $ 37,795.4 |
Net sales | $ | 5,932 | 6,839 | 7,399 | 5,605 | 8,043 | 8,723 | 9,246 | 6,949 | 25,775.2 | 32,960.6 | 34,997.9 |
Gross profit | $ | 1,262 | 1,482 | 1,704 | 1,184 | 1,946 | 2,112 | 2,374 | 1,753 | |||
Income before income taxes | $ | 457 | 738 | 1,017 | 568 | 1,076 | 1,292 | 1,464 | 965 | 2,780.1 | 4,797.4 | 5,483.4 |
Net income attributable to Deere & Company | $ | $ 351 | $ 512 | $ 690 | $ 387 | $ 649 | $ 851 | $ 981 | $ 681 | $ 1,940 | $ 3,161.7 | $ 3,537.3 |
Per Share Data | |||||||||||
Basic (in dollars per share) | $ 1.09 | $ 1.54 | $ 2.05 | $ 1.13 | $ 1.84 | $ 2.35 | $ 2.67 | $ 1.83 | $ 5.81 | $ 8.71 | $ 9.18 |
Diluted (in dollars per share) | 1.08 | 1.53 | 2.03 | 1.12 | 1.83 | 2.33 | 2.65 | 1.81 | 5.77 | 8.63 | 9.09 |
Dividends declared (in dollars per share) | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.51 | 0.51 | 2.40 | 2.22 | $ 1.99 |
Dividends paid (in dollars per share) | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.51 | 0.51 | 0.51 | |||
Common Stock | Maximum | |||||||||||
Market price of shares | |||||||||||
Share price | 97.14 | 97.33 | 92.75 | 90.85 | 87.16 | 94.53 | 93.89 | 91.33 | 97.14 | 87.16 | |
Common Stock | Minimum | |||||||||||
Market price of shares | |||||||||||
Share price | $ 72.89 | $ 88.98 | $ 86.64 | $ 84.55 | $ 80.01 | $ 85.11 | $ 84.05 | $ 81.50 | $ 72.89 | $ 80.01 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Dec. 02, 2015 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 |
Subsequent Events | ||||||||||||
Quarterly dividend declared (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.51 | $ 0.51 | $ 2.40 | $ 2.22 | $ 1.99 | |
Subsequent Event | ||||||||||||
Subsequent Events | ||||||||||||
Quarterly dividend declared (in dollars per share) | $ 0.60 |
SUPPLEMENTAL CONSOLIDATING D131
SUPPLEMENTAL CONSOLIDATING DATA (Income Statement) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Net Sales and Revenues | |||||||||||
Net sales | $ 5,932 | $ 6,839 | $ 7,399 | $ 5,605 | $ 8,043 | $ 8,723 | $ 9,246 | $ 6,949 | $ 25,775.2 | $ 32,960.6 | $ 34,997.9 |
Finance and interest income | 2,381.1 | 2,282.1 | 2,115.1 | ||||||||
Other income | 706.5 | 824.2 | 682.4 | ||||||||
Total | 6,715 | 7,594 | 8,171 | 6,383 | 8,965 | 9,500 | 9,948 | 7,654 | 28,862.8 | 36,066.9 | 37,795.4 |
Costs and Expenses | |||||||||||
Cost of sales | 20,143.2 | 24,775.8 | 25,667.3 | ||||||||
Research and development expenses | 1,425.1 | 1,452 | 1,477.3 | ||||||||
Selling, administrative and general expenses | 2,873.3 | 3,284.4 | 3,605.5 | ||||||||
Interest expense | 680 | 664 | 741.3 | ||||||||
Other operating expenses | 961.1 | 1,093.3 | 820.6 | ||||||||
Total | 26,082.7 | 31,269.5 | 32,312 | ||||||||
Income of Consolidated Group before Income Taxes | 457 | 738 | 1,017 | 568 | 1,076 | 1,292 | 1,464 | 965 | 2,780.1 | 4,797.4 | 5,483.4 |
Provision for income taxes | 840.1 | 1,626.5 | 1,945.9 | ||||||||
Income of Consolidated Group | 1,940 | 3,170.9 | 3,537.5 | ||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Net Income | 1,940.9 | 3,163.3 | 3,537.6 | ||||||||
Less: Net income attributable to noncontrolling interests | 0.9 | 1.6 | 0.3 | ||||||||
Net Income Attributable to Deere & Company | $ 351 | $ 512 | $ 690 | $ 387 | $ 649 | $ 851 | $ 981 | $ 681 | 1,940 | 3,161.7 | 3,537.3 |
Equipment Operations | |||||||||||
Net Sales and Revenues | |||||||||||
Net sales | 25,775.2 | 32,960.6 | 34,997.9 | ||||||||
Finance and interest income | 77 | 76.5 | 80.8 | ||||||||
Other income | 602.7 | 622.6 | 549.1 | ||||||||
Total | 26,454.9 | 33,659.7 | 35,627.8 | ||||||||
Costs and Expenses | |||||||||||
