Document and Entity Information
Document and Entity Information | 6 Months Ended |
Apr. 29, 2018shares | |
Document and Entity Information | |
Entity Registrant Name | DEERE & CO |
Entity Central Index Key | 315,189 |
Document Type | 10-Q |
Document Period End Date | Apr. 29, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --10-28 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 324,284,554 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
STATEMENT OF CONSOLIDATED INCOM
STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Net Sales and Revenues | ||||
Net sales | $ 9,747 | $ 7,259.8 | $ 15,721 | $ 11,957.7 |
Finance and interest income | 753.9 | 665 | 1,476.8 | 1,320.5 |
Other income | 219.1 | 362.2 | 435.7 | 634 |
Total | 10,720 | 8,287 | 17,633.5 | 13,912.2 |
Costs and Expenses | ||||
Cost of sales | 7,333.3 | 5,427.7 | 12,037.8 | 9,209.2 |
Research and development expenses | 415.2 | 325.4 | 772 | 637.5 |
Selling, administrative and general expenses | 939.2 | 783.6 | 1,644.3 | 1,451 |
Interest expense | 303.7 | 226.9 | 590 | 434.9 |
Other operating expenses | 344.9 | 354.1 | 687.8 | 682.3 |
Total | 9,336.3 | 7,117.7 | 15,731.9 | 12,414.9 |
Income of Consolidated Group before Income Taxes | 1,383.7 | 1,169.3 | 1,901.6 | 1,497.3 |
Provision for income taxes | 177.1 | 365.8 | 1,234.7 | 495.1 |
Income of Consolidated Group | 1,206.6 | 803.5 | 666.9 | 1,002.2 |
Equity in income of unconsolidated affiliates | 3.1 | 4.8 | 8 | 4.5 |
Net Income | 1,209.7 | 808.3 | 674.9 | 1,006.7 |
Less: Net income (loss) attributable to noncontrolling interests | 1.4 | (0.2) | 1.7 | (0.8) |
Net Income Attributable to Deere & Company | $ 1,208.3 | $ 808.5 | $ 673.2 | $ 1,007.5 |
Per Share Data | ||||
Basic (in dollars per share) | $ 3.73 | $ 2.53 | $ 2.08 | $ 3.17 |
Diluted (in dollars per share) | $ 3.67 | $ 2.50 | $ 2.05 | $ 3.14 |
Average Shares Outstanding | ||||
Basic (in shares) | 324.2 | 319.2 | 323.4 | 317.9 |
Diluted (in shares) | 329.2 | 323 | 328.4 | 321.3 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||||
Net income | $ 1,209.7 | $ 808.3 | $ 674.9 | $ 1,006.7 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||||
Retirement benefits adjustment | 118.9 | 33.6 | 165.2 | 76.6 |
Cumulative translation adjustment | 1.6 | 16.7 | 224.9 | (1) |
Unrealized gain on derivatives | 4.9 | 10.3 | 2 | |
Unrealized gain (loss) on investments | (9.3) | 58.7 | (9.5) | 52.9 |
Other Comprehensive Income (Loss), Net of Income Taxes | 116.1 | 109 | 390.9 | 130.5 |
Comprehensive Income of Consolidated Group | 1,325.8 | 917.3 | 1,065.8 | 1,137.2 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 1.7 | (0.2) | 2.1 | (0.8) |
Comprehensive Income Attributable to Deere & Company | $ 1,324.1 | $ 917.5 | $ 1,063.7 | $ 1,138 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | Oct. 30, 2016 |
ASSETS | ||||
Cash and cash equivalents | $ 4,201.4 | $ 9,334.9 | $ 4,525.8 | $ 4,335.8 |
Marketable securities | 479.3 | 451.6 | 546.3 | |
Receivables from unconsolidated affiliates | 34.3 | 35.9 | 34.9 | |
Trade accounts and notes receivable - net | 6,511.1 | 3,924.9 | 4,482.3 | |
Financing receivables - net | 24,275.5 | 25,104.1 | 23,301.1 | |
Financing receivables securitized - net | 4,436.3 | 4,158.8 | 4,281.8 | |
Other receivables | 1,398.2 | 1,200 | 931.3 | |
Equipment on operating leases - net | 6,723.1 | 6,593.7 | 5,923.9 | |
Inventories | 6,888.9 | 3,904.1 | 4,114.8 | |
Property and equipment - net | 5,742.9 | 5,067.7 | 4,959.9 | |
Investments in unconsolidated affiliates | 202.1 | 182.5 | 215.7 | |
Goodwill | 3,188.7 | 1,033.3 | 806.2 | 816 |
Other intangible assets - net | 1,692.2 | 218 | 90.8 | |
Retirement benefits | 617.9 | 538.2 | 176.2 | |
Deferred income taxes | 1,718.5 | 2,415 | 3,041.9 | |
Other assets | 1,762.6 | 1,623.6 | 1,535.9 | |
Total Assets | 69,873 | 65,786.3 | 58,968.8 | |
LIABILITIES | ||||
Short-term borrowings | 10,894.6 | 10,035.3 | 7,963.6 | |
Short-term securitization borrowings | 4,401.1 | 4,118.7 | 4,224.6 | |
Payables to unconsolidated affiliates | 145.7 | 121.9 | 101.6 | |
Accounts payable and accrued expenses | 9,789.6 | 8,417 | 7,215.9 | |
Deferred income taxes | 562.7 | 209.7 | 169 | |
Long-term borrowings | 26,278.6 | 25,891.3 | 23,253.1 | |
Retirement benefits and other liabilities | 7,366.1 | 7,417.9 | 8,333.2 | |
Total liabilities | 59,438.4 | 56,211.8 | 51,261 | |
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interest | 14.6 | 14 | 14 | |
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204) | 4,423.4 | 4,280.5 | 4,165.4 | |
Common stock in treasury | (15,425.9) | (15,460.8) | (15,521) | |
Retained earnings | 25,586 | 25,301.3 | 24,535.8 | |
Accumulated other comprehensive income (loss) | (4,173.2) | (4,563.7) | (5,495.5) | |
Total Deere & Company stockholders' equity | 10,410.3 | 9,557.3 | 7,684.7 | |
Noncontrolling interests | 9.7 | 3.2 | 9.1 | |
Total stockholders' equity | 10,420 | 9,560.5 | 7,693.8 | $ 6,530.8 |
Total Liabilities and Stockholders' Equity | $ 69,873 | $ 65,786.3 | $ 58,968.8 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) | Apr. 29, 2018$ / sharesshares |
CONDENSED CONSOLIDATED BALANCE SHEET | |
Common stock, par value (in dollars per share) | $ / shares | $ 1 |
Common stock, issued shares | shares | 536,431,204 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Apr. 29, 2018 | Apr. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net income | $ 674.9 | $ 1,006.7 |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Provision for credit losses | 26.8 | 32.6 |
Provision for depreciation and amortization | 950.8 | 843.1 |
Share-based compensation expense | 39.8 | 32.3 |
Gain on sale of affiliates and investments | (13.2) | (281.4) |
Undistributed earnings of unconsolidated affiliates | (4.5) | (3.1) |
Provision (credit) for deferred income taxes | 604.3 | (100.4) |
Changes in assets and liabilities: | ||
Trade, notes and financing receivables related to sales | (2,094.1) | (989.5) |
Inventories | (1,796.8) | (1,090.4) |
Accounts payable and accrued expenses | 306.9 | 103.6 |
Accrued income taxes payable/receivable | 153 | 195.1 |
Retirement benefits | 67.6 | 115.6 |
Other | (137.2) | (27.9) |
Net cash used for operating activities | (1,221.7) | (163.7) |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 8,780.9 | 8,228 |
Proceeds from maturities and sales of marketable securities | 23.8 | 41.3 |
Proceeds from sales of equipment on operating leases | 748.6 | 786.4 |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 55 | |
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 113.9 | |
Cost of receivables acquired (excluding receivables related to sales) | (8,181.2) | (7,628.6) |
Acquisitions of businesses, net of cash acquired | (5,171.1) | |
Purchases of marketable securities | (62.8) | (43.7) |
Purchases of property and equipment | (352.2) | (253) |
Cost of equipment on operating leases acquired | (926.5) | (925.1) |
Other | (67.5) | (18.7) |
Net cash provided by (used for) investing activities | (5,153) | 300.5 |
Cash Flows from Financing Activities | ||
Increase in total short-term borrowings | 199.1 | 183.1 |
Proceeds from long-term borrowings | 4,077.7 | 2,661.6 |
Payments of long-term borrowings | (2,888.7) | (2,742.2) |
Proceeds from issuance of common stock | 198.6 | 383.6 |
Repurchases of common stock | (60.6) | (6.2) |
Dividends paid | (386.9) | (379.5) |
Other | (43.9) | (39.7) |
Net cash provided by financing activities | 1,095.3 | 60.7 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 145.9 | (7.5) |
Net Increase (Decrease) in Cash and Cash Equivalents | (5,133.5) | 190 |
Cash and Cash Equivalents at Beginning of Period | 9,334.9 | 4,335.8 |
Cash and Cash Equivalents at End of Period | $ 4,201.4 | $ 4,525.8 |
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) | Noncontrolling Interests | Total |
Balance at Oct. 30, 2016 | $ 3,911.8 | $ (15,677.1) | $ 23,911.3 | $ (5,626) | $ 10.8 | $ 6,530.8 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 1,007.5 | (0.8) | 1,006.7 | |||
Other comprehensive income | 130.5 | 130.5 | ||||
Repurchases of common stock | (6.2) | (6.2) | ||||
Treasury shares reissued | 162.3 | 162.3 | ||||
Dividends declared | (382.9) | (0.7) | (383.6) | |||
Stock options and other | 253.6 | (0.1) | (0.2) | 253.3 | ||
Balance at Apr. 30, 2017 | 4,165.4 | (15,521) | 24,535.8 | (5,495.5) | 9.1 | 7,693.8 |
Redeemable Noncontrolling Interest - Balance at Oct. 30, 2016 | 14 | |||||
Redeemable Noncontrolling Interest - Balance at Apr. 30, 2017 | 14 | |||||
Balance at Oct. 29, 2017 | 4,280.5 | (15,460.8) | 25,301.3 | (4,563.7) | 3.2 | 9,560.5 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 673.2 | 1.1 | 674.3 | |||
Other comprehensive income | 390.5 | 0.4 | 390.9 | |||
Repurchases of common stock | (60.6) | (60.6) | ||||
Treasury shares reissued | 95.5 | 95.5 | ||||
Dividends declared | (389.5) | (2.7) | (392.2) | |||
Acquisitions (Note 18) | 7.5 | 7.5 | ||||
Stock options and other | 142.9 | 1 | 0.2 | 144.1 | ||
Balance at Apr. 29, 2018 | $ 4,423.4 | $ (15,425.9) | $ 25,586 | $ (4,173.2) | $ 9.7 | 10,420 |
Redeemable Noncontrolling Interest - Balance at Oct. 29, 2017 | 14 | |||||
Increase in Redeemable Noncontrolling Interest | ||||||
Net income | 0.6 | |||||
Redeemable Noncontrolling Interest - Balance at Apr. 29, 2018 | $ 14.6 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 6 Months Ended |
Apr. 29, 2018 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | (1) 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. On December 1, 2017, the Company acquired the stock and certain assets of substantially all of the business of Wirtgen Group Holding GmbH (Wirtgen). Wirtgen results are included in the construction and forestry operations (see Note 18). 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. The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2018 and 2017 were April 29, 2018 and April 30, 2017, respectively. Both periods contained 13 weeks. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 6 Months Ended |
Apr. 29, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. 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. |
CASH FLOW INFORMATION | Cash Flow Information All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the Company’s customers. Cash flows from financing receivables that are related to sales to the Company’s customers are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities. The Company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The Company transferred inventory to equipment on operating leases of approximately $357 million and $319 million in the first six months of 2018 and 2017, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $42 million and $32 million at April 29, 2018 and April 30, 2017, respectively. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 6 Months Ended |
Apr. 29, 2018 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | (3) New accounting standards adopted are as follows: In the first quarter of 2018, the Company early adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends Accounting Standards Codification (ASC) 715, Compensation – Retirement Benefits. This ASU required that employers report only the service cost component of the total defined benefit pension and postretirement benefit cost in the same income statement lines as compensation for the participating employees. The other components of these benefit costs are reported outside of operating profit in the income statement line other operating expenses. The ASU was adopted on a retrospective basis that increased operating profit in the second quarter and first six months of 2018 by $4 million and $12 million, respectively, and second quarter and first six months of 2017 by $7 million and $14 million, respectively. The income statement line changes for the second quarter and first six months of 2017 were cost of sales decreased $17 million and $32 million, research and development expenses increased $1 million and $2 million, selling, administrative and general expenses increased $9 million and $16 million, and other operating expenses increased $7 million and $14 million, respectively. In addition, only the service cost component of the benefit costs is eligible for capitalization, which was adopted beginning the first quarter of 2018. In the third quarter of 2017, the Company early adopted ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU changes the treatment of share based payment transactions by recognizing the impact of excess tax benefits or deficiencies related to exercised or vested awards in income tax expense in the period of exercise or vesting, instead of common stock. As required, this change was reflected for all periods in fiscal year 2017. Net income increased in the second quarter and first six months of fiscal year 2017 by approximately $6 million and $11 million, respectively. The ASU also modified the presentation of excess tax benefits in the statement of consolidated cash flows by including that amount with other income tax cash flows as an operating activity and no longer presented separately as a financing activity. This change was recognized through a retrospective application that increased net cash flow provided by operating activities by approximately $11 million for the first six months of fiscal year 2017. The ASU also requires that cash paid by an employer when directly withholding shares for tax withholding purposes should be presented as a financing activity in the statement of consolidated cash flows, which is the Company’s existing presentation. The Company will continue to recognize the impact of share-based payment award forfeitures as the forfeitures occur. In the first quarter of 2018, the Company adopted ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323, Investments – Equity Method and Joint Ventures, which did not have a material effect on the Company’s consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which amends ASC 740, Income Taxes. In December 2017, the U.S. government enacted new tax legislation (tax reform). This ASU incorporates SEC Staff Accounting Bulletin No. 118, which was also issued in December 2017, into the ASC. The ASU provides guidance on when to record and disclose provisional amounts related to tax reform. In addition, the ASU allows for a measurement period up to one year after the enactment date of tax reform to complete the related accounting requirements and was effective when issued. The Company will complete the adjustments related to tax reform within the allowed period. The effects of tax reform on the Company’s consolidated financial statements are outlined in Note 8. New accounting standards to be adopted are as follows: 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. The FASB issued several amendments clarifying various aspects of the ASU, including revenue transactions that involve a third party, goods or services that are immaterial in the context of the contract, and licensing arrangements. The Company will adopt the ASU effective the first quarter of fiscal year 2019 using a modified retrospective method. The Company’s evaluation of the ASU is largely complete, with the exception of the Wirtgen acquisition (see Note 18). The ASU requires that a gross asset and liability rather than a net liability be recorded for the value of estimated service parts returns and the related refund liability. The gross asset will be recorded in other assets and the gross liability will be recorded in accounts payable and accrued expenses. In addition, certain revenue disclosures will be expanded. At this point of the evaluation, the Company has not identified an item that will have a material effect on the Company’s consolidated financial statements. The Company continues to evaluate the ASU’s potential effects on the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments - Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income and no longer in Other Comprehensive Income (OCI). The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the Company is not permitted. The ASU will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The Company is evaluating the potential effects on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU does not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU currently requires that lessees and lessors use a modified retrospective transition approach. In January 2018, the FASB issued an exposure draft to provide for an adoption option that would not require earlier periods to be restated at the adoption date. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the potential adoption options and the effects on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The ASU will be adopted using a modified-retrospective approach. The Company is evaluating the potential effects on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. The effective date will be the first quarter of fiscal year 2019. The ASU will be adopted using a modified-retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted, and will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which amends ASC 805, Business Combinations. This ASU provides further guidance on the definition of a business to determine whether transactions should be accounted for as acquisitions of assets or businesses. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted in certain cases. The ASU will be adopted on a prospective basis and will not have a material effect on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables – Nonrefundable Fees and Other Costs. This ASU reduces the amortization period for certain callable debt securities held at a premium to the earliest call date. The treatment of securities held at a discount is unchanged. The effective date is the first quarter of fiscal year 2020, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. The ASU will be adopted on a prospective basis. The effective date is the first quarter of fiscal year 2019, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which amends ASC 220, Income Statement – Reporting Comprehensive Income. Included in the provisions of tax reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. Accounting principles generally accepted in the U.S. require that deferred taxes are remeasured to the new corporate tax rate in the period legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in OCI. This treatment results in the items in OCI not reflecting the appropriate tax rate, which are referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. The effective date is fiscal year 2020, with early adoption permitted, including in interim periods. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is evaluating the potential effects of the ASU on the consolidated financial statements. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 6 Months Ended |
Apr. 29, 2018 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | (4) The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) Balance October 30, 2016 $ $ $ $ 11 $ Other comprehensive income (loss) items before reclassification 165 151 Amounts reclassified from accumulated other comprehensive income 89 Net current period other comprehensive income (loss) 76 53 130 Balance April 30, 2017 $ $ $ $ 64 $ Balance October 29, 2017 $ $ $ $ 10 $ Other comprehensive income (loss) items before reclassification 81 225 11 308 Amounts reclassified from accumulated other comprehensive income 84 83 Net current period other comprehensive income (loss) 165 225 10 391 Balance April 29, 2018 $ $ $ 15 $ $ Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Three Months Ended April 29, 2018 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Six Months Ended April 29, 2018 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Three Months Ended April 30, 2017 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ 162 $ $ 109 * These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail. In the second quarter of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $1.7 million and $(.2) million, respectively, which consisted of net income (loss) of $1.4 million and $(.2) million and cumulative translation adjustments of $.3 million and none, respectively. Before Tax After Tax (Expense) Tax Six Months Ended April 30, 2017 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses $ Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) 262 165 Reclassification of realized (gain) loss – Other income 66 Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss 77 Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. In the first six months of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $2.1 million and $(.8) million, respectively, which consisted of net income (loss) of $1.7 million and $(.8) million and cumulative translation adjustments of $.4 million and none, respectively. |
