Document and Entity Information
Document and Entity Information | 9 Months Ended |
Aug. 01, 2021shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Aug. 1, 2021 |
Entity File Number | 1-4121 |
Entity Registrant Name | DEERE & CO |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 36-2382580 |
Entity Address, Address Line One | One John Deere Place |
Entity Address, City or Town | Moline |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 61265 |
City Area Code | 309 |
Local Phone Number | 765-8000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 310,061,478 |
Current Fiscal Year End Date | --10-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q3 |
Entity Central Index Key | 0000315189 |
Amendment Flag | false |
Common Stock | |
Document Information [Line Items] | |
Title of 12(b) Security | Common stock, $1 par value |
Trading Symbol | DE |
Security Exchange Name | NYSE |
8-1/2% Debentures Due 2022 | |
Document Information [Line Items] | |
Title of 12(b) Security | 8½% Debentures Due 2022 |
Trading Symbol | DE22 |
Security Exchange Name | NYSE |
6.55% Debentures Due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.55% Debentures Due 2028 |
Trading Symbol | DE28 |
Security Exchange Name | NYSE |
STATEMENT OF CONSOLIDATED INCOM
STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Net Sales and Revenues | ||||
Net sales and revenues | $ 11,527 | $ 8,925 | $ 32,697 | $ 25,809 |
Costs and Expenses | ||||
Research and development expenses | 394 | 370 | 1,137 | 1,201 |
Selling, administrative and general expenses | 841 | 752 | 2,448 | 2,467 |
Interest expense | 244 | 290 | 783 | 969 |
Total | 9,377 | 7,655 | 26,708 | 23,042 |
Income of Consolidated Group before Income Taxes | 2,150 | 1,270 | 5,989 | 2,767 |
Provision for income taxes | 491 | 457 | 1,328 | 752 |
Income of Consolidated Group | 1,659 | 813 | 4,661 | 2,015 |
Equity in income (loss) of unconsolidated affiliates | 8 | (2) | 21 | (20) |
Net Income | 1,667 | 811 | 4,682 | 1,995 |
Less: Net income attributable to noncontrolling interests | 2 | 2 | ||
Net Income Attributable to Deere & Company | $ 1,667 | $ 811 | $ 4,680 | $ 1,993 |
Per Share Data | ||||
Basic (in dollars per share) | $ 5.36 | $ 2.59 | $ 14.98 | $ 6.36 |
Diluted (in dollars per share) | $ 5.32 | $ 2.57 | $ 14.86 | $ 6.30 |
Average Shares Outstanding | ||||
Basic (in shares) | 311 | 313 | 312.4 | 313.3 |
Diluted (in shares) | 313.4 | 315.8 | 314.9 | 316.4 |
Net Sales | ||||
Net Sales and Revenues | ||||
Net sales and revenues | $ 10,413 | $ 7,859 | $ 29,461 | $ 22,612 |
Costs and Expenses | ||||
Costs and expenses | 7,574 | 5,835 | 21,307 | 17,206 |
Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 825 | 838 | 2,468 | 2,584 |
Other | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 289 | 228 | 768 | 613 |
Costs and Expenses | ||||
Costs and expenses | $ 324 | $ 408 | $ 1,033 | $ 1,199 |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | ||||
Net Income | $ 1,667 | $ 811 | $ 4,682 | $ 1,995 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||||
Retirement benefits adjustment | 54 | 51 | 208 | 338 |
Cumulative translation adjustment | (114) | 331 | 319 | (67) |
Unrealized gain (loss) on derivatives | 1 | 4 | 8 | (4) |
Unrealized gain (loss) on debt securities | 8 | 10 | (7) | 21 |
Other Comprehensive Income (Loss), Net of Income Taxes | (51) | 396 | 528 | 288 |
Comprehensive Income of Consolidated Group | 1,616 | 1,207 | 5,210 | 2,283 |
Less: Comprehensive income attributable to noncontrolling interests | 2 | 2 | ||
Comprehensive Income Attributable to Deere & Company | $ 1,616 | $ 1,207 | $ 5,208 | $ 2,281 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Assets | |||
Cash and cash equivalents | $ 7,519 | $ 7,066 | $ 8,190 |
Marketable securities | 688 | 641 | 640 |
Receivables from unconsolidated affiliates | 29 | 31 | 26 |
Trade accounts and notes receivable - net | 5,268 | 4,171 | 5,473 |
Financing receivables - net | 31,449 | 29,750 | 27,814 |
Financing receivables securitized - net | 5,401 | 4,703 | 5,469 |
Other receivables | 1,673 | 1,220 | 1,217 |
Equipment on operating leases - net | 6,982 | 7,298 | 7,158 |
Inventories | 6,410 | 4,999 | 5,650 |
Property and equipment - net | 5,649 | 5,817 | 5,754 |
Investments in unconsolidated affiliates | 188 | 193 | 199 |
Goodwill | 3,148 | 3,081 | 2,984 |
Other intangible assets - net | 1,267 | 1,327 | 1,301 |
Retirement benefits | 990 | 863 | 1,031 |
Deferred income taxes | 1,767 | 1,499 | 1,534 |
Other assets | 2,260 | 2,432 | 2,824 |
Total Assets | 80,688 | 75,091 | 77,264 |
Liabilities | |||
Short-term borrowings | 10,404 | 8,582 | 9,075 |
Short-term securitization borrowings | 5,277 | 4,682 | 5,361 |
Payables to unconsolidated affiliates | 116 | 105 | 80 |
Accounts payable and accrued expenses | 11,091 | 10,112 | 9,565 |
Deferred income taxes | 515 | 519 | 479 |
Long-term borrowings | 32,280 | 32,734 | 34,037 |
Retirement benefits and other liabilities | 5,272 | 5,413 | 5,776 |
Total liabilities | 64,955 | 62,147 | 64,373 |
Commitments and contingencies (Note 18) | |||
Stockholders' Equity | |||
Common stock, $1 par value (issued shares at August 1, 2021 - 536,431,204) | 5,031 | 4,895 | 4,750 |
Common stock in treasury | (19,780) | (18,065) | (17,671) |
Retained earnings | 35,491 | 31,646 | 31,128 |
Accumulated other comprehensive income (loss) | (5,011) | (5,539) | (5,319) |
Total Deere & Company stockholders' equity | 15,731 | 12,937 | 12,888 |
Noncontrolling interests | 2 | 7 | 3 |
Total stockholders' equity | 15,733 | 12,944 | 12,891 |
Total Liabilities and Stockholders' Equity | $ 80,688 | $ 75,091 | $ 77,264 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) | Aug. 01, 2021$ / sharesshares |
CONDENSED CONSOLIDATED BALANCE SHEET | |
Common stock, par value (in dollars per share) | $ / shares | $ 1 |
Common stock, issued shares | shares | 536,431,204 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Aug. 01, 2021 | Aug. 02, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 4,682 | $ 1,995 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (credit) for credit losses | (17) | 123 |
Provision for depreciation and amortization | 1,569 | 1,614 |
Impairment charges | 50 | |
Impairment charges | 147 | |
Share-based compensation expense | 64 | 63 |
Undistributed earnings of unconsolidated affiliates | 4 | (5) |
Credit for deferred income taxes | (271) | (160) |
Changes in assets and liabilities: | ||
Trade, notes, and financing receivables related to sales | (444) | 626 |
Inventories | (1,817) | (1) |
Accounts payable and accrued expenses | 742 | (572) |
Accrued income taxes payable/receivable | 34 | 4 |
Retirement benefits | 13 | 88 |
Other | (295) | 135 |
Net cash provided by operating activities | 4,314 | 4,057 |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 14,480 | 13,237 |
Proceeds from maturities and sales of marketable securities | 82 | 70 |
Proceeds from sales of equipment on operating leases | 1,510 | 1,310 |
Cost of receivables acquired (excluding receivables related to sales) | (17,161) | (14,449) |
Acquisitions of businesses, net of cash acquired | (19) | |
Purchases of marketable securities | (115) | (91) |
Purchases of property and equipment | (492) | (594) |
Cost of equipment on operating leases acquired | (1,210) | (1,312) |
Collateral on derivatives - net | (189) | 324 |
Other | 12 | (12) |
Net cash used for investing activities | (3,102) | (1,517) |
Cash Flows from Financing Activities | ||
Increase in total short-term borrowings | 929 | 170 |
Proceeds from long-term borrowings | 5,877 | 8,331 |
Payments of long-term borrowings | (5,172) | (5,797) |
Proceeds from issuance of common stock | 136 | 111 |
Repurchases of common stock | (1,780) | (263) |
Dividends paid | (761) | (718) |
Other | (80) | (110) |
Net cash provided by (used for) financing activities | (851) | 1,724 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | 106 | 80 |
Net Increase in Cash, Cash Equivalents, and Restricted Cash | 467 | 4,344 |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 7,172 | 3,956 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ 7,639 | $ 8,300 |
STATEMENT OF CHANGES IN CONSOLI
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained EarningsCumulative Effect from Adoption | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Cumulative Effect from Adoption | Total |
Balance at Nov. 03, 2019 | $ 4,642 | $ (17,474) | $ 29,852 | $ (5,607) | $ 4 | $ 11,417 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,993 | 1 | 1,994 | |||||
Other comprehensive income (loss) | 288 | 288 | ||||||
Repurchases of common stock | (263) | (263) | ||||||
Treasury shares reissued | 66 | 66 | ||||||
Dividends declared | (716) | (3) | (719) | |||||
Stock options and other | 108 | (1) | 1 | 108 | ||||
Balance at Aug. 02, 2020 | 4,750 | (17,671) | 31,128 | (5,319) | 3 | 12,891 | ||
Redeemable Noncontrolling Interest - Balance at Nov. 03, 2019 | 14 | |||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Net income | 1 | |||||||
Dividends declared | (1) | |||||||
Noncontrolling interest redemption (Note 22) | (14) | |||||||
Balance at May. 03, 2020 | 4,713 | (17,690) | 30,556 | (5,715) | 1 | 11,865 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 811 | 811 | ||||||
Other comprehensive income (loss) | 396 | 396 | ||||||
Treasury shares reissued | 19 | 19 | ||||||
Dividends declared | (239) | (239) | ||||||
Stock options and other | 37 | 2 | 39 | |||||
Balance at Aug. 02, 2020 | 4,750 | (17,671) | 31,128 | (5,319) | 3 | 12,891 | ||
Balance (ASU 2016-13) at Nov. 01, 2020 | $ (35) | $ (35) | ||||||
Balance at Nov. 01, 2020 | 4,895 | (18,065) | 31,646 | (5,539) | 7 | 12,944 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 4,680 | 2 | 4,682 | |||||
Other comprehensive income (loss) | 528 | 528 | ||||||
Repurchases of common stock | (1,780) | (1,780) | ||||||
Treasury shares reissued | 65 | 65 | ||||||
Dividends declared | (800) | (2) | (802) | |||||
Stock options and other | 136 | (5) | 131 | |||||
Balance at Aug. 01, 2021 | 5,031 | (19,780) | 35,491 | (5,011) | 2 | 15,733 | ||
Balance at May. 02, 2021 | 4,999 | (19,052) | 34,105 | (4,960) | 4 | 15,096 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,667 | 1,667 | ||||||
Other comprehensive income (loss) | (51) | (51) | ||||||
Repurchases of common stock | (736) | (736) | ||||||
Treasury shares reissued | 8 | 8 | ||||||
Dividends declared | (280) | (2) | (282) | |||||
Stock options and other | 32 | (1) | 31 | |||||
Balance at Aug. 01, 2021 | $ 5,031 | $ (19,780) | $ 35,491 | $ (5,011) | $ 2 | $ 15,733 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 9 Months Ended |
Aug. 01, 2021 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | (1) Organization and Consolidation The information in the notes and related commentary are presented in a format which includes data grouped as follows: Consolidated Equipment Operations Financial Services – Beginning in fiscal year 2021, the Company implemented a new operating model and reporting structure. With this change, the Company’s agriculture and turf operations were divided into two new segments: production and precision agriculture and small agriculture and turf. There were no changes to the construction and forestry and financial services segments. In addition, at the beginning of fiscal year 2021 the Company also reclassified goodwill from identifiable operating assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Additional information on the new segments and the segment financial results are presented in Note 10. Prior period segment information was recast for a consistent presentation. References to agriculture and turf include both production and precision agriculture and small agriculture and turf. The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2021 and 2020 were August 1, 2021 and August 2, 2020, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to the Company’s fiscal years generally ending in October and the associated periods in those fiscal years. Prior to November 2, 2020, the operating results of the Wirtgen Group (Wirtgen) were incorporated into the Company’s consolidated financial statements using a one-month lag period. In the first quarter of 2021, the reporting lag was eliminated resulting in one additional month of Wirtgen activity in the first quarter and the year-to-date period. The effect was an increase to “Net sales” of $270 million, which the Company considers immaterial to construction and forestry’s annual net sales. Prior period results were not restated. Variable Interest Entities The Company consolidates certain variable interest entities (VIEs) related to retail note securitizations (see Note 12). The Company also has an interest in a joint venture that manufactures construction equipment in Indaiatuba, Brazil for local and overseas markets. The joint venture is a VIE; however, the Company is not the primary beneficiary. Therefore, the entity’s financial results are not fully consolidated in the Company’s consolidated financial statements, but are included on the equity basis. The maximum exposure to loss was $9 million, $5 million, and $13 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. On August 19, 2021, the Company announced the dissolution of the joint venture with Hitachi Construction Machinery Co., Ltd. and the purchase of the shares in the relevant joint venture manufacturing entities including the above referenced factory in Indaiatuba, Brazil. Refer to the Subsequent Events section of the MD&A for more details. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | 9 Months Ended |
Aug. 01, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) Summary of Significant Accounting Policies and Cash Flow Information T The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the Company’s business, which may result in actual results differing from those estimates. |
CASH FLOW INFORMATION | Cash Flow Information All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the Company’s customers. Cash flows from financing receivables that are related to sales to the Company’s customers are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities. The Company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The Company transferred inventory to equipment on operating leases of approximately $450 million and $388 million in the first nine months of 2021 and 2020, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $51 million at both August 1, 2021 and August 2, 2020. The Company’s restricted cash held at August 1, 2021, November 1, 2020, August 2, 2020, and November 3, 2019 was as follows in millions of dollars: August 1 November 1 August 2 November 3 2021 2020 2020 2019 Equipment operations $ 13 $ 11 $ 11 $ 21 Financial services 107 95 99 78 Total $ 120 $ 106 $ 110 $ 99 The equipment operations’ restricted cash relates to miscellaneous operational activities. The financial services restricted cash primarily relates to securitization of financing receivables (see Note 12). The restricted cash is recorded in “Other assets” in the consolidated balance sheet. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 9 Months Ended |
Aug. 01, 2021 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | (3) New Accounting Standards New Accounting Standards Adopted In the first quarter of 2021, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13 , Measurement of Credit Losses on Financial Instruments, which establishes Accounting Standards Codification (ASC) 326, Financial Instruments - Credit Losses. This ASU was adopted using a modified-retrospective approach. The ASU, along with related amendments, revised the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. The Company holds deposits from dealers (dealer deposits), which are recorded in “Accounts payable and accrued expenses” to absorb certain credit losses. Prior to adopting this ASU, the allowance for credit losses was estimated on probable credit losses incurred after consideration of recoveries from dealer deposits. The ASU considers dealer deposits and certain credit insurance contracts as freestanding credit enhancements. As a result, after adoption, credit losses recovered from dealer deposits and certain credit insurance contracts are presented in “Other income” and no longer as part of the allowance for credit losses or the provision for credit losses. The ASU also modified the treatment of the estimated write-off of delinquent receivables by no longer including the estimated benefit of charges to the dealer deposits in the write-off amount. This change increases the estimated write-offs on delinquent financing receivables with the benefit of credit losses recovered from dealer deposits presented in “Other income.” This benefit, in both situations, is recorded when the dealer deposits are charged and no longer based on estimated recoveries. The effects of adopting the ASU on the consolidated balance sheet were as follows in millions of dollars: November 1 Cumulative Effect November 2 2020 from Adoption 2020 Assets Trade accounts and note receivable - net $ 4,171 $ 2 $ 4,173 Financing receivables - net 29,750 (27) 29,723 Financing receivables securitized - net 4,703 (4) 4,699 Deferred income taxes 1,499 1 1,500 Liabilities Accounts payable and accrued expenses $ 10,112 $ 14 $ 10,126 Deferred income taxes 519 (7) 512 Stockholders’ equity Retained earnings $ 31,646 $ (35) $ 31,611 Note 11 contains additional disclosures as well as the Company’s updated allowance for credit losses accounting policy. The Company also adopted the following standards in 2021, none of which had a material effect on the Company’s consolidated financial statements: No. 