Cost of sales | 20,145.2 | 24,777.8 | 25,668.8 | ||||||||
Research and development expenses | 1,425.1 | 1,452 | 1,477.3 | ||||||||
Selling, administrative and general expenses | 2,393.8 | 2,765.1 | 3,143.9 | ||||||||
Interest expense | 272.8 | 289.4 | 297.1 | ||||||||
Interest compensation to Financial Services | 204.8 | 212.1 | 202.7 | ||||||||
Other operating expenses | 195 | 285.4 | 223.7 | ||||||||
Total | 24,636.7 | 29,781.8 | 31,013.5 | ||||||||
Income of Consolidated Group before Income Taxes | 1,818.2 | 3,877.9 | 4,614.3 | ||||||||
Provision for income taxes | 509.9 | 1,329.6 | 1,640.7 | ||||||||
Income of Consolidated Group | 1,308.3 | 2,548.3 | 2,973.6 | ||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 632.6 | 615 | 564 | ||||||||
Net Income | 1,940.9 | 3,163.3 | 3,537.6 | ||||||||
Less: Net income attributable to noncontrolling interests | 0.9 | 1.6 | 0.3 | ||||||||
Net Income Attributable to Deere & Company | 1,940 | 3,161.7 | 3,537.3 | ||||||||
Equipment Operations | Financial Services | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 632.9 | 624.5 | 565 | ||||||||
Equipment Operations | Other | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | (0.3) | (9.5) | (1) | ||||||||
Financial Services | |||||||||||
Net Sales and Revenues | |||||||||||
Finance and interest income | 2,557 | 2,475 | 2,280.5 | ||||||||
Other income | 258.9 | 330.2 | 288.4 | ||||||||
Total | 2,815.9 | 2,805.2 | 2,568.9 | ||||||||
Costs and Expenses | |||||||||||
Selling, administrative and general expenses | 487.3 | 529.2 | 473.2 | ||||||||
Interest expense | 455 | 430.9 | 487.6 | ||||||||
Other operating expenses | 911.7 | 925.6 | 739 | ||||||||
Total | 1,854 | 1,885.7 | 1,699.8 | ||||||||
Income of Consolidated Group before Income Taxes | 961.9 | 919.5 | 869.1 | ||||||||
Provision for income taxes | 330.2 | 296.9 | 305.2 | ||||||||
Income of Consolidated Group | 631.7 | 622.6 | 563.9 | ||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | 1.2 | 1.9 | 1.1 | ||||||||
Net Income | 632.9 | 624.5 | 565 | ||||||||
Net Income Attributable to Deere & Company | 632.9 | 624.5 | 565 | ||||||||
Financial Services | Financial Services | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | |||||||||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates | $ 1.2 | $ 1.9 | $ 1.1 |
SUPPLEMENTAL CONSOLIDATING D132
SUPPLEMENTAL CONSOLIDATING DATA (Balance Sheet) (Details 2) - USD ($) $ / shares in Units, $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
ASSETS | ||||
Cash and cash equivalents | $ 4,162.2 | $ 3,787 | $ 3,504 | $ 4,652.2 |
Marketable securities | 437.4 | 1,215.1 | ||
Receivables from unconsolidated subsidiaries and affiliates | 33.3 | 30.2 | ||
Trade accounts and notes receivable - net | 3,051.1 | 3,277.6 | ||
Financing receivables - net | 24,809 | 27,422.2 | ||
Financing receivables securitized - net | 4,834.6 | 4,602.3 | ||
Other receivables | 991.2 | 1,500.3 | ||
Equipment on operating leases - net | 4,970.4 | 4,015.5 | ||
Inventories | 3,817 | 4,209.7 | ||
Property and equipment - net | 5,181.5 | 5,577.8 | 5,467 | |
Investments in unconsolidated subsidiaries and affiliates | 303.5 | 303.2 | 221 | |
Goodwill | 726 | 791.2 | 845 | |
Other intangible assets - net | 63.6 | 68.8 | ||
Retirement benefits | 215.6 | 262 | ||
Deferred income taxes | 2,767.3 | 2,776.6 | ||
Other assets | 1,583.9 | 1,496.9 | ||
Total Assets | 57,947.6 | 61,336.4 | 59,521 | |
LIABILITIES | ||||
Short-term borrowings | 8,426.6 | 8,019.2 | ||
Short-term securitization borrowings | 4,590 | 4,558.5 | ||