DIVIDENDS DECLARED AND PAID
DIVIDENDS DECLARED AND PAID | 6 Months Ended |
Apr. 29, 2018 | |
DIVIDENDS DECLARED AND PAID | |
DIVIDENDS DECLARED AND PAID | (5) Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Dividends declared $ .60 $ .60 $ 1.20 $ 1.20 Dividends paid $ .60 $ .60 $ 1.20 $ 1.20 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Apr. 29, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | (6) A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Net income attributable to Deere & Company $ 1,208.3 $ 808.5 $ 673.2 $ Less income allocable to participating securities .2 .2 .1 .3 Income allocable to common stock $ 1,208.1 $ 808.3 $ 673.1 $ 1,007.2 Average shares outstanding 324.2 319.2 323.4 317.9 Basic per share $ 3.73 $ 2.53 $ 2.08 $ 3.17 Average shares outstanding 324.2 319.2 323.4 317.9 Effect of dilutive share-based compensation 5.0 3.8 5.0 3.4 Total potential shares outstanding 329.2 323.0 328.4 321.3 Diluted per share $ 3.67 $ 2.50 $ 2.05 $ 3.14 During the second quarter and first six months of 2018, .5 million shares and .3 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive. During the second quarter and first six months of 2017, .7 million shares and .5 million shares, respectively, were excluded in the above per share computation. |
PENSION AND POSTRETIREMENT BENE
PENSION AND POSTRETIREMENT BENEFITS | 6 Months Ended |
Apr. 29, 2018 | |
PENSION AND POSTRETIREMENT BENEFITS | |
PENSION AND POSTRETIREMENT BENEFITS | (7) The Company has several defined benefit pension plans and defined postretirement health care and life insurance plans covering many of its U.S. employees and employees in certain foreign countries. The worldwide components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Service cost $ 76 $ 67 $ 148 $ 135 Interest cost 97 90 195 180 Expected return on plan assets Amortization of actuarial loss 121 Amortization of prior service cost Settlements/curtailments Net cost $ 42 $ 25 $ 82 $ 49 The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Service cost $ $ $ $ 21 Interest cost 48 49 96 98 Expected return on plan assets Amortization of actuarial loss 15 24 31 49 Amortization of prior service credit Net cost $ 49 $ 60 $ 100 $ 121 The components of net periodic pension and postretirement benefits cost excluding the service cost component are included in the line item other operating expenses in the Statement of Consolidated Income. In the second quarter, a committee of the Company’s Board of Directors approved a voluntary $1,000 million contribution to its U.S. pension and postretirement benefit plans. During the first six months of 2018, the Company contributed approximately $86 million to its pension plans, which included a $50 million voluntary contribution to a U.S. plan, and $31 million to its other postretirement benefit plans. The Company presently anticipates contributing an additional $851 million to its pension plans and $138 million to its other postretirement benefit plans during the remainder of fiscal year 2018. The anticipated total contributions include voluntary contributions of $820 million to a U.S. pension plan and $130 million to a U.S. postretirement benefit plan, which will increase plan assets. The other contributions primarily include payments from Company funds to make direct payments to plan participants. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Apr. 29, 2018 | |
INCOME TAXES | |
INCOME TAXES | (8) On December 22, 2017, the U.S. government enacted tax reform. The primary provisions of tax reform expected to impact the Company in fiscal year 2018 are a reduction to the corporate income tax rate from 35 percent to 21 percent and a transition from a worldwide corporate tax system to a territorial tax system. The reduction in the corporate income tax rate requires the Company to remeasure its net deferred tax assets to the new corporate tax rate and the transition to a territorial tax system requires payment of a one-time tax on deemed repatriation of undistributed and previously untaxed non-U.S. earnings. The Company currently plans to pay the deemed repatriation tax over an eight year period, as allowed by tax reform. In December 2017, the SEC issued a staff accounting bulletin that allows for a measurement period up to one year after the enactment date of tax reform to complete the related accounting requirements. The tax reform measurement period adjustments and the effects on the results of the second quarter and first six months of 2018 in millions of dollars follow: Three Months Ended Six Months Ended Equipment Operations Financial Services Total Equipment Operations Financial Services Total Net deferred tax asset remeasurement $ $ $ $ $ $ Deemed earnings repatriation tax Total discrete tax expense (benefit) $ $ $ $ $ $ The second quarter measurement period benefit on the net deferred tax assets primarily results from the planned, voluntary $1,000 million contribution to U.S. pension and other postretirement benefit plans, which results in a tax deduction applicable to the 2017 tax year. The Company received authorization for this contribution in the second quarter (see Note 7). The provision for income taxes was also affected by other tax reform items, primarily the lower corporate income tax rate on current year income. The 21 percent corporate income tax rate is effective January 1, 2018. Based on the Company’s October fiscal year end, the U.S. statutory income tax rate for fiscal year 2018 will be approximately 23.3 percent. The first six months of 2018 tax expense is provisional as outlined below and may change during the remaining measurement period. The Company completed a preliminary assessment of earnings that could be repatriated based on reinvestment needs of non-U.S. operations and earnings available for repatriation. The estimated withholding tax that would be incurred from the repatriation of those earnings is included in the first six months of 2018 provisional income tax expense. The Company continues to analyze the provisions of tax reform addressing the net deferred tax asset remeasurement and the calculations, and the deemed earnings repatriation tax, including the determination of undistributed non-U.S. earnings. In addition, the Company is evaluating actions, including repatriating additional non-U.S. earnings and other actions that could affect the Company’s 2017 U.S. taxable income. The Company also continues to prepare its 2017 U.S. income tax returns, undergo income tax audits, and monitor potential legislative action and regulatory interpretations of tax reform. Based on the effective date of certain provisions, the Company will be subject to additional requirements of tax reform beginning in fiscal year 2019. Those provisions include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion and anti-abuse tax benefits (BEAT) from certain payments between a U.S. corporation and foreign subsidiaries, a limitation of certain executive compensation, a deduction for foreign derived intangible income (FDII), and interest expense limitations. The Company has not completed its analysis of those provisions and the estimated effects. The Company also has not determined its accounting policy to treat the taxes due on GILTI as a period cost or include them in the determination of deferred taxes. The Company’s unrecognized tax benefits at April 29, 2018 were $421 million, compared to $221 million at October 29, 2017. The increase is primarily due to a review of the timing of deduction for certain U.S. expenses and the effect of a lower U.S. corporate tax rate. These positions remain under review. The liability at April 29, 2018, October 29, 2017, and April 30, 2017 consisted of approximately $157 million, $86 million, and $79 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. Based on the ongoing review of tax accounting methods affecting the timing of certain U.S. tax deductions, the Company believes a reduction of unrecognized tax benefits of approximately $160 million, with a positive impact on the effective tax rate of approximately $55 million, in the next 12 months is reasonably possible. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Apr. 29, 2018 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | (9) Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow: Three Months Ended Six Months Ended April 29 April 30 % April 29 April 30 % 2018 2017 Change 2018 2017 Change Net sales and revenues: Agriculture and turf $ 7,049 $ 5,794 +22 $ 11,292 $ 9,392 +20 Construction and forestry 2,698 1,466 +84 4,429 2,566 +73 Total net sales 9,747 7,260 +34 15,721 11,958 +31 Financial services 795 716 +11 1,572 1,412 +11 Other revenues 178 311 -43 340 542 -37 Total net sales and revenues $ 10,720 $ 8,287 +29 $ 17,633 $ 13,912 +27 Operating profit: * Agriculture and turf $ 1,056 $ 1,009 +5 $ 1,443 $ 1,227 +18 Construction and forestry 259 111 +133 291 148 +97 Financial services 179 158 +13 396 325 +22 Total operating profit 1,494 1,278 +17 2,130 1,700 +25 Reconciling items ** +5 +12 Income taxes -52 +149 Net income attributable to Deere & Company $ 1,208 $ 808 +50 $ 673 $ 1,007 -33 Intersegment sales and revenues: Agriculture and turf net sales $ 15 $ 10 +50 $ 24 $ 17 +41 Construction and forestry net sales Financial services 82 62 +32 145 111 +31 Equipment operations outside the U.S. and Canada: Net sales $ 4,295 $ 2,968 +45 $ 6,804 $ 4,860 +40 Operating profit 534 391 +37 680 467 +46 April 29 October 29 2018 2017 Identifiable assets: Agriculture and turf $ 10,603 $ 9,359 +13 Construction and forestry 10,471 3,212 +226 Financial services 44,278 42,596 +4 Corporate 4,521 10,619 -57 Total assets $ 69,873 $ 65,786 +6 * Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. ** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 6 Months Ended |
Apr. 29, 2018 | |
FINANCING RECEIVABLES | |
FINANCING RECEIVABLES | (10) 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, if any, 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 in millions of dollars follows: April 29, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 117 $ 58 $ 44 $ 219 Construction and forestry 36 177 Other: Agriculture and turf Construction and forestry Total $ 257 $ 122 $ 110 $ 489 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 219 $ 171 $ 17,014 $ 17,404 Construction and forestry 177 2,899 3,118 Other: Agriculture and turf 7,072 7,164 Construction and forestry 1,192 1,213 Total $ 489 $ 233 $ 28,177 28,899 Less allowance for credit losses 187 Total financing receivables – net $ 28,712 October 29, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 118 $ 54 $ 49 $ 221 Construction and forestry 75 33 39 147 Other: Agriculture and turf 27 14 7 48 Construction and forestry 11 6 2 Total $ 231 $ 107 $ 97 $ 435 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 221 $ 173 $ 17,508 $ 17,902 Construction and forestry 147 30 2,618 2,795 Other: Agriculture and turf 48 12 7,610 7,670 Construction and forestry 5 1,059 1,083 Total $ 435 $ 220 $ 28,795 29,450 Less allowance for credit losses 187 Total financing receivables – net $ 29,263 April 30, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 120 $ 75 $ 65 $ 260 Construction and forestry 80 44 33 157 Other: Agriculture and turf 37 12 27 76 Construction and forestry 12 4 2 18 Total $ 249 $ 135 $ 127 $ 511 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 260 $ 159 $ 16,838 $ 17,257 Construction and forestry 157 31 2,563 2,751 Other: Agriculture and turf 76 10 6,692 6,778 Construction and forestry 18 4 952 974 Total $ 511 $ 204 $ 27,045 27,760 Less allowance for credit losses 177 Total financing receivables – net $ 27,583 An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Three Months Ended April 29, 2018 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision 16 Write-offs Recoveries 10 Translation adjustments End of period balance * $ 120 $ $ 27 $ 187 Six Months Ended April 29, 2018 Allowance: Beginning of period balance $ $ $ $ Provision 18 Write-offs Recoveries 10 11 21 Translation adjustments End of period balance * $ 120 $ 40 $ 27 $ 187 Financing receivables: End of period balance $ 20,522 $ 3,205 $ 5,172 $ 28,899 Balance individually evaluated ** $ 120 $ $ 15 $ 136 Three Months Ended April 30, 2017 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries End of period balance * $ 111 $ 43 $ 23 $ Six Months Ended April 30, 2017 Allowance: Beginning of period balance $ $ $ $ Provision 18 13 2 Write-offs (27) (20) (3) Recoveries 7 10 End of period balance * $ 111 $ 43 $ 23 $ Financing receivables: End of period balance $ 20,008 $ 3,036 $ 4,716 $ Balance individually evaluated ** $ 148 $ 4 $ 17 $ * Individual allowances were not significant. ** Remainder is collectively evaluated. Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing. An analysis of the impaired financing receivables in millions of dollars follows: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment April 29, 2018* Receivables with specific allowance ** $ 33 $ 31 $ 10 $ 34 Receivables without a specific allowance ** 41 40 43 Total $ 74 $ 71 $ 10 $ 77 Agriculture and turf $ 52 $ 51 $ $ 54 Construction and forestry $ 22 $ 20 $ $ 23 October 29, 2017* Receivables with specific allowance ** $ 36 $ 33 $ $ 30 Receivables without a specific allowance *** 28 24 Total $ 64 $ 60 $ $ 54 Agriculture and turf $ 49 $ 46 $ $ 38 Construction and forestry $ 15 $ 14 $ 16 April 30, 2017* Receivables with specific allowance ** $ 23 $ 22 $ $ 26 Receivables without a specific allowance *** 27 24 28 Total $ 50 $ 46 $ $ 54 Agriculture and turf $ 28 $ 26 $ $ 32 Construction and forestry $ 22 $ $ $ 22 * 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 the first six months of 2018, the Company identified 253 financing receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $13 million pre-modification and $13 million post-modification. During the first six months of 2017, there were 226 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $5 million pre-modification and $4 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At April 29, 2018, the Company had commitments to lend approximately $8 million to borrowers whose accounts were modified in troubled debt restructurings. |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 6 Months Ended |
Apr. 29, 2018 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | (11) 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 non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized – net” on the balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,489 million, $2,631 million, and $2,589 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,438 million, $2,571 million, and $2,522 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit. In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $686 million, $478 million, and $413 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $656 million, $454 million, and $390 million at April 29, 2018, October 29, 2017, and April 30, 2017, 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 $1,383 million, $1,155 million, and $1,395 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,310 million, $1,096 million, and $1,315 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars: April 29, 2018 Carrying value of liabilities $ 1,310 Maximum exposure to loss 1,383 The total assets of unconsolidated VIEs related to securitizations were approximately $36 billion at April 29, 2018. The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: April 29 October 29 April 30 2018 2017 2017 Financing receivables securitized (retail notes) $ 4,450 $ 4,172 $ 4,295 Allowance for credit losses Other assets 122 105 115 Total restricted securitized assets $ 4,558 $ 4,264 $ 4,397 The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: April 29 October 29 April 30 2018 2017 2017 Short-term securitization borrowings $ 4,401 $ 4,119 $ 4,225 Accrued interest on borrowings Total liabilities related to restricted securitized assets $ 4,404 $ 4,121 $ 4,227 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 April 29, 2018, the maximum remaining term of all securitized retail notes was approximately seven years. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Apr. 29, 2018 | |
INVENTORIES | |
INVENTORIES | (12) Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows: April 29 October 29 April 30 2018 2017 2017 Raw materials and supplies $ 2,231 $ 1,688 $ 1,559 Work-in-process 900 495 531 Finished goods and parts 5,208 3,182 3,421 Total FIFO value 8,339 5,365 5,511 Less adjustment to LIFO value 1,450 1,461 1,396 Inventories $ 6,889 $ 3,904 $ 4,115 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 6 Months Ended |