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software No. 2019-04 Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments No. 2021-01 Reference Rate Reform (Topic 848): Scope New Accounting Standards to be Adopted The Company will adopt the following standards in future periods, none of which are expected to have a material effect on the Company’s consolidated financial statements: No. 2019-12 Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes No. 2020-08 Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Aug. 01, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | (4) Revenue Recognition The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition was as follows in millions of dollars: Three Months Ended August 1, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 1,995 $ 1,753 $ 1,559 $ 605 $ 5,912 Canada 253 153 285 162 853 Western Europe 566 679 455 27 1,727 Central Europe and CIS 398 117 241 10 766 Latin America 758 125 227 60 1,170 Asia, Africa, Australia, New Zealand, and Middle East 368 385 308 38 1,099 Total $ 4,338 $ 3,212 $ 3,075 $ 902 $ 11,527 Major product lines: Production agriculture $ 4,179 $ 4,179 Small agriculture $ 2,355 2,355 Turf 719 719 Construction $ 1,283 1,283 Compact construction 398 398 Roadbuilding 948 948 Forestry 342 342 Financial products 13 12 5 $ 902 932 Other 146 126 99 371 Total $ 4,338 $ 3,212 $ 3,075 $ 902 $ 11,527 Timing of revenue recognition: Revenue recognized at a point in time $ 4,293 $ 3,191 $ 3,052 $ 27 $ 10,563 Revenue recognized over time 45 21 23 875 964 Total $ 4,338 $ 3,212 $ 3,075 $ 902 $ 11,527 Nine Months Ended August 1, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 5,814 $ 5,014 $ 4,242 $ 1,812 $ 16,882 Canada 617 376 793 469 2,255 Western Europe 1,604 1,903 1,408 77 4,992 Central Europe and CIS 1,090 361 628 28 2,107 Latin America 1,971 305 617 179 3,072 Asia, Africa, Australia, New Zealand, and Middle East 991 1,230 1,054 114 3,389 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 Major product lines: Production agriculture $ 11,656 $ 11,656 Small agriculture $ 6,583 6,583 Turf 2,268 2,268 Construction $ 3,402 3,402 Compact construction 1,140 1,140 Roadbuilding 2,924 2,924 Forestry 975 975 Financial products 41 32 17 $ 2,679 2,769 Other 390 306 284 980 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 Timing of revenue recognition: Revenue recognized at a point in time $ 11,960 $ 9,137 $ 8,666 $ 77 $ 29,840 Revenue recognized over time 127 52 76 2,602 2,857 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 Three Months Ended August 2, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 1,617 $ 1,228 $ 1,048 $ 632 $ 4,525 Canada 199 96 194 146 635 Western Europe 517 586 376 22 1,501 Central Europe and CIS 219 100 178 9 506 Latin America 512 90 124 51 777 Asia, Africa, Australia, New Zealand, and Middle East 312 319 318 32 981 Total $ 3,376 $ 2,419 $ 2,238 $ 892 $ 8,925 Major product lines: Production agriculture $ 3,210 $ 3,210 Small agriculture $ 1,704 1,704 Turf 651 651 Construction $ 817 817 Compact construction 303 303 Roadbuilding 818 818 Forestry 241 241 Financial products 14 10 5 $ 892 921 Other 152 54 54 260 Total $ 3,376 $ 2,419 $ 2,238 $ 892 $ 8,925 Timing of revenue recognition: Revenue recognized at a point in time $ 3,337 $ 2,402 $ 2,210 $ 28 $ 7,977 Revenue recognized over time 39 17 28 864 948 Total $ 3,376 $ 2,419 $ 2,238 $ 892 $ 8,925 Nine Months Ended August 2, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 4,892 $ 3,833 $ 3,331 $ 1,880 $ 13,936 Canada 460 239 532 453 1,684 Western Europe 1,422 1,570 1,073 66 4,131 Central Europe and CIS 608 269 477 27 1,381 Latin America 1,290 225 418 177 2,110 Asia, Africa, Australia, New Zealand, and Middle East 722 924 825 96 2,567 Total $ 9,394 $ 7,060 $ 6,656 $ 2,699 $ 25,809 Major product lines: Production agriculture $ 8,915 $ 8,915 Small agriculture $ 4,953 4,953 Turf 1,925 1,925 Construction $ 2,535 2,535 Compact construction 930 930 Roadbuilding 2,146 2,146 Forestry 769 769 Financial products 48 24 18 $ 2,699 2,789 Other 431 158 258 847 Total $ 9,394 $ 7,060 $ 6,656 $ 2,699 $ 25,809 Timing of revenue recognition: Revenue recognized at a point in time $ 9,277 $ 7,017 $ 6,576 $ 80 $ 22,950 Revenue recognized over time 117 43 80 2,619 2,859 Total $ 9,394 $ 7,060 $ 6,656 $ 2,699 $ 25,809 Following is a description of the Company’s major product lines: Production agriculture Small agriculture Turf Construction Compact construction Roadbuilding Forestry Financial products Other The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheet. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 18, was $1,259 million, $1,090 million, and $1,115 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended August 1, 2021 and August 2, 2020, $108 million and $97 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the nine months ended August 1, 2021 and August 2, 2020, $442 million and $375 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. The Company entered into contracts with customers to deliver equipment and services that have not been recognized at August 1, 2021 because the equipment or services have not been provided. These contracts primarily relate to extended warranty and certain precision guidance and telematic services. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $957 million at August 1, 2021. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2021 - $113, 2022 - $312, 2023 - $242, 2024 - $152, 2025 - $73, 2026 - $44 and later years - $21. The Company discloses unsatisfied performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and end customers for equipment, service parts, repair services, and certain telematics services. During 2020, and to a much lesser extent in 2021, the Company provided short-term payment relief on trade accounts and notes receivables to independent dealers and certain other customers that were negatively affected by the economic effects of COVID. The relief was provided both in regional programs and case-by-case situations with creditworthy customers. This relief generally included payment deferrals not exceeding three months, extending interest-free periods for up to an additional three months with the total interest-free period not to exceed one year, or reducing interest rates for a maximum of three months. The trade receivable balance granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 was not material. |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 9 Months Ended |
Aug. 01, 2021 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | (5) Other Comprehensive Income Items The after-tax changes in accumulated other comprehensive income (loss) was as follows in millions of dollars: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Debt Securities Income (Loss) Balance November 3, 2019 $ (3,915) $ (1,651) $ (60) $ 19 $ (5,607) Other comprehensive income (loss) items before reclassification 179 (75) (14) 22 112 Amounts reclassified from accumulated other comprehensive income 159 8 10 (1) 176 Net current period other comprehensive income (loss) 338 (67) (4) 21 288 Balance August 2, 2020 $ (3,577) $ (1,718) $ (64) $ 40 $ (5,319) Balance November 1, 2020 $ (3,918) $ (1,596) $ (58) $ 33 $ (5,539) Other comprehensive income (loss) items before reclassification 27 319 (1) (7) 338 Amounts reclassified from accumulated other comprehensive income 181 9 190 Net current period other comprehensive income (loss) 208 319 8 (7) 528 Balance August 1, 2021 $ (3,710) $ (1,277) $ (50) $ 26 $ (5,011) Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars. Retirement benefits adjustment reclassifications for actuarial gain (loss), prior service (credit) cost, and settlements are included in net periodic pension and other postretirement benefit costs (see Note 8). Before Tax After Tax (Expense) Tax Three Months Ended August 1, 2021 Amount Credit Amount Cumulative translation adjustment $ (112) $ (2) $ (114) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 3 (1) 2 Net unrealized gain (loss) on derivatives 2 (1) 1 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 11 (3) 8 Net unrealized gain (loss) on debt securities 11 (3) 8 Retirement benefits adjustment: Net actuarial gain (loss) (5) 1 (4) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 71 (17) 54 Prior service (credit) cost 1 1 Settlements 4 (1) 3 Net unrealized gain (loss) on retirement benefits adjustment 71 (17) 54 Total other comprehensive income (loss) $ (28) $ (23) $ (51) Before Tax After Tax (Expense) Tax Nine Months Ended August 1, 2021 Amount Credit Amount Cumulative translation adjustment $ 319 $ 319 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 11 $ (2) 9 Net unrealized gain (loss) on derivatives 10 (2) 8 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (6) (1) (7) Net unrealized gain (loss) on debt securities (6) (1) (7) Retirement benefits adjustment: Net actuarial gain (loss) 35 (8) 27 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 213 (53) 160 Prior service (credit) cost 5 (1) 4 Settlements 22 (5) 17 Net unrealized gain (loss) on retirement benefits adjustment 275 (67) 208 Total other comprehensive income (loss) $ 598 $ (70) $ 528 Before Tax After Tax (Expense) Tax Three Months Ended August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ 321 $ 2 $ 323 Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment 329 2 331 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 7 (2) 5 Net unrealized gain (loss) on derivatives 6 (2) 4 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 13 (2) 11 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 12 (2) 10 Retirement benefits adjustment: Net actuarial gain (loss) (9) 2 (7) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 69 (17) 52 Prior service (credit) cost 2 2 Settlements 6 (2) 4 Net unrealized gain (loss) on retirement benefits adjustment 68 (17) 51 Total other comprehensive income (loss) $ 415 $ (19) $ 396 Before Tax After Tax (Expense) Tax Nine Months Ended August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ (77) $ 2 $ (75) Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment (69) 2 (67) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (18) 4 (14) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 13 (3) 10 Net unrealized gain (loss) on derivatives (5) 1 (4) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 27 (5) 22 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 26 (5) 21 Retirement benefits adjustment: Net actuarial gain (loss) 238 (59) 179 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 207 (62) 145 Prior service (credit) cost 6 (1) 5 Settlements 12 (3) 9 Net unrealized gain (loss) on retirement benefits adjustment 463 (125) 338 Total other comprehensive income (loss) $ 415 $ (127) $ 288 |
DIVIDENDS DECLARED AND PAID
DIVIDENDS DECLARED AND PAID | 9 Months Ended |
Aug. 01, 2021 | |
DIVIDENDS DECLARED AND PAID | |
DIVIDENDS DECLARED AND PAID | (6) Dividends Declared and Paid Dividends declared and paid on a per share basis were as follows: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Dividends declared $ .90 $ .76 $ 2.56 $ 2.28 Dividends paid $ .90 $ .76 $ 2.42 $ 2.28 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Aug. 01, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | (7) Earnings Per Share A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Net income attributable to Deere & Company $ 1,667 $ 811 $ 4,680 $ 1,993 Average shares outstanding 311.0 313.0 312.4 313.3 Basic per share $ 5.36 $ 2.59 $ 14.98 $ 6.36 Average shares outstanding 311.0 313.0 312.4 313.3 Effect of dilutive share-based compensation 2.4 2.8 2.5 3.1 Total potential shares outstanding 313.4 315.8 314.9 316.4 Diluted per share $ 5.32 $ 2.57 $ 14.86 $ 6.30 During the third quarter and first nine months of 2021, no shares were antidilutive. During the third quarter and first nine months of 2020, 1.2 million shares and .8 million shares, respectively, were excluded from the above per share computation because the incremental shares would have been antidilutive. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 9 Months Ended |
Aug. 01, 2021 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | (8) Pension and Other Postretirement Benefits The Company has several defined benefit pension plans and postretirement benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries. The worldwide components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Service cost $ 83 $ 80 $ 251 $ 241 Interest cost 69 86 207 260 Expected return on plan assets (199) (204) (599) (613) Amortization of actuarial loss 64 62 192 186 Amortization of prior service cost 2 3 8 9 Settlements 4 6 22 12 Net cost $ 23 $ 33 $ 81 $ 95 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Service cost $ 12 $ 12 $ 36 $ 36 Interest cost 25 34 76 106 Expected return on plan assets (19) (12) (58) (36) Amortization of actuarial loss 7 7 21 21 Amortization of prior service credit (1) (1) (3) (3) Curtailments 21 Net cost $ 24 $ 40 $ 72 $ 145 The components of net periodic pension and OPEB costs excluding the service cost component are included in the line item “Other operating expenses” in the statement of consolidated income. In the first quarter of 2020, the Company remeasured the U.S. salary OPEB health care plans due to the U.S. voluntary employee-separation program (see Note 22), which resulted in a $21 million curtailment loss. During the first nine months of 2021, the Company contributed approximately $88 million to its pension plans and $113 million to its OPEB plans. The Company presently anticipates contributing an additional $11 million to its pension plans and $29 million to its OPEB plans during the remainder of fiscal year 2021. The pension and OPEB contributions are primarily direct benefit payments from Company funds. The Company previously planned to make a voluntary contribution to its U.S. OPEB plan for $700 million in the fourth quarter of 2021. This voluntary contribution will be delayed into fiscal year 2022. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Aug. 01, 2021 | |
INCOME TAXES | |
INCOME TAXES | (9) Income Taxes The Company’s unrecognized tax benefits at August 1, 2021, November 1, 2020, and August 2, 2020 were $772 million, $668 million, and $657 million, respectively. The liability at August 1, 2021, November 1, 2020, and August 2, 2020 consisted of approximately $213 million, $134 million, and $141 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be significant. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Aug. 01, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | (10) Segment Reporting Beginning in fiscal year 2021, the Company implemented a new operating model and reporting structure. With this change, the Company’s agriculture and turf operations were divided into two new segments, which are described as follows: The production and precision agriculture The small agriculture and turf There were no reporting changes for the construction and forestry and financial services segments. As a result, the Company has four reportable segments. Worldwide net sales and revenues, operating profit, and identifiable assets by segment were as follows in millions of dollars. Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and OPEB benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. Three Months Ended Nine Months Ended August 1 August 2 % August 1 August 2 % 2021 2020 Change 2021 2020 Change Net sales and revenues: Production & precision ag net sales $ 4,250 $ 3,289 +29 $ 11,848 $ 9,161 +29 Small ag & turf net sales 3,147 2,383 +32 9,051 6,966 +30 Construction & forestry net sales 3,016 2,187 +38 8,562 6,485 +32 Financial services revenues 902 892 +1 2,679 2,699 -1 Other revenues 212 174 +22 557 498 +12 Total net sales and revenues $ 11,527 $ 8,925 +29 $ 32,697 $ 25,809 +27 Operating profit: Production & precision ag $ 906 $ 605 +50 $ 2,557 $ 1,391 +84 Small ag & turf 583 337 +73 1,699 718 +137 Construction & forestry 463 205 +126 1,220 394 +210 Financial services 291 243 +20 844 498 +69 Total operating profit 2,243 1,390 +61 6,320 3,001 +111 Reconciling items (85) (122) -30 (312) (256) +22 Income taxes (491) (457) +7 (1,328) (752) +77 Net income attributable to Deere & Company $ 1,667 $ 811 +106 $ 4,680 $ 1,993 +135 Intersegment sales and revenues: Production & precision ag net sales $ 8 $ 5 +60 $ 21 $ 18 +17 Small ag & turf net sales 2 9 2 +350 Construction & forestry net sales Financial services revenues 61 59 +3 172 218 -21 Outside the U.S. and Canada: Net sales and revenues $ 4,762 $ 3,765 +26 $ 13,560 $ 10,189 +33 Operating profit 931 577 +61 2,565 1,109 +131 At the beginning of fiscal year 2021, the Company reclassified goodwill from identifiable operating segment assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Prior period amounts have been restated for a consistent presentation. August 1 November 1 August 2 2021 2020 2020 Identifiable assets: Production & precision ag $ 6,910 $ 5,708 $ 6,172 Small ag & turf 3,643 3,266 3,376 Construction & forestry 6,378 6,322 6,697 Financial services 51,647 48,719 48,869 Corporate 12,110 11,076 12,150 Total assets $ 80,688 $ 75,091 $ 77,264 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 9 Months Ended |
Aug. 01, 2021 | |
FINANCING RECEIVABLES | |