Payables to unconsolidated subsidiaries and affiliates | 80.6 | 101 | ||
Accounts payable and accrued expenses | 7,311.5 | 8,554.1 | ||
Deferred income taxes | 160.8 | 160.9 | ||
Long-term borrowings | 23,832.8 | 24,380.7 | ||
Retirement benefits and other liabilities | 6,787.7 | 6,496.5 | ||
Total liabilities | $ 51,190 | $ 52,270.9 | ||
Commitments and contingencies (Note 22) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2015 and 2014), at paid-in amount | $ 3,825.6 | $ 3,675.4 | $ 3,524 | $ 3,352 |
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 | 536,400,000 | 536,400,000 |
Common stock in treasury, 219,743,893 shares in 2015 and 190,926,805 shares in 2014, at cost | $ (15,497.6) | $ (12,834.2) | ||
Common stock in treasury (in shares) | 219,743,893 | 190,926,805 | ||
Retained earnings | $ 23,144.8 | $ 22,004.4 | ||
Accumulated other comprehensive income (loss) | (4,729.4) | (3,783) | ||
Total Deere & Company stockholders' equity | 6,743.4 | 9,062.6 | ||
Noncontrolling interests | 14.2 | 2.9 | ||
Total stockholders' equity | 6,757.6 | 9,065.5 | $ 10,267.7 | $ 6,862 |
Total Liabilities and Stockholders' Equity | 57,947.6 | 61,336.4 | ||
Equipment Operations | ||||
ASSETS | ||||
Cash and cash equivalents | 2,900 | 2,569.2 | 3,023.3 | 3,907.9 |
Marketable securities | 47.7 | 700.4 | ||
Receivables from unconsolidated subsidiaries and affiliates | 2,428.7 | 3,663.9 | ||
Trade accounts and notes receivable - net | 485.2 | 706 | ||
Financing receivables - net | 0.9 | 18.5 | ||
Other receivables | 849.5 | 848 | ||
Inventories | 3,817 | 4,209.7 | ||
Property and equipment - net | 5,126.2 | 5,522.5 | ||
Investments in unconsolidated subsidiaries and affiliates | 4,817.6 | 5,106.5 | ||
Goodwill | 726 | 791.2 | ||
Other intangible assets - net | 63.6 | 64.8 | ||
Retirement benefits | 211.9 | 263.5 | ||
Deferred income taxes | 3,092 | 2,981.9 | ||
Other assets | 807.3 | 850.6 | ||
Total Assets | 25,373.6 | 28,296.7 | ||
LIABILITIES | ||||
Short-term borrowings | 464.3 | 434.1 | ||
Payables to unconsolidated subsidiaries and affiliates | 80.6 | 101 | ||
Accounts payable and accrued expenses | 6,801.2 | 7,518.4 | ||
Deferred income taxes | 86.8 | 87.1 | ||
Long-term borrowings | 4,460.6 | 4,642.5 | ||
Retirement benefits and other liabilities | 6,722.5 | 6,448.1 | ||
Total liabilities | $ 18,616 | $ 19,231.2 | ||
Commitments and contingencies (Note 22) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2015 and 2014), at paid-in amount | $ 3,825.6 | $ 3,675.4 | ||
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, 219,743,893 shares in 2015 and 190,926,805 shares in 2014, at cost | $ (15,497.6) | $ (12,834.2) | ||
Common stock in treasury (in shares) | 219,743,893 | 190,926,805 | ||
Retained earnings | $ 23,144.8 | $ 22,004.4 | ||
Accumulated other comprehensive income (loss) | (4,729.4) | (3,783) | ||
Total Deere & Company stockholders' equity | 6,743.4 | 9,062.6 | ||
Noncontrolling interests | 14.2 | 2.9 | ||
Total stockholders' equity | 6,757.6 | 9,065.5 | ||
Total Liabilities and Stockholders' Equity | 25,373.6 | 28,296.7 | ||
Financial Services | ||||
ASSETS | ||||
Cash and cash equivalents | 1,262.2 | 1,217.8 | $ 480.8 | $ 744.3 |
Marketable securities | 389.7 | 514.7 | ||
Trade accounts and notes receivable - net | 3,553.1 | 3,554.4 | ||
Financing receivables - net | 24,808.1 | 27,403.7 | ||
Financing receivables securitized - net | 4,834.6 | 4,602.3 | ||
Other receivables | 152.9 | 659 | ||
Equipment on operating leases - net | 4,970.4 | 4,015.5 | ||
Property and equipment - net | 55.3 | 55.3 | ||
Investments in unconsolidated subsidiaries and affiliates | 10.5 | 10.9 | ||