Apr. 29, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | (13) The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and Turf and Forestry Total Goodwill at October 30, 2016 $ $ $ Translation adjustments and other Goodwill at April 30, 2017 $ $ $ Goodwill at October 29, 2017 $ $ $ Acquisitions * Divestitures ** Translation adjustments Goodwill at April 29, 2018 $ $ $ * See Note 18. ** See Note 19. There were no accumulated impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: Useful Lives * April 29 October 29 April 30 (Years) 2018 2017 2017 Amortized intangible assets: Customer lists and relationships 16 $ 590 $ $ Technology, patents, trademarks, and other 18 1,109 Total at cost 1,699 Less accumulated amortization ** 130 Total 1,569 91 Unamortized intangible assets: In-process research and development 123 Other intangible assets – net $ 1,692 $ $ * Weighted-averages ** Accumulated amortization at April 29, 2018, October 29, 2017, and April 30, 2017 for customer lists and relationships totaled $30 million, $17 million, and $15 million and technology, patents, trademarks, and other totaled $100 million, $69 million, and $62 million, respectively. The amortization of other intangible assets in the second quarter and the first six months of 2018 was $31 million and $44 million and for 2017 was $4 million and $9 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2018 – $61, 2019 – $121, 2020 – $109, 2021 – $104, and 2022 – $104. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Apr. 29, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (14) Commitments and contingencies: The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments. The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $475 million and $444 million at April 29, 2018 and April 30, 2017, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Beginning of period balance $ $ $ 1,468 $ Payments Amortization of premiums received Accruals for warranties 260 453 Premiums received 65 126 Acquisitions * 80 Foreign exchange End of period balance $ 1,591 $ $ 1,591 $ * See Note 18. At April 29, 2018, the Company had approximately $447 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere and Wirtgen equipment. The increase from October 29, 2017 primarily relates to the Wirtgen acquisition. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At April 29, 2018, the Company had accrued losses of approximately $16 million under these agreements. The maximum remaining term of the receivables guaranteed at April 29, 2018 was approximately eight years. At April 29, 2018, the Company had commitments of approximately $328 million for the construction and acquisition of property and equipment. The increase from October 29, 2017 primarily relates to the Wirtgen acquisition. Also, at April 29, 2018, the Company had restricted assets of $123 million, primarily as collateral for borrowings and restricted other assets. See Note 11 for additional restricted assets associated with borrowings related to securitizations. The Company also had other miscellaneous contingent liabilities totaling approximately $85 million at April 29, 2018. The accrued liability for these contingencies was not material at April 29, 2018. The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Apr. 29, 2018 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | (15) Fa Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow: April 29, 2018 October 29, 2017 April 30, 2017 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations ** $ 76 $ 74 Financial services 24,200 23,997 $ $ $ $ Total $ 24,276 $ 24,071 $ $ $ $ Financing receivables securitized – net: Equipment operations ** $ 113 $ 110 Financial services 4,323 4,273 $ $ $ $ Total $ 4,436 $ 4,383 $ $ $ $ Short-term securitization borrowings: Equipment operations ** $ 113 $ 113 Financial services 4,288 4,274 $ $ $ $ Total $ 4,401 $ 4,387 $ $ $ $ Long-term borrowings due within one year: Equipment operations ** $ 274 $ 273 $ $ $ $ Financial services 6,566 6,559 Total $ 6,840 $ 6,832 $ $ $ $ Long-term borrowings: Equipment operations ** $ 5,537 $ 5,850 $ $ $ $ Financial services 20,742 20,769 Total $ 26,279 $ 26,619 $ $ $ $ * Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings. ** See Note 18. Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow: April 29 October 29 April 30 2018* 2017* 2017* Marketable securities Equity fund $ 46 $ 48 $ 135 Fixed income fund 14 15 U.S. government debt securities 86 77 79 Municipal debt securities 46 39 39 Corporate debt securities 137 135 132 International debt securities 17 20 28 Mortgage-backed securities ** 133 118 118 Total marketable securities 479 452 546 Other assets Derivatives: Interest rate contracts 87 116 142 Foreign exchange contracts 101 108 60 Cross-currency interest rate contracts 11 14 Total assets *** $ 673 $ 687 $ 762 Accounts payable and accrued expenses Derivatives: Interest rate contracts $ 341 $ 131 $ 79 Foreign exchange contracts 28 26 50 Cross-currency interest rate contracts Total liabilities $ 371 $ 158 $ 131 * All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $46 million, $48 million, and $135 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; the fixed income fund of $14 million, $15 million, and $15 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; and U.S. government debt securities of $42 million, $44 million, and $46 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. In addition, $14 million, $17 million, and $23 million of the international debt securities were Level 3 measurements at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. There were no transfers between Level 1 and Level 2 during the first six months of 2018 or 2017. ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were the Company’s 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. The contractual maturities of debt securities at April 29, 2018 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Amortized Fair Cost Value Due in one year or less $ 29 $ 28 Due after one through five years 107 105 Due after five through 10 years 95 91 Due after 10 years 62 62 Mortgage-backed securities 139 133 Debt securities $ 432 $ 419 Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Beginning of period balance $ $ $ $ Principal payments Change in unrealized gain End of period balance $ $ $ $ Fair value, nonrecurring Level 1 measurements from impairments in millions of dollars follow: Fair Value * Losses Three Months Ended Six Months Ended April 29 October 29 April 30 April 29 April 30 April 29 April 30 2018 2017 2017 2018 2017 2018 2017 Investments in unconsolidated affiliates $ 28 * See financing receivables with specific allowances in Note 10. Losses were not significant. The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities 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. Investment in Unconsolidated Affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value and the carrying value of the investments. The fair value for publicly traded entities is the share price multiplied by the shares owned. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Apr. 29, 2018 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | (16) It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement. 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 April 29, 2018, October 29, 2017, and April 30, 2017 were $1,800 million, $1,700 million, and $1,600 million, respectively. The total notional amounts of the cross-currency interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $11 million, $22 million, and $32 million, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in 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 periods presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of gain recorded in OCI at April 29, 2018 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 $9 million after-tax. These contracts mature in up to 26 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 April 29, 2018, October 29, 2017, and April 30, 2017 were $8,421 million, $8,661 million, and $7,605 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 loss of $2 million and none during the second quarter of 2018 and 2017, respectively, and a loss of $3 million and a gain of $2 million during the first six months of 2018 and 2017, 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: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Interest rate contracts * $ $ 32 $ $ Borrowings ** 121 268 204 * Includes changes in fair values of interest rate contracts excluding ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $64 million and $61 million during the second quarter of 2018 and 2017, respectively, and $127 million and $126 million during the first six months of 2018 and 2017, 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 these interest rate swaps at April 29, 2018, October 29, 2017, and April 30, 2017 were $7,189 million, $6,757 million, and $5,783 million, the foreign exchange contracts were $6,791 million, $8,499 million, and $4,600 million, and the cross-currency interest rate contracts were $92 million, $66 million, and $76 million, respectively. The increase in the total notional amounts of foreign exchange contracts at October 29, 2017 primarily relates to the Wirtgen acquisition (see Note 18). At April 29, 2018, October 29, 2017, and April 30, 2017, there were also $123 million, $253 million, and $366 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 condensed consolidated balance sheet in millions of dollars follow: April 29 October 29 April 30 Other Assets 2018 2017 2017 Designated as hedging instruments: Interest rate contracts $ 34 $ 74 $ 116 Cross-currency interest rate contracts Total designated 37 79 123 Not designated as hedging instruments: Interest rate contracts 53 42 26 Foreign exchange contracts 101 108 60 Cross-currency interest rate contracts Total not designated 157 156 93 Total derivative assets $ 194 $ 235 $ 216 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 316 $ 112 $ 64 Total designated 316 112 64 Not designated as hedging instruments: Interest rate contracts 25 15 Foreign exchange contracts 28 26 50 Cross-currency interest rate contracts Total not designated 55 46 67 Total derivative liabilities $ 371 $ 158 $ 131 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: Expense or Three Months Ended Six Months Ended OCI April 29 April 30 April 29 April 30 Classification 2018 2017 2018 2017 Fair Value Hedges: Interest rate contracts Interest $ $ 54 $ $ Cash Flow Hedges : Recognized in OCI (Effective Portion): Interest rate contracts OCI (pretax) * 14 Foreign exchange contracts OCI (pretax) * Reclassified from OCI (Effective Portion): Interest rate contracts Interest * Foreign exchange contracts Other operating * Recognized Directly in Income (Ineffective Portion) ** ** ** ** Not Designated as Hedges: Interest rate contracts Interest * $ $ Foreign exchange contracts Cost of sales 36 28 $ $ Foreign exchange contracts Other operating * 164 15 Total not designated $ 195 $ 39 $ $ * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts are not significant. Counterparty Risk and Collateral Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination. Certain of the Company’s derivative agreements contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at April 29, 2018, October 29, 2017, and April 30, 2017, was $344 million, $132 million, and $81 million, respectively. In accordance with the limits established in these agreements, the Company posted $32 million in cash collateral at April 29, 2018. No cash collateral was posted or received at either October 29, 2017 or April 30, 2017. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows: Gross Amounts Netting Cash Collateral April 29, 2018 Recognized Arrangements Received/Paid Net Amount Assets $ 194 $ $ 120 Liabilities 371 $ 265 Gross Amounts Netting Cash Collateral October 29, 2017 Recognized Arrangements Received/Paid Net Amount Assets $ 235 $ $ 170 Liabilities 158 93 Gross Amounts Netting Cash Collateral April 30, 2017 Recognized Arrangements Received/Paid Net Amount Assets $ 216 $ $ 162 Liabilities 131 77 |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 6 Months Ended |
Apr. 29, 2018 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (17) In December 2017, the Company granted stock options to employees for the purchase of 476 thousand shares of common stock at an exercise price of $151.95 per share and a binomial lattice model fair value of $39.11 per share at the grant date. At April 29, 2018, options for 9.1 million shares were outstanding with a weighted-average exercise price of $86.73 per share. The Company also granted 403 thousand restricted stock units to employees and non-employee directors in the first six months of 2018, of which 318 thousand are subject to service based only conditions and 85 thousand are subject to performance/service based conditions. The weighted-average fair value of the service based only units at the grant date was $152.07 per unit based on the market price of a share of underlying common stock. The weighted-average fair value of the performance/service based units at the grant date was $145.33 per unit based on the market price of a share of underlying common stock excluding dividends. At April 29, 2018, the Company was authorized to grant an additional 10.0 million shares related to stock option and restricted stock awards. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Apr. 29, 2018 | |
ACQUISITIONS | |
ACQUISITIONS | (18) On December 1, 2017, the Company acquired Wirtgen, which was a privately-held international company and is the leading manufacturer worldwide of road construction equipment. Headquartered in Germany, Wirtgen has six brands across the road construction sector spanning processing, mixing, paving, compaction, and rehabilitation. Wirtgen sells products in more than 100 countries and had approximately 8,200 employees at the acquisition date. The total cash purchase price, net of cash acquired of $197 million, was $5,130 million, a portion of which is held in escrow to secure certain indemnity obligations of Wirtgen. In addition to the cash purchase price, the Company assumed $1,717 million in liabilities, which represented substantially all of Wirtgen’s liabilities. The Company financed the acquisition and associated transaction expenses from a combination of cash and new debt financing, which consisted of medium-term notes, including €850 million issued in September 2017. The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at April 29, 2018 follows: Trade accounts and notes receivable $ 457 Financing receivables 43 Financing receivables securitized 125 Other receivables Inventories 1,538 Property and equipment 757 Goodwill 2,060 Other intangible assets 1,458 Deferred income taxes 96 Other assets Total assets $ 6,855 Short-term borrowings $ 285 Short-term securitization borrowings Accounts payable and accrued expenses 725 Deferred income taxes 502 Long-term borrowings 50 Retirement benefits and other liabilities Total liabilities $ 1,717 Noncontrolling interests $ During the second quarter of 2018, measurement period adjustments decreased the total assets by $8 million, total liabilities by $7 million, and noncontrolling interests by $1 million. The Company continues to review the fair value of the assets and liabilities acquired, which may be updated during the measurement period. The identifiable intangible assets’ preliminary fair values in millions of dollars and weighted-average useful lives in years follows: Weighted-Average Preliminary Customer lists and relationships 16 $ 534 Technology, patents, trademarks, and other 19 $ 924 The goodwill was the result of future cash flows and related fair value of Wirtgen exceeding the fair value of the identified assets and liabilities. The goodwill is not expected to be deductible for income tax purposes and is included in the construction and forestry segment. Wirtgen’s results were included in the Company’s consolidated financial statements beginning on the acquisition date. The results are incorporated using a 30-day lag period and are included in the construction and forestry segment. The net sales and revenues and operating profit (loss) included in the Company’s statement of consolidated income in the second quarter of 2018 and first six months of 2018 were $873 million and $1,127 million, and $41 million and $(51) million, respectively. The Company also recognized $3 million of acquisition related costs in the second quarter of 2018, which were recorded in selling, administrative and general expenses. In the first six months of 2018, the Company recognized $53 million of acquisition related costs, which were recorded $27 million in selling, administrative and general expenses and $26 million in other operating expenses. The unaudited pro forma consolidated net sales and revenues and net income are prepared as if the acquisition closed at the beginning of fiscal year 2017 and follow in millions of dollars: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Net sales and revenues $ 10,720 $ 9,045 $ 18,098 $ 15,253 Net income attributable to Deere & Company $ 1,310 $ 837 $ 877 $ 942 The pro forma amounts have been calculated using policies consistent with the Company’s accounting policies and include the additional expense from the amortization from the allocated purchase price adjustments. The pro forma results exclude acquisition related costs incurred in both periods and assume the medium-term notes used to fund the acquisition were issued in fiscal year 2016 at the interest rate of the actual notes. In addition, the pro forma results for the second quarter and six months ended April 30, 2017 include nonrecurring pretax expenses of $102 million and $264 million, for the higher cost basis from the inventory fair value adjustment and $21 million and $42 million for the amortization of identifiable intangible assets. Anticipated synergies or other expected benefits of the acquisition are not included in the pro forma results. As a result, the unaudited pro forma financial information may not be indicative of the results for future operations or the results if the acquisition closed at the beginning of fiscal year 2017. In March 2018, the Company acquired King Agro, a privately held manufacturer of carbon fiber technology products with headquarters in Valencia, Spain and a production facility in Campana, Argentina. The total cash purchase price, net of cash acquired of $3 million, was $41 million, excluding a loan to King Agro of $4 million that was forgiven on the acquisition date. In addition to the cash purchase price, the Company assumed $11 million of liabilities. The preliminary asset and liability fair values are as follows: Trade accounts and notes receivable $ Other receivables Inventories Property and equipment Goodwill Other intangible assets 13 Total assets $ 56 Short-term borrowings $ Accounts payable and accrued expenses Deferred income taxes Long-term borrowings Total liabilities $ The identifiable intangibles were primarily related to trade name and technology, which have a weighted-average amortization period of 10 years. The goodwill was the result of future cash flows and related fair values of the entity exceeding the fair value of the identified assets and liabilities, which is not expected to be deducted for tax purposes. The results of King Agro were included in the Company’s consolidated financial statements in the agriculture and turf segment since the date of acquisition. The pro forma results of operations as if the acquisition had occurred at the beginning of the prior fiscal year would not differ significantly from the reported results. |
DIVESTITURES
DIVESTITURES | 6 Months Ended |
Apr. 29, 2018 | |
DIVESTITURES | |
DIVESTITURES | (19) In November 2017, the Company sold its construction and forestry retail locations in Florida. At the time of the sale, total assets were $93 million and liabilities were $1 million. The assets consisted of inventory of $61 million, property and equipment – net of $21 million, goodwill of $10 million, and $1 million of other assets. The liabilities consisted of $1 million of accounts payable and accrued expenses. The total proceeds from the sale will be approximately $105 million, with $55 million received in the first six months of 2018. The remaining sales price is due based on standard payment terms of new equipment sales to independent dealers. A pretax gain of $13 million was recorded in other income in the construction and forestry segment. After the sale, the Company sells equipment, service parts, and provides other services to the purchaser as an independent dealer. |
SUPPLEMENTAL CONSOLIDATING DATA
SUPPLEMENTAL CONSOLIDATING DATA | 6 Months Ended |
Apr. 29, 2018 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