FINANCING RECEIVABLES | (11) Financing Receivables The Company monitors the credit quality of financing receivables based on delinquency status. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. The Company ceases accruing finance income, and accrued finance income previously recognized is reversed when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. Due to the economic effects of COVID, the Company provided short-term payment relief to dealers and retail customers during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. Financing receivables granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 3 percent of the financing receivables balance. The majority of financing receivables granted short-term relief are beyond the deferral period and have either resumed making payments or are reported as delinquent based on the modified payment schedule. While the Company implemented a new operating model in fiscal year 2021 resulting in new operating segments, assets managed by financial services, including most financing receivables and equipment on operating leases, continue to be evaluated by market (agriculture and turf or construction and forestry). The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, customer receivables) was as follows in millions of dollars at August 1, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 9,159 $ 7,516 $ 3,938 $ 2,053 $ 910 $ 317 $ 3,658 $ 27,551 30-59 days past due 38 54 35 19 7 3 13 169 60-89 days past due 14 28 15 6 3 1 4 71 90+ days past due 1 1 Non-performing 12 58 63 42 22 30 6 233 Construction and forestry Current 2,327 1,845 938 357 84 13 86 5,650 30-59 days past due 35 44 26 9 4 1 3 122 60-89 days past due 13 19 10 5 1 1 1 50 90+ days past due 4 2 9 5 6 2 28 Non-performing 12 47 41 19 8 4 1 132 Total customer receivables $ 11,614 $ 9,614 $ 5,075 $ 2,515 $ 1,045 $ 372 $ 3,772 $ 34,007 The credit quality analysis of customer receivables was as follows in millions of dollars at November 1, 2020 and August 2, 2020: November 1, 2020 August 2, 2020 Retail Notes & Financing Leases Revolving Charge Accounts Total Retail Notes & Financing Leases Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 $ 20,261 $ 3,876 $ 24,137 30-59 days past due 135 13 148 148 20 168 60-89 days past due 64 4 68 77 3 80 90+ days past due 2 2 4 4 Non-performing 263 6 269 329 8 337 Construction and forestry Current 4,859 88 4,947 4,582 85 4,667 30-59 days past due 111 2 113 90 3 93 60-89 days past due 55 1 56 40 1 41 90+ days past due 14 14 12 12 Non-performing 106 1 107 139 1 140 Total customer receivables $ 27,206 $ 3,902 $ 31,108 $ 25,682 $ 3,997 $ 29,679 The credit quality analysis of wholesale receivables was as follows in millions of dollars at August 1, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 263 $ 110 $ 38 $ 13 $ 3 $ 1 $ 2,256 $ 2,684 30-59 days past due 60-89 days past due 90+ days past due Non-performing 18 18 Construction and forestry Current 8 8 8 1 1 1 287 314 30-59 days past due 1 1 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 271 $ 118 $ 64 $ 14 $ 4 $ 3 $ 2,543 $ 3,017 The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020 and August 2, 2020: November 1 August 2 2020 2020 Wholesale receivables: Agriculture and turf Current $ 3,010 $ 3,279 30-59 days past due 60-89 days past due 90+ days past due Non-performing 47 50 Construction and forestry Current 472 473 30-59 days past due 60-89 days past due 90+ days past due Non-performing 2 Total wholesale receivables $ 3,529 $ 3,804 The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing financing receivables are included in the estimate of expected credit losses. The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars during the periods: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended August 1, 2021 Allowance: Beginning of period balance $ 152 $ 19 $ 7 $ 178 Provision 3 3 Write-offs (14) (9) (23) Recoveries 8 8 16 End of period balance $ 149 $ 18 $ 7 $ 174 Nine Months Ended August 1, 2021 Allowance: Beginning of period balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 adoption 44 (13) 31 Provision (credit) (9) (16) (1) (26) Write-offs (38) (23) (61) Recoveries 17 27 44 Translation adjustments 2 2 End of period balance $ 149 $ 18 $ 7 $ 174 Financing receivables: End of period balance $ 30,235 $ 3,772 $ 3,017 $ 37,024 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended August 2, 2020 Allowance: Beginning of period balance $ 141 $ 43 $ 11 $ 195 Provision (credit) 6 14 (2) 18 Write-offs (9) (22) (31) Recoveries 7 8 15 Translation adjustments 3 3 End of period balance $ 148 $ 43 $ 9 $ 200 Nine Months Ended August 2, 2020 Allowance: Beginning of period balance $ 107 $ 40 $ 3 $ 150 Provision 88 32 4 124 Write-offs (53) (51) (104) Recoveries 12 22 34 Translation adjustments (6) 2 (4) End of period balance $ 148 $ 43 $ 9 $ 200 Financing receivables: End of period balance $ 25,682 $ 3,997 $ 3,804 $ 33,483 The allowance for credit losses on retail notes and financing lease receivables increased in the first nine months of 2021 due to the impact of adopting ASU No. 2016-13. This was partially offset by lower expected losses on retail notes and financing leases in the construction and forestry market and better than expected performance of accounts granted payment relief due to the economic effects of COVID. The allowance for credit losses on revolving charge accounts decreased in the first nine months of 2021, reflecting strong payment performance due to continued improvement in the agricultural market. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first nine months of 2021, the Company identified 304 receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $12 million pre-modification and $10 million post-modification. During the first nine months of 2020, there were 413 receivable contracts, primarily wholesale receivables in Argentina, identified as troubled debt restructurings with aggregate balances of $99 million pre-modification and $88 million post-modification. The short-term payment relief related to COVID, mentioned earlier, did not meet the definition of a troubled debt restructuring. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At August 1, 2021, the Company had no commitments to lend to borrowers whose accounts were modified in troubled debt restructurings. |
SECURITIZATION OF FINANCING REC
SECURITIZATION OF FINANCING RECEIVABLES | 9 Months Ended |
Aug. 01, 2021 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | (12) Securitization of Financing Receivables The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into VIEs that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized – net” on the balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the financing receivables securitized or a fixed percentage of the outstanding balance of the securitized financing receivables. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $3,605 million, $2,898 million, and $3,342 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $3,487 million, $2,856 million, and $3,259 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit. In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $568 million, $576 million, and $680 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $533 million, $554 million, and $643 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,341 million, $1,327 million, and $1,551 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,259 million, $1,275 million, and $1,463 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars: August 1 2021 Carrying value of liabilities $ 1,259 Maximum exposure to loss 1,341 The total assets of unconsolidated VIEs related to securitizations were approximately $37 billion at August 1, 2021. The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Financing receivables securitized (retail notes) $ 5,421 $ 4,716 $ 5,484 Allowance for credit losses (20) (13) (15) Other assets 113 98 104 Total restricted securitized assets $ 5,514 $ 4,801 $ 5,573 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Short-term securitization borrowings $ 5,277 $ 4,682 $ 5,361 Accrued interest on borrowings 2 3 4 Total liabilities related to restricted securitized assets $ 5,279 $ 4,685 $ 5,365 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 August 1, 2021, the maximum remaining term of all securitized retail notes was approximately seven years. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Aug. 01, 2021 | |
INVENTORIES | |
INVENTORIES | (13) Inventories Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows: August 1 November 1 August 2 2021 2020 2020 Raw materials and supplies $ 2,895 $ 1,995 $ 2,101 Work-in-process 1,124 648 696 Finished goods and parts 4,176 4,006 4,427 Total FIFO value 8,195 6,649 7,224 Less adjustment to LIFO value 1,785 1,650 1,574 Inventories $ 6,410 $ 4,999 $ 5,650 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 9 Months Ended |
Aug. 01, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | (14) Goodwill and Other Intangible Assets – Net The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Production & Small Ag Construction Precision Ag & Turf & Forestry Total Goodwill at November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Translation adjustments and other 1 1 65 67 Goodwill at August 2, 2020 $ 311 $ 265 $ 2,408 $ 2,984 Goodwill at November 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments and other 13 (3) 45 55 Goodwill at August 1, 2021 $ 358 $ 265 $ 2,525 $ 3,148 There were no accumulated goodwill impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Amortized intangible assets: Customer lists and relationships $ 545 $ 535 $ 515 Technology, patents, trademarks, and other 1,080 1,056 1,021 Total at cost 1,625 1,591 1,536 Less accumulated amortization: Customer lists and relationships 144 113 103 Technology, patents, trademarks, and other 337 274 255 Total accumulated amortization 481 387 358 Amortized intangible assets, net 1,144 1,204 1,178 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,267 $ 1,327 $ 1,301 The amortization of other intangible assets in the third quarter and the first nine months of 2021 was $27 million and $89 million, and for 2020 was $26 million and $76 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2021 – $26, 2022 – $107, 2023 – $106, 2024 – $102, 2025 – $99, and 2026 –$97. |
TOTAL SHORT-TERM BORROWINGS
TOTAL SHORT-TERM BORROWINGS | 9 Months Ended |
Aug. 01, 2021 | |
TOTAL SHORT-TERM BORROWINGS | |
TOTAL SHORT-TERM BORROWINGS | (15) Total Short-Term Borrowings Total short-term borrowings were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Equipment Operations Commercial paper $ 60 Notes payable to banks $ 114 $ 192 268 Finance lease obligations due within one year 23 21 18 Long-term borrowings due within one year 1,239 79 507 Total 1,376 292 853 Financial Services Commercial paper 1,882 1,238 1,927 Notes payable to banks 19 182 181 Long-term borrowings due within one year 7,127 6,870 6,114 Total 9,028 8,290 8,222 Short-term borrowings 10,404 8,582 9,075 Short-term securitization borrowings Equipment Operations 12 26 37 Financial Services 5,265 4,656 5,324 Total 5,277 4,682 5,361 Total short-term borrowings $ 15,681 $ 13,264 $ 14,436 |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 9 Months Ended |
Aug. 01, 2021 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | (16) Long-Term Borrowings Long-term borrowings were as follows in millions of dollars. The financial services medium-term notes include fair value adjustments related to interest rate swaps. August 1 November 1 August 2 2021 2020 2020 Equipment Operations U.S. dollar notes and debentures: 8½% debentures due 2022 $ 105 $ 105 2.60% notes due 2022 1,000 1,000 2.75% notes due 2025 $ 700 700 700 6.55% debentures due 2028 200 200 200 5.375% notes due 2029 500 500 500 3.10% notes due 2030 700 700 700 8.10% debentures due 2030 250 250 250 7.125% notes due 2031 300 300 300 3.90% notes due 2042 1,250 1,250 1,250 2.875% notes due 2049 500 500 500 3.75% notes due 2050 850 850 850 Euro notes: .5% notes due 2023 (€500 principal) 594 584 592 1.375% notes due 2024 (€800 principal) 951 934 948 1.85% notes due 2028 (€600 principal) 713 700 711 2.20% notes due 2032 (€600 principal) 713 700 711 1.65% notes due 2039 (€650 principal) 773 759 770 Finance lease obligations and other notes 44 153 193 Less debt issuance costs and debt discounts 56 61 63 Total 8,982 10,124 10,217 Financial Services Notes and debentures: Medium-term notes: (principal as of: August 1, 2021 - $21,892, November 1, 2020 - $20,996, August 2, 2020 - $22,032) 22,346 21,661 22,826 Other notes 1,015 1,003 1,051 Less debt issuance costs and debt discounts 63 54 57 Total 23,298 22,610 23,820 Long-term borrowings $ 32,280 $ 32,734 $ 34,037 |
LEASES
LEASES | 9 Months Ended |
Aug. 01, 2021 | |
LEASES | |
LEASES | (17) Leases Lessee Operating and finance lease right of use assets and liabilities were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Operating leases: Other assets $ 310 $ 324 $ 341 Accounts payable and accrued expenses 304 305 318 Finance leases: Property and equipment - net $ 68 $ 63 $ 56 Short-term borrowings $ 23 $ 21 $ 18 Long-term borrowings 42 39 33 Total finance lease liabilities $ 65 $ 60 $ 51 Right of use assets obtained in exchange for lease liabilities were as follows in millions of dollars: Nine Months Ended August 1, 2021 August 2, 2020 Operating leases $ 80 $ 27 Finance leases 25 37 Lessor The Company leases equipment manufactured or sold by the Company and a limited amount of non-Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in “Financing receivables - net” on the consolidated balance sheet. Operating leases are reported in “Equipment on operating leases - net” on the consolidated balance sheet. Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Nine Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Sales-type and direct financing lease revenues $ 37 $ 33 $ 107 $ 101 Operating lease revenues 359 361 1,079 1,104 Variable lease revenues 6 6 18 17 Total lease revenues $ 402 $ 400 $ 1,204 $ 1,222 The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. In the second quarter of 2020, the Company recorded impairment losses on operating leases of $22 million due to higher expected equipment return rates and lower estimated values of used construction equipment. Operating lease impairments were recorded in “Other operating expenses.” The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. In the second quarter of 2020, the Company recorded impairment losses on matured operating lease inventory of $10 million due to lower estimated values of used construction equipment. These impairment losses were included in “Other operating expenses.” Due to the significant, negative effects of COVID, the Company provided short-term payment relief to lessees during 2020, and to a much lesser extent in 2021. The relief, which included payment deferrals of three months or less, was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 3 percent of the Company’s operating lease portfolio. The majority of operating leases granted short-term relief are beyond the deferral period and have resumed making payments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Aug. 01, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (18) Commitments and Contingencies The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments. The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $709 million and $621 million at August 1, 2021 and August 2, 2020, respectively. A reconciliation of the changes in the warranty liability and unearned premiums was as follows in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Beginning of period balance $ 1,876 $ 1,767 $ 1,743 $ 1,800 Payments (209) (250) (626) (703) Amortization of premiums received (66) (58) (193) (168) Accruals for warranties 299 177 794 609 Premiums received 96 68 258 202 Foreign exchange (2) 27 18 (9) End of period balance $ 1,994 $ 1,731 $ 1,994 $ 1,731 At August 1, 2021, the Company had approximately $419 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At August 1, 2021, the Company had accrued losses of approximately $7 million under these agreements. The maximum remaining term of the receivables guaranteed at August 1, 2021 was approximately seven years. At August 1, 2021, the Company had commitments of approximately $312 million for the construction and acquisition of property and equipment. Also, at August 1, 2021, the Company had restricted assets of $72 million, primarily as collateral for borrowings and restricted other assets. See Note 12 for additional restricted assets associated with borrowings related to securitizations. The Company also had other miscellaneous contingent liabilities totaling approximately $65 million at August 1, 2021. The accrued liability for these contingencies was not material at August 1, 2021. The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Aug. 01, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | (19) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities (see Note 17). August 1, 2021 November 1, 2020 August 2, 2020 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 89 $ 85 $ 105 $ 103 $ 111 $ 102 Financial services 31,360 31,430 29,645 29,838 27,703 27,929 Total $ 31,449 $ 31,515 $ 29,750 $ 29,941 $ 27,814 $ 28,031 Financing receivables securitized – net: Equipment operations $ 13 $ 13 $ 26 $ 26 $ 37 $ 34 Financial services 5,388 5,454 4,677 4,773 5,432 5,544 Total $ 5,401 $ 5,467 $ 4,703 $ 4,799 $ 5,469 $ 5,578 Short-term Equipment operations $ 12 $ 13 $ 26 $ 26 $ 37 $ 37 Financial services 5,265 5,289 4,656 4,698 5,324 5,381 Total $ 5,277 $ 5,302 $ 4,682 $ 4,724 $ 5,361 $ 5,418 Long-term borrowings due within one year: Equipment operations $ 1,239 $ 1,257 $ 79 $ 78 $ 507 $ 504 Financial services 7,127 7,183 6,870 6,936 6,114 6,168 Total $ 8,366 $ 8,440 $ 6,949 $ 7,014 $ 6,621 $ 6,672 Long-term borrowings: Equipment operations $ 8,940 $ 10,586 $ 10,085 $ 11,837 $ 10,184 $ 12,163 Financial services 23,298 23,759 22,610 23,170 23,820 24,464 Total $ 32,238 $ 34,345 $ 32,695 $ 35,007 $ 34,004 $ 36,627 Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings. Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021. August 1 November 1 August 2 2021 2020 2020 Level 1: Marketable securities International equity securities $ 3 $ 2 $ 2 U.S. equity fund 74 62 68 U.S. government debt securities 60 55 50 Total Level 1 marketable securities 137 119 120 Level 2: Marketable securities U.S. government debt securities 124 113 105 Municipal debt securities 71 68 64 Corporate debt securities 217 188 185 International debt securities 3 2 2 Mortgage-backed securities 136 147 159 Total Level 2 marketable securities 551 518 515 Other assets Derivatives: Interest rate contracts 389 669 895 Foreign exchange contracts 41 48 57 Cross-currency interest rate contracts 2 8 9 Total Level 2 other assets 432 725 961 Accounts payable and accrued expenses Derivatives: Interest rate contracts 83 88 115 Foreign exchange contracts 67 26 55 Cross-currency interest rate contracts 2 1 Total Level 2 accounts payable and accrued expenses 152 115 170 Level 3: Marketable securities International debt securities 4 5 The contractual maturities of debt securities at August 1, 2021 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Mortgage-backed securities were primarily issued by U.S. government sponsored enterprises. Amortized Fair Cost Value Due in one year or less $ 21 $ 21 Due after one through five years 82 86 Due after five through 10 years 136 142 Due after 10 years 213 226 Mortgage-backed securities 132 136 Debt securities $ 584 $ 611 Fair value, nonrecurring measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. The fair value measurement losses for the investment in unconsolidated affiliates during the nine months ended August 2, 2020 were Level 1. The other fair value measurements were Level 3. Equipment on operating leases – net and Other assets fair values for November 1, 2020 represents the fair value assessment at May 3, 2020. Fair Value Losses Three Months Ended Nine Months Ended August 1 November 1 August 2 August 1 August 2 August 1 August 2 2021 2020 2020 2021 2020 2021 2020 Other receivables $ 1 $ 1 $ 2 $ 2 Equipment on operating leases – net $ 371 $ 22 Property and equipment – net $ 135 $ 8 $ 5 $ 44 $ 67 Investments in unconsolidated affiliates $ 19 $ 20 Other intangible assets – net $ 2 $ 2 Other assets $ 59 $ 19 $ 24 $ 6 $ 34 The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable securities – Derivatives – Financing receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. Other receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation (see Note 22). Equipment on operating leases – net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus estimates of return rates and equipment sale price at lease maturity. Inputs include historical return rates and realized sales values (see Note 22). Property and equipment – net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence, or quoted prices when available (see Note 22). Investment in unconsolidated affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value or the estimated realization amount, and the carrying value of the investment. The fair value for publicly traded entities is the share price multiplied by the shares owned, or estimated realization amount (see Note 22). Other intangible assets – net – The impairment was measured at the remaining net book value of customer relationships related to a closed factory operation (see Note 22). Other assets – The impairments of matured operating lease inventory are measured at the fair value of that inventory. The valuations were based on a market approach. The inputs include sales of comparable assets. The impairment of the German lawn mower business was measured at the estimated realizable value. Fair value was based on estimates of the final sale price (see Note 22). |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Aug. 01, 2021 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | (20) Derivative Instruments It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the Company has interest rate exposure at certain equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Cash Flow Hedges Certain interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at August 1, 2021, November 1, 2020, and August 2, 2020 were $1,750 million, $1,550 million, and $1,900 million, respectively. Fair value gains or losses on cash flow hedges were recorded in OCI and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate changes on the related borrowings. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of loss recorded in OCI at August 1, 2021 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $4 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at August 1, 2021, November 1, 2020, and August 2, 2020 were $8,658 million, $7,239 million, and $8,850 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense. The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows in millions of dollars: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued Hedged Item Relationships Relationships Total August 1, 2021 Long-term borrowings due within one year $ 188 $ 4 $ (1) $ 3 Long-term borrowings 8,888 263 190 453 November 1, 2020 Long-term borrowings due within one year $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 August 2, 2020 Long-term borrowings due within one year $ 480 $ 6 $ 2 $ 8 Long-term borrowings 9,140 754 40 794 Long-term borrowings due within one year are presented in short-term borrowings. Derivatives Not Designated as Hedging Instruments The Company has certain interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings, purchases or sales of inventory, and below market retail financing programs. The total notional amounts of these interest rate swaps at August 1, 2021, November 1, 2020, and August 2, 2020 were $9,195 million, $8,514 million, and $7,522 million, the foreign exchange contracts were $6,328 million, $4,903 million, and $4,790 million, and the cross-currency interest rate contracts were $197 million, $113 million, and $125 million, respectively. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense or net sales and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows. Fair values of derivative instruments in the condensed consolidated balance sheet were as follows in millions of dollars: August 1 November 1 August 2 Other Assets 2021 2020 2020 Designated as hedging instruments: Interest rate contracts $ 332 $ 586 $ 806 Not designated as hedging instruments: Interest rate contracts 57 83 89 Foreign exchange contracts 41 48 57 Cross-currency interest rate contracts 2 8 9 Total not designated 100 139 155 Total derivative assets $ 432 $ 725 $ 961 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 40 $ 14 $ 24 Not designated as hedging instruments: Interest rate contracts 43 74 91 Foreign exchange contracts 67 26 55 Cross-currency interest rate contracts 2 1 Total not designated 112 101 146 Total derivative liabilities $ 152 $ 115 $ 170 The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Fair Value Hedges: Interest rate contracts - Interest expense $ 146 $ 78 $ (79) $ 589 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (1) (1) (1) (18) Reclassified from OCI Interest rate contracts - Interest expense (3) (7) (11) (13) Not Designated as Hedges: Interest rate contracts - Net sales $ (2) $ (2) $ 3 $ (26) Interest rate contracts - Interest expense * (2) (1) (6) 2 Foreign exchange contracts - Cost of sales (7) (28) (107) 64 Foreign exchange contracts - Other operating expenses * (5) (49) (209) 125 Total not designated $ (16) $ (80) $ (319) $ 165 * 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 August 1, 2021, November 1, 2020, and August 2, 2020, was $87 million, $89 million, and $115 million, respectively. In accordance with the limits established in these agreements, the Company posted no cash collateral at August 1, 2021, November 1, 2020, or August 2, 2020. In addition, the Company paid $8 million of cash collateral that was outstanding at August 1, 2021 to participate in an international futures market to hedge currency exposure, not included in the table below. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid was as follows in millions of dollars: Gross Amounts Netting August 1, 2021 Recognized Arrangements Collateral Net Amount Assets $ 432 $ (94) $ (88) $ 250 Liabilities 152 (94) (2) 56 Gross Amounts Netting November 1, 2020 Recognized Arrangements Collateral Net Amount Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 Gross Amounts Netting August 2, 2020 Recognized Arrangements Collateral Net Amount Assets $ 961 $ (120) $ (332) $ 509 Liabilities 170 (120) 50 |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 9 Months Ended |
Aug. 01, 2021 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (21) Stock Option and Restricted Stock Awards In December 2020, the Company granted stock options to employees for the purchase of 269 thousand shares of common stock at an exercise price of $254.83 per share and a binomial lattice model fair value of $62.73 per share at the grant date. At August 1, 2021, options for 2.6 million shares were outstanding with a weighted-average exercise price of $126.13 per share. The Company also granted 212 thousand restricted stock units to employees and non-employee directors in the first nine months of 2021, of which 165 thousand are subject to service based only conditions and 47 thousand are subject to performance/service based conditions. The weighted-average fair value of the service based only units at the grant date was $258.67 per unit based on the market price of a share of underlying common stock. The fair value of the performance/service based units at the grant date was $245.73 per unit based on the market price of a share of underlying common stock excluding dividends. At August 1, 2021, the Company was authorized to grant an additional 17.7 million shares under the equity incentive plans. |
SPECIAL ITEMS
SPECIAL ITEMS | 9 Months Ended |
Aug. 01, 2021 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | (22) S pecial Items 2021 Special Items In the third quarter of 2021, the Company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. During the first quarter of 2021, the fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and after-tax . The Company also continued to assess its manufacturing locations, resulting in additional long-lived asset impairments of $12 million pretax. The impairments were the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. These impairments were offset by a favorable indirect tax ruling in Brazil of $58 million pretax. See Note 19 for fair value measurement information. Nine Months Ended August 1, 2021 Expense (benefit): Production & Precision Ag Small Ag & Turf Construction & Forestry Total Long-lived asset impairments – Cost of sales $ 5 $ 3 $ 42 $ 50 Brazil indirect tax – Cost of sales (53) (5) (58) Gain on sale – Other income (27) (27) Total expense (benefit) $ (48) $ (24) $ 37 $ (35) 2020 Special Items In the second quarter of 2020, the fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax . The impairment is the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The equipment on operating leases and matured operating lease inventory were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows would not cover the carrying amount of the net assets. A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax . The impairment was the result of an other than temporary decline in value. In the third quarter of 2020, the Company closed a factory producing small agricultural equipment in China. In connection with this closure, a non-cash impairment of other receivables, property, and intangible assets of $9 million pretax and after-tax was recorded and $4 million pretax and after-tax for severance payments. See Note 19 for fair value measurement information. Nine Months Ended August 2, 2020 Expense: Small Ag & Turf Construction & Forestry Financial Services Total Factory closure – Cost of sales $ 13 $ 13 Long-lived asset impairments – Cost of sales $ 62 62 Equipment on operating leases & matured operating lease inventory impairments – Other operating expenses $ 32 32 Investments in unconsolidated affiliates impairment – Equity in loss of unconsolidated affiliate 20 20 Total expense $ 13 $ 82 $ 32 $ 127 Dispositions In the third quarter of 2020, the Company reached a definitive agreement to sell its German walk-behind lawn mower business. This transaction closed in the fourth quarter of 2020. A non-cash impairment of $24 million pretax and after-tax was recorded in “Other operating expenses” to write the operations down to realizable value. This activity was included in the Company’s small agriculture and turf segment. Employee-Separation Program During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continued the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The payments for the program were also substantially made in the first quarter of 2020. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “ Other operating expense. ” Nine Months Ended August 2, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Cost of sales $ 21 $ 11 $ 9 $ 41 Research and development expenses 8 7 4 19 Selling, administrative and general expenses 19 19 14 $ 3 55 Total operating profit impact $ 48 $ 37 $ 27 $ 3 115 Other operating expenses 23 Total expense $ 138 Redeemable Noncontrolling Interest In the second quarter of 2020, the minority interest holder in Hagie Manufacturing Company, LLC exercised its right to sell the remaining 20 percent interest to the Company for $14 million. The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statement of consolidated income. This operation is included in the Company’s production and precision agriculture segment. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies) | 9 Months Ended |
Aug. 01, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION | |
Fiscal Period, Policy | The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2021 and 2020 were August 1, 2021 and August 2, 2020, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to the Company’s fiscal years generally ending in October and the associated periods in those fiscal years. |
Use of Estimates in Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the Company’s business, which may result in actual results differing from those estimates. |
Financing Receivables - Non-Performing, Policy | The Company monitors the credit quality of financing receivables based on delinquency status. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. The Company ceases accruing finance income, and accrued finance income previously recognized is reversed when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. |
Allowance for Credit Losses, Policy | The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing financing receivables are included in the estimate of expected credit losses. The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Inventory Valuation, Policy | Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. |
Product Warranties | The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments. |
Extended Product Warranty, Policy | The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. |
Fair Value of Financial Instruments, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. |
Derivative Financial Instruments | It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the Company has interest rate exposure at certain equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
CASH FLOW INFORMATION | |
Restricted Cash Held | The Company’s restricted cash held at August 1, 2021, November 1, 2020, August 2, 2020, and November 3, 2019 was as follows in millions of dollars: August 1 November 1 August 2 November 3 2021 2020 2020 2019 Equipment operations $ 13 $ 11 $ 11 $ 21 Financial services 107 95 99 78 Total $ 120 $ 106 $ 110 $ 99 |
NEW ACCOUNTING STANDARDS (Table
NEW ACCOUNTING STANDARDS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
NEW ACCOUNTING STANDARDS | |
Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Measurement of Credit Losses on Financial Instruments Guidance | The effects of adopting the ASU on the consolidated balance sheet were as follows in millions of dollars: November 1 Cumulative Effect November 2 2020 from Adoption 2020 Assets Trade accounts and note receivable - net $ 4,171 $ 2 $ 4,173 Financing receivables - net 29,750 (27) 29,723 Financing receivables securitized - net 4,703 (4) 4,699 Deferred income taxes 1,499 1 1,500 Liabilities Accounts payable and accrued expenses $ 10,112 $ 14 $ 10,126 Deferred income taxes 519 (7) 512 Stockholders’ equity Retained earnings $ 31,646 $ (35) $ 31,611 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
REVENUE RECOGNITION | |
Schedule of Revenue Recognition | The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition was as follows in millions of dollars: Three Months Ended August 1, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 1,995 $ 1,753 $ 1,559 $ 605 $ 5,912 Canada 253 153 285 162 853 Western Europe 566 679 455 27 1,727 Central Europe and CIS 398 117 241 10 766 Latin America 758 125 227 60 1,170 Asia, Africa, Australia, New Zealand, and Middle East 368 385 308 38 1,099 Total $ 4,338 $ 3,212 $ 3,075 $ 902 $ 11,527 Major product lines: Production agriculture $ 4,179 $ 4,179 Small agriculture $ 2,355 2,355 Turf 719 719 Construction $ 1,283 1,283 Compact construction 398 398 Roadbuilding 948 948 Forestry 342 342 Financial products 13 12 5 $ 902 932 Other 146 126 99 371 Total $ 4,338 $ 3,212 $ 3,075 $ 902 $ 11,527 Timing of revenue recognition: Revenue recognized at a point in time $ 4,293 $ 3,191 $ 3,052 $ 27 $ 10,563 Revenue recognized over time 45 21 23 875 964 Total $ 4,338 $ 3,212 $ 3,075 $ 902 $ 11,527 Nine Months Ended August 1, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 5,814 $ 5,014 $ 4,242 $ 1,812 $ 16,882 Canada 617 376 793 469 2,255 Western Europe 1,604 1,903 1,408 77 4,992 Central Europe and CIS 1,090 361 628 28 2,107 Latin America 1,971 305 617 179 3,072 Asia, Africa, Australia, New Zealand, and Middle East 991 1,230 1,054 114 3,389 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 Major product lines: Production agriculture $ 11,656 $ 11,656 Small agriculture $ 6,583 6,583 Turf 2,268 2,268 Construction $ 3,402 3,402 Compact construction 1,140 1,140 Roadbuilding 2,924 2,924 Forestry 975 975 Financial products 41 32 17 $ 2,679 2,769 Other 390 306 284 980 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 Timing of revenue recognition: Revenue recognized at a point in time $ 11,960 $ 9,137 $ 8,666 $ 77 $ 29,840 Revenue recognized over time 127 52 76 2,602 2,857 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 Three Months Ended August 2, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 1,617 $ 1,228 $ 1,048 $ 632 $ 4,525 Canada 199 96 194 146 635 Western Europe 517 586 376 22 1,501 Central Europe and CIS 219 100 178 9 506 Latin America 512 90 124 51 777 Asia, Africa, Australia, New Zealand, and Middle East 312 319 318 32 981 Total $ 3,376 $ 2,419 $ 2,238 $ 892 $ 8,925 Major product lines: Production agriculture $ 3,210 $ 3,210 Small agriculture $ 1,704 1,704 Turf 651 651 Construction $ 817 817 Compact construction 303 303 Roadbuilding 818 818 Forestry 241 241 Financial products 14 10 5 $ 892 921 Other 152 54 54 260 Total $ 3,376 $ 2,419 $ 2,238 $ 892 $ 8,925 Timing of revenue recognition: Revenue recognized at a point in time $ 3,337 $ 2,402 $ 2,210 $ 28 $ 7,977 Revenue recognized over time 39 17 28 864 948 Total $ 3,376 $ 2,419 $ 2,238 $ 892 $ 8,925 Nine Months Ended August 2, 2020 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographical markets: United States $ 4,892 $ 3,833 $ 3,331 $ 1,880 $ 13,936 Canada 460 239 532 453 1,684 Western Europe 1,422 1,570 1,073 66 4,131 Central Europe and CIS 608 269 477 27 1,381 Latin America 1,290 225 418 177 2,110 Asia, Africa, Australia, New Zealand, and Middle East 722 924 825 96 2,567 Total $ 9,394 $ 7,060 $ 6,656 $ 2,699 $ 25,809 Major product lines: Production agriculture $ 8,915 $ 8,915 Small agriculture $ 4,953 4,953 Turf 1,925 1,925 Construction $ 2,535 2,535 Compact construction 930 930 Roadbuilding 2,146 2,146 Forestry 769 769 Financial products 48 24 18 $ 2,699 2,789 Other 431 158 258 847 Total $ 9,394 $ 7,060 $ 6,656 $ 2,699 $ 25,809 Timing of revenue recognition: Revenue recognized at a point in time $ 9,277 $ 7,017 $ 6,576 $ 80 $ 22,950 Revenue recognized over time 117 43 80 2,619 2,859 Total $ 9,394 $ 7,060 $ 6,656 $ 2,699 $ 25,809 |
OTHER COMPREHENSIVE INCOME IT_2