Other intangible assets - net | 4 | |||
Retirement benefits | 25 | 32.9 | ||
Deferred income taxes | 67.9 | 64.9 | ||
Other assets | 779.1 | 648.2 | ||
Total Assets | 40,908.8 | 42,783.6 | ||
LIABILITIES | ||||
Short-term borrowings | 7,962.3 | 7,585.1 | ||
Short-term securitization borrowings | 4,590 | 4,558.5 | ||
Payables to unconsolidated subsidiaries and affiliates | 2,395.4 | 3,633.7 | ||
Accounts payable and accrued expenses | 1,511.2 | 2,027 | ||
Deferred income taxes | 466.6 | 344.1 | ||
Long-term borrowings | 19,372.2 | 19,738.2 | ||
Retirement benefits and other liabilities | 86.4 | 82.8 | ||
Total liabilities | $ 36,384.1 | $ 37,969.4 | ||
Commitments and contingencies (Note 22) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (authorized - 1,200,000,000 shares; issued - 536,431,204 shares in 2015 and 2014), at paid-in amount | $ 2,050.8 | $ 2,023.1 | ||
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 | ||
Retained earnings | $ 2,764.8 | $ 2,811.8 | ||
Accumulated other comprehensive income (loss) | (290.9) | (20.7) | ||
Total Deere & Company stockholders' equity | 4,524.7 | 4,814.2 | ||
Total stockholders' equity | 4,524.7 | 4,814.2 | ||
Total Liabilities and Stockholders' Equity | $ 40,908.8 | $ 42,783.6 |
SUPPLEMENTAL CONSOLIDATING D133
SUPPLEMENTAL CONSOLIDATING DATA (Statement of Cash Flows) (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net income | $ 1,940.9 | $ 3,163.3 | $ 3,537.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (credit) for credit losses | 55.4 | 38.1 | 20.5 |
Provision for depreciation and amortization | 1,382.4 | 1,306.5 | 1,140.3 |
Impairment charges | 34.8 | 95.9 | 102 |
Undistributed earnings of unconsolidated subsidiaries and affiliates | (1) | 9.3 | 9.1 |
Provision (credit) for deferred income taxes | (18.4) | (280.1) | (172.6) |
Changes in assets and liabilities: | |||
Trade receivables | 811.6 | (749) | (1,510.2) |
Insurance receivables | 333.4 | (149.9) | 263.4 |
Inventories | (691.4) | (297.9) | (728.4) |
Accounts payable and accrued expenses | (503.6) | (137.1) | 217.1 |
Accrued income taxes payable/receivable | (137.6) | 342.6 | 80.4 |
Retirement benefits | 427.5 | 336.9 | 262 |
Other | 40.2 | (231.2) | (47.6) |
Net cash provided by operating activities | 3,740.3 | 3,525.9 | 3,254.3 |
Cash Flows from Investing Activities | |||
Proceeds from maturities and sales of marketable securities | 860.7 | 1,022.5 | 843.9 |
Proceeds from sales of equipment on operating leases | 1,049.4 | 1,091.5 | 936.7 |
Proceeds from sales of businesses, net of cash sold | 149.2 | 345.8 | 22 |
Purchases of marketable securities | (154.9) | (614.6) | (1,026.3) |
Purchases of property and equipment | (694) | (1,048.3) | (1,158.4) |
Cost of equipment on operating leases acquired | (2,132.1) | (1,611) | (1,216.9) |
Acquisitions of businesses, net of cash acquired | (83.5) | ||
Other | (60.2) | (145.6) | (214.5) |
Net cash used for investing activities | (1,058.7) | (2,881) | (4,820.7) |
Cash Flows from Financing Activities | |||
Increase in total short-term borrowings | 501.6 | 89.2 | 2,749.4 |
Proceeds from long-term borrowings | 5,711 | 8,232 | 4,734 |
Payments of long-term borrowings | (4,863.2) | (5,209.1) | (4,958.5) |
Proceeds from issuance of common stock | 172.1 | 149.5 | 174.5 |
Repurchases of common stock | (2,770.7) | (2,731.1) | (1,531.4) |
Dividends paid | (816.3) | (786) | (752.9) |
Excess tax benefits from share-based compensation | 18.5 | 30.8 | 50.7 |
Other | (72.1) | (63.6) | (59.3) |