SUPPLEMENTAL CONSOLIDATING DATA | (20) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME For the Three Months Ended April 29, 2018 and April 30, 2017 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2018 2017 2018 2017 Net Sales and Revenues Net sales $ 9,747.0 $ 7,259.8 Finance and interest income 27.8 18.7 $ 812.5 $ 716.4 Other income 202.9 339.6 64.9 61.0 Total 9,977.7 7,618.1 877.4 777.4 Costs and Expenses Cost of sales 7,333.8 5,428.1 Research and development expenses 415.2 325.4 Selling, administrative and general expenses 799.5 644.1 141.5 141.3 Interest expense 78.2 67.0 231.2 169.4 Interest compensation to Financial Services 80.6 60.4 Other operating expenses 66.7 83.2 324.7 307.3 Total 8,774.0 6,608.2 697.4 618.0 Income of Consolidated Group before Income Taxes 1,203.7 1,009.9 180.0 159.4 Provision for income taxes 100.8 309.7 76.3 56.1 Income of Consolidated Group 1,102.9 700.2 103.7 103.3 Equity in Income of Unconsolidated Subsidiaries and Affiliates Financial Services 104.1 103.5 .4 .2 Other 2.7 4.6 Total 106.8 108.1 .4 .2 Net Income 1,209.7 808.3 104.1 103.5 Less: Net income (loss) attributable to noncontrolling interests 1.4 (.2) Net Income Attributable to Deere & Company $ 1,208.3 $ 808.5 $ 104.1 $ 103.5 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENT OF INCOME For the Six Months Ended April 29, 2018 and April 30, 2017 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2018 2017 2018 2017 Net Sales and Revenues Net sales $ 15,721.0 $ 11,957.7 Finance and interest income 39.4 40.0 $ 1,589.4 $ 1,403.7 Other income 399.3 597.6 127.7 119.2 Total 16,159.7 12,595.3 1,717.1 1,522.9 Costs and Expenses Cost of sales 12,038.8 9,210.0 Research and development expenses 772.0 637.5 Selling, administrative and general expenses 1,390.2 1,189.3 257.7 264.7 Interest expense 174.2 133.8 425.3 318.1 Interest compensation to Financial Services 142.2 106.1 Other operating expenses 138.9 148.9 635.9 612.5 Total 14,656.3 11,425.6 1,318.9 1,195.3 Income of Consolidated Group before Income Taxes 1,503.4 1,169.7 398.2 327.6 Provision (credit) for income taxes 1,364.7 384.6 110.5 Income of Consolidated Group 138.7 785.1 528.2 217.1 Equity in Income of Unconsolidated Subsidiaries and Affiliates Financial Services 529.4 217.9 1.2 .8 Other 6.8 3.7 Total 536.2 221.6 1.2 .8 Net Income 674.9 1,006.7 529.4 217.9 Less: Net income (loss) attributable to noncontrolling interests 1.7 (.8) Net Income Attributable to Deere & Company $ 673.2 $ 1,007.5 $ 529.4 $ 217.9 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. SUPPLEMENTAL CONSOLIDATING DATA (Continued) CONDENSED BALANCE SHEET (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES April 29 October 29 April 30 April 29 October 29 April 30 2018 2017 2017 2018 2017 2017 Assets Cash and cash equivalents $ 2,988.9 $ 8,168.4 $ 3,343.8 $ 1,212.5 $ 1,166.5 $ 1,182.0 Marketable securities 16.9 20.2 118.1 462.4 431.4 428.2 Receivables from unconsolidated subsidiaries 1,668.0 1,032.1 3,453.0 Trade accounts and notes receivable – net 1,515.9 876.3 742.9 6,436.0 4,134.1 4,867.3 Financing receivables – net 75.7 24,199.8 25,104.1 23,301.1 Financing receivables securitized – net 113.1 4,323.2 4,158.8 4,281.8 Other receivables 1,273.3 1,045.6 801.6 190.1 195.5 136.0 Equipment on operating leases – net 6,723.1 6,593.7 5,923.9 Inventories 6,888.9 3,904.1 4,114.8 Property and equipment – net 5,696.0 5,017.3 4,909.7 46.9 50.4 50.2 Investments in unconsolidated subsidiaries 4,915.9 4,812.3 4,612.2 15.3 13.8 12.5 Goodwill 3,188.7 1,033.3 806.2 Other intangible assets – net 1,692.2 218.0 90.8 Retirement benefits 617.9 538.1 176.2 15.0 16.9 18.9 Deferred income taxes 2,065.5 3,098.8 3,651.1 76.4 79.8 76.3 Other assets 1,186.3 973.9 901.1 577.3 651.4 636.8 Total Assets $ 33,903.2 $ 30,738.4 $ 27,721.5 $ 44,278.0 $ 42,596.4 $ 40,915.0 Liabilities and Stockholders’ Equity Liabilities Short-term borrowings $ 659.1 $ 375.5 $ 276.6 $ 10,235.5 $ 9,659.8 $ 7,687.0 Short-term securitization borrowings 113.2 4,287.9 4,118.7 4,224.6 Payables to unconsolidated subsidiaries 145.7 121.9 101.6 1,633.7 996.2 3,418.1 Accounts payable and accrued expenses 9,265.7 7,718.1 6,765.0 2,030.8 1,827.1 1,587.1 Deferred income taxes 462.9 115.6 89.7 523.2 857.7 764.8 Long-term borrowings 5,536.5 5,490.9 4,520.4 20,742.1 20,400.4 18,732.7 Retirement benefits and other liabilities 7,285.5 7,341.9 8,260.4 95.6 92.9 91.7 Total liabilities 23,468.6 21,163.9 20,013.7 39,548.8 37,952.8 36,506.0 Commitments and contingencies (Note 14) Redeemable noncontrolling interest 14.6 14.0 Stockholders’ Equity Common stock, $1 par value (issued shares at April 29, 2018 – 536,431,204) 4,423.4 4,280.5 4,165.4 2,099.1 2,099.1 2,079.1 Common stock in treasury Retained earnings 25,586.0 25,301.3 24,535.8 2,872.4 2,782.0 2,608.1 Accumulated other comprehensive income (loss) Total Deere & Company stockholders' equity 10,410.3 9,557.3 7,684.7 4,729.2 4,643.6 4,409.0 Noncontrolling interests 9.7 3.2 9.1 Total stockholders’ equity 10,420.0 9,560.5 7,693.8 4,729.2 4,643.6 4,409.0 Total Liabilities and Stockholders’ Equity $ 33,903.2 $ 30,738.4 $ 27,721.5 $ 44,278.0 $ 42,596.4 $ 40,915.0 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the consolidated financial statements. SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENT OF CASH FLOWS For the Six Months Ended April 29, 2018 and April 30, 2017 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2018 2017 2018 2017 Cash Flows from Operating Activities Net income $ 674.9 $ 1,006.7 $ 529.4 $ Adjustments to reconcile net income to net cash provided by operating activities: Provision (credit) for credit losses 9.2 (.2) 17.6 Provision for depreciation and amortization 483.8 529.3 Gain on sale of affiliates and investments Undistributed earnings of unconsolidated subsidiaries and affiliates (.6) Provision (credit) for deferred income taxes 934.5 Changes in assets and liabilities: Trade receivables Inventories Accounts payable and accrued expenses 578.0 84.2 Accrued income taxes payable/receivable 147.4 191.5 5.6 Retirement benefits 62.7 4.9 Other 72.0 Net cash provided by operating activities 1,049.4 911.8 Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) 9,486.7 Proceeds from maturities and sales of marketable securities 3.6 20.2 Proceeds from sales of equipment on operating leases 748.6 Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold 55.0 Cost of receivables acquired (excluding trade and wholesale) Acquisitions of businesses, net of cash acquired Purchases of marketable securities Purchases of property and equipment (.6) (.8) Cost of equipment on operating leases acquired Increase in trade and wholesale receivables Other 44.2 (.6) Net cash used for investing activities Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings 266.2 Change in intercompany receivables/payables 641.6 Proceeds from long-term borrowings 107.1 3,970.6 Payments of long-term borrowings Proceeds from issuance of common stock 198.6 Repurchases of common stock Dividends paid Other Net cash provided by (used for) financing activities 1,617.4 Effect of Exchange Rate Changes on Cash and Cash Equivalents 152.3 (.8) Net Increase (Decrease) in Cash and Cash Equivalents 46.0 Cash and Cash Equivalents at Beginning of Period 8,168.4 1,166.5 Cash and Cash Equivalents at End of Period $ 2,988.9 $ $ 1,212.5 $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 6 Months Ended |
Apr. 29, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
Fiscal Period, Policy | The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2018 and 2017 were April 29, 2018 and April 30, 2017, respectively. Both periods contained 13 weeks. |
Use of Estimates in Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Financing Receivables - Non-Performing, Policy | Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, 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 that are impaired are generally classified as non-performing. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Inventory Valuation, Policy | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. |
Product Warranties | The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. |
Extended Product Warranty, Policy | The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. |
Fair Value of Financial Instruments, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. |
Derivative Financial Instruments | It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement. |
OTHER COMPREHENSIVE INCOME IT29
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Investments Income (Loss) Balance October 30, 2016 $ $ $ $ 11 $ Other comprehensive income (loss) items before reclassification 165 151 Amounts reclassified from accumulated other comprehensive income 89 Net current period other comprehensive income (loss) 76 53 130 Balance April 30, 2017 $ $ $ $ 64 $ Balance October 29, 2017 $ $ $ $ 10 $ Other comprehensive income (loss) items before reclassification 81 225 11 308 Amounts reclassified from accumulated other comprehensive income 84 83 Net current period other comprehensive income (loss) 165 225 10 391 Balance April 29, 2018 $ $ $ 15 $ $ |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars: Before Tax After Tax (Expense) Tax Three Months Ended April 29, 2018 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Six Months Ended April 29, 2018 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail. Before Tax After Tax (Expense) Tax Three Months Ended April 30, 2017 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) $ Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) Reclassification of realized (gain) loss – Other income Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ 162 $ $ 109 * These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail. In the second quarter of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $1.7 million and $(.2) million, respectively, which consisted of net income (loss) of $1.4 million and $(.2) million and cumulative translation adjustments of $.3 million and none, respectively. Before Tax After Tax (Expense) Tax Six Months Ended April 30, 2017 Amount Credit Amount Cumulative translation adjustment $ $ Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense Foreign exchange contracts – Other operating expenses $ Net unrealized gain (loss) on derivatives Unrealized gain (loss) on investments: Unrealized holding gain (loss) 262 165 Reclassification of realized (gain) loss – Other income 66 Net unrealized gain (loss) on investments Retirement benefits adjustment: Pensions Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss 77 Prior service (credit) cost Settlements/curtailments Health care and life insurance Net actuarial gain (loss) Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: * Actuarial (gain) loss Prior service (credit) cost Net unrealized gain (loss) on retirement benefits adjustments Total other comprehensive income (loss) $ $ $ * These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail. In the first six months of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $2.1 million and $(.8) million, respectively, which consisted of net income (loss) of $1.7 million and $(.8) million and cumulative translation adjustments of $.4 million and none, respectively. |
DIVIDENDS DECLARED AND PAID (Ta
DIVIDENDS DECLARED AND PAID (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
DIVIDENDS DECLARED AND PAID | |
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Dividends declared $ .60 $ .60 $ 1.20 $ 1.20 Dividends paid $ .60 $ .60 $ 1.20 $ 1.20 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
EARNINGS PER SHARE | |
Reconciliation of Basic and Diluted Net Income (Loss) Per Share | A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Net income attributable to Deere & Company $ 1,208.3 $ 808.5 $ 673.2 $ Less income allocable to participating securities .2 .2 .1 .3 Income allocable to common stock $ 1,208.1 $ 808.3 $ 673.1 $ 1,007.2 Average shares outstanding 324.2 319.2 323.4 317.9 Basic per share $ 3.73 $ 2.53 $ 2.08 $ 3.17 Average shares outstanding 324.2 319.2 323.4 317.9 Effect of dilutive share-based compensation 5.0 3.8 5.0 3.4 Total potential shares outstanding 329.2 323.0 328.4 321.3 Diluted per share $ 3.67 $ 2.50 $ 2.05 $ 3.14 |
PENSION AND POSTRETIREMENT BE32
PENSION AND POSTRETIREMENT BENEFITS (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
PENSION AND POSTRETIREMENT BENEFITS | |
Components of Pension and Postretirement Benefit Costs | The worldwide components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Service cost $ 76 $ 67 $ 148 $ 135 Interest cost 97 90 195 180 Expected return on plan assets Amortization of actuarial loss 121 Amortization of prior service cost Settlements/curtailments Net cost $ 42 $ 25 $ 82 $ 49 The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Service cost $ $ $ $ 21 Interest cost 48 49 96 98 Expected return on plan assets Amortization of actuarial loss 15 24 31 49 Amortization of prior service credit Net cost $ 49 $ 60 $ 100 $ 121 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
INCOME TAXES | |
Tax Reform Measurement Period Adjustments and Effects on Results | The tax reform measurement period adjustments and the effects on the results of the second quarter and first six months of 2018 in millions of dollars follow: Three Months Ended Six Months Ended Equipment Operations Financial Services Total Equipment Operations Financial Services Total Net deferred tax asset remeasurement $ $ $ $ $ $ Deemed earnings repatriation tax Total discrete tax expense (benefit) $ $ $ $ $ $ |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
SEGMENT REPORTING | |
Schedule of Segment Reporting Information | Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow: Three Months Ended Six Months Ended April 29 April 30 % April 29 April 30 % 2018 2017 Change 2018 2017 Change Net sales and revenues: Agriculture and turf $ 7,049 $ 5,794 +22 $ 11,292 $ 9,392 +20 Construction and forestry 2,698 1,466 +84 4,429 2,566 +73 Total net sales 9,747 7,260 +34 15,721 11,958 +31 Financial services 795 716 +11 1,572 1,412 +11 Other revenues 178 311 -43 340 542 -37 Total net sales and revenues $ 10,720 $ 8,287 +29 $ 17,633 $ 13,912 +27 Operating profit: * Agriculture and turf $ 1,056 $ 1,009 +5 $ 1,443 $ 1,227 +18 Construction and forestry 259 111 +133 291 148 +97 Financial services 179 158 +13 396 325 +22 Total operating profit 1,494 1,278 +17 2,130 1,700 +25 Reconciling items ** +5 +12 Income taxes -52 +149 Net income attributable to Deere & Company $ 1,208 $ 808 +50 $ 673 $ 1,007 -33 Intersegment sales and revenues: Agriculture and turf net sales $ 15 $ 10 +50 $ 24 $ 17 +41 Construction and forestry net sales Financial services 82 62 +32 145 111 +31 Equipment operations outside the U.S. and Canada: Net sales $ 4,295 $ 2,968 +45 $ 6,804 $ 4,860 +40 Operating profit 534 391 +37 680 467 +46 April 29 October 29 2018 2017 Identifiable assets: Agriculture and turf $ 10,603 $ 9,359 +13 Construction and forestry 10,471 3,212 +226 Financial services 44,278 42,596 +4 Corporate 4,521 10,619 -57 Total assets $ 69,873 $ 65,786 +6 * Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. ** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
FINANCING RECEIVABLES | |
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows: April 29, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 117 $ 58 $ 44 $ 219 Construction and forestry 36 177 Other: Agriculture and turf Construction and forestry Total $ 257 $ 122 $ 110 $ 489 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 219 $ 171 $ 17,014 $ 17,404 Construction and forestry 177 2,899 3,118 Other: Agriculture and turf 7,072 7,164 Construction and forestry 1,192 1,213 Total $ 489 $ 233 $ 28,177 28,899 Less allowance for credit losses 187 Total financing receivables – net $ 28,712 October 29, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 118 $ 54 $ 49 $ 221 Construction and forestry 75 33 39 147 Other: Agriculture and turf 27 14 7 48 Construction and forestry 11 6 2 Total $ 231 $ 107 $ 97 $ 435 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 221 $ 173 $ 17,508 $ 17,902 Construction and forestry 147 30 2,618 2,795 Other: Agriculture and turf 48 12 7,610 7,670 Construction and forestry 5 1,059 1,083 Total $ 435 $ 220 $ 28,795 29,450 Less allowance for credit losses 187 Total financing receivables – net $ 29,263 April 30, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail Notes: Agriculture and turf $ 120 $ 75 $ 65 $ 260 Construction and forestry 80 44 33 157 Other: Agriculture and turf 37 12 27 76 Construction and forestry 12 4 2 18 Total $ 249 $ 135 $ 127 $ 511 Total Total Total Financing Past Due Non-Performing Current Receivables Retail Notes: Agriculture and turf $ 260 $ 159 $ 16,838 $ 17,257 Construction and forestry 157 31 2,563 2,751 Other: Agriculture and turf 76 10 6,692 6,778 Construction and forestry 18 4 952 974 Total $ 511 $ 204 $ 27,045 27,760 Less allowance for credit losses 177 Total financing receivables – net $ 27,583 |
Analysis of the Allowance for Credit Losses and Investment in Financing Receivables | An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Three Months Ended April 29, 2018 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision 16 Write-offs Recoveries 10 Translation adjustments End of period balance * $ 120 $ $ 27 $ 187 Six Months Ended April 29, 2018 Allowance: Beginning of period balance $ $ $ $ Provision 18 Write-offs Recoveries 10 11 21 Translation adjustments End of period balance * $ 120 $ 40 $ 27 $ 187 Financing receivables: End of period balance $ 20,522 $ 3,205 $ 5,172 $ 28,899 Balance individually evaluated ** $ 120 $ $ 15 $ 136 Three Months Ended April 30, 2017 Revolving Retail Charge Notes Accounts Other Total Allowance: Beginning of period balance $ $ $ $ Provision Write-offs Recoveries End of period balance * $ 111 $ 43 $ 23 $ Six Months Ended April 30, 2017 Allowance: Beginning of period balance $ $ $ $ Provision 18 13 2 Write-offs (27) (20) (3) Recoveries 7 10 End of period balance * $ 111 $ 43 $ 23 $ Financing receivables: End of period balance $ 20,008 $ 3,036 $ 4,716 $ Balance individually evaluated ** $ 148 $ 4 $ 17 $ * Individual allowances were not significant. ** Remainder is collectively evaluated. |
Analysis of the Impaired Financing Receivables | An analysis of the impaired financing receivables in millions of dollars follows: Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment April 29, 2018* Receivables with specific allowance ** $ 33 $ 31 $ 10 $ 34 Receivables without a specific allowance ** 41 40 43 Total $ 74 $ 71 $ 10 $ 77 Agriculture and turf $ 52 $ 51 $ $ 54 Construction and forestry $ 22 $ 20 $ $ 23 October 29, 2017* Receivables with specific allowance ** $ 36 $ 33 $ $ 30 Receivables without a specific allowance *** 28 24 Total $ 64 $ 60 $ $ 54 Agriculture and turf $ 49 $ 46 $ $ 38 Construction and forestry $ 15 $ 14 $ 16 April 30, 2017* Receivables with specific allowance ** $ 23 $ 22 $ $ 26 Receivables without a specific allowance *** 27 24 28 Total $ 50 $ 46 $ $ 54 Agriculture and turf $ 28 $ 26 $ $ 32 Construction and forestry $ 22 $ $ $ 22 * Finance income recognized was not material. ** Primarily retail notes. *** Primarily retail notes and wholesale receivables. |
SECURITIZATION OF FINANCING R36
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars: April 29, 2018 Carrying value of liabilities $ 1,310 Maximum exposure to loss 1,383 |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars: April 29 October 29 April 30 2018 2017 2017 Financing receivables securitized (retail notes) $ 4,450 $ 4,172 $ 4,295 Allowance for credit losses Other assets 122 105 115 Total restricted securitized assets $ 4,558 $ 4,264 $ 4,397 The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars: April 29 October 29 April 30 2018 2017 2017 Short-term securitization borrowings $ 4,401 $ 4,119 $ 4,225 Accrued interest on borrowings Total liabilities related to restricted securitized assets $ 4,404 $ 4,121 $ 4,227 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
INVENTORIES | |
Major Classification of Inventories | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows: April 29 October 29 April 30 2018 2017 2017 Raw materials and supplies $ 2,231 $ 1,688 $ 1,559 Work-in-process 900 495 531 Finished goods and parts 5,208 3,182 3,421 Total FIFO value 8,339 5,365 5,511 Less adjustment to LIFO value 1,450 1,461 1,396 Inventories $ 6,889 $ 3,904 $ 4,115 |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Agriculture Construction and Turf and Forestry Total Goodwill at October 30, 2016 $ $ $ Translation adjustments and other Goodwill at April 30, 2017 $ $ $ Goodwill at October 29, 2017 $ $ $ Acquisitions * Divestitures ** Translation adjustments Goodwill at April 29, 2018 $ $ $ * See Note 18. ** See Note 19. There were no accumulated impairment losses in the reported periods. |