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income (loss) was as follows in millions of dollars: Total Unrealized Unrealized Accumulated Retirement Cumulative Gain (Loss) Gain (Loss) Other Benefits Translation on on Comprehensive Adjustment Adjustment Derivatives Debt Securities Income (Loss) Balance November 3, 2019 $ (3,915) $ (1,651) $ (60) $ 19 $ (5,607) Other comprehensive income (loss) items before reclassification 179 (75) (14) 22 112 Amounts reclassified from accumulated other comprehensive income 159 8 10 (1) 176 Net current period other comprehensive income (loss) 338 (67) (4) 21 288 Balance August 2, 2020 $ (3,577) $ (1,718) $ (64) $ 40 $ (5,319) Balance November 1, 2020 $ (3,918) $ (1,596) $ (58) $ 33 $ (5,539) Other comprehensive income (loss) items before reclassification 27 319 (1) (7) 338 Amounts reclassified from accumulated other comprehensive income 181 9 190 Net current period other comprehensive income (loss) 208 319 8 (7) 528 Balance August 1, 2021 $ (3,710) $ (1,277) $ (50) $ 26 $ (5,011) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars. Retirement benefits adjustment reclassifications for actuarial gain (loss), prior service (credit) cost, and settlements are included in net periodic pension and other postretirement benefit costs (see Note 8). Before Tax After Tax (Expense) Tax Three Months Ended August 1, 2021 Amount Credit Amount Cumulative translation adjustment $ (112) $ (2) $ (114) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 3 (1) 2 Net unrealized gain (loss) on derivatives 2 (1) 1 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 11 (3) 8 Net unrealized gain (loss) on debt securities 11 (3) 8 Retirement benefits adjustment: Net actuarial gain (loss) (5) 1 (4) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 71 (17) 54 Prior service (credit) cost 1 1 Settlements 4 (1) 3 Net unrealized gain (loss) on retirement benefits adjustment 71 (17) 54 Total other comprehensive income (loss) $ (28) $ (23) $ (51) Before Tax After Tax (Expense) Tax Nine Months Ended August 1, 2021 Amount Credit Amount Cumulative translation adjustment $ 319 $ 319 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 11 $ (2) 9 Net unrealized gain (loss) on derivatives 10 (2) 8 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (6) (1) (7) Net unrealized gain (loss) on debt securities (6) (1) (7) Retirement benefits adjustment: Net actuarial gain (loss) 35 (8) 27 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 213 (53) 160 Prior service (credit) cost 5 (1) 4 Settlements 22 (5) 17 Net unrealized gain (loss) on retirement benefits adjustment 275 (67) 208 Total other comprehensive income (loss) $ 598 $ (70) $ 528 Before Tax After Tax (Expense) Tax Three Months Ended August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ 321 $ 2 $ 323 Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment 329 2 331 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (1) (1) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 7 (2) 5 Net unrealized gain (loss) on derivatives 6 (2) 4 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 13 (2) 11 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 12 (2) 10 Retirement benefits adjustment: Net actuarial gain (loss) (9) 2 (7) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 69 (17) 52 Prior service (credit) cost 2 2 Settlements 6 (2) 4 Net unrealized gain (loss) on retirement benefits adjustment 68 (17) 51 Total other comprehensive income (loss) $ 415 $ (19) $ 396 Before Tax After Tax (Expense) Tax Nine Months Ended August 2, 2020 Amount Credit Amount Cumulative translation adjustment: Unrealized gain (loss) on translation adjustment $ (77) $ 2 $ (75) Reclassification of (gain) loss to Other operating expenses 8 8 Net unrealized gain (loss) on translation adjustment (69) 2 (67) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (18) 4 (14) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 13 (3) 10 Net unrealized gain (loss) on derivatives (5) 1 (4) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 27 (5) 22 Reclassification of realized (gain) loss – Other income (1) (1) Net unrealized gain (loss) on debt securities 26 (5) 21 Retirement benefits adjustment: Net actuarial gain (loss) 238 (59) 179 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 207 (62) 145 Prior service (credit) cost 6 (1) 5 Settlements 12 (3) 9 Net unrealized gain (loss) on retirement benefits adjustment 463 (125) 338 Total other comprehensive income (loss) $ 415 $ (127) $ 288 |
DIVIDENDS DECLARED AND PAID (Ta
DIVIDENDS DECLARED AND PAID (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
DIVIDENDS DECLARED AND PAID | |
Dividends Declared and Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Dividends declared $ .90 $ .76 $ 2.56 $ 2.28 Dividends paid $ .90 $ .76 $ 2.42 $ 2.28 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
EARNINGS PER SHARE | |
Reconciliation of Basic and Diluted Net Income Per Share | A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Net income attributable to Deere & Company $ 1,667 $ 811 $ 4,680 $ 1,993 Average shares outstanding 311.0 313.0 312.4 313.3 Basic per share $ 5.36 $ 2.59 $ 14.98 $ 6.36 Average shares outstanding 311.0 313.0 312.4 313.3 Effect of dilutive share-based compensation 2.4 2.8 2.5 3.1 Total potential shares outstanding 313.4 315.8 314.9 316.4 Diluted per share $ 5.32 $ 2.57 $ 14.86 $ 6.30 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
Schedule of Components of Net Periodic Pension and OPEB Cost | The worldwide components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Service cost $ 83 $ 80 $ 251 $ 241 Interest cost 69 86 207 260 Expected return on plan assets (199) (204) (599) (613) Amortization of actuarial loss 64 62 192 186 Amortization of prior service cost 2 3 8 9 Settlements 4 6 22 12 Net cost $ 23 $ 33 $ 81 $ 95 The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Service cost $ 12 $ 12 $ 36 $ 36 Interest cost 25 34 76 106 Expected return on plan assets (19) (12) (58) (36) Amortization of actuarial loss 7 7 21 21 Amortization of prior service credit (1) (1) (3) (3) Curtailments 21 Net cost $ 24 $ 40 $ 72 $ 145 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
SEGMENT REPORTING | |
Schedule of Segment Reporting Information | Worldwide net sales and revenues, operating profit, and identifiable assets by segment were as follows in millions of dollars. Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and OPEB benefit costs excluding the service cost component, and net income attributable to noncontrolling interests. Three Months Ended Nine Months Ended August 1 August 2 % August 1 August 2 % 2021 2020 Change 2021 2020 Change Net sales and revenues: Production & precision ag net sales $ 4,250 $ 3,289 +29 $ 11,848 $ 9,161 +29 Small ag & turf net sales 3,147 2,383 +32 9,051 6,966 +30 Construction & forestry net sales 3,016 2,187 +38 8,562 6,485 +32 Financial services revenues 902 892 +1 2,679 2,699 -1 Other revenues 212 174 +22 557 498 +12 Total net sales and revenues $ 11,527 $ 8,925 +29 $ 32,697 $ 25,809 +27 Operating profit: Production & precision ag $ 906 $ 605 +50 $ 2,557 $ 1,391 +84 Small ag & turf 583 337 +73 1,699 718 +137 Construction & forestry 463 205 +126 1,220 394 +210 Financial services 291 243 +20 844 498 +69 Total operating profit 2,243 1,390 +61 6,320 3,001 +111 Reconciling items (85) (122) -30 (312) (256) +22 Income taxes (491) (457) +7 (1,328) (752) +77 Net income attributable to Deere & Company $ 1,667 $ 811 +106 $ 4,680 $ 1,993 +135 Intersegment sales and revenues: Production & precision ag net sales $ 8 $ 5 +60 $ 21 $ 18 +17 Small ag & turf net sales 2 9 2 +350 Construction & forestry net sales Financial services revenues 61 59 +3 172 218 -21 Outside the U.S. and Canada: Net sales and revenues $ 4,762 $ 3,765 +26 $ 13,560 $ 10,189 +33 Operating profit 931 577 +61 2,565 1,109 +131 At the beginning of fiscal year 2021, the Company reclassified goodwill from identifiable operating segment assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Prior period amounts have been restated for a consistent presentation. August 1 November 1 August 2 2021 2020 2020 Identifiable assets: Production & precision ag $ 6,910 $ 5,708 $ 6,172 Small ag & turf 3,643 3,266 3,376 Construction & forestry 6,378 6,322 6,697 Financial services 51,647 48,719 48,869 Corporate 12,110 11,076 12,150 Total assets $ 80,688 $ 75,091 $ 77,264 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
Financing Receivables | |
Analysis of the Allowance for Credit Losses and Investment in Financing Receivables | An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars during the periods: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended August 1, 2021 Allowance: Beginning of period balance $ 152 $ 19 $ 7 $ 178 Provision 3 3 Write-offs (14) (9) (23) Recoveries 8 8 16 End of period balance $ 149 $ 18 $ 7 $ 174 Nine Months Ended August 1, 2021 Allowance: Beginning of period balance $ 133 $ 43 $ 8 $ 184 ASU No. 2016-13 adoption 44 (13) 31 Provision (credit) (9) (16) (1) (26) Write-offs (38) (23) (61) Recoveries 17 27 44 Translation adjustments 2 2 End of period balance $ 149 $ 18 $ 7 $ 174 Financing receivables: End of period balance $ 30,235 $ 3,772 $ 3,017 $ 37,024 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended August 2, 2020 Allowance: Beginning of period balance $ 141 $ 43 $ 11 $ 195 Provision (credit) 6 14 (2) 18 Write-offs (9) (22) (31) Recoveries 7 8 15 Translation adjustments 3 3 End of period balance $ 148 $ 43 $ 9 $ 200 Nine Months Ended August 2, 2020 Allowance: Beginning of period balance $ 107 $ 40 $ 3 $ 150 Provision 88 32 4 124 Write-offs (53) (51) (104) Recoveries 12 22 34 Translation adjustments (6) 2 (4) End of period balance $ 148 $ 43 $ 9 $ 200 Financing receivables: End of period balance $ 25,682 $ 3,997 $ 3,804 $ 33,483 |
Customer Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, customer receivables) was as follows in millions of dollars at August 1, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 9,159 $ 7,516 $ 3,938 $ 2,053 $ 910 $ 317 $ 3,658 $ 27,551 30-59 days past due 38 54 35 19 7 3 13 169 60-89 days past due 14 28 15 6 3 1 4 71 90+ days past due 1 1 Non-performing 12 58 63 42 22 30 6 233 Construction and forestry Current 2,327 1,845 938 357 84 13 86 5,650 30-59 days past due 35 44 26 9 4 1 3 122 60-89 days past due 13 19 10 5 1 1 1 50 90+ days past due 4 2 9 5 6 2 28 Non-performing 12 47 41 19 8 4 1 132 Total customer receivables $ 11,614 $ 9,614 $ 5,075 $ 2,515 $ 1,045 $ 372 $ 3,772 $ 34,007 |
Age Credit Quality Analysis | The credit quality analysis of customer receivables was as follows in millions of dollars at November 1, 2020 and August 2, 2020: November 1, 2020 August 2, 2020 Retail Notes & Financing Leases Revolving Charge Accounts Total Retail Notes & Financing Leases Revolving Charge Accounts Total Customer receivables: Agriculture and turf Current $ 21,597 $ 3,787 $ 25,384 $ 20,261 $ 3,876 $ 24,137 30-59 days past due 135 13 148 148 20 168 60-89 days past due 64 4 68 77 3 80 90+ days past due 2 2 4 4 Non-performing 263 6 269 329 8 337 Construction and forestry Current 4,859 88 4,947 4,582 85 4,667 30-59 days past due 111 2 113 90 3 93 60-89 days past due 55 1 56 40 1 41 90+ days past due 14 14 12 12 Non-performing 106 1 107 139 1 140 Total customer receivables $ 27,206 $ 3,902 $ 31,108 $ 25,682 $ 3,997 $ 29,679 |
Wholesale Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at August 1, 2021: Year of Origination 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 263 $ 110 $ 38 $ 13 $ 3 $ 1 $ 2,256 $ 2,684 30-59 days past due 60-89 days past due 90+ days past due Non-performing 18 18 Construction and forestry Current 8 8 8 1 1 1 287 314 30-59 days past due 1 1 60-89 days past due 90+ days past due Non-performing Total wholesale receivables $ 271 $ 118 $ 64 $ 14 $ 4 $ 3 $ 2,543 $ 3,017 |
Age Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020 and August 2, 2020: November 1 August 2 2020 2020 Wholesale receivables: Agriculture and turf Current $ 3,010 $ 3,279 30-59 days past due 60-89 days past due 90+ days past due Non-performing 47 50 Construction and forestry Current 472 473 30-59 days past due 60-89 days past due 90+ days past due Non-performing 2 Total wholesale receivables $ 3,529 $ 3,804 |
SECURITIZATION OF FINANCING R_2
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars: August 1 2021 Carrying value of liabilities $ 1,259 Maximum exposure to loss 1,341 |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Financing receivables securitized (retail notes) $ 5,421 $ 4,716 $ 5,484 Allowance for credit losses (20) (13) (15) Other assets 113 98 104 Total restricted securitized assets $ 5,514 $ 4,801 $ 5,573 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Short-term securitization borrowings $ 5,277 $ 4,682 $ 5,361 Accrued interest on borrowings 2 3 4 Total liabilities related to restricted securitized assets $ 5,279 $ 4,685 $ 5,365 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
INVENTORIES | |
Major Classification of Inventories | If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows: August 1 November 1 August 2 2021 2020 2020 Raw materials and supplies $ 2,895 $ 1,995 $ 2,101 Work-in-process 1,124 648 696 Finished goods and parts 4,176 4,006 4,427 Total FIFO value 8,195 6,649 7,224 Less adjustment to LIFO value 1,785 1,650 1,574 Inventories $ 6,410 $ 4,999 $ 5,650 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars: Production & Small Ag Construction Precision Ag & Turf & Forestry Total Goodwill at November 3, 2019 $ 310 $ 264 $ 2,343 $ 2,917 Translation adjustments and other 1 1 65 67 Goodwill at August 2, 2020 $ 311 $ 265 $ 2,408 $ 2,984 Goodwill at November 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments and other 13 (3) 45 55 Goodwill at August 1, 2021 $ 358 $ 265 $ 2,525 $ 3,148 There were no accumulated goodwill impairment losses in the reported periods. |
Components of Other Intangible Assets | The components of other intangible assets were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Amortized intangible assets: Customer lists and relationships $ 545 $ 535 $ 515 Technology, patents, trademarks, and other 1,080 1,056 1,021 Total at cost 1,625 1,591 1,536 Less accumulated amortization: Customer lists and relationships 144 113 103 Technology, patents, trademarks, and other 337 274 255 Total accumulated amortization 481 387 358 Amortized intangible assets, net 1,144 1,204 1,178 Unamortized intangible assets: In-process research and development 123 123 123 Other intangible assets – net $ 1,267 $ 1,327 $ 1,301 |
TOTAL SHORT-TERM BORROWINGS (Ta
TOTAL SHORT-TERM BORROWINGS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
TOTAL SHORT-TERM BORROWINGS | |
Short-Term Borrowings | Total short-term borrowings were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Equipment Operations Commercial paper $ 60 Notes payable to banks $ 114 $ 192 268 Finance lease obligations due within one year 23 21 18 Long-term borrowings due within one year 1,239 79 507 Total 1,376 292 853 Financial Services Commercial paper 1,882 1,238 1,927 Notes payable to banks 19 182 181 Long-term borrowings due within one year 7,127 6,870 6,114 Total 9,028 8,290 8,222 Short-term borrowings 10,404 8,582 9,075 Short-term securitization borrowings Equipment Operations 12 26 37 Financial Services 5,265 4,656 5,324 Total 5,277 4,682 5,361 Total short-term borrowings $ 15,681 $ 13,264 $ 14,436 |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
LONG-TERM BORROWINGS | |
Long-Term Borrowings | Long-term borrowings were as follows in millions of dollars. The financial services medium-term notes include fair value adjustments related to interest rate swaps. August 1 November 1 August 2 2021 2020 2020 Equipment Operations U.S. dollar notes and debentures: 8½% debentures due 2022 $ 105 $ 105 2.60% notes due 2022 1,000 1,000 2.75% notes due 2025 $ 700 700 700 6.55% debentures due 2028 200 200 200 5.375% notes due 2029 500 500 500 3.10% notes due 2030 700 700 700 8.10% debentures due 2030 250 250 250 7.125% notes due 2031 300 300 300 3.90% notes due 2042 1,250 1,250 1,250 2.875% notes due 2049 500 500 500 3.75% notes due 2050 850 850 850 Euro notes: .5% notes due 2023 (€500 principal) 594 584 592 1.375% notes due 2024 (€800 principal) 951 934 948 1.85% notes due 2028 (€600 principal) 713 700 711 2.20% notes due 2032 (€600 principal) 713 700 711 1.65% notes due 2039 (€650 principal) 773 759 770 Finance lease obligations and other notes 44 153 193 Less debt issuance costs and debt discounts 56 61 63 Total 8,982 10,124 10,217 Financial Services Notes and debentures: Medium-term notes: (principal as of: August 1, 2021 - $21,892, November 1, 2020 - $20,996, August 2, 2020 - $22,032) 22,346 21,661 22,826 Other notes 1,015 1,003 1,051 Less debt issuance costs and debt discounts 63 54 57 Total 23,298 22,610 23,820 Long-term borrowings $ 32,280 $ 32,734 $ 34,037 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
LEASES | |
Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Condensed Consolidated Balance Sheet | Operating and finance lease right of use assets and liabilities were as follows in millions of dollars: August 1 November 1 August 2 2021 2020 2020 Operating leases: Other assets $ 310 $ 324 $ 341 Accounts payable and accrued expenses 304 305 318 Finance leases: Property and equipment - net $ 68 $ 63 $ 56 Short-term borrowings $ 23 $ 21 $ 18 Long-term borrowings 42 39 33 Total finance lease liabilities $ 65 $ 60 $ 51 |
Schedule of Right of Use Assets Obtained in Exchange for Lease Liabilities | Right of use assets obtained in exchange for lease liabilities were as follows in millions of dollars: Nine Months Ended August 1, 2021 August 2, 2020 Operating leases $ 80 $ 27 Finance leases 25 37 |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Nine Months Ended August 1, 2021 August 2, 2020 August 1, 2021 August 2, 2020 Sales-type and direct financing lease revenues $ 37 $ 33 $ 107 $ 101 Operating lease revenues 359 361 1,079 1,104 Variable lease revenues 6 6 18 17 Total lease revenues $ 402 $ 400 $ 1,204 $ 1,222 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Reconciliation of the Changes in Warranty Liability and Unearned Premiums | A reconciliation of the changes in the warranty liability and unearned premiums was as follows in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Beginning of period balance $ 1,876 $ 1,767 $ 1,743 $ 1,800 Payments (209) (250) (626) (703) Amortization of premiums received (66) (58) (193) (168) Accruals for warranties 299 177 794 609 Premiums received 96 68 258 202 Foreign exchange (2) 27 18 (9) End of period balance $ 1,994 $ 1,731 $ 1,994 $ 1,731 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
FAIR VALUE MEASUREMENTS | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities (see Note 17). August 1, 2021 November 1, 2020 August 2, 2020 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net: Equipment operations $ 89 $ 85 $ 105 $ 103 $ 111 $ 102 Financial services 31,360 31,430 29,645 29,838 27,703 27,929 Total $ 31,449 $ 31,515 $ 29,750 $ 29,941 $ 27,814 $ 28,031 Financing receivables securitized – net: Equipment operations $ 13 $ 13 $ 26 $ 26 $ 37 $ 34 Financial services 5,388 5,454 4,677 4,773 5,432 5,544 Total $ 5,401 $ 5,467 $ 4,703 $ 4,799 $ 5,469 $ 5,578 Short-term Equipment operations $ 12 $ 13 $ 26 $ 26 $ 37 $ 37 Financial services 5,265 5,289 4,656 4,698 5,324 5,381 Total $ 5,277 $ 5,302 $ 4,682 $ 4,724 $ 5,361 $ 5,418 Long-term borrowings due within one year: Equipment operations $ 1,239 $ 1,257 $ 79 $ 78 $ 507 $ 504 Financial services 7,127 7,183 6,870 6,936 6,114 6,168 Total $ 8,366 $ 8,440 $ 6,949 $ 7,014 $ 6,621 $ 6,672 Long-term borrowings: Equipment operations $ 8,940 $ 10,586 $ 10,085 $ 11,837 $ 10,184 $ 12,163 Financial services 23,298 23,759 22,610 23,170 23,820 24,464 Total $ 32,238 $ 34,345 $ 32,695 $ 35,007 $ 34,004 $ 36,627 Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021. August 1 November 1 August 2 2021 2020 2020 Level 1: Marketable securities International equity securities $ 3 $ 2 $ 2 U.S. equity fund 74 62 68 U.S. government debt securities 60 55 50 Total Level 1 marketable securities 137 119 120 Level 2: Marketable securities U.S. government debt securities 124 113 105 Municipal debt securities 71 68 64 Corporate debt securities 217 188 185 International debt securities 3 2 2 Mortgage-backed securities 136 147 159 Total Level 2 marketable securities 551 518 515 Other assets Derivatives: Interest rate contracts 389 669 895 Foreign exchange contracts 41 48 57 Cross-currency interest rate contracts 2 8 9 Total Level 2 other assets 432 725 961 Accounts payable and accrued expenses Derivatives: Interest rate contracts 83 88 115 Foreign exchange contracts 67 26 55 Cross-currency interest rate contracts 2 1 Total Level 2 accounts payable and accrued expenses 152 115 170 Level 3: Marketable securities International debt securities 4 5 |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at August 1, 2021 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Mortgage-backed securities were primarily issued by U.S. government sponsored enterprises. Amortized Fair Cost Value Due in one year or less $ 21 $ 21 Due after one through five years 82 86 Due after five through 10 years 136 142 Due after 10 years 213 226 Mortgage-backed securities 132 136 Debt securities $ 584 $ 611 |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. The fair value measurement losses for the investment in unconsolidated affiliates during the nine months ended August 2, 2020 were Level 1. The other fair value measurements were Level 3. Equipment on operating leases – net and Other assets fair values for November 1, 2020 represents the fair value assessment at May 3, 2020. Fair Value Losses Three Months Ended Nine Months Ended August 1 November 1 August 2 August 1 August 2 August 1 August 2 2021 2020 2020 2021 2020 2021 2020 Other receivables $ 1 $ 1 $ 2 $ 2 Equipment on operating leases – net $ 371 $ 22 Property and equipment – net $ 135 $ 8 $ 5 $ 44 $ 67 Investments in unconsolidated affiliates $ 19 $ 20 Other intangible assets – net $ 2 $ 2 Other assets $ 59 $ 19 $ 24 $ 6 $ 34 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