Net cash provided by (used for) financing activities | (2,119.1) | (288.3) | 406.5 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (187.3) | (73.6) | 11.7 |
Net Increase (Decrease) in Cash and Cash Equivalents | 375.2 | 283 | (1,148.2) |
Cash and Cash Equivalents at Beginning of Year | 3,787 | 3,504 | 4,652.2 |
Cash and Cash Equivalents at End of Year | 4,162.2 | 3,787 | 3,504 |
Equipment Operations | |||
Cash Flows from Operating Activities | |||
Net income | 1,940.9 | 3,163.3 | 3,537.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (credit) for credit losses | 5.5 | 2.9 | 10.8 |
Provision for depreciation and amortization | 791.8 | 795.7 | 733 |
Impairment charges | 15.3 | 95.9 | 102 |
Undistributed earnings of unconsolidated subsidiaries and affiliates | 46.6 | (463.4) | (369) |
Provision (credit) for deferred income taxes | (139.8) | (236.4) | (204.6) |
Changes in assets and liabilities: | |||
Trade receivables | 113.4 | 231.5 | 26.1 |
Inventories | (17) | 496.2 | (69.6) |
Accounts payable and accrued expenses | (253.8) | (277) | 470.5 |
Accrued income taxes payable/receivable | (133) | 330.5 | 84.2 |
Retirement benefits | 414.3 | 323 | 241.6 |
Other | 271.1 | 70 | 106 |
Net cash provided by operating activities | 3,055.3 | 4,532.2 | 4,668.6 |
Cash Flows from Investing Activities | |||
Proceeds from maturities and sales of marketable securities | 700.1 | 1,000.1 | 800.1 |
Proceeds from sales of businesses, net of cash sold | 345.8 | 22 | |
Purchases of marketable securities | (60) | (504.1) | (911.1) |
Purchases of property and equipment | (688.1) | (1,045.2) | (1,155.2) |
Increase in investment in Financial Services | (27.4) | (66.8) | (121.6) |
Acquisitions of businesses, net of cash acquired | (83.5) | ||
Other | 6.8 | (98.6) | (120) |
Net cash used for investing activities | (68.6) | (368.8) | (1,569.3) |
Cash Flows from Financing Activities | |||
Increase in total short-term borrowings | 211.9 | (65.8) | 36 |
Change in intercompany receivables/payables | 928.6 | (367.5) | (2,007.2) |
Proceeds from long-term borrowings | 6.2 | 60.7 | 282.9 |
Payments of long-term borrowings | (214.2) | (819.1) | (191) |
Proceeds from issuance of common stock | 172.1 | 149.5 | 174.5 |
Repurchases of common stock | (2,770.7) | (2,731.1) | (1,531.4) |
Dividends paid | (816.3) | (786) | (752.9) |
Excess tax benefits from share-based compensation | 18.5 | 30.8 | 50.7 |
Other | (45.4) | (27.7) | (40.1) |
Net cash provided by (used for) financing activities | (2,509.3) | (4,556.2) | (3,978.5) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (146.6) | (61.3) | (5.4) |
Net Increase (Decrease) in Cash and Cash Equivalents | 330.8 | (454.1) | (884.6) |
Cash and Cash Equivalents at Beginning of Year | 2,569.2 | 3,023.3 | 3,907.9 |
Cash and Cash Equivalents at End of Year | 2,900 | 2,569.2 | 3,023.3 |
Financial Services | |||
Cash Flows from Operating Activities | |||
Net income | 632.9 | 624.5 | 565 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (credit) for credit losses | 49.9 | 35.2 | 9.7 |
Provision for depreciation and amortization | 688.5 | 574.9 | 492.2 |
Impairment charges | 19.5 | ||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (1) | (1.7) | (0.9) |
Provision (credit) for deferred income taxes | 121.4 | (43.7) | 32 |
Changes in assets and liabilities: | |||
Insurance receivables | 333.4 | (149.9) | 263.4 |
Accounts payable and accrued expenses | (245.4) | 263.3 | (207.9) |
Accrued income taxes payable/receivable | (4.6) | 12.1 | (3.8) |
Retirement benefits | 13.2 | 13.9 | 20.4 |
Other | (25.7) | (7.7) | 73.5 |
Net cash provided by operating activities | 1,582.1 | 1,320.9 | 1,243.6 |