Components of Other Intangible Assets | The components of other intangible assets were as follows in millions of dollars: Useful Lives * April 29 October 29 April 30 (Years) 2018 2017 2017 Amortized intangible assets: Customer lists and relationships 16 $ 590 $ $ Technology, patents, trademarks, and other 18 1,109 Total at cost 1,699 Less accumulated amortization ** 130 Total 1,569 91 Unamortized intangible assets: In-process research and development 123 Other intangible assets – net $ 1,692 $ $ * Weighted-averages ** Accumulated amortization at April 29, 2018, October 29, 2017, and April 30, 2017 for customer lists and relationships totaled $30 million, $17 million, and $15 million and technology, patents, trademarks, and other totaled $100 million, $69 million, and $62 million, respectively. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Reconciliation of the Changes in Warranty Liability and Unearned Premiums | A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Beginning of period balance $ $ $ 1,468 $ Payments Amortization of premiums received Accruals for warranties 260 453 Premiums received 65 126 Acquisitions * 80 Foreign exchange End of period balance $ 1,591 $ $ 1,591 $ * See Note 18. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow: April 29, 2018 October 29, 2017 April 30, 2017 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations ** $ 76 $ 74 Financial services 24,200 23,997 $ $ $ $ Total $ 24,276 $ 24,071 $ $ $ $ Financing receivables securitized – net: Equipment operations ** $ 113 $ 110 Financial services 4,323 4,273 $ $ $ $ Total $ 4,436 $ 4,383 $ $ $ $ Short-term securitization borrowings: Equipment operations ** $ 113 $ 113 Financial services 4,288 4,274 $ $ $ $ Total $ 4,401 $ 4,387 $ $ $ $ Long-term borrowings due within one year: Equipment operations ** $ 274 $ 273 $ $ $ $ Financial services 6,566 6,559 Total $ 6,840 $ 6,832 $ $ $ $ Long-term borrowings: Equipment operations ** $ 5,537 $ 5,850 $ $ $ $ Financial services 20,742 20,769 Total $ 26,279 $ 26,619 $ $ $ $ * Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings. ** See Note 18. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow: April 29 October 29 April 30 2018* 2017* 2017* Marketable securities Equity fund $ 46 $ 48 $ 135 Fixed income fund 14 15 U.S. government debt securities 86 77 79 Municipal debt securities 46 39 39 Corporate debt securities 137 135 132 International debt securities 17 20 28 Mortgage-backed securities ** 133 118 118 Total marketable securities 479 452 546 Other assets Derivatives: Interest rate contracts 87 116 142 Foreign exchange contracts 101 108 60 Cross-currency interest rate contracts 11 14 Total assets *** $ 673 $ 687 $ 762 Accounts payable and accrued expenses Derivatives: Interest rate contracts $ 341 $ 131 $ 79 Foreign exchange contracts 28 26 50 Cross-currency interest rate contracts Total liabilities $ 371 $ 158 $ 131 * All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $46 million, $48 million, and $135 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; the fixed income fund of $14 million, $15 million, and $15 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; and U.S. government debt securities of $42 million, $44 million, and $46 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. In addition, $14 million, $17 million, and $23 million of the international debt securities were Level 3 measurements at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. There were no transfers between Level 1 and Level 2 during the first six months of 2018 or 2017. ** Primarily issued by U.S. government sponsored enterprises. *** Excluded from this table were the Company’s 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. |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at April 29, 2018 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Amortized Fair Cost Value Due in one year or less $ 29 $ 28 Due after one through five years 107 105 Due after five through 10 years 95 91 Due after 10 years 62 62 Mortgage-backed securities 139 133 Debt securities $ 432 $ 419 |
Fair Value, Recurring, Level 3 Measurements | Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Beginning of period balance $ $ $ $ Principal payments Change in unrealized gain End of period balance $ $ $ $ |
Fair Value, Nonrecurring, Level 1 Measurements | Fair value, nonrecurring Level 1 measurements from impairments in millions of dollars follow: Fair Value * Losses Three Months Ended Six Months Ended April 29 October 29 April 30 April 29 April 30 April 29 April 30 2018 2017 2017 2018 2017 2018 2017 Investments in unconsolidated affiliates $ 28 * See financing receivables with specific allowances in Note 10. Losses were not significant. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
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: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Interest rate contracts * $ $ 32 $ $ Borrowings ** 121 268 204 * Includes changes in fair values of interest rate contracts excluding ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $64 million and $61 million during the second quarter of 2018 and 2017, respectively, and $127 million and $126 million during the first six months of 2018 and 2017, respectively. |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow: April 29 October 29 April 30 Other Assets 2018 2017 2017 Designated as hedging instruments: Interest rate contracts $ 34 $ 74 $ 116 Cross-currency interest rate contracts Total designated 37 79 123 Not designated as hedging instruments: Interest rate contracts 53 42 26 Foreign exchange contracts 101 108 60 Cross-currency interest rate contracts Total not designated 157 156 93 Total derivative assets $ 194 $ 235 $ 216 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 316 $ 112 $ 64 Total designated 316 112 64 Not designated as hedging instruments: Interest rate contracts 25 15 Foreign exchange contracts 28 26 50 Cross-currency interest rate contracts Total not designated 55 46 67 Total derivative liabilities $ 371 $ 158 $ 131 |
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: Expense or Three Months Ended Six Months Ended OCI April 29 April 30 April 29 April 30 Classification 2018 2017 2018 2017 Fair Value Hedges: Interest rate contracts Interest $ $ 54 $ $ Cash Flow Hedges : Recognized in OCI (Effective Portion): Interest rate contracts OCI (pretax) * 14 Foreign exchange contracts OCI (pretax) * Reclassified from OCI (Effective Portion): Interest rate contracts Interest * Foreign exchange contracts Other operating * Recognized Directly in Income (Ineffective Portion) ** ** ** ** Not Designated as Hedges: Interest rate contracts Interest * $ $ Foreign exchange contracts Cost of sales 36 28 $ $ Foreign exchange contracts Other operating * 164 15 Total not designated $ 195 $ 39 $ $ * 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 | Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows: Gross Amounts Netting Cash Collateral April 29, 2018 Recognized Arrangements Received/Paid Net Amount Assets $ 194 $ $ 120 Liabilities 371 $ 265 Gross Amounts Netting Cash Collateral October 29, 2017 Recognized Arrangements Received/Paid Net Amount Assets $ 235 $ $ 170 Liabilities 158 93 Gross Amounts Netting Cash Collateral April 30, 2017 Recognized Arrangements Received/Paid Net Amount Assets $ 216 $ $ 162 Liabilities 131 77 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
Wirtgen Group Holding GmbH (Wirtgen) | |
Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at April 29, 2018 follows: Trade accounts and notes receivable $ 457 Financing receivables 43 Financing receivables securitized 125 Other receivables Inventories 1,538 Property and equipment 757 Goodwill 2,060 Other intangible assets 1,458 Deferred income taxes 96 Other assets Total assets $ 6,855 Short-term borrowings $ 285 Short-term securitization borrowings Accounts payable and accrued expenses 725 Deferred income taxes 502 Long-term borrowings 50 Retirement benefits and other liabilities Total liabilities $ 1,717 Noncontrolling interests $ |
Preliminary Fair Values and Weighted-Average Useful Lives of Identifiable Intangible Assets | The identifiable intangible assets’ preliminary fair values in millions of dollars and weighted-average useful lives in years follows: Weighted-Average Preliminary Customer lists and relationships 16 $ 534 Technology, patents, trademarks, and other 19 $ 924 |
Unaudited Pro Forma Consolidated Net Sales and Revenues and Net Income | The unaudited pro forma consolidated net sales and revenues and net income are prepared as if the acquisition closed at the beginning of fiscal year 2017 and follow in millions of dollars: Three Months Ended Six Months Ended April 29 April 30 April 29 April 30 2018 2017 2018 2017 Net sales and revenues $ 10,720 $ 9,045 $ 18,098 $ 15,253 Net income attributable to Deere & Company $ 1,310 $ 837 $ 877 $ 942 |
King Agro | |
Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | The preliminary asset and liability fair values are as follows: Trade accounts and notes receivable $ Other receivables Inventories Property and equipment Goodwill Other intangible assets 13 Total assets $ 56 Short-term borrowings $ Accounts payable and accrued expenses Deferred income taxes Long-term borrowings Total liabilities $ |
SUPPLEMENTAL CONSOLIDATING DA43
SUPPLEMENTAL CONSOLIDATING DATA (Tables) | 6 Months Ended |
Apr. 29, 2018 | |
SUPPLEMENTAL CONSOLIDATING DATA | |
Supplemental Consolidating Data Income Statement | (20) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME For the Three Months Ended April 29, 2018 and April 30, 2017 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2018 2017 2018 2017 Net Sales and Revenues Net sales $ 9,747.0 $ 7,259.8 Finance and interest income 27.8 18.7 $ 812.5 $ 716.4 Other income 202.9 339.6 64.9 61.0 Total 9,977.7 7,618.1 877.4 777.4 Costs and Expenses Cost of sales 7,333.8 5,428.1 Research and development expenses 415.2 325.4 Selling, administrative and general expenses 799.5 644.1 141.5 141.3 Interest expense 78.2 67.0 231.2 169.4 Interest compensation to Financial Services 80.6 60.4 Other operating expenses 66.7 83.2 324.7 307.3 Total 8,774.0 6,608.2 697.4 618.0 Income of Consolidated Group before Income Taxes 1,203.7 1,009.9 180.0 159.4 Provision for income taxes 100.8 309.7 76.3 56.1 Income of Consolidated Group 1,102.9 700.2 103.7 103.3 Equity in Income of Unconsolidated Subsidiaries and Affiliates Financial Services 104.1 103.5 .4 .2 Other 2.7 4.6 Total 106.8 108.1 .4 .2 Net Income 1,209.7 808.3 104.1 103.5 Less: Net income (loss) attributable to noncontrolling interests 1.4 (.2) Net Income Attributable to Deere & Company $ 1,208.3 $ 808.5 $ 104.1 $ 103.5 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENT OF INCOME For the Six Months Ended April 29, 2018 and April 30, 2017 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2018 2017 2018 2017 Net Sales and Revenues Net sales $ 15,721.0 $ 11,957.7 Finance and interest income 39.4 40.0 $ 1,589.4 $ 1,403.7 Other income 399.3 597.6 127.7 119.2 Total 16,159.7 12,595.3 1,717.1 1,522.9 Costs and Expenses Cost of sales 12,038.8 9,210.0 Research and development expenses 772.0 637.5 Selling, administrative and general expenses 1,390.2 1,189.3 257.7 264.7 Interest expense 174.2 133.8 425.3 318.1 Interest compensation to Financial Services 142.2 106.1 Other operating expenses 138.9 148.9 635.9 612.5 Total 14,656.3 11,425.6 1,318.9 1,195.3 Income of Consolidated Group before Income Taxes 1,503.4 1,169.7 398.2 327.6 Provision (credit) for income taxes 1,364.7 384.6 110.5 Income of Consolidated Group 138.7 785.1 528.2 217.1 Equity in Income of Unconsolidated Subsidiaries and Affiliates Financial Services 529.4 217.9 1.2 .8 Other 6.8 3.7 Total 536.2 221.6 1.2 .8 Net Income 674.9 1,006.7 529.4 217.9 Less: Net income (loss) attributable to noncontrolling interests 1.7 (.8) Net Income Attributable to Deere & Company $ 673.2 $ 1,007.5 $ 529.4 $ 217.9 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
Supplemental Consolidating Data Condensed Balance Sheet | SUPPLEMENTAL CONSOLIDATING DATA (Continued) CONDENSED BALANCE SHEET (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES April 29 October 29 April 30 April 29 October 29 April 30 2018 2017 2017 2018 2017 2017 Assets Cash and cash equivalents $ 2,988.9 $ 8,168.4 $ 3,343.8 $ 1,212.5 $ 1,166.5 $ 1,182.0 Marketable securities 16.9 20.2 118.1 462.4 431.4 428.2 Receivables from unconsolidated subsidiaries 1,668.0 1,032.1 3,453.0 Trade accounts and notes receivable – net 1,515.9 876.3 742.9 6,436.0 4,134.1 4,867.3 Financing receivables – net 75.7 24,199.8 25,104.1 23,301.1 Financing receivables securitized – net 113.1 4,323.2 4,158.8 4,281.8 Other receivables 1,273.3 1,045.6 801.6 190.1 195.5 136.0 Equipment on operating leases – net 6,723.1 6,593.7 5,923.9 Inventories 6,888.9 3,904.1 4,114.8 Property and equipment – net 5,696.0 5,017.3 4,909.7 46.9 50.4 50.2 Investments in unconsolidated subsidiaries 4,915.9 4,812.3 4,612.2 15.3 13.8 12.5 Goodwill 3,188.7 1,033.3 806.2 Other intangible assets – net 1,692.2 218.0 90.8 Retirement benefits 617.9 538.1 176.2 15.0 16.9 18.9 Deferred income taxes 2,065.5 3,098.8 3,651.1 76.4 79.8 76.3 Other assets 1,186.3 973.9 901.1 577.3 651.4 636.8 Total Assets $ 33,903.2 $ 30,738.4 $ 27,721.5 $ 44,278.0 $ 42,596.4 $ 40,915.0 Liabilities and Stockholders’ Equity Liabilities Short-term borrowings $ 659.1 $ 375.5 $ 276.6 $ 10,235.5 $ 9,659.8 $ 7,687.0 Short-term securitization borrowings 113.2 4,287.9 4,118.7 4,224.6 Payables to unconsolidated subsidiaries 145.7 121.9 101.6 1,633.7 996.2 3,418.1 Accounts payable and accrued expenses 9,265.7 7,718.1 6,765.0 2,030.8 1,827.1 1,587.1 Deferred income taxes 462.9 115.6 89.7 523.2 857.7 764.8 Long-term borrowings 5,536.5 5,490.9 4,520.4 20,742.1 20,400.4 18,732.7 Retirement benefits and other liabilities 7,285.5 7,341.9 8,260.4 95.6 92.9 91.7 Total liabilities 23,468.6 21,163.9 20,013.7 39,548.8 37,952.8 36,506.0 Commitments and contingencies (Note 14) Redeemable noncontrolling interest 14.6 14.0 Stockholders’ Equity Common stock, $1 par value (issued shares at April 29, 2018 – 536,431,204) 4,423.4 4,280.5 4,165.4 2,099.1 2,099.1 2,079.1 Common stock in treasury Retained earnings 25,586.0 25,301.3 24,535.8 2,872.4 2,782.0 2,608.1 Accumulated other comprehensive income (loss) Total Deere & Company stockholders' equity 10,410.3 9,557.3 7,684.7 4,729.2 4,643.6 4,409.0 Noncontrolling interests 9.7 3.2 9.1 Total stockholders’ equity 10,420.0 9,560.5 7,693.8 4,729.2 4,643.6 4,409.0 Total Liabilities and Stockholders’ Equity $ 33,903.2 $ 30,738.4 $ 27,721.5 $ 44,278.0 $ 42,596.4 $ 40,915.0 * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the consolidated financial statements. |
Supplemental Consolidating Data Statement of Cash Flows | SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENT OF CASH FLOWS For the Six Months Ended April 29, 2018 and April 30, 2017 (In millions of dollars) Unaudited EQUIPMENT OPERATIONS* FINANCIAL SERVICES 2018 2017 2018 2017 Cash Flows from Operating Activities Net income $ 674.9 $ 1,006.7 $ 529.4 $ Adjustments to reconcile net income to net cash provided by operating activities: Provision (credit) for credit losses 9.2 (.2) 17.6 Provision for depreciation and amortization 483.8 529.3 Gain on sale of affiliates and investments Undistributed earnings of unconsolidated subsidiaries and affiliates (.6) Provision (credit) for deferred income taxes 934.5 Changes in assets and liabilities: Trade receivables Inventories Accounts payable and accrued expenses 578.0 84.2 Accrued income taxes payable/receivable 147.4 191.5 5.6 Retirement benefits 62.7 4.9 Other 72.0 Net cash provided by operating activities 1,049.4 911.8 Cash Flows from Investing Activities Collections of receivables (excluding trade and wholesale) 9,486.7 Proceeds from maturities and sales of marketable securities 3.6 20.2 Proceeds from sales of equipment on operating leases 748.6 Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold 55.0 Cost of receivables acquired (excluding trade and wholesale) Acquisitions of businesses, net of cash acquired Purchases of marketable securities Purchases of property and equipment (.6) (.8) Cost of equipment on operating leases acquired Increase in trade and wholesale receivables Other 44.2 (.6) Net cash used for investing activities Cash Flows from Financing Activities Increase (decrease) in total short-term borrowings 266.2 Change in intercompany receivables/payables 641.6 Proceeds from long-term borrowings 107.1 3,970.6 Payments of long-term borrowings Proceeds from issuance of common stock 198.6 Repurchases of common stock Dividends paid Other Net cash provided by (used for) financing activities 1,617.4 Effect of Exchange Rate Changes on Cash and Cash Equivalents 152.3 (.8) Net Increase (Decrease) in Cash and Cash Equivalents 46.0 Cash and Cash Equivalents at Beginning of Period 8,168.4 1,166.5 Cash and Cash Equivalents at End of Period $ 2,988.9 $ $ 1,212.5 $ * Deere & Company with Financial Services on the equity basis. The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 29, 2018 | Apr. 30, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | ||
Transfer of inventory to equipment on operating leases | $ 357 | $ 319 |
Accounts payable related to purchases of property and equipment | $ 42 | $ 32 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
New accounting standards adopted | ||||
Operating profit | $ 1,494 | $ 1,278 | $ 2,130 | $ 1,700 |
Cost of sales | 7,333.3 | 5,427.7 | 12,037.8 | 9,209.2 |
Research and development expenses | 415.2 | 325.4 | 772 | 637.5 |
Selling, administrative and general expenses | 939.2 | 783.6 | 1,644.3 | 1,451 |
Other operating expenses | 344.9 | 354.1 | 687.8 | 682.3 |
Net income attributable to Deere & Company | 1,208.3 | 808.5 | 673.2 | 1,007.5 |
Cash flow provided by operating activities | (1,221.7) | (163.7) | ||
ASU 2017-07 | Early Adoption | ||||
New accounting standards adopted | ||||
Operating profit | $ 4 | 7 | $ 12 | 14 |
ASU 2017-07 | Early Adoption | Restatement Adjustment | ||||
New accounting standards adopted | ||||
Cost of sales | (17) | (32) | ||
Research and development expenses | 1 | 2 | ||
Selling, administrative and general expenses | 9 | 16 | ||
Other operating expenses | 7 | 14 | ||
ASU 2016-09 | Early Adoption | Restatement Adjustment | ||||
New accounting standards adopted | ||||
Net income attributable to Deere & Company | $ 6 | 11 | ||
Cash flow provided by operating activities | $ 11 |
OTHER COMPREHENSIVE INCOME IT46
OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Changes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Accumulated other comprehensive income (loss) | ||||
Balance | $ 9,560.5 | $ 6,530.8 | ||
Net current period other comprehensive income (loss) | $ 116.1 | $ 109 | 390.9 | 130.5 |
Balance | 10,420 | 7,693.8 | 10,420 | 7,693.8 |
Total Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (4,564) | (5,626) | ||
Other comprehensive income (loss) items before reclassification | 308 | 151 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 83 | (21) | ||
Net current period other comprehensive income (loss) | 391 | 130 | ||
Balance | (4,173) | (5,496) | (4,173) | (5,496) |
Retirement Benefits Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (3,580) | (4,409) | ||
Other comprehensive income (loss) items before reclassification | 81 | (13) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 84 | 89 | ||
Net current period other comprehensive income (loss) | 119 | 33 | 165 | 76 |
Balance | (3,415) | (4,333) | (3,415) | (4,333) |
Cumulative Translation Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (999) | (1,229) | ||
Other comprehensive income (loss) items before reclassification | 225 | (1) | ||
Net current period other comprehensive income (loss) | 1 | 17 | 225 | (1) |
Balance | (774) | (1,230) | (774) | (1,230) |
Unrealized Gain (Loss) on Derivatives | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | 5 | 1 | ||
Other comprehensive income (loss) items before reclassification | 6 | (2) | 11 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (1) | 2 | ||
Net current period other comprehensive income (loss) | 5 | 10 | 2 | |
Balance | 15 | 3 | 15 | 3 |
Unrealized Gain (Loss) on Investments | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | 10 | 11 | ||
Other comprehensive income (loss) items before reclassification | (9) | 170 | (9) | 165 |
Amounts reclassified from accumulated other comprehensive income (loss) | (112) | |||
Net current period other comprehensive income (loss) | (9) | 59 | (9) | 53 |
Balance | $ 1 | $ 64 | $ 1 | $ 64 |
OTHER COMPREHENSIVE INCOME IT47
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | $ (303.7) | $ (226.9) | $ (590) | $ (434.9) |