DERIVATIVE INSTRUMENTS | |
Amounts Recorded in the Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships | The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows in millions of dollars: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued Hedged Item Relationships Relationships Total August 1, 2021 Long-term borrowings due within one year $ 188 $ 4 $ (1) $ 3 Long-term borrowings 8,888 263 190 453 November 1, 2020 Long-term borrowings due within one year $ 155 $ 2 $ 3 $ 5 Long-term borrowings 7,725 543 122 665 August 2, 2020 Long-term borrowings due within one year $ 480 $ 6 $ 2 $ 8 Long-term borrowings 9,140 754 40 794 Long-term borrowings due within one year are presented in short-term borrowings. |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the condensed consolidated balance sheet were as follows in millions of dollars: August 1 November 1 August 2 Other Assets 2021 2020 2020 Designated as hedging instruments: Interest rate contracts $ 332 $ 586 $ 806 Not designated as hedging instruments: Interest rate contracts 57 83 89 Foreign exchange contracts 41 48 57 Cross-currency interest rate contracts 2 8 9 Total not designated 100 139 155 Total derivative assets $ 432 $ 725 $ 961 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 40 $ 14 $ 24 Not designated as hedging instruments: Interest rate contracts 43 74 91 Foreign exchange contracts 67 26 55 Cross-currency interest rate contracts 2 1 Total not designated 112 101 146 Total derivative liabilities $ 152 $ 115 $ 170 |
Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income | The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars: Three Months Ended Nine Months Ended August 1 August 2 August 1 August 2 2021 2020 2021 2020 Fair Value Hedges: Interest rate contracts - Interest expense $ 146 $ 78 $ (79) $ 589 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (1) (1) (1) (18) Reclassified from OCI Interest rate contracts - Interest expense (3) (7) (11) (13) Not Designated as Hedges: Interest rate contracts - Net sales $ (2) $ (2) $ 3 $ (26) Interest rate contracts - Interest expense * (2) (1) (6) 2 Foreign exchange contracts - Cost of sales (7) (28) (107) 64 Foreign exchange contracts - Other operating expenses * (5) (49) (209) 125 Total not designated $ (16) $ (80) $ (319) $ 165 * |
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid was as follows in millions of dollars: Gross Amounts Netting August 1, 2021 Recognized Arrangements Collateral Net Amount Assets $ 432 $ (94) $ (88) $ 250 Liabilities 152 (94) (2) 56 Gross Amounts Netting November 1, 2020 Recognized Arrangements Collateral Net Amount Assets $ 725 $ (93) $ (274) $ 358 Liabilities 115 (93) 22 Gross Amounts Netting August 2, 2020 Recognized Arrangements Collateral Net Amount Assets $ 961 $ (120) $ (332) $ 509 Liabilities 170 (120) 50 |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 9 Months Ended |
Aug. 01, 2021 | |
SPECIAL ITEMS | |
Schedule of Impairments and Other Benefits | 2021 Special Items In the third quarter of 2021, the Company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. During the first quarter of 2021, the fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and after-tax . The Company also continued to assess its manufacturing locations, resulting in additional long-lived asset impairments of $12 million pretax. The impairments were the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. These impairments were offset by a favorable indirect tax ruling in Brazil of $58 million pretax. See Note 19 for fair value measurement information. Nine Months Ended August 1, 2021 Expense (benefit): Production & Precision Ag Small Ag & Turf Construction & Forestry Total Long-lived asset impairments – Cost of sales $ 5 $ 3 $ 42 $ 50 Brazil indirect tax – Cost of sales (53) (5) (58) Gain on sale – Other income (27) (27) Total expense (benefit) $ (48) $ (24) $ 37 $ (35) 2020 Special Items In the second quarter of 2020, the fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax . The impairment is the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The equipment on operating leases and matured operating lease inventory were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows would not cover the carrying amount of the net assets. A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax . The impairment was the result of an other than temporary decline in value. In the third quarter of 2020, the Company closed a factory producing small agricultural equipment in China. In connection with this closure, a non-cash impairment of other receivables, property, and intangible assets of $9 million pretax and after-tax was recorded and $4 million pretax and after-tax for severance payments. See Note 19 for fair value measurement information. Nine Months Ended August 2, 2020 Expense: Small Ag & Turf Construction & Forestry Financial Services Total Factory closure – Cost of sales $ 13 $ 13 Long-lived asset impairments – Cost of sales $ 62 62 Equipment on operating leases & matured operating lease inventory impairments – Other operating expenses $ 32 32 Investments in unconsolidated affiliates impairment – Equity in loss of unconsolidated affiliate 20 20 Total expense $ 13 $ 82 $ 32 $ 127 |
Schedule of Employee-Separation Program Pretax Expenses | Employee-Separation Program During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continued the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The payments for the program were also substantially made in the first quarter of 2020. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “ Other operating expense. ” Nine Months Ended August 2, 2020 Production & Precision Ag Small Ag & Turf Construction & Forestry Financial Services Total Cost of sales $ 21 $ 11 $ 9 $ 41 Research and development expenses 8 7 4 19 Selling, administrative and general expenses 19 19 14 $ 3 55 Total operating profit impact $ 48 $ 37 $ 27 $ 3 115 Other operating expenses 23 Total expense $ 138 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Aug. 01, 2021 | Jan. 31, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Nov. 01, 2020 | |
Fiscal period duration | 91 days | 91 days | 273 days | 273 days | ||
VIE-Not Primary Beneficiary | ||||||
Maximum Exposure to Losses | ||||||
Maximum exposure to loss | $ 1,341 | $ 1,341 | ||||
VIE-Not Primary Beneficiary | Brazilian Construction Equipment Manufacturer Joint Venture | ||||||
Maximum Exposure to Losses | ||||||
Maximum exposure to loss | $ 9 | $ 13 | 9 | $ 13 | $ 5 | |
Wirtgen Group Holding GmbH (Wirtgen) | ||||||
Net sales | $ 270 | $ 270 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Nov. 01, 2020 | Nov. 03, 2019 | |
Transfer of inventory to equipment on operating leases | $ 450 | $ 388 | ||
Accounts payable related to purchases of property and equipment | 51 | 51 | ||
Restricted cash | 120 | 110 | $ 106 | $ 99 |
Equipment Operations | ||||
Restricted cash | 13 | 11 | 11 | 21 |
Financial Services | ||||
Restricted cash | $ 107 | $ 99 | $ 95 | $ 78 |
NEW ACCOUNTING STANDARDS (Detai
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Aug. 01, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | Aug. 02, 2020 | |
Assets | ||||
Trade accounts and notes receivable - net | $ 5,268 | $ 4,173 | $ 4,171 | $ 5,473 |
Financing receivables - net | 31,449 | 29,723 | 29,750 | 27,814 |
Financing receivables securitized - net | 5,401 | 4,699 | 4,703 | 5,469 |
Deferred income taxes | 1,767 | 1,500 | 1,499 | 1,534 |
Liabilities | ||||
Accounts payable and accrued expenses | 11,091 | 10,126 | 10,112 | 9,565 |
Deferred income taxes | 515 | 512 | 519 | 479 |
Stockholders' Equity | ||||
Retained earnings | $ 35,491 | $ 31,611 | 31,646 | $ 31,128 |
ASU 2016-13 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Extensible List] | de:AccountingStandardsUpdate201613CumulativeEffectPeriodOfAdoptionMember | |||
ASU 2016-13 | Cumulative Effect from Adoption | ||||
Assets | ||||
Trade accounts and notes receivable - net | 2 | |||
Financing receivables - net | (27) | |||
Financing receivables securitized - net | (4) | |||
Deferred income taxes | 1 | |||
Liabilities | ||||
Accounts payable and accrued expenses | 14 | |||
Deferred income taxes | (7) | |||
Stockholders' Equity | ||||
Retained earnings | $ (35) | |||
ASU 2018-15 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2019-04 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2021-01 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2019-12 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |||
ASU 2020-08 | ||||
New accounting standards | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false |
REVENUE RECOGNITION - Primary G
REVENUE RECOGNITION - Primary Geograhical Market, Major Product Lines, and Timing (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Revenue Recognition | ||||
Net sales and revenues | $ 11,527 | $ 8,925 | $ 32,697 | $ 25,809 |
Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 10,563 | 7,977 | 29,840 | 22,950 |
Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 964 | 948 | 2,857 | 2,859 |
Production Agriculture | ||||
Revenue Recognition | ||||
Net sales | 4,179 | 3,210 | 11,656 | 8,915 |
Small Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,355 | 1,704 | 6,583 | 4,953 |
Turf | ||||
Revenue Recognition | ||||
Net sales | 719 | 651 | 2,268 | 1,925 |
Construction | ||||
Revenue Recognition | ||||
Net sales | 1,283 | 817 | 3,402 | 2,535 |
Compact Construction | ||||
Revenue Recognition | ||||
Net sales | 398 | 303 | 1,140 | 930 |
Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 948 | 818 | 2,924 | 2,146 |
Forestry | ||||
Revenue Recognition | ||||
Net sales | 342 | 241 | 975 | 769 |
Financial Products | ||||
Revenue Recognition | ||||
Financial | 932 | 921 | 2,769 | 2,789 |
Other income | ||||
Revenue Recognition | ||||
Other net sales and revenues | 371 | 260 | 980 | 847 |
United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 5,912 | 4,525 | 16,882 | 13,936 |
Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 853 | 635 | 2,255 | 1,684 |
Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,727 | 1,501 | 4,992 | 4,131 |
Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 766 | 506 | 2,107 | 1,381 |
Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,170 | 777 | 3,072 | 2,110 |
Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,099 | 981 | 3,389 | 2,567 |
Production & Precision Ag | ||||
Revenue Recognition | ||||
Net sales and revenues | 4,338 | 3,376 | 12,087 | 9,394 |
Production & Precision Ag | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 4,293 | 3,337 | 11,960 | 9,277 |
Production & Precision Ag | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 45 | 39 | 127 | 117 |
Production & Precision Ag | Production Agriculture | ||||
Revenue Recognition | ||||
Net sales | 4,179 | 3,210 | 11,656 | 8,915 |
Production & Precision Ag | Financial Products | ||||
Revenue Recognition | ||||
Financial | 13 | 14 | 41 | 48 |
Production & Precision Ag | Other income | ||||
Revenue Recognition | ||||
Other net sales and revenues | 146 | 152 | 390 | 431 |
Production & Precision Ag | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,995 | 1,617 | 5,814 | 4,892 |
Production & Precision Ag | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 253 | 199 | 617 | 460 |
Production & Precision Ag | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 566 | 517 | 1,604 | 1,422 |
Production & Precision Ag | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 398 | 219 | 1,090 | 608 |
Production & Precision Ag | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 758 | 512 | 1,971 | 1,290 |
Production & Precision Ag | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 368 | 312 | 991 | 722 |
Small Ag & Turf | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,212 | 2,419 | 9,189 | 7,060 |
Small Ag & Turf | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,191 | 2,402 | 9,137 | 7,017 |
Small Ag & Turf | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 21 | 17 | 52 | 43 |
Small Ag & Turf | Small Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,355 | 1,704 | 6,583 | 4,953 |
Small Ag & Turf | Turf | ||||
Revenue Recognition | ||||
Net sales | 719 | 651 | 2,268 | 1,925 |
Small Ag & Turf | Financial Products | ||||
Revenue Recognition | ||||
Financial | 12 | 10 | 32 | 24 |
Small Ag & Turf | Other income | ||||
Revenue Recognition | ||||
Other net sales and revenues | 126 | 54 | 306 | 158 |
Small Ag & Turf | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,753 | 1,228 | 5,014 | 3,833 |
Small Ag & Turf | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 153 | 96 | 376 | 239 |
Small Ag & Turf | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 679 | 586 | 1,903 | 1,570 |
Small Ag & Turf | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 117 | 100 | 361 | 269 |
Small Ag & Turf | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 125 | 90 | 305 | 225 |
Small Ag & Turf | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 385 | 319 | 1,230 | 924 |
Construction & Forestry | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,075 | 2,238 | 8,742 | 6,656 |
Construction & Forestry | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,052 | 2,210 | 8,666 | 6,576 |
Construction & Forestry | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 23 | 28 | 76 | 80 |
Construction & Forestry | Construction | ||||
Revenue Recognition | ||||
Net sales | 1,283 | 817 | 3,402 | 2,535 |
Construction & Forestry | Compact Construction | ||||
Revenue Recognition | ||||
Net sales | 398 | 303 | 1,140 | 930 |
Construction & Forestry | Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 948 | 818 | 2,924 | 2,146 |
Construction & Forestry | Forestry | ||||
Revenue Recognition | ||||
Net sales | 342 | 241 | 975 | 769 |
Construction & Forestry | Financial Products | ||||
Revenue Recognition | ||||
Financial | 5 | 5 | 17 | 18 |
Construction & Forestry | Other income | ||||
Revenue Recognition | ||||
Other net sales and revenues | 99 | 54 | 284 | 258 |
Construction & Forestry | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,559 | 1,048 | 4,242 | 3,331 |
Construction & Forestry | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 285 | 194 | 793 | 532 |
Construction & Forestry | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 455 | 376 | 1,408 | 1,073 |
Construction & Forestry | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 241 | 178 | 628 | 477 |
Construction & Forestry | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 227 | 124 | 617 | 418 |
Construction & Forestry | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 308 | 318 | 1,054 | 825 |
Financial Services Segment | ||||
Revenue Recognition | ||||
Financial | 902 | 892 | 2,679 | 2,699 |
Financial Services Segment | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Financial | 27 | 28 | 77 | 80 |
Financial Services Segment | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Financial | 875 | 864 | 2,602 | 2,619 |
Financial Services Segment | Financial Products | ||||
Revenue Recognition | ||||
Financial | 902 | 892 | 2,679 | 2,699 |
Financial Services Segment | United States | ||||
Revenue Recognition | ||||
Financial | 605 | 632 | 1,812 | 1,880 |
Financial Services Segment | Canada | ||||
Revenue Recognition | ||||
Financial | 162 | 146 | 469 | 453 |
Financial Services Segment | Western Europe | ||||
Revenue Recognition | ||||
Financial | 27 | 22 | 77 | 66 |
Financial Services Segment | Central Europe and CIS | ||||
Revenue Recognition | ||||
Financial | 10 | 9 | 28 | 27 |
Financial Services Segment | Latin America | ||||
Revenue Recognition | ||||
Financial | 60 | 51 | 179 | 177 |
Financial Services Segment | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Financial | $ 38 | $ 32 | $ 114 | $ 96 |
REVENUE RECOGNITION - Advanced
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Nov. 01, 2020 | |
Advanced customer payments | |||||
Deferred revenue received | $ 1,259 | $ 1,115 | $ 1,259 | $ 1,115 | $ 1,090 |
Revenue recognized from deferred revenue | $ 108 | $ 97 | $ 442 | $ 375 |
REVENUE RECOGNITION - Unsatisfi
REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions | Aug. 01, 2021USD ($) |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 957 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-08-02 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 113 |
Period estimated revenue to be recognized | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-11-01 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 312 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-31 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 242 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-30 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 152 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-28 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 73 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-11-03 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 44 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-11-02 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 21 |
Period estimated revenue to be recognized | 24 months |
REVENUE RECOGNITION - Short-ter
REVENUE RECOGNITION - Short-term Payment Relief (Details) - Trade Accounts and Notes Receivable - COVID-19 - Maximum | 9 Months Ended |
Nov. 01, 2020 | |