Cash Flows from Investing Activities | |||
Collections of receivables (excluding trade and wholesale) | 16,266.1 | 16,772 | 15,440 |
Proceeds from maturities and sales of marketable securities | 160.6 | 22.4 | 43.8 |
Proceeds from sales of equipment on operating leases | 1,049.4 | 1,091.5 | 936.7 |
Proceeds from sales of businesses, net of cash sold | 149.2 | ||
Cost of receivables acquired (excluding trade and wholesale) | (16,327.8) | (19,015.3) | (18,792.7) |
Purchases of marketable securities | (94.9) | (110.5) | (115.2) |
Purchases of property and equipment | (5.9) | (3.1) | (3.2) |
Cost of equipment on operating leases acquired | (3,043.6) | (2,684.2) | (2,107.2) |
Increase in trade and wholesale receivables | 657 | (782) | (1,152.7) |
Other | (45.1) | (47.1) | (94.5) |
Net cash used for investing activities | (1,235) | (4,756.3) | (5,845) |
Cash Flows from Financing Activities | |||
Increase in total short-term borrowings | 289.7 | 155 | 2,713.5 |
Change in intercompany receivables/payables | (928.6) | 367.5 | 2,007.2 |
Proceeds from long-term borrowings | 5,704.8 | 8,171.3 | 4,451.1 |
Payments of long-term borrowings | (4,649) | (4,390) | (4,767.4) |
Capital investment from Equipment Operations | 27.4 | 66.8 | 121.6 |
Dividends paid | (679.6) | (150) | (186) |
Other | (26.7) | (35.9) | (19.2) |
Net cash provided by (used for) financing activities | (262) | 4,184.7 | 4,320.8 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (40.7) | (12.3) | 17.1 |
Net Increase (Decrease) in Cash and Cash Equivalents | 44.4 | 737 | (263.5) |
Cash and Cash Equivalents at Beginning of Year | 1,217.8 | 480.8 | 744.3 |
Cash and Cash Equivalents at End of Year | $ 1,262.2 | $ 1,217.8 | $ 480.8 |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Consolidated Receivable Allowances | |||
Allowance for credit losses: | |||
Balance at beginning of period | $ 230,178 | $ 240,145 | $ 242,866 |
Charged to costs and expenses | 52,923 | 38,242 | 20,170 |
Charged to other accounts | 26,333 | 26,152 | 28,547 |
Deductions | 110,990 | 74,361 | 51,438 |
Balance at end of period | 198,444 | 230,178 | 240,145 |
Trade Receivable Allowances | Equipment Operations | |||
Allowance for credit losses: | |||
Balance at beginning of period | 50,248 | 62,845 | 62,255 |
Charged to costs and expenses | 5,270 | 3,054 | 10,546 |
Charged to other accounts - bad debt recoveries | 116 | 92 | 476 |
Deductions - receivable write-offs | 5,260 | 10,744 | 3,847 |
Deductions - Other (primarily translation) | 15,483 | 4,999 | 6,585 |
Balance at end of period | 34,891 | 50,248 | 62,845 |
Trade Receivable Allowances | Financial Services | |||
Allowance for credit losses: | |||
Balance at beginning of period | 5,298 | 4,300 | 4,037 |
Charged to costs and expenses | 1,172 | 4,009 | (102) |
Charged to other accounts - bad debt recoveries | 230 | 92 | 203 |
Charged to other accounts - other (primarily translation) | 462 | ||
Deductions - receivable write-offs | 329 | 2,863 | 300 |
Deductions - Other (primarily translation) | 439 | 240 | |
Balance at end of period | 5,932 | 5,298 | 4,300 |
Financing Receivable Allowances | Financial Services | |||
Allowance for credit losses: | |||
Balance at beginning of period | 174,632 | 173,000 | 176,574 |
Charged to costs and expenses | 46,481 | 31,179 | 9,726 |
Charged to other accounts - bad debt recoveries | 25,987 | 25,968 | 27,406 |
Deductions - receivable write-offs | 66,807 | 49,313 | 35,258 |
Deductions - Other (primarily translation) | 22,672 | 6,202 | 5,448 |
Balance at end of period | $ 157,621 | $ 174,632 | $ 173,000 |