Other operating expenses | (344.9) | (354.1) | (687.8) | (682.3) |
Other income | 219.1 | 362.2 | 435.7 | 634 |
Total other comprehensive income (loss), before tax | 152 | 162 | 453 | 206 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (36) | (53) | (62) | (76) |
Other Comprehensive Income (Loss), After Tax | ||||
Other Comprehensive Income (Loss), Net of Income Taxes | 116.1 | 109 | 390.9 | 130.5 |
Cumulative Translation Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | 17 | 225 | (1) | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | 1 | |||
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 225 | (1) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 1 | 17 | 225 | (1) |
Unrealized Gain (Loss) on Derivatives | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 7 | (4) | 15 | |
Total other comprehensive income (loss), before tax | 6 | 14 | 3 | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (1) | 2 | (4) | |
Total other comprehensive income (loss), tax (expense) credit | (1) | (4) | (1) | |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 6 | (2) | 11 | |
Reclassification from accumulated other comprehensive income, after tax | (1) | 2 | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 5 | 10 | 2 | |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | (1) | 1 | (1) | 1 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | |||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (1) | (1) | 1 | |
Unrealized Gain (Loss) on Derivatives | Foreign Exchange Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 3 | 2 | ||
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (1) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 2 | 1 | ||
Unrealized Gain (Loss) on Investments | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (11) | 269 | (11) | 262 |
Total other comprehensive income (loss), before tax | (12) | 93 | (12) | 84 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 2 | (99) | 2 | (97) |
Total other comprehensive income (loss), tax (expense) credit | 3 | (34) | 3 | (31) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (9) | 170 | (9) | 165 |
Reclassification from accumulated other comprehensive income, after tax | (112) | |||
Other Comprehensive Income (Loss), Net of Income Taxes | (9) | 59 | (9) | 53 |
Unrealized Gain (Loss) on Investments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other income | (1) | (176) | (1) | (178) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 1 | 65 | 1 | 66 |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (111) | (112) | ||
Retirement Benefits Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | 158 | 52 | 226 | 120 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (39) | (19) | (61) | (44) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 81 | (13) | ||
Reclassification from accumulated other comprehensive income, after tax | 84 | 89 | ||
Other Comprehensive Income (Loss), Net of Income Taxes | 119 | 33 | 165 | 76 |
Retirement Benefits Adjustment | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 39 | (8) | 46 | (9) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (9) | 3 | (11) | 3 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 30 | (5) | 35 | (6) |
Retirement Benefits Adjustment | Other Postretirement | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 60 | (10) | 60 | (10) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (14) | 3 | (14) | 3 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 46 | (7) | 46 | (7) |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 54 | 61 | 115 | 121 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (14) | (22) | (34) | (44) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 40 | 39 | 81 | 77 |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other Postretirement | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 15 | 24 | 31 | 49 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (4) | (9) | (9) | (18) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 11 | 15 | 22 | 31 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 3 | 3 | 6 | 6 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (1) | (2) | (2) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 2 | 2 | 4 | 4 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other Postretirement | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | (19) | (19) | (38) | (38) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 5 | 7 | 11 | 14 |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (14) | (12) | (27) | (24) |
Settlements/Curtailments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 6 | 1 | 6 | 1 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (2) | (2) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 4 | $ 1 | $ 4 | $ 1 |
OTHER COMPREHENSIVE INCOME IT48
OTHER COMPREHENSIVE INCOME ITEMS - Noncontrolling Interests' (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests | ||||
Comprehensive income (loss) attributable to noncontrolling interests | $ 1.7 | $ (0.2) | $ 2.1 | $ (0.8) |
Net income (loss) attributable to noncontrolling interests | 1.4 | (0.2) | 1.7 | (0.8) |
Cumulative translation adjustments attributable to noncontrolling interests | $ 0.3 | $ 0 | $ 0.4 | $ 0 |
DIVIDENDS DECLARED AND PAID (De
DIVIDENDS DECLARED AND PAID (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
DIVIDENDS DECLARED AND PAID | ||||
Dividends declared (in dollars per share) | $ 0.60 | $ 0.60 | $ 1.20 | $ 1.20 |
Dividends paid (in dollars per share) | $ 0.60 | $ 0.60 | $ 1.20 | $ 1.20 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
EARNINGS PER SHARE | ||||
Net income attributable to Deere & Company | $ 1,208.3 | $ 808.5 | $ 673.2 | $ 1,007.5 |
Less income allocable to participating securities (in dollars) | 0.2 | 0.2 | 0.1 | 0.3 |
Income allocable to common stock (in dollars) | $ 1,208.1 | $ 808.3 | $ 673.1 | $ 1,007.2 |
Average shares outstanding | 324.2 | 319.2 | 323.4 | 317.9 |
Basic (in dollars per share) | $ 3.73 | $ 2.53 | $ 2.08 | $ 3.17 |
Diluted Earnings Per Share | ||||
Average shares outstanding | 324.2 | 319.2 | 323.4 | 317.9 |
Effect of dilutive share-based compensation (in shares) | 5 | 3.8 | 5 | 3.4 |
Total potential shares outstanding | 329.2 | 323 | 328.4 | 321.3 |
Diluted (in dollars per share) | $ 3.67 | $ 2.50 | $ 2.05 | $ 3.14 |
Antidilutive incremental shares excluded from computation of earnings per share | 0.5 | 0.7 | 0.3 | 0.5 |
PENSION AND POSTRETIREMENT BE51
PENSION AND POSTRETIREMENT BENEFITS - Components of Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Pensions | ||||
Net Periodic Cost | ||||
Service cost | $ 76 | $ 67 | $ 148 | $ 135 |
Interest cost | 97 | 90 | 195 | 180 |
Expected return on plan assets | (194) | (197) | (388) | (394) |
Amortization of actuarial (gain) loss | 54 | 61 | 115 | 121 |
Amortization of prior service (credit) cost | 3 | 3 | 6 | 6 |
Settlements/curtailments | 6 | 1 | 6 | 1 |
Net cost | 42 | 25 | 82 | 49 |
Employer Contributions | ||||
Defined benefit plan employer contributions | 86 | |||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 851 | 851 | ||
Pensions | U.S. | ||||
Employer Contributions | ||||
Defined benefit plan employer contributions | 50 | |||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 820 | 820 | ||
Other Postretirement | ||||
Net Periodic Cost | ||||
Service cost | 11 | 11 | 22 | 21 |
Interest cost | 48 | 49 | 96 | 98 |
Expected return on plan assets | (6) | (5) | (11) | (9) |
Amortization of actuarial (gain) loss | 15 | 24 | 31 | 49 |
Amortization of prior service (credit) cost | (19) | (19) | (38) | (38) |
Net cost | 49 | $ 60 | 100 | $ 121 |
Employer Contributions | ||||
Defined benefit plan employer contributions | 31 | |||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 138 | 138 | ||
Other Postretirement | U.S. | ||||
Employer Contributions | ||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 130 | 130 | ||
Pension and Other Postretirement | U.S. | ||||
Employer Contributions | ||||
Defined benefit plan approved voluntary employer contributions | $ 1,000 | $ 1,000 |
INCOME TAXES - Tax Reform (Deta
INCOME TAXES - Tax Reform (Details) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |
Apr. 29, 2018 | Apr. 29, 2018 | Apr. 29, 2018 | Oct. 28, 2018 | Dec. 31, 2017 | |
U.S. Tax Reform | |||||
Corporate federal statutory tax rate (as a percent) | 21.00% | 35.00% | |||
Deemed repatriation tax payment period | 8 years | ||||
Net deferred tax asset remeasurement | $ (177) | $ 539 | |||
Deemed earnings repatriation tax | 3 | 264 | |||
Total discrete tax expense (benefit) | (174) | 803 | |||
Forecasted | |||||
U.S. Tax Reform | |||||
Corporate federal statutory tax rate (as a percent) | 23.30% | ||||
Pension and Other Postretirement | U.S. | |||||
U.S. Tax Reform | |||||
Defined benefit plan approved voluntary employer contributions | 1,000 | $ 1,000 | 1,000 | ||
Equipment Operations | |||||
U.S. Tax Reform | |||||
Net deferred tax asset remeasurement | (158) | 853 | |||
Deemed earnings repatriation tax | (49) | 179 | |||
Total discrete tax expense (benefit) | (207) | 1,032 | |||
Financial Services | |||||
U.S. Tax Reform | |||||
Net deferred tax asset remeasurement | (19) | (314) | |||
Deemed earnings repatriation tax | 52 | 85 | |||
Total discrete tax expense (benefit) | $ 33 | $ (229) |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
UNRECOGNIZED TAX BENEFITS | |||
Unrecognized tax benefits | $ 421 | $ 221 | |
Unrecognized tax benefits affecting effective tax rate if recognized | 157 | $ 86 | $ 79 |
Reduction of unrecognized tax benefits reasonably possible in next 12 months | 160 | ||
Reduction of unrecognized tax benefits reasonably possible in the next 12 months affecting effective tax rate if recognized | $ 55 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | Oct. 29, 2017 | |
Net Sales and Revenues | |||||
Total net sales | $ 9,747 | $ 7,259.8 | $ 15,721 | $ 11,957.7 | |
% Change - Net sales | 34.00% | 31.00% | |||
Total net sales and revenues | $ 10,720 | 8,287 | $ 17,633.5 | 13,912.2 | |
% Change - Net sales and revenues | 29.00% | 27.00% | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 1,494 | 1,278 | $ 2,130 | 1,700 | |
% Change - Operating profit (loss) | 17.00% | 25.00% | |||
Net income attributable to Deere & Company | $ 1,208.3 | 808.5 | $ 673.2 | 1,007.5 | |
% Change - Net income (loss) attributable to Deere & Company | 50.00% | (33.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 69,873 | 58,968.8 | $ 69,873 | 58,968.8 | $ 65,786.3 |
% Change - Identifiable assets | 6.00% | ||||
Operating Segments (Other) | |||||
Reconciling items | $ (109) | (104) | $ (222) | (198) | |
% Change - Reconciling items | 5.00% | 12.00% | |||
Income taxes | $ (177.1) | (365.8) | $ (1,234.7) | (495.1) | |
% Change - Income taxes | (52.00%) | 149.00% | |||
Equipment Operations | |||||
Net Sales and Revenues | |||||
Total net sales | $ 9,747 | 7,259.8 | $ 15,721 | 11,957.7 | |
Total net sales and revenues | 9,977.7 | 7,618.1 | 16,159.7 | 12,595.3 | |
Operating Profit (Loss) | |||||
Net income attributable to Deere & Company | 1,208.3 | 808.5 | 673.2 | 1,007.5 | |
Identifiable Assets | |||||
Total Assets | 33,903.2 | 27,721.5 | 33,903.2 | 27,721.5 | 30,738.4 |
Operating Segments (Other) | |||||
Income taxes | (100.8) | (309.7) | (1,364.7) | (384.6) | |
Equipment Operations | Outside U.S. and Canada: | |||||
Net Sales and Revenues | |||||
Total net sales | $ 4,295 | 2,968 | $ 6,804 | 4,860 | |
% Change - Net sales | 45.00% | 40.00% | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 534 | 391 | $ 680 | 467 | |
% Change - Operating profit (loss) | 37.00% | 46.00% | |||
Corporate | |||||
Identifiable Assets | |||||
Total Assets | $ 4,521 | $ 4,521 | 10,619 | ||
% Change - Identifiable assets | (57.00%) | ||||
Other Revenues | |||||
Net Sales and Revenues | |||||
Total net sales and revenues | $ 178 | 311 | $ 340 | 542 | |
% Change - Net sales and revenues | (43.00%) | (37.00%) | |||
Agriculture and Turf | |||||
Net Sales and Revenues | |||||
Total net sales | $ 7,049 | 5,794 | $ 11,292 | 9,392 | |
% Change - Net sales | 22.00% | 20.00% | |||
Intersegment sales and revenues | $ 15 | 10 | $ 24 | 17 | |
% Change - Intersegment sales and revenues | 50.00% | 41.00% | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 1,056 | 1,009 | $ 1,443 | 1,227 | |
% Change - Operating profit (loss) | 5.00% | 18.00% | |||
Identifiable Assets | |||||
Total Assets | $ 10,603 | $ 10,603 | 9,359 | ||
% Change - Identifiable assets | 13.00% | ||||
Construction and Forestry | |||||
Net Sales and Revenues | |||||
Total net sales | $ 2,698 | 1,466 | $ 4,429 | 2,566 | |
% Change - Net sales | 84.00% | 73.00% | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 259 | 111 | $ 291 | 148 | |
% Change - Operating profit (loss) | 133.00% | 97.00% | |||
Identifiable Assets | |||||
Total Assets | $ 10,471 | $ 10,471 | 3,212 | ||
% Change - Identifiable assets | 226.00% | ||||
Financial Services | |||||
Net Sales and Revenues | |||||
Total net sales and revenues | $ 795 | 716 | $ 1,572 | 1,412 | |
% Change - Net sales and revenues | 11.00% | 11.00% | |||
Intersegment sales and revenues | $ 82 | 62 | $ 145 | 111 | |
% Change - Intersegment sales and revenues | 32.00% | 31.00% | |||
Operating Profit (Loss) | |||||
Total operating profit (loss) | $ 179 | $ 158 | $ 396 | $ 325 | |
% Change - Operating profit (loss) | 13.00% | 22.00% | |||
Identifiable Assets | |||||
Total Assets | $ 44,278 | $ 44,278 | $ 42,596 | ||
% Change - Identifiable assets | 4.00% |
FINANCING RECEIVABLES - Past Du
FINANCING RECEIVABLES - Past Due Age Analysis (Details) - USD ($) $ in Millions | 6 Months Ended | |||||
Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | |
Financing Receivable, Past Due | ||||||
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 ceased 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 | $ 489 | $ 435 | $ 511 | |||
Total Non-Performing | 233 | 220 | 204 | |||
Current | 28,177 | 28,795 | 27,045 | |||
Total Financing Receivables | 28,899 | 29,450 | 27,760 | |||
Less allowance for credit losses | 187 | $ 190 | 187 | 177 | $ 175 | $ 176 |
Total financing receivables - net | 28,712 | 29,263 | 27,583 | |||
30-59 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 257 | 231 | 249 | |||
60-89 Days Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 122 | 107 | 135 | |||
90 Days or Greater Past Due | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 110 | 97 | 127 | |||
Retail Notes | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Financing Receivables | 20,522 | 20,008 | ||||
Less allowance for credit losses | 120 | $ 123 | 121 | 111 | $ 111 | $ 113 |
Retail Notes | Agriculture and Turf | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 219 | 221 | 260 | |||
Total Non-Performing | 171 | 173 | 159 | |||
Current | 17,014 | 17,508 | 16,838 | |||
Total Financing Receivables | 17,404 | 17,902 | 17,257 | |||
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 | 117 | 118 | 120 | |||
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 | 58 | 54 | 75 | |||
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 | 44 | 49 | 65 | |||
Retail Notes | Construction and Forestry | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 177 | 147 | 157 | |||
Total Non-Performing | 42 | 30 | 31 | |||
Current | 2,899 | 2,618 | 2,563 | |||
Total Financing Receivables | 3,118 | 2,795 | 2,751 | |||
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 | 97 | 75 | 80 | |||
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 | 44 | 33 | 44 | |||
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 | 36 | 39 | 33 | |||
Other Financing Receivables | Agriculture and Turf | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 76 | 48 | 76 | |||
Total Non-Performing | 16 | 12 | 10 | |||
Current | 7,072 | 7,610 | 6,692 | |||
Total Financing Receivables | 7,164 | 7,670 | 6,778 | |||
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 | 32 | 27 | 37 | |||
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 | 16 | 14 | 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 | 28 | 7 | 27 | |||
Other Financing Receivables | Construction and Forestry | ||||||
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables | ||||||
Total Past Due | 17 | 19 | 18 | |||
Total Non-Performing | 4 | 5 | 4 | |||
Current | 1,192 | 1,059 | 952 | |||
Total Financing Receivables | 1,213 | 1,083 | 974 | |||
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 | 11 | 11 | 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 | 4 | 6 | 4 | |||
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 | $ 2 | $ 2 | $ 2 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | Oct. 29, 2017 | |
Allowance: | |||||
Beginning of period balance | $ 190 | $ 175 | $ 187 | $ 176 | |
Provision (credit) | 16 | 26 | 18 | 33 | |
Write-offs | (23) | (34) | (37) | (50) | |
Recoveries | 10 | 10 | 21 | 18 | |
Translation adjustments | (6) | (2) | |||
End of period balance | 187 | 177 | 187 | 177 | |
Financing receivables: | |||||
End of period balance | 28,899 | 27,760 | 28,899 | 27,760 | $ 29,450 |
Balance individually evaluated | 136 | 169 | 136 | 169 | |
Retail Notes | |||||
Allowance: | |||||
Beginning of period balance | 123 | 111 | 121 | 113 | |
Provision (credit) | 5 | 10 | 5 | 18 | |
Write-offs | (7) | (15) | (14) | (27) | |
Recoveries | 4 | 5 | 10 | 7 | |
Translation adjustments | (5) | (2) | |||
End of period balance | 120 | 111 | 120 | 111 | |
Financing receivables: | |||||
End of period balance | 20,522 | 20,008 | 20,522 | 20,008 | |
Balance individually evaluated | 120 | 148 | 120 | 148 | |
Revolving Charge Accounts | |||||
Allowance: | |||||
Beginning of period balance | 40 | 41 | 40 | 40 | |
Provision (credit) | 9 | 15 | 9 | 13 | |
Write-offs | (15) | (18) | (20) | (20) | |
Recoveries | 6 | 5 | 11 | 10 | |
End of period balance | 40 | 43 | 40 | 43 | |
Financing receivables: | |||||
End of period balance | 3,205 | 3,036 | 3,205 | 3,036 | |
Balance individually evaluated | 1 | 4 | 1 | 4 | |
Other Financing Receivables | |||||
Allowance: | |||||
Beginning of period balance | 27 | 23 | 26 | 23 | |
Provision (credit) | 2 | 1 | 4 | 2 | |
Write-offs | (1) | (1) | (3) | (3) | |
Recoveries | 1 | ||||
Translation adjustments | (1) | ||||
End of period balance | 27 | 23 | 27 | 23 | |
Financing receivables: | |||||
End of period balance | 5,172 | 4,716 | 5,172 | 4,716 | |
Balance individually evaluated | $ 15 | $ 17 | $ 15 | $ 17 |
FINANCING RECEIVABLES - Impaire
FINANCING RECEIVABLES - Impaired (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Apr. 29, 2018 | Apr. 30, 2017 | Oct. 29, 2017 | |
Analysis of Impaired Financing Receivables | |||
Recorded investment, with specific allowance | $ 33 | $ 23 | $ 36 |
Recorded investment, without specific allowance | 41 | 27 | 28 |
Recorded Investment | 74 | 50 | 64 |
Unpaid principal balance, with specific allowance | 31 | 22 | 33 |
Unpaid principal balance, without specific allowance | 40 | 24 | 27 |
Unpaid Principal Balance | 71 | 46 | 60 |
Specific Allowance | 10 | 9 | 10 |
Average recorded investment, with specific allowance | 34 | 26 | 30 |
Average recorded investment, without specific allowance | 43 | 28 | 24 |
Average Recorded Investment | 77 | 54 | 54 |
Agriculture and Turf | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 52 | 28 | 49 |
Unpaid Principal Balance | 51 | 26 | 46 |
Specific Allowance | 9 | 8 | 10 |
Average Recorded Investment | 54 | 32 | 38 |
Construction and Forestry | |||
Analysis of Impaired Financing Receivables | |||
Recorded Investment | 22 | 22 | 15 |
Unpaid Principal Balance | 20 | 20 | 14 |
Specific Allowance | 1 | 1 | |
Average Recorded Investment | $ 23 | $ 22 | $ 16 |
FINANCING RECEIVABLES - Trouble
FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 6 Months Ended | |
Apr. 29, 2018USD ($)item | Apr. 30, 2017USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | ||