Short-term Payment Relief | |
Payment deferral period | 3 months |
Extension of interest-free period | 3 months |
Total interest-free period | 1 year |
Interest rate reduction period | 3 months |
OTHER COMPREHENSIVE INCOME IT_3
OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Changes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Accumulated other comprehensive income (loss) | ||||
Balance | $ 12,937 | |||
Net current period other comprehensive income (loss) | $ (51) | $ 396 | 528 | $ 288 |
Balance | 15,731 | 12,888 | 15,731 | 12,888 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (5,539) | (5,607) | ||
Other comprehensive income (loss) items before reclassification | 338 | 112 | ||
Amounts reclassified from accumulated other comprehensive income | 190 | 176 | ||
Net current period other comprehensive income (loss) | (51) | 396 | 528 | 288 |
Balance | (5,011) | (5,319) | (5,011) | (5,319) |
Retirement Benefits Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (3,918) | (3,915) | ||
Other comprehensive income (loss) items before reclassification | 27 | 179 | ||
Amounts reclassified from accumulated other comprehensive income | 181 | 159 | ||
Net current period other comprehensive income (loss) | 208 | 338 | ||
Balance | (3,710) | (3,577) | (3,710) | (3,577) |
Cumulative Translation Adjustment | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (1,596) | (1,651) | ||
Other comprehensive income (loss) items before reclassification | 319 | (75) | ||
Amounts reclassified from accumulated other comprehensive income | 8 | |||
Net current period other comprehensive income (loss) | 319 | (67) | ||
Balance | (1,277) | (1,718) | (1,277) | (1,718) |
Unrealized Gain (Loss) on Derivatives | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | (58) | (60) | ||
Other comprehensive income (loss) items before reclassification | (1) | (14) | ||
Amounts reclassified from accumulated other comprehensive income | 9 | 10 | ||
Net current period other comprehensive income (loss) | 8 | (4) | ||
Balance | (50) | (64) | (50) | (64) |
Unrealized Gain (Loss) on Debt Securities | ||||
Accumulated other comprehensive income (loss) | ||||
Balance | 33 | 19 | ||
Other comprehensive income (loss) items before reclassification | (7) | 22 | ||
Amounts reclassified from accumulated other comprehensive income | (1) | |||
Net current period other comprehensive income (loss) | (7) | 21 | ||
Balance | $ 26 | $ 40 | $ 26 | $ 40 |
OTHER COMPREHENSIVE INCOME IT_4
OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | $ (244) | $ (290) | $ (783) | $ (969) |
Total other comprehensive income (loss), before tax | (28) | 415 | 598 | 415 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (23) | (19) | (70) | (127) |
Other Comprehensive Income (Loss), After Tax | ||||
Other Comprehensive Income (Loss), Net of Income Taxes | (51) | 396 | 528 | 288 |
Cumulative Translation Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 321 | (77) | ||
Total other comprehensive income (loss), before tax | (112) | 329 | 319 | (69) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 2 | 2 | ||
Total other comprehensive income (loss), tax (expense) credit | (2) | 2 | 2 | |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 323 | (75) | ||
Other Comprehensive Income (Loss), Net of Income Taxes | (114) | 331 | 319 | (67) |
Cumulative Translation Adjustment | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 8 | 8 | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 8 | 8 | ||
Unrealized Gain (Loss) on Derivatives | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (1) | (1) | (1) | (18) |
Total other comprehensive income (loss), before tax | 2 | 6 | 10 | (5) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 4 | |||
Total other comprehensive income (loss), tax (expense) credit | (1) | (2) | (2) | 1 |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (1) | (1) | (1) | (14) |
Other Comprehensive Income (Loss), Net of Income Taxes | 1 | 4 | 8 | (4) |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | 3 | 7 | 11 | 13 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (2) | (2) | (3) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 2 | 5 | 9 | 10 |
Unrealized Gain (Loss) on Debt Securities | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 11 | 13 | (6) | 27 |
Total other comprehensive income (loss), before tax | 11 | 12 | (6) | 26 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (3) | (2) | (1) | (5) |
Total other comprehensive income (loss), tax (expense) credit | (3) | (2) | (1) | (5) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 8 | 11 | (7) | 22 |
Other Comprehensive Income (Loss), Net of Income Taxes | 8 | 10 | (7) | 21 |
Unrealized Gain (Loss) on Debt Securities | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other income | (1) | (1) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (1) | (1) | ||
Retirement Benefits Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (5) | (9) | 35 | 238 |
Total other comprehensive income (loss), before tax | 71 | 68 | 275 | 463 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 1 | 2 | (8) | (59) |
Total other comprehensive income (loss), tax (expense) credit | (17) | (17) | (67) | (125) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (4) | (7) | 27 | 179 |
Other Comprehensive Income (Loss), Net of Income Taxes | 54 | 51 | 208 | 338 |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 71 | 69 | 213 | 207 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (17) | (17) | (53) | (62) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 54 | 52 | 160 | 145 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 1 | 2 | 5 | 6 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (1) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 1 | 2 | 4 | 5 |
Settlements | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 4 | 6 | 22 | 12 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (2) | (5) | (3) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 3 | $ 4 | $ 17 | $ 9 |
DIVIDENDS DECLARED AND PAID (De
DIVIDENDS DECLARED AND PAID (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
DIVIDENDS DECLARED AND PAID | ||||
Dividends declared (in dollars per share) | $ 0.90 | $ 0.76 | $ 2.56 | $ 2.28 |
Dividends paid (in dollars per share) | $ 0.90 | $ 0.76 | $ 2.42 | $ 2.28 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
EARNINGS PER SHARE | ||||
Net income attributable to Deere & Company | $ 1,667 | $ 811 | $ 4,680 | $ 1,993 |
Average shares outstanding | 311 | 313 | 312.4 | 313.3 |
Basic (in dollars per share) | $ 5.36 | $ 2.59 | $ 14.98 | $ 6.36 |
Diluted Earnings Per Share | ||||
Average shares outstanding | 311 | 313 | 312.4 | 313.3 |
Effect of dilutive share-based compensation (in shares) | 2.4 | 2.8 | 2.5 | 3.1 |
Total potential shares outstanding | 313.4 | 315.8 | 314.9 | 316.4 |
Diluted (in dollars per share) | $ 5.32 | $ 2.57 | $ 14.86 | $ 6.30 |
Antidilutive incremental shares excluded from computation of earnings per share | 0 | 1.2 | 0 | 0.8 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Feb. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Net Periodic Cost | |||||
Location of costs excluding the service component | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | us-gaap:OtherCostOfOperatingRevenue | |
Pensions | |||||
Net Periodic Cost | |||||
Service cost | $ 83 | $ 80 | $ 251 | $ 241 | |
Interest cost | 69 | 86 | 207 | 260 | |
Expected return on plan assets | (199) | (204) | (599) | (613) | |
Amortization of actuarial loss | 64 | 62 | 192 | 186 | |
Amortization of prior service (credit) cost | 2 | 3 | 8 | 9 | |
Settlements | 4 | 6 | 22 | 12 | |
Net cost | 23 | 33 | 81 | 95 | |
Employer Contributions | |||||
Defined benefit plan employer contributions | 88 | ||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 11 | 11 | |||
OPEB | |||||
Net Periodic Cost | |||||
Service cost | 12 | 12 | 36 | 36 | |
Interest cost | 25 | 34 | 76 | 106 | |
Expected return on plan assets | (19) | (12) | (58) | (36) | |
Amortization of actuarial loss | 7 | 7 | 21 | 21 | |
Amortization of prior service (credit) cost | (1) | (1) | (3) | (3) | |
Curtailments | 21 | ||||
Net cost | 24 | $ 40 | 72 | $ 145 | |
Employer Contributions | |||||
Defined benefit plan employer contributions | 113 | ||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | 29 | 29 | |||
OPEB | 2020 Employee-Separation Program | |||||
Net Periodic Cost | |||||
Curtailments | $ 21 | ||||
OPEB | United States | |||||
Employer Contributions | |||||
Defined benefit plan employer voluntary contributions expected for next fiscal year | $ 700 | $ 700 | |||
OPEB | United States | 2020 Employee-Separation Program | |||||
Net Periodic Cost | |||||
Curtailments | $ 21 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
UNRECOGNIZED TAX BENEFITS | |||
Unrecognized tax benefits | $ 772 | $ 668 | $ 657 |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 213 | $ 134 | $ 141 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Nov. 01, 2020 | |
Net Sales and Revenues | |||||
Net sales and revenues | $ 11,527 | $ 8,925 | $ 32,697 | $ 25,809 | |
% Change - Net sales and revenues | 29.00% | 27.00% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 2,243 | 1,390 | $ 6,320 | 3,001 | |
% Change - Operating profit | 61.00% | 111.00% | |||
Net income attributable to Deere & Company | $ 1,667 | 811 | $ 4,680 | 1,993 | |
% Change - Net income attributable to Deere & Company | 106.00% | 135.00% | |||
Identifiable Assets | |||||
Total Assets | $ 80,688 | 77,264 | $ 80,688 | 77,264 | $ 75,091 |
Operating Segments (Other) | |||||
Reconciling items | $ (85) | (122) | $ (312) | (256) | |
% Change - Reconciling items | (30.00%) | 22.00% | |||
Income taxes | $ (491) | (457) | $ (1,328) | (752) | |
% Change - Income taxes | 7.00% | 77.00% | |||
Outside U.S. and Canada: | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 4,762 | 3,765 | $ 13,560 | 10,189 | |
% Change - Net sales and revenues | 26.00% | 33.00% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 931 | 577 | $ 2,565 | 1,109 | |
% Change - Operating profit | 61.00% | 131.00% | |||
Corporate | |||||
Identifiable Assets | |||||
Total Assets | $ 12,110 | 12,150 | $ 12,110 | 12,150 | 11,076 |
Other Revenues | |||||
Net Sales and Revenues | |||||
Other revenues | $ 212 | 174 | $ 557 | 498 | |
% Change - Other revenues | 22.00% | 12.00% | |||
Production & Precision Ag | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 4,338 | 3,376 | $ 12,087 | 9,394 | |
Intersegment sales and revenues | $ 8 | 5 | $ 21 | 18 | |
% Change - Intersegment sales and revenues | 60.00% | 17.00% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 906 | 605 | $ 2,557 | 1,391 | |
% Change - Operating profit | 50.00% | 84.00% | |||
Identifiable Assets | |||||
Total Assets | $ 6,910 | 6,172 | $ 6,910 | 6,172 | 5,708 |
Small Ag & Turf | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 3,212 | 2,419 | 9,189 | 7,060 | |
Intersegment sales and revenues | 2 | $ 9 | 2 | ||
% Change - Intersegment sales and revenues | 350.00% | ||||
Operating Profit (Loss) | |||||
Total operating profit | $ 583 | 337 | $ 1,699 | 718 | |
% Change - Operating profit | 73.00% | 137.00% | |||
Identifiable Assets | |||||
Total Assets | $ 3,643 | 3,376 | $ 3,643 | 3,376 | 3,266 |
Construction & Forestry | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 3,075 | 2,238 | 8,742 | 6,656 | |
Operating Profit (Loss) | |||||
Total operating profit | $ 463 | 205 | $ 1,220 | 394 | |
% Change - Operating profit | 126.00% | 210.00% | |||
Identifiable Assets | |||||
Total Assets | $ 6,378 | 6,697 | $ 6,378 | 6,697 | 6,322 |
Financial Services Segment | |||||
Net Sales and Revenues | |||||
Financial revenues | $ 902 | 892 | $ 2,679 | 2,699 | |
% Change - Financial revenues | 1.00% | (1.00%) | |||
Intersegment sales and revenues | $ 61 | 59 | $ 172 | 218 | |
% Change - Intersegment sales and revenues | 3.00% | (21.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 291 | 243 | $ 844 | 498 | |
% Change - Operating profit | 20.00% | 69.00% | |||
Identifiable Assets | |||||
Total Assets | $ 51,647 | 48,869 | $ 51,647 | 48,869 | $ 48,719 |
Net Sales | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 10,413 | 7,859 | 29,461 | 22,612 | |
Net Sales | Production & Precision Ag | |||||
Net Sales and Revenues | |||||
Net sales | $ 4,250 | 3,289 | $ 11,848 | 9,161 | |
% Change - Net sales | 29.00% | 29.00% | |||
Net Sales | Small Ag & Turf | |||||
Net Sales and Revenues | |||||
Net sales | $ 3,147 | 2,383 | $ 9,051 | 6,966 | |
% Change - Net sales | 32.00% | 30.00% | |||
Net Sales | Construction & Forestry | |||||
Net Sales and Revenues | |||||
Net sales | $ 3,016 | $ 2,187 | $ 8,562 | $ 6,485 | |
% Change - Net sales | 38.00% | 32.00% |
FINANCING RECEIVABLES - Financi
FINANCING RECEIVABLES - Financing Receivables Past Due (Details) | 9 Months Ended |
Aug. 01, 2021 | |
Financing Receivable, Past Due | |
Minimum number of days for a financing receivable to be considered past due | 30 days |
Generally the number of days for a financing receivable to be considered non-performing | 90 days |
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off | 120 days |
COVID-19 | |
Financing Receivable, Past Due | |
Financing receivables balance granted relief (as a percent) | 3.00% |
FINANCING RECEIVABLES - Retail
FINANCING RECEIVABLES - Retail Notes, Financing Leases, and Revolving Charge Accounts Credit Quality Analysis (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Credit Quality Analysis | |||
Total customer receivables | $ 37,024 | $ 33,483 | |
Customer Receivables | |||
Credit Quality Analysis | |||
2021 | 11,614 | ||
2020 | 9,614 | ||
2019 | 5,075 | ||
2018 | 2,515 | ||
2017 | 1,045 | ||
Prior | 372 | ||
Revolving | 3,772 | ||
Total customer receivables | 34,007 | $ 31,108 | 29,679 |
Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 38 | ||
2020 | 54 | ||
2019 | 35 | ||
2018 | 19 | ||
2017 | 7 | ||
Prior | 3 | ||
Revolving | 13 | ||
Total customer receivables | 169 | 148 | 168 |
Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 14 | ||
2020 | 28 | ||
2019 | 15 | ||
2018 | 6 | ||
2017 | 3 | ||
Prior | 1 | ||
Revolving | 4 | ||
Total customer receivables | 71 | 68 | 80 |
Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2020 | 1 | ||
Total customer receivables | 1 | 2 | 4 |
Customer Receivables | Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 9,159 | ||
2020 | 7,516 | ||
2019 | 3,938 | ||
2018 | 2,053 | ||
2017 | 910 | ||
Prior | 317 | ||
Revolving | 3,658 | ||
Total customer receivables | 27,551 | ||
Customer Receivables | Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2021 | 12 | ||
2020 | 58 | ||
2019 | 63 | ||
2018 | 42 | ||
2017 | 22 | ||
Prior | 30 | ||
Revolving | 6 | ||
Total customer receivables | 233 | ||
Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 35 | ||
2020 | 44 | ||
2019 | 26 | ||
2018 | 9 | ||
2017 | 4 | ||
Prior | 1 | ||
Revolving | 3 | ||
Total customer receivables | 122 | 113 | 93 |
Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2021 | 13 | ||
2020 | 19 | ||
2019 | 10 | ||
2018 | 5 | ||
2017 | 1 | ||
Prior | 1 | ||
Revolving | 1 | ||
Total customer receivables | 50 | 56 | 41 |
Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2021 | 4 | ||
2020 | 2 | ||
2019 | 9 | ||
2018 | 5 | ||
2017 | 6 | ||
Prior | 2 | ||
Total customer receivables | 28 | $ 14 | $ 12 |
Customer Receivables | Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 2,327 | ||
2020 | 1,845 | ||
2019 | 938 | ||
2018 | 357 | ||
2017 | 84 | ||
Prior | 13 | ||
Revolving | 86 | ||
Total customer receivables | 5,650 | ||
Customer Receivables | Construction and Forestry | Non-performing | |||
Credit Quality Analysis | |||
2021 | 12 | ||
2020 | 47 | ||
2019 | 41 | ||
2018 | 19 | ||
2017 | 8 | ||
Prior | 4 | ||
Revolving | 1 | ||
Total customer receivables | $ 132 |
FINANCING RECEIVABLES - Custome
FINANCING RECEIVABLES - Customer Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Age Credit Quality Analysis | |||
Total customer receivables | $ 37,024 | $ 33,483 | |
Customer Receivables | |||
Age Credit Quality Analysis | |||
Total customer receivables | 34,007 | $ 31,108 | 29,679 |
Customer Receivables | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 269 | 337 | |
Customer Receivables | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total customer receivables | 25,384 | 24,137 | |
Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 169 | 148 | 168 |
Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 71 | 68 | 80 |
Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 1 | 2 | 4 |
Customer Receivables | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 107 | 140 | |
Customer Receivables | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total customer receivables | 4,947 | 4,667 | |
Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 122 | 113 | 93 |
Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 50 | 56 | 41 |
Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 28 | 14 | 12 |
Retail Notes and Financing Leases | |||
Age Credit Quality Analysis | |||
Total customer receivables | 30,235 | 27,206 | 25,682 |
Retail Notes and Financing Leases | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 263 | 329 | |
Retail Notes and Financing Leases | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total customer receivables | 21,597 | 20,261 | |
Retail Notes and Financing Leases | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 135 | 148 | |
Retail Notes and Financing Leases | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 64 | 77 | |
Retail Notes and Financing Leases | Agriculture and Turf | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 2 | 4 | |
Retail Notes and Financing Leases | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 106 | 139 | |
Retail Notes and Financing Leases | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total customer receivables | 4,859 | 4,582 | |
Retail Notes and Financing Leases | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 111 | 90 | |
Retail Notes and Financing Leases | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 55 | 40 | |
Retail Notes and Financing Leases | Construction and Forestry | 90 Days or Greater Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 14 | 12 | |
Revolving Charge Accounts | |||
Age Credit Quality Analysis | |||
Total customer receivables | $ 3,772 | 3,902 | 3,997 |
Revolving Charge Accounts | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 6 | 8 | |
Revolving Charge Accounts | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total customer receivables | 3,787 | 3,876 | |
Revolving Charge Accounts | Agriculture and Turf | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 13 | 20 | |
Revolving Charge Accounts | Agriculture and Turf | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 4 | 3 | |