Financing receivable contracts in troubled debt restructuring, number | item | 253 | 226 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 13 | $ 5 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 13 | $ 4 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 8 |
SECURITIZATION OF FINANCING R59
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | |
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | $ 1,310 | ||
Unconsolidated conduits, maximum exposure to loss | 1,383 | ||
Financing receivables securitized (retail notes) | 4,450 | $ 4,172 | $ 4,295 |
Allowance for credit losses - securitization transactions | (14) | (13) | (13) |
Other assets - securitization transactions | 122 | 105 | 115 |
Total restricted securitized assets - securitization transactions | 4,558 | 4,264 | 4,397 |
Short-term securitization borrowings | 4,401.1 | 4,118.7 | 4,224.6 |
Accrued interest on borrowings - securitization transactions | 3 | 2 | 2 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,404 | 4,121 | 4,227 |
Maximum remaining term of all restricted securitized retail notes | 7 years | ||
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | $ 2,489 | 2,631 | 2,589 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,438 | 2,571 | 2,522 |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 686 | 478 | 413 |
Total liabilities related to restricted securitized assets - securitization transactions | 656 | 454 | 390 |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Total Assets | 36,000 | ||
Total restricted securitized assets - securitization transactions | 1,383 | 1,155 | 1,395 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,310 | $ 1,096 | $ 1,315 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
INVENTORIES | |||
Raw materials and supplies | $ 2,231 | $ 1,688 | $ 1,559 |
Work-in-process | 900 | 495 | 531 |
Finished goods and parts | 5,208 | 3,182 | 3,421 |
Total FIFO value | 8,339 | 5,365 | 5,511 |
Less adjustment to LIFO value | 1,450 | 1,461 | 1,396 |
Inventories | $ 6,888.9 | $ 3,904.1 | $ 4,114.8 |
GOODWILL AND OTHER INTANGIBLE61
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 29, 2018 | Apr. 30, 2017 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 1,033.3 | $ 816 |
Acquisitions | 2,085 | |
Divestitures | (10) | |
Translation adjustments | 81 | |
Translation adjustments and other | (10) | |
Goodwill - net, ending balance | 3,188.7 | 806.2 |
Accumulated impairment loss | 0 | 0 |
Agriculture and Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 521 | 323 |
Acquisitions | 25 | |
Translation adjustments | 5 | |
Translation adjustments and other | (10) | |
Goodwill - net, ending balance | 551 | 313 |
Construction and Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 512 | 493 |
Acquisitions | 2,060 | |
Divestitures | (10) | |
Translation adjustments | 76 | |
Goodwill - net, ending balance | $ 2,638 | $ 493 |
GOODWILL AND OTHER INTANGIBLE62
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | |
Amortized intangible assets: | |||
Total at cost | $ 1,699 | $ 181 | $ 168 |
Less accumulated amortization | 130 | 86 | 77 |
Total amortized intangible assets - net | 1,569 | 95 | 91 |
Unamortized intangible assets: | |||
Other intangible assets - net | $ 1,692.2 | 218 | 90.8 |
Customer Lists and Relationships | |||
Amortized intangible assets: | |||
Weighted-average useful lives | 16 years | ||
Total at cost | $ 590 | 42 | 39 |
Less accumulated amortization | $ 30 | 17 | 15 |
Technology, Patents, Trademarks, and Other | |||
Amortized intangible assets: | |||
Weighted-average useful lives | 18 years | ||
Total at cost | $ 1,109 | 139 | 129 |
Less accumulated amortization | 100 | 69 | $ 62 |
In-process Research and Development | |||
Unamortized intangible assets: | |||
Unamortized intangible assets | $ 123 | $ 123 |
GOODWILL AND OTHER INTANGIBLE63
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Amortized Intangible Assets: | ||||
Amortization expense of other intangible assets | $ 31 | $ 4 | $ 44 | $ 9 |
Amortization expense of other intangible assets - remainder of 2018 | 61 | 61 | ||
Amortization expense of other intangible assets - 2019 | 121 | 121 | ||
Amortization expense of other intangible assets - 2020 | 109 | 109 | ||
Amortization expense of other intangible assets - 2021 | 104 | 104 | ||
Amortization expense of other intangible assets - 2022 | $ 104 | $ 104 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | ||||
Historical claims rate, review period | 5 years | |||
Unamortized extended warranty premiums (deferred revenue) | $ 475 | $ 444 | $ 475 | $ 444 |
Change in Warranty Liability and Unearned Premiums | ||||
Beginning of period balance | 1,550 | 1,285 | 1,468 | 1,226 |
Payments | (213) | (167) | (430) | (332) |
Amortization of premiums received | (57) | (54) | (113) | (97) |
Accruals for warranties | 260 | 238 | 453 | 470 |
Premiums received | 65 | 55 | 126 | 95 |
Acquisitions | 80 | |||
Foreign exchange | (14) | 8 | 7 | 3 |
End of period balance | $ 1,591 | $ 1,365 | $ 1,591 | $ 1,365 |
COMMITMENTS AND CONTINGENCIES65
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 6 Months Ended |
Apr. 29, 2018USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 328 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 123 |
Miscellaneous contingent liabilities | 85 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 447 |
Guarantee obligations accrued losses | $ 16 |
Guarantee obligations term | P8Y |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
Fair Values of Financial Instruments | |||
Financing receivables - net | $ 24,275.5 | $ 25,104.1 | $ 23,301.1 |
Financing receivables securitized - net | 4,436.3 | 4,158.8 | 4,281.8 |
Short-term securitization borrowings | 4,401.1 | 4,118.7 | 4,224.6 |
Long-term borrowings | 26,278.6 | 25,891.3 | 23,253.1 |
Level 2 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,118 | 4,225 | |
Long-term borrowings due within one year | 6,832 | 6,233 | 5,464 |
Long-term borrowings | 26,619 | 26,632 | 23,884 |
Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 24,071 | 24,946 | 23,141 |
Financing receivables securitized - net | 4,383 | 4,130 | 4,253 |
Level 2 and Level 3 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,387 | ||
Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 24,276 | 25,104 | 23,301 |
Financing receivables securitized - net | 4,436 | 4,159 | 4,282 |
Short-term securitization borrowings | 4,401 | 4,119 | 4,225 |
Long-term borrowings due within one year | 6,840 | 6,218 | 5,459 |
Long-term borrowings | 26,279 | 25,891 | 23,253 |
Equipment Operations | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 75.7 | ||
Financing receivables securitized - net | 113.1 | ||
Short-term securitization borrowings | 113.2 | ||
Long-term borrowings | 5,536.5 | 5,490.9 | 4,520.4 |
Equipment Operations | Level 2 | |||
Fair Values of Financial Instruments | |||
Long-term borrowings due within one year | 273 | 154 | 119 |
Long-term borrowings | 5,850 | 6,026 | 5,020 |
Equipment Operations | Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 74 | ||
Financing receivables securitized - net | 110 | ||
Short-term securitization borrowings | 113 | ||
Equipment Operations | Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 76 | ||
Financing receivables securitized - net | 113 | ||
Short-term securitization borrowings | 113 | ||
Long-term borrowings due within one year | 274 | 154 | 120 |
Long-term borrowings | 5,537 | 5,491 | 4,520 |
Financial Services | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 24,199.8 | 25,104.1 | 23,301.1 |
Financing receivables securitized - net | 4,323.2 | 4,158.8 | 4,281.8 |
Short-term securitization borrowings | 4,287.9 | 4,118.7 | 4,224.6 |
Long-term borrowings | 20,742.1 | 20,400.4 | 18,732.7 |
Financial Services | Level 2 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | 4,274 | 4,118 | 4,225 |
Long-term borrowings due within one year | 6,559 | 6,079 | 5,345 |
Long-term borrowings | 20,769 | 20,606 | 18,864 |
Financial Services | Level 3 | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 23,997 | 24,946 | 23,141 |
Financing receivables securitized - net | 4,273 | 4,130 | 4,253 |
Financial Services | Carrying Value | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 24,200 | 25,104 | 23,301 |
Financing receivables securitized - net | 4,323 | 4,159 | 4,282 |
Short-term securitization borrowings | 4,288 | 4,119 | 4,225 |
Long-term borrowings due within one year | 6,566 | 6,064 | 5,339 |
Long-term borrowings | $ 20,742 | $ 20,400 | $ 18,733 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 479.3 | $ 451.6 | $ 546.3 |
Derivative assets | 194 | 235 | 216 |
Derivative liabilities | 371 | 158 | 131 |
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 a Recurring Basis | |||
Derivative assets | 194 | 235 | 216 |
Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 371 | 158 | 131 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Total Estimated Fair Value | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 479 | 452 | 546 |
Total assets | 673 | 687 | 762 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 and Level 2 | U.S. Government Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 86 | 77 | 79 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 46 | 48 | 135 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Fixed Income Funds | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 14 | 15 | 15 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 42 | 44 | 46 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Total liabilities | 371 | 158 | 131 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 87 | 116 | 142 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 341 | 131 | 79 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 101 | 108 | 60 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 28 | 26 | 50 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 6 | 11 | 14 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 2 | 1 | 2 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 46 | 39 | 39 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 137 | 135 | 132 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-backed Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 133 | 118 | 118 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 and Level 3 | International Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 17 | 20 | 28 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 14 | $ 17 | $ 23 |
FAIR VALUE MEASUREMENTS - Contr
FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions | Apr. 29, 2018USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 29 |
Amortized cost, due after one through five years | 107 |
Amortized cost, due after five through 10 years | 95 |
Amortized cost, due after 10 years | 62 |
Amortized cost, mortgage-backed securities | 139 |
Amortized cost, debt securities | 432 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 28 |
Fair value, due after one through five years | 105 |
Fair value, due after five through 10 years | 91 |
Fair value, due after 10 years | 62 |
Fair value, mortgage-backed securities | 133 |
Fair value, debt securities | $ 419 |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring, Level 3 Measurements (Details) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Fair Value, Recurring Level 3 Measurements from Available-for-Sale Marketable Securities | ||||
Beginning of period balance | $ 15 | $ 23 | $ 17 | $ 28 |
Principal payments | (1) | (1) | (3) | (6) |
Change in unrealized gain (loss) | 1 | 1 | ||
End of period balance | $ 14 | $ 23 | $ 14 | $ 23 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring, Level 1 Measurements (Details) $ in Millions | Oct. 29, 2017USD ($) |
Fair Value, Nonrecurring Measurements | Level 1 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | |
Investments in unconsolidated affiliates | $ 28 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | |
Cash Flow Hedges | |||
Cash flow hedge gain (loss) recorded in OCI to be reclassified within twelve months | $ 9 | ||
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 26 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 | 1,800 | $ 1,700 | $ 1,600 |
Cross-Currency Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | $ 11 | $ 22 | $ 32 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | Oct. 29, 2017 | |
Fair Value Hedges | |||||
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives | $ (2) | $ 0 | $ (3) | $ 2 | |
Gain (Loss) on Fair Value Hedges | |||||
Gains (losses) on interest rate contracts | (123) | 32 | (271) | (202) | |
Net accrued interest income on interest rate contracts | 5 | 22 | 17 | 48 | |
Gains (losses) on borrowings | 121 | (32) | 268 | 204 | |
Accrued interest expense on borrowings | 64 | 61 | 127 | 126 | |
Fair Value Hedges | Designated as Hedging Instruments | |||||
Fair Value Hedges | |||||
Notional amount of interest rate fair value hedge derivatives | $ 8,421 | $ 7,605 | $ 8,421 | $ 7,605 | $ 8,661 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 7,189 | $ 6,757 | $ 5,783 |
Interest Rate Cap Contracts | Purchased | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 123 | 253 | 366 |
Interest Rate Cap Contracts | Sold | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 123 | 253 | 366 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 6,791 | 8,499 | 4,600 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 92 | $ 66 | $ 76 |
DERIVATIVE INSTRUMENTS - Fair74
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 194 | $ 235 | $ 216 |
Total derivative liabilities | 371 | 158 | 131 |
Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 194 | 235 | 216 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 371 | 158 | 131 |
Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 37 | 79 | 123 |
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 316 | 112 | 64 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 34 | 74 | 116 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 316 | 112 | 64 |
Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 3 | 5 | 7 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 157 | 156 | 93 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 55 | 46 | 67 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 53 | 42 | 26 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 25 | 19 | 15 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 101 | 108 | 60 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 28 | 26 | 50 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 3 | 6 | 7 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 2 | $ 1 | $ 2 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ 195 | $ 39 | $ (64) | $ (25) |
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) | 6 | (1) | 14 | 2 |
Interest Rate Contracts | Interest Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | (118) | 54 | (254) | (154) |
Not designated as hedges, gains (losses) | (5) | (4) | ||
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) | 1 | (1) | 1 | (1) |
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) | 1 | (3) | 1 | (2) |
Foreign Exchange Contracts | Cost of Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | 36 | 28 | (12) | (12) |
Foreign Exchange Contracts | Other Operating Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ 164 | 15 | $ (52) | (13) |
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) | $ (3) | $ (2) |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 |
DERIVATIVE INSTRUMENTS | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 344 | $ 132 | $ 81 |
Derivative Assets | |||
Gross amounts recognized | 194 | 235 | 216 |
Netting arrangements | (74) | (65) | (54) |
Net amount | 120 | 170 | 162 |
Derivative Liabilities | |||
Gross amounts recognized | 371 | 158 | 131 |
Netting arrangements | (74) | (65) | (54) |
Cash collateral paid | (32) | 0 | 0 |
Net amount | $ 265 | $ 93 | $ 77 |
STOCK OPTION AND RESTRICTED S77
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands | 1 Months Ended | 6 Months Ended |
Dec. 25, 2016 | Apr. 29, 2018 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant related to stock option and restricted stock awards | 10,000 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 476 | |
Options granted, exercise price (in dollars per share) | $ 151.95 | |
Options granted, fair value (in dollars per share) | $ 39.11 | |
Options outstanding (in shares) | 9,100 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 86.73 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 403 | |
Restricted Stock Units Subject to Service Based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 318 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 152.07 | |
Restricted Stock Units Subject to Performance/Service Based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 85 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 145.33 |
ACQUISITIONS - Wirtgen Purchase
ACQUISITIONS - Wirtgen Purchase Price and Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) € in Millions, $ in Millions | Dec. 01, 2017USD ($)item | Apr. 29, 2018USD ($) | Apr. 29, 2018USD ($) | Oct. 29, 2017USD ($) | Sep. 24, 2017EUR (€) | Apr. 30, 2017USD ($) | Oct. 30, 2016USD ($) |
Acquisitions | |||||||
Cash purchase price, net of cash acquired | $ 5,171.1 | ||||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | |||||||
Goodwill | $ 3,188.7 | $ 3,188.7 | $ 1,033.3 | $ 806.2 | $ 816 | ||
Wirtgen Group Holding GmbH (Wirtgen) | |||||||
Acquisitions | |||||||
Number of brands | item | 6 | ||||||
Number of countries entity sells products | item | 100 | ||||||
Number of employees | item | 8,200 | ||||||
Cash acquired | $ 197 | ||||||
Cash purchase price, net of cash acquired | 5,130 | ||||||
Liabilities assumed | 1,717 | ||||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | |||||||
Trade accounts and notes receivable | 457 | ||||||
Financing receivables | 43 | ||||||
Financing receivables securitized | 125 | ||||||
Other receivables | 100 | ||||||
Inventories | 1,538 | ||||||
Property and equipment | 757 | ||||||
Goodwill | 2,060 | ||||||
Other intangible assets | 1,458 | ||||||
Deferred income taxes | 96 | ||||||
Other assets | 221 | ||||||
Total assets | 6,855 | ||||||
Short-term borrowings | 285 | ||||||
Short-term securitization borrowings | 127 | ||||||
Accounts payable and accrued expenses | 725 | ||||||
Deferred income taxes | 502 | ||||||
Long-term borrowings | 50 | ||||||
Retirement benefits and other liabilities | 28 | ||||||
Total liabilities | 1,717 | ||||||
Noncontrolling interests | $ 8 | ||||||
Measurement period adjustments | |||||||
Measurement period adjustments - decrease assets | 8 | ||||||
Measurement period adjustments - decrease liabilities | 7 | ||||||
Measurement period adjustments - decrease noncontrolling interests | $ 1 | ||||||
Wirtgen Group Holding GmbH (Wirtgen) | Medium-term notes due 2020 - 2023 | |||||||
Acquisitions | |||||||
Debt financing | € | € 850 |
ACQUISITIONS - Wirtgen Identifi
ACQUISITIONS - Wirtgen Identifiable Intangible Assets (Details) - Wirtgen Group Holding GmbH (Wirtgen) $ in Millions | Dec. 01, 2017USD ($) |
Weighted-Average Useful Lives and Preliminary Fair Values | |
Preliminary fair values | $ 1,458 |
Customer Lists and Relationships | |
Weighted-Average Useful Lives and Preliminary Fair Values | |
Weighted-average useful lives (in years) | 16 years |
Preliminary fair values | $ 534 |
Technology, Patents, Trademarks, and Other | |
Weighted-Average Useful Lives and Preliminary Fair Values | |
Weighted-average useful lives (in years) | 19 years |
Preliminary fair values | $ 924 |
ACQUISITIONS - Wirtgen Results
ACQUISITIONS - Wirtgen Results and Pro Forma Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Unaudited Pro Forma Results of Operations | ||||
Pro forma net income attributable to Deere & Company | $ (1,208.3) | $ (808.5) | $ (673.2) | $ (1,007.5) |
Wirtgen Group Holding GmbH (Wirtgen) | ||||
Acquisitions | ||||
Acquisition related costs | 53 | |||
Unaudited Pro Forma Results of Operations | ||||
Net sales and revenues | 10,720 | 9,045 | 18,098 | 15,253 |
Net income attributable to Deere & Company | 1,310 | 837 | 877 | 942 |
Wirtgen Group Holding GmbH (Wirtgen) | Inventory Fair Value Adjustment | ||||
Unaudited Pro Forma Results of Operations | ||||
Pro forma net income attributable to Deere & Company | 102 | 264 | ||
Wirtgen Group Holding GmbH (Wirtgen) | Amortization of Identifiable Intangible Assets | ||||
Unaudited Pro Forma Results of Operations | ||||
Pro forma net income attributable to Deere & Company | $ 21 | $ 42 | ||
Wirtgen Group Holding GmbH (Wirtgen) | Selling, Administrative and General Expenses | ||||
Acquisitions | ||||
Acquisition related costs | 3 | 27 | ||
Wirtgen Group Holding GmbH (Wirtgen) | Other Operating Expenses | ||||
Acquisitions | ||||
Acquisition related costs | 26 | |||
Wirtgen Group Holding GmbH (Wirtgen) | Construction and Forestry | ||||
Acquisitions | ||||
Net sales and revenues | 873 | 1,127 | ||
Operating profit (loss) | $ 41 | $ (51) |
ACQUISITIONS - King Agro Purcha
ACQUISITIONS - King Agro Purchase Price and Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | |||
Mar. 25, 2018 | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | Oct. 30, 2016 | |
Acquisitions | |||||
Cash purchase price, net of cash acquired | $ 5,171.1 | ||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | |||||
Goodwill | $ 3,188.7 | $ 1,033.3 | $ 806.2 | $ 816 | |
King Agro | |||||
Acquisitions | |||||
Cash acquired | $ 3 | ||||
Cash purchase price, net of cash acquired | 41 | ||||
Loan forgiven | 4 | ||||
Liabilities assumed | 11 | ||||
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity | |||||
Trade accounts and notes receivable | 4 | ||||
Other receivables | 3 | ||||
Inventories | 6 | ||||
Property and equipment | 5 | ||||
Goodwill | 25 | ||||
Other intangible assets | 13 | ||||
Total assets | 56 | ||||
Short-term borrowings | 2 | ||||
Accounts payable and accrued expenses | 4 | ||||
Deferred income taxes | 3 | ||||
Long-term borrowings | 2 | ||||
Total liabilities | $ 11 | ||||
Identifiable Intangibles | |||||
Weighted-average useful lives (in years) | 10 years |
DIVESTITURES (Details)
DIVESTITURES (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Nov. 26, 2017 | Apr. 29, 2018 | |
Sale of Assets and Liabilities | ||
Proceeds received from sale | $ 55 | |
Sale of Construction and Forestry Retail Locations in Florida | ||
Sale of Assets and Liabilities | ||
Total assets | $ 93 | |
Liabilities | 1 | |
Inventory | 61 | |
Property and equipment - net | 21 | |
Goodwill | 10 | |
Other assets | 1 | |
Accounts payable and accrued expenses | 1 | |
Total proceeds from sale | 105 | |
Proceeds received from sale | $ 55 | |
Gain from sale, pretax, recorded in other income | $ 13 |
SUPPLEMENTAL CONSOLIDATING DA83
SUPPLEMENTAL CONSOLIDATING DATA - Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Net Sales and Revenues | ||||
Net sales | $ 9,747 | $ 7,259.8 | $ 15,721 | $ 11,957.7 |
Finance and interest income | 753.9 | 665 | 1,476.8 | 1,320.5 |
Other income | 219.1 | 362.2 | 435.7 | 634 |
Total | 10,720 | 8,287 | 17,633.5 | 13,912.2 |
Costs and Expenses | ||||
Cost of sales | 7,333.3 | 5,427.7 | 12,037.8 | 9,209.2 |
Research and development expenses | 415.2 | 325.4 | 772 | 637.5 |
Selling, administrative and general expenses | 939.2 | 783.6 | 1,644.3 | 1,451 |
Interest expense | 303.7 | 226.9 | 590 | 434.9 |
Other operating expenses | 344.9 | 354.1 | 687.8 | 682.3 |
Total | 9,336.3 | 7,117.7 | 15,731.9 | 12,414.9 |
Income of Consolidated Group before Income Taxes | 1,383.7 | 1,169.3 | 1,901.6 | 1,497.3 |
Provision (credit) for income taxes | 177.1 | 365.8 | 1,234.7 | 495.1 |
Income of Consolidated Group | 1,206.6 | 803.5 | 666.9 | 1,002.2 |
Equity in Income of Unconsolidated Subsidiaries and Affiliates | ||||
Net Income | 1,209.7 | 808.3 | 674.9 | 1,006.7 |
Less: Net income (loss) attributable to noncontrolling interests | 1.4 | (0.2) | 1.7 | (0.8) |
Net Income Attributable to Deere & Company | 1,208.3 | 808.5 | 673.2 | 1,007.5 |
Equipment Operations | ||||
Net Sales and Revenues | ||||
Net sales | 9,747 | 7,259.8 | 15,721 | 11,957.7 |
Finance and interest income | 27.8 | 18.7 | 39.4 | 40 |
Other income | 202.9 | 339.6 | 399.3 | 597.6 |
Total | 9,977.7 | 7,618.1 | 16,159.7 | 12,595.3 |
Costs and Expenses | ||||
Cost of sales | 7,333.8 | 5,428.1 | 12,038.8 | 9,210 |
Research and development expenses | 415.2 | 325.4 | 772 | 637.5 |
Selling, administrative and general expenses | 799.5 | 644.1 | 1,390.2 | 1,189.3 |
Interest expense | 78.2 | 67 | 174.2 | 133.8 |
Interest compensation to Financial Services | 80.6 | 60.4 | 142.2 | 106.1 |
Other operating expenses | 66.7 | 83.2 | 138.9 | 148.9 |
Total | 8,774 | 6,608.2 | 14,656.3 | 11,425.6 |
Income of Consolidated Group before Income Taxes | 1,203.7 | 1,009.9 | 1,503.4 | 1,169.7 |
Provision (credit) for income taxes | 100.8 | 309.7 | 1,364.7 | 384.6 |
Income of Consolidated Group | 1,102.9 | 700.2 | 138.7 | 785.1 |
Equity in Income of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | 106.8 | 108.1 | 536.2 | 221.6 |
Net Income | 1,209.7 | 808.3 | 674.9 | 1,006.7 |
Less: Net income (loss) attributable to noncontrolling interests | 1.4 | (0.2) | 1.7 | (0.8) |
Net Income Attributable to Deere & Company | 1,208.3 | 808.5 | 673.2 | 1,007.5 |
Equipment Operations | Financial Services | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | 104.1 | 103.5 | 529.4 | 217.9 |
Equipment Operations | Other | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | 2.7 | 4.6 | 6.8 | 3.7 |
Financial Services | ||||
Net Sales and Revenues | ||||
Finance and interest income | 812.5 | 716.4 | 1,589.4 | 1,403.7 |
Other income | 64.9 | 61 | 127.7 | 119.2 |
Total | 877.4 | 777.4 | 1,717.1 | 1,522.9 |
Costs and Expenses | ||||
Selling, administrative and general expenses | 141.5 | 141.3 | 257.7 | 264.7 |
Interest expense | 231.2 | 169.4 | 425.3 | 318.1 |
Other operating expenses | 324.7 | 307.3 | 635.9 | 612.5 |
Total | 697.4 | 618 | 1,318.9 | 1,195.3 |
Income of Consolidated Group before Income Taxes | 180 | 159.4 | 398.2 | 327.6 |
Provision (credit) for income taxes | 76.3 | 56.1 | (130) | 110.5 |
Income of Consolidated Group | 103.7 | 103.3 | 528.2 | 217.1 |
Equity in Income of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | 0.4 | 0.2 | 1.2 | 0.8 |
Net Income | 104.1 | 103.5 | 529.4 | 217.9 |
Net Income Attributable to Deere & Company | 104.1 | 103.5 | 529.4 | 217.9 |
Financial Services | Financial Services | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates | $ 0.4 | $ 0.2 | $ 1.2 | $ 0.8 |
SUPPLEMENTAL CONSOLIDATING DA84
SUPPLEMENTAL CONSOLIDATING DATA - Condensed Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 29, 2018 | Oct. 29, 2017 | Apr. 30, 2017 | Oct. 30, 2016 |
ASSETS | ||||
Cash and cash equivalents | $ 4,201.4 | $ 9,334.9 | $ 4,525.8 | $ 4,335.8 |
Marketable securities | 479.3 | 451.6 | 546.3 | |
Receivables from unconsolidated subsidiaries and affiliates | 34.3 | 35.9 | 34.9 | |
Trade accounts and notes receivable - net | 6,511.1 | 3,924.9 | 4,482.3 | |
Financing receivables - net | 24,275.5 | 25,104.1 | 23,301.1 | |
Financing receivables securitized - net | 4,436.3 | 4,158.8 | 4,281.8 | |
Other receivables | 1,398.2 | 1,200 | 931.3 | |
Equipment on operating leases - net | 6,723.1 | 6,593.7 | 5,923.9 | |
Inventories | 6,888.9 | 3,904.1 | 4,114.8 | |
Property and equipment - net | 5,742.9 | 5,067.7 | 4,959.9 | |
Investments in unconsolidated subsidiaries and affiliates | 202.1 | 182.5 | 215.7 | |
Goodwill | 3,188.7 | 1,033.3 | 806.2 | 816 |
Other intangible assets - net | 1,692.2 | 218 | 90.8 | |
Retirement benefits | 617.9 | 538.2 | 176.2 | |
Deferred income taxes | 1,718.5 | 2,415 | 3,041.9 | |
Other assets | 1,762.6 | 1,623.6 | 1,535.9 | |
Total Assets | 69,873 | 65,786.3 | 58,968.8 | |
LIABILITIES | ||||
Short-term borrowings | 10,894.6 | 10,035.3 | 7,963.6 | |
Short-term securitization borrowings | 4,401.1 | 4,118.7 | 4,224.6 | |
Payables to unconsolidated subsidiaries and affiliates | 145.7 | 121.9 | 101.6 | |
Accounts payable and accrued expenses | 9,789.6 | 8,417 | 7,215.9 | |
Deferred income taxes | 562.7 | 209.7 | 169 | |
Long-term borrowings | 26,278.6 | 25,891.3 | 23,253.1 | |
Retirement benefits and other liabilities | 7,366.1 | 7,417.9 | 8,333.2 | |
Total liabilities | 59,438.4 | 56,211.8 | 51,261 | |
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interest | 14.6 | 14 | 14 | |
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204) | $ 4,423.4 | 4,280.5 | 4,165.4 | |
Common stock, par value (in dollars per share) | $ 1 | |||
Common stock, issued shares | 536,431,204 | |||
Common stock in treasury | $ (15,425.9) | (15,460.8) | (15,521) | |
Retained earnings | 25,586 | 25,301.3 | 24,535.8 | |
Accumulated other comprehensive income (loss) | (4,173.2) | (4,563.7) | (5,495.5) | |
Total Deere & Company stockholders' equity | 10,410.3 | 9,557.3 | 7,684.7 | |
Noncontrolling interests | 9.7 | 3.2 | 9.1 | |
Total stockholders' equity | 10,420 | 9,560.5 | 7,693.8 | 6,530.8 |
Total Liabilities and Stockholders' Equity | 69,873 | 65,786.3 | 58,968.8 | |
Equipment Operations | ||||
ASSETS | ||||
Cash and cash equivalents | 2,988.9 | 8,168.4 | 3,343.8 | 3,140.5 |
Marketable securities | 16.9 | 20.2 | 118.1 | |
Receivables from unconsolidated subsidiaries and affiliates | 1,668 | 1,032.1 | 3,453 | |
Trade accounts and notes receivable - net | 1,515.9 | 876.3 | 742.9 | |
Financing receivables - net | 75.7 | |||
Financing receivables securitized - net | 113.1 | |||
Other receivables | 1,273.3 | 1,045.6 | 801.6 | |
Inventories | 6,888.9 | 3,904.1 | 4,114.8 | |
Property and equipment - net | 5,696 | 5,017.3 | 4,909.7 | |
Investments in unconsolidated subsidiaries and affiliates | 4,915.9 | 4,812.3 | 4,612.2 | |
Goodwill | 3,188.7 | 1,033.3 | 806.2 | |
Other intangible assets - net | 1,692.2 | 218 | 90.8 | |
Retirement benefits | 617.9 | 538.1 | 176.2 | |
Deferred income taxes | 2,065.5 | 3,098.8 | 3,651.1 | |
Other assets | 1,186.3 | 973.9 | 901.1 | |
Total Assets | 33,903.2 | 30,738.4 | 27,721.5 | |
LIABILITIES | ||||
Short-term borrowings | 659.1 | 375.5 | 276.6 | |
Short-term securitization borrowings | 113.2 | |||
Payables to unconsolidated subsidiaries and affiliates | 145.7 | 121.9 | 101.6 | |
Accounts payable and accrued expenses | 9,265.7 | 7,718.1 | 6,765 | |
Deferred income taxes | 462.9 | 115.6 | 89.7 | |
Long-term borrowings | 5,536.5 | 5,490.9 | 4,520.4 | |
Retirement benefits and other liabilities | 7,285.5 | 7,341.9 | 8,260.4 | |
Total liabilities | 23,468.6 | 21,163.9 | 20,013.7 | |
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interest | 14.6 | 14 | 14 | |
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204) | $ 4,423.4 | $ 4,280.5 | $ 4,165.4 | |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | |
Common stock, issued shares | 536,431,204 | |||
Common stock in treasury | $ (15,425.9) | $ (15,460.8) | $ (15,521) | |
Retained earnings | 25,586 | 25,301.3 | 24,535.8 | |
Accumulated other comprehensive income (loss) | (4,173.2) | (4,563.7) | (5,495.5) | |
Total Deere & Company stockholders' equity | 10,410.3 | 9,557.3 | 7,684.7 | |
Noncontrolling interests | 9.7 | 3.2 | 9.1 | |
Total stockholders' equity | 10,420 | 9,560.5 | 7,693.8 | |
Total Liabilities and Stockholders' Equity | 33,903.2 | 30,738.4 | 27,721.5 | |
Financial Services | ||||
ASSETS | ||||
Cash and cash equivalents | 1,212.5 | 1,166.5 | 1,182 | $ 1,195.3 |
Marketable securities | 462.4 | 431.4 | 428.2 | |
Trade accounts and notes receivable - net | 6,436 | 4,134.1 | 4,867.3 | |
Financing receivables - net | 24,199.8 | 25,104.1 | 23,301.1 | |
Financing receivables securitized - net | 4,323.2 | 4,158.8 | 4,281.8 | |
Other receivables | 190.1 | 195.5 | 136 | |
Equipment on operating leases - net | 6,723.1 | 6,593.7 | 5,923.9 | |
Property and equipment - net | 46.9 | 50.4 | 50.2 | |
Investments in unconsolidated subsidiaries and affiliates | 15.3 | 13.8 | 12.5 | |
Retirement benefits | 15 | 16.9 | 18.9 | |
Deferred income taxes | 76.4 | 79.8 | 76.3 | |
Other assets | 577.3 | 651.4 | 636.8 | |
Total Assets | 44,278 | 42,596.4 | 40,915 | |
LIABILITIES | ||||
Short-term borrowings | 10,235.5 | 9,659.8 | 7,687 | |
Short-term securitization borrowings | 4,287.9 | 4,118.7 | 4,224.6 | |
Payables to unconsolidated subsidiaries and affiliates | 1,633.7 | 996.2 | 3,418.1 | |
Accounts payable and accrued expenses | 2,030.8 | 1,827.1 | 1,587.1 | |
Deferred income taxes | 523.2 | 857.7 | 764.8 | |
Long-term borrowings | 20,742.1 | 20,400.4 | 18,732.7 | |
Retirement benefits and other liabilities | 95.6 | 92.9 | 91.7 | |
Total liabilities | 39,548.8 | 37,952.8 | 36,506 | |
Commitments and contingencies (Note 14) | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204) | $ 2,099.1 | $ 2,099.1 | $ 2,079.1 | |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | |
Common stock, issued shares | 536,431,204 | |||
Retained earnings | $ 2,872.4 | $ 2,782 | $ 2,608.1 | |
Accumulated other comprehensive income (loss) | (242.3) | (237.5) | (278.2) | |
Total Deere & Company stockholders' equity | 4,729.2 | 4,643.6 | 4,409 | |
Total stockholders' equity | 4,729.2 | 4,643.6 | 4,409 | |
Total Liabilities and Stockholders' Equity | $ 44,278 | $ 42,596.4 | $ 40,915 |
SUPPLEMENTAL CONSOLIDATING DA85
SUPPLEMENTAL CONSOLIDATING DATA - Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 29, 2018 | Apr. 30, 2017 | Apr. 29, 2018 | Apr. 30, 2017 | |
Cash Flows from Operating Activities | ||||
Net income | $ 1,209.7 | $ 808.3 | $ 674.9 | $ 1,006.7 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
Provision (credit) for credit losses | 26.8 | 32.6 | ||
Provision for depreciation and amortization | 950.8 | 843.1 | ||
Gain on sale of affiliates and investments | (13.2) | (281.4) | ||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (4.5) | (3.1) | ||
Provision (credit) for deferred income taxes | 604.3 | (100.4) | ||
Changes in assets and liabilities: | ||||
Trade receivables | (2,094.1) | (989.5) | ||
Inventories | (1,796.8) | (1,090.4) | ||
Accounts payable and accrued expenses | 306.9 | 103.6 | ||
Accrued income taxes payable/receivable | 153 | 195.1 | ||
Retirement benefits | 67.6 | 115.6 | ||
Other | (137.2) | (27.9) | ||
Net cash provided by (used for) operating activities | (1,221.7) | (163.7) | ||
Cash Flows from Investing Activities | ||||
Proceeds from maturities and sales of marketable securities | 23.8 | 41.3 | ||
Proceeds from sales of equipment on operating leases | 748.6 | 786.4 | ||
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 55 | |||
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 113.9 | |||
Acquisitions of businesses, net of cash acquired | (5,171.1) | |||
Purchases of marketable securities | (62.8) | (43.7) | ||
Purchases of property and equipment | (352.2) | (253) | ||
Cost of equipment on operating leases acquired | (926.5) | (925.1) | ||
Other | (67.5) | (18.7) | ||
Net cash provided by (used for) investing activities | (5,153) | 300.5 | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | 199.1 | 183.1 | ||
Proceeds from long-term borrowings | 4,077.7 | 2,661.6 | ||
Payments of long-term borrowings | (2,888.7) | (2,742.2) | ||
Proceeds from issuance of common stock | 198.6 | 383.6 | ||
Repurchases of common stock | (60.6) | (6.2) | ||
Dividends paid | (386.9) | (379.5) | ||
Other | (43.9) | (39.7) | ||
Net cash provided by (used for) financing activities | 1,095.3 | 60.7 | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 145.9 | (7.5) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | (5,133.5) | 190 | ||
Cash and Cash Equivalents at Beginning of Period | 9,334.9 | 4,335.8 | ||
Cash and Cash Equivalents at End of Period | 4,201.4 | 4,525.8 | 4,201.4 | 4,525.8 |
Equipment Operations | ||||
Cash Flows from Operating Activities | ||||
Net income | 1,209.7 | 808.3 | 674.9 | 1,006.7 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
Provision (credit) for credit losses | 9.2 | (0.2) | ||
Provision for depreciation and amortization | 483.8 | 427 | ||
Gain on sale of affiliates and investments | (13.2) | (281.4) | ||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (93.8) | 59.8 | ||
Provision (credit) for deferred income taxes | 934.5 | (118.8) | ||
Changes in assets and liabilities: | ||||
Trade receivables | (188.5) | (87.7) | ||
Inventories | (1,439.5) | (771.8) | ||
Accounts payable and accrued expenses | 578 | 200 | ||
Accrued income taxes payable/receivable | 147.4 | 191.5 | ||
Retirement benefits | 62.7 | 111 | ||
Other | (106.1) | (49.2) | ||
Net cash provided by (used for) operating activities | 1,049.4 | 686.9 | ||
Cash Flows from Investing Activities | ||||
Proceeds from maturities and sales of marketable securities | 3.6 | 7.9 | ||
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 55 | |||
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold | 113.9 | |||
Acquisitions of businesses, net of cash acquired | (5,171.1) | |||
Purchases of property and equipment | (351.6) | (252.2) | ||
Other | 44.2 | (18.1) | ||
Net cash provided by (used for) investing activities | (5,419.9) | (148.5) | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | (67.1) | (7.4) | ||
Change in intercompany receivables/payables | (641.6) | (287.5) | ||
Proceeds from long-term borrowings | 107.1 | 19.1 | ||
Payments of long-term borrowings | (85.3) | (24.7) | ||
Proceeds from issuance of common stock | 198.6 | 383.6 | ||
Repurchases of common stock | (60.6) | (6.2) | ||
Dividends paid | (386.9) | (379.5) | ||
Other | (25.5) | (25.8) | ||
Net cash provided by (used for) financing activities | (961.3) | (328.4) | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 152.3 | (6.7) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | (5,179.5) | 203.3 | ||
Cash and Cash Equivalents at Beginning of Period | 8,168.4 | 3,140.5 | ||
Cash and Cash Equivalents at End of Period | 2,988.9 | 3,343.8 | 2,988.9 | 3,343.8 |
Financial Services | ||||
Cash Flows from Operating Activities | ||||
Net income | 104.1 | 103.5 | 529.4 | 217.9 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
Provision (credit) for credit losses | 17.6 | 32.8 | ||
Provision for depreciation and amortization | 529.3 | 476.9 | ||
Undistributed earnings of unconsolidated subsidiaries and affiliates | (1) | (0.6) | ||
Provision (credit) for deferred income taxes | (330.2) | 18.4 | ||
Changes in assets and liabilities: | ||||
Accounts payable and accrued expenses | 84.2 | 18 | ||
Accrued income taxes payable/receivable | 5.6 | 3.6 | ||
Retirement benefits | 4.9 | 4.6 | ||
Other | 72 | 104.8 | ||
Net cash provided by (used for) operating activities | 911.8 | 876.4 | ||
Cash Flows from Investing Activities | ||||
Collections of receivables (excluding trade and wholesale) | 9,486.7 | 8,833.8 | ||
Proceeds from maturities and sales of marketable securities | 20.2 | 33.4 | ||
Proceeds from sales of equipment on operating leases | 748.6 | 786.4 | ||
Cost of receivables acquired (excluding trade and wholesale) | (8,918.8) | (8,238) | ||
Purchases of marketable securities | (62.8) | (43.7) | ||
Purchases of property and equipment | (0.6) | (0.8) | ||
Cost of equipment on operating leases acquired | (1,409.3) | (1,355.6) | ||
Decrease (increase) in trade and wholesale receivables | (2,293.8) | (1,012.7) | ||
Other | (47) | (0.6) | ||
Net cash provided by (used for) investing activities | (2,476.8) | (997.8) | ||
Cash Flows from Financing Activities | ||||
Increase (decrease) in total short-term borrowings | 266.2 | 190.5 | ||
Change in intercompany receivables/payables | 641.6 | 287.5 | ||
Proceeds from long-term borrowings | 3,970.6 | 2,642.5 | ||
Payments of long-term borrowings | (2,803.4) | (2,717.5) | ||
Dividends paid | (439.1) | (280.2) | ||
Other | (18.5) | (13.9) | ||
Net cash provided by (used for) financing activities | 1,617.4 | 108.9 | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (6.4) | (0.8) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | 46 | (13.3) | ||
Cash and Cash Equivalents at Beginning of Period | 1,166.5 | 1,195.3 | ||
Cash and Cash Equivalents at End of Period | $ 1,212.5 | $ 1,182 | $ 1,212.5 | $ 1,182 |