Revolving Charge Accounts | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 1 | 1 | |
Revolving Charge Accounts | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total customer receivables | 88 | 85 | |
Revolving Charge Accounts | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | 2 | 3 | |
Revolving Charge Accounts | Construction and Forestry | 60-89 Days Past Due | |||
Age Credit Quality Analysis | |||
Total customer receivables | $ 1 | $ 1 |
FINANCING RECEIVABLES - Wholesa
FINANCING RECEIVABLES - Wholesale Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Credit Quality Analysis | |||
Total wholesale receivables | $ 37,024 | $ 33,483 | |
Wholesale Receivables | |||
Credit Quality Analysis | |||
2021 | 271 | ||
2020 | 118 | ||
2019 | 64 | ||
2018 | 14 | ||
2017 | 4 | ||
Prior | 3 | ||
Revolving | 2,543 | ||
Total wholesale receivables | 3,017 | $ 3,529 | $ 3,804 |
Wholesale Receivables | Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2021 | 263 | ||
2020 | 110 | ||
2019 | 38 | ||
2018 | 13 | ||
2017 | 3 | ||
Prior | 1 | ||
Revolving | 2,256 | ||
Total wholesale receivables | 2,684 | ||
Wholesale Receivables | Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2019 | 18 | ||
Total wholesale receivables | 18 | ||
Wholesale Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
Prior | 1 | ||
Total wholesale receivables | 1 | ||
Wholesale Receivables | Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2021 | 8 | ||
2020 | 8 | ||
2019 | 8 | ||
2018 | 1 | ||
2017 | 1 | ||
Prior | 1 | ||
Revolving | 287 | ||
Total wholesale receivables | $ 314 |
FINANCING RECEIVABLES - Whole_2
FINANCING RECEIVABLES - Wholesale Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 37,024 | $ 33,483 | |
Wholesale Receivables | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | 3,017 | $ 3,529 | 3,804 |
Wholesale Receivables | Agriculture and Turf | |||
Age Credit Quality Analysis | |||
Non-performing | 47 | 50 | |
Wholesale Receivables | Agriculture and Turf | Current | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | 3,010 | 3,279 | |
Wholesale Receivables | Construction and Forestry | |||
Age Credit Quality Analysis | |||
Non-performing | 2 | ||
Wholesale Receivables | Construction and Forestry | Current | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 472 | $ 473 | |
Wholesale Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Age Credit Quality Analysis | |||
Total wholesale receivables | $ 1 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Nov. 01, 2020 | |
Allowance: | |||||
Beginning of period balance | $ 178 | $ 195 | $ 184 | $ 150 | |
Provision (credit) | 3 | (26) | |||
Provision | 18 | 124 | |||
Write-offs | (23) | (31) | (61) | (104) | |
Recoveries | 16 | 15 | 44 | 34 | |
Translation adjustments | 2 | ||||
Translation adjustments | 3 | (4) | |||
End of period balance | 174 | 200 | 174 | 200 | |
Financing receivables: | |||||
End of period balance | 37,024 | 33,483 | 37,024 | 33,483 | |
Cumulative Effect from Adoption | ASU 2016-13 | |||||
Allowance: | |||||
Beginning of period balance | 31 | ||||
Customer Receivables | |||||
Financing receivables: | |||||
End of period balance | 34,007 | 29,679 | 34,007 | 29,679 | $ 31,108 |
Retail Notes and Financing Leases | |||||
Allowance: | |||||
Beginning of period balance | 152 | 141 | 133 | 107 | |
Provision (credit) | 3 | (9) | |||
Provision | 6 | 88 | |||
Write-offs | (14) | (9) | (38) | (53) | |
Recoveries | 8 | 7 | 17 | 12 | |
Translation adjustments | 2 | ||||
Translation adjustments | 3 | (6) | |||
End of period balance | 149 | 148 | 149 | 148 | |
Financing receivables: | |||||
End of period balance | 30,235 | 25,682 | 30,235 | 25,682 | 27,206 |
Retail Notes and Financing Leases | Cumulative Effect from Adoption | ASU 2016-13 | |||||
Allowance: | |||||
Beginning of period balance | 44 | ||||
Revolving Charge Accounts | |||||
Allowance: | |||||
Beginning of period balance | 19 | 43 | 43 | 40 | |
Provision (credit) | (16) | ||||
Provision | 14 | 32 | |||
Write-offs | (9) | (22) | (23) | (51) | |
Recoveries | 8 | 8 | 27 | 22 | |
End of period balance | 18 | 43 | 18 | 43 | |
Financing receivables: | |||||
End of period balance | 3,772 | 3,997 | 3,772 | 3,997 | 3,902 |
Revolving Charge Accounts | Cumulative Effect from Adoption | ASU 2016-13 | |||||
Allowance: | |||||
Beginning of period balance | (13) | ||||
Wholesale Receivables | |||||
Allowance: | |||||
Beginning of period balance | 7 | 11 | 8 | 3 | |
Provision (credit) | (1) | ||||
Provision | (2) | 4 | |||
Translation adjustments | 2 | ||||
End of period balance | 7 | 9 | 7 | 9 | |
Financing receivables: | |||||
End of period balance | $ 3,017 | $ 3,804 | $ 3,017 | $ 3,804 | $ 3,529 |
FINANCING RECEIVABLES - Trouble
FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 9 Months Ended | |
Aug. 01, 2021USD ($)item | Aug. 02, 2020USD ($)item | |
Financing Receivables Related to Troubled Debt Restructurings | ||
Financing receivable contracts in troubled debt restructuring, number | item | 304 | 413 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 12 | $ 99 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 10 | $ 88 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 |
SECURITIZATION OF FINANCING R_3
SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 | |
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | $ 64,955 | $ 62,147 | $ 64,373 |
Short-term securitization borrowings | 5,277 | 4,682 | 5,361 |
Accrued interest on borrowings - securitization transactions | 2 | 3 | 4 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 5,279 | 4,685 | 5,365 |
Maximum remaining term of all restricted securitized retail notes | 7 years | ||
Securitized | |||
Securitization Transactions | |||
Financing receivables securitized (retail notes) | $ 5,421 | 4,716 | 5,484 |
Allowance for credit losses - securitization transactions | (20) | (13) | (15) |
Other assets - securitization transactions | 113 | 98 | 104 |
Total restricted securitized assets - securitization transactions | 5,514 | 4,801 | 5,573 |
VIE-Primary Beneficiary | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 3,605 | 2,898 | 3,342 |
Total liabilities related to restricted securitized assets - securitization transactions | 3,487 | 2,856 | 3,259 |
Non-VIE Banking Operation | |||
Securitization Transactions | |||
Total restricted securitized assets - securitization transactions | 568 | 576 | 680 |
Total liabilities related to restricted securitized assets - securitization transactions | 533 | 554 | 643 |
VIE-Not Primary Beneficiary | |||
Securitization Transactions | |||
Unconsolidated conduits, carrying value of liabilities | 1,259 | ||
Unconsolidated conduits, maximum exposure to loss | 1,341 | ||
Total Assets | 37,000 | ||
Total restricted securitized assets - securitization transactions | 1,341 | 1,327 | 1,551 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,259 | $ 1,275 | $ 1,463 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
INVENTORIES | |||
Raw materials and supplies | $ 2,895 | $ 1,995 | $ 2,101 |
Work-in-process | 1,124 | 648 | 696 |
Finished goods and parts | 4,176 | 4,006 | 4,427 |
Total FIFO value | 8,195 | 6,649 | 7,224 |
Less adjustment to LIFO value | 1,785 | 1,650 | 1,574 |
Inventories | $ 6,410 | $ 4,999 | $ 5,650 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Aug. 01, 2021 | Aug. 02, 2020 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 3,081 | $ 2,917 |
Acquisitions | 12 | |
Translation adjustments and other | 55 | 67 |
Goodwill - net, ending balance | 3,148 | 2,984 |
Accumulated goodwill impairment losses | 0 | 0 |
Production & Precision Ag | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 333 | 310 |
Acquisitions | 12 | |
Translation adjustments and other | 13 | 1 |
Goodwill - net, ending balance | 358 | 311 |
Small Ag & Turf | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 268 | 264 |
Translation adjustments and other | (3) | 1 |
Goodwill - net, ending balance | 265 | 265 |
Construction & Forestry | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 2,480 | 2,343 |
Translation adjustments and other | 45 | 65 |
Goodwill - net, ending balance | $ 2,525 | $ 2,408 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Amortized intangible assets: | |||
Total at cost | $ 1,625 | $ 1,591 | $ 1,536 |
Total accumulated amortization | 481 | 387 | 358 |
Amortized intangible assets - net | 1,144 | 1,204 | 1,178 |
Unamortized intangible assets: | |||
Other intangible assets - net | 1,267 | 1,327 | 1,301 |
Customer Lists and Relationships | |||
Amortized intangible assets: | |||
Total at cost | 545 | 535 | 515 |
Total accumulated amortization | 144 | 113 | 103 |
Technology, Patents, Trademarks and Other | |||
Amortized intangible assets: | |||
Total at cost | 1,080 | 1,056 | 1,021 |
Total accumulated amortization | 337 | 274 | 255 |
In-process Research and Development | |||
Unamortized intangible assets: | |||
Unamortized intangible assets | $ 123 | $ 123 | $ 123 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Amortized Intangible Assets: | ||||
Amortization expense of other intangible assets | $ 27 | $ 26 | $ 89 | $ 76 |
Amortization expense of other intangible assets - remainder of 2021 | 26 | 26 | ||
Amortization expense of other intangible assets - 2022 | 107 | 107 | ||
Amortization expense of other intangible assets - 2023 | 106 | 106 | ||
Amortization expense of other intangible assets - 2024 | 102 | 102 | ||
Amortization expense of other intangible assets - 2025 | 99 | 99 | ||
Amortization expense of other intangible assets - 2026 | $ 97 | $ 97 |
TOTAL SHORT-TERM BORROWINGS (De
TOTAL SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Short-term borrowings | |||
Short-term borrowings | $ 10,404 | $ 8,582 | $ 9,075 |
Short-term securitization borrowings | 5,277 | 4,682 | 5,361 |
Total short-term borrowings | 15,681 | 13,264 | 14,436 |
Equipment Operations | |||
Short-term borrowings | |||
Short-term borrowings | 1,376 | 292 | 853 |
Short-term securitization borrowings | 12 | 26 | 37 |
Equipment Operations | Commercial Paper | |||
Short-term borrowings | |||
Short-term borrowings | 60 | ||
Equipment Operations | Notes Payable to Banks | |||
Short-term borrowings | |||
Short-term borrowings | 114 | 192 | 268 |
Equipment Operations | Finance Lease Obligations Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | 23 | 21 | 18 |
Equipment Operations | Long-term Borrowings Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | 1,239 | 79 | 507 |
Financial Services | |||
Short-term borrowings | |||
Short-term borrowings | 9,028 | 8,290 | 8,222 |
Short-term securitization borrowings | 5,265 | 4,656 | 5,324 |
Financial Services | Commercial Paper | |||
Short-term borrowings | |||
Short-term borrowings | 1,882 | 1,238 | 1,927 |
Financial Services | Notes Payable to Banks | |||
Short-term borrowings | |||
Short-term borrowings | 19 | 182 | 181 |
Financial Services | Long-term Borrowings Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | $ 7,127 | $ 6,870 | $ 6,114 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) € in Millions, $ in Millions | Aug. 01, 2021USD ($) | Aug. 01, 2021EUR (€) | Nov. 01, 2020USD ($) | Nov. 01, 2020EUR (€) | Aug. 02, 2020USD ($) | Aug. 02, 2020EUR (€) |
Long-term borrowings | ||||||
Total long-term borrowings | $ 32,280 | $ 32,734 | $ 34,037 | |||
Equipment Operations | ||||||
Long-term borrowings | ||||||
Less debt issuance costs and debt discounts | 56 | 61 | 63 | |||
Total long-term borrowings | $ 8,982 | 10,124 | 10,217 | |||
Equipment Operations | 8-1/2% Debentures Due 2022 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 105 | $ 105 | ||||
Debt instrument, stated interest rate | 8.50% | 8.50% | 8.50% | 8.50% | ||
Equipment Operations | 2.60% Notes Due 2022 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 1,000 | $ 1,000 | ||||
Debt instrument, stated interest rate | 2.60% | 2.60% | 2.60% | 2.60% | 2.60% | 2.60% |
Equipment Operations | 2.75% Notes Due 2025 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 700 | $ 700 | $ 700 | |||
Debt instrument, stated interest rate | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% |
Equipment Operations | 6.55% Debentures Due 2028 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 200 | $ 200 | $ 200 | |||
Debt instrument, stated interest rate | 6.55% | 6.55% | 6.55% | 6.55% | 6.55% | 6.55% |
Equipment Operations | 5.375% Notes Due 2029 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 500 | $ 500 | $ 500 | |||
Debt instrument, stated interest rate | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% |
Equipment Operations | 3.10% Notes Due 2030 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 700 | $ 700 | $ 700 | |||
Debt instrument, stated interest rate | 3.10% | 3.10% | 3.10% | 3.10% | 3.10% | 3.10% |
Equipment Operations | 8.10% Debentures Due 2030 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 250 | $ 250 | $ 250 | |||
Debt instrument, stated interest rate | 8.10% | 8.10% | 8.10% | 8.10% | 8.10% | 8.10% |
Equipment Operations | 7.125% Notes Due 2031 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 300 | $ 300 | $ 300 | |||
Debt instrument, stated interest rate | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% |
Equipment Operations | 3.90% Notes Due 2042 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 1,250 | $ 1,250 | $ 1,250 | |||
Debt instrument, stated interest rate | 3.90% | 3.90% | 3.90% | 3.90% | 3.90% | 3.90% |
Equipment Operations | 2.875% Notes Due 2049 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 500 | $ 500 | $ 500 | |||
Debt instrument, stated interest rate | 2.875% | 2.875% | 2.875% | 2.875% | 2.875% | 2.875% |
Equipment Operations | 3.75% Notes Due 2050 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 850 | $ 850 | $ 850 | |||
Debt instrument, stated interest rate | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
Equipment Operations | .5% Notes Due 2023 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 594 | $ 584 | $ 592 | |||
Debt instrument, stated interest rate | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% |
Principal amount | € | € 500 | € 500 | € 500 | |||
Equipment Operations | 1.375% Notes Due 2024 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 951 | $ 934 | $ 948 | |||
Debt instrument, stated interest rate | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% |
Principal amount | € | € 800 | € 800 | € 800 | |||
Equipment Operations | 1.85% Notes Due 2028 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 713 | $ 700 | $ 711 | |||
Debt instrument, stated interest rate | 1.85% | 1.85% | 1.85% | 1.85% | 1.85% | 1.85% |
Principal amount | € | € 600 | € 600 | € 600 | |||
Equipment Operations | 2.20% Notes Due 2032 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 713 | $ 700 | $ 711 | |||
Debt instrument, stated interest rate | 2.20% | 2.20% | 2.20% | 2.20% | 2.20% | 2.20% |
Principal amount | € | € 600 | € 600 | € 600 | |||
Equipment Operations | 1.65% Notes Due 2039 | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 773 | $ 759 | $ 770 | |||
Debt instrument, stated interest rate | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Principal amount | € | € 650 | € 650 | € 650 | |||
Equipment Operations | Other Notes | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 44 | $ 153 | $ 193 | |||
Financial Services | ||||||
Long-term borrowings | ||||||
Less debt issuance costs and debt discounts | 63 | 54 | 57 | |||
Total long-term borrowings | 23,298 | 22,610 | 23,820 | |||
Financial Services | Medium-term notes | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | 22,346 | 21,661 | 22,826 | |||
Principal amount | 21,892 | 20,996 | 22,032 | |||
Financial Services | Other Notes | ||||||
Long-term borrowings | ||||||
Long-term borrowings, gross | $ 1,015 | $ 1,003 | $ 1,051 |
LEASES - Lease Right of Use Ass
LEASES - Lease Right of Use Assets and Liabilities - (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Lessee | |||
Operating leases - Other assets | $ 310 | $ 324 | $ 341 |
Operating lease, right-of-use asset, Condensed Consolidated Balance Sheet location | Other assets | Other assets | Other assets |
Operating leases - Accounts payable and accrued expenses | $ 304 | $ 305 | $ 318 |
Operating lease, liability, Condensed Consolidated Balance Sheet location | Accounts payable and accrued expenses | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Finance leases - Property and equipment - net | $ 68 | $ 63 | $ 56 |
Finance lease, right-of-use asset, Condensed Consolidated Balance Sheet location | Property and equipment - net | Property and equipment - net | Property and equipment - net |
Finance leases - Short-term borrowings | $ 23 | $ 21 | $ 18 |
Finance lease, liability, short-term, Condensed Consolidated Balance Sheet location | Short-term borrowings | Short-term borrowings | Short-term borrowings |
Finance leases - Long-term borrowings | $ 42 | $ 39 | $ 33 |
Finance lease, liability, long-term, Condensed Consolidated Balance Sheet location | Long-term borrowings | Long-term borrowings | Long-term borrowings |
Total finance lease liabilities | $ 65 | $ 60 | $ 51 |
LEASES - Right of Use Assets Ob
LEASES - Right of Use Assets Obtained in Exchange for Lease Liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Aug. 01, 2021 | Aug. 02, 2020 | |
Right of Use Assets Obtained in Exchange for Lease Liabilities | ||
Operating leases | $ 80 | $ 27 |
Finance leases | $ 25 | $ 37 |
LEASES - Lease Revenues (Detail
LEASES - Lease Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Aug. 01, 2021 | Aug. 02, 2020 | May 03, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Lessor | |||||
Sales-type and direct finance lease revenues | $ 37 | $ 33 | $ 107 | $ 101 | |
Operating lease revenues | 359 | 361 | 1,079 | 1,104 | |
Variable lease revenues | 6 | 6 | 18 | 17 | |
Total lease revenues | $ 402 | $ 400 | $ 1,204 | $ 1,222 | |
Other Operating Expenses | |||||
Lessor | |||||
Equipment on operating leases impairment, pretax | $ 22 | ||||
Non-cash operating lease inventory impairments | $ 10 |
LEASES - Short-term Relief to L
LEASES - Short-term Relief to Lessees (Details) - COVID-19 | 9 Months Ended | |
Nov. 01, 2020 | Aug. 01, 2021 | |
Lessor | ||
Operating lease portfolio granted relief (as a percent) | 3.00% | |
Maximum | ||
Lessor | ||
Lease payment deferral period | 3 months |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||||
Historical claims rate, review period | 5 years | |||
Unamortized extended warranty premiums (deferred revenue) | $ 709 | $ 621 | $ 709 | $ 621 |
Change in Warranty Liability and Unearned Premiums | ||||
Beginning of period balance | 1,876 | 1,767 | 1,743 | 1,800 |
Payments | (209) | (250) | (626) | (703) |
Amortization of premiums received | (66) | (58) | (193) | (168) |
Accruals for warranties | 299 | 177 | 794 | 609 |
Premiums received | 96 | 68 | 258 | 202 |
Foreign exchange | (2) | 27 | 18 | (9) |
End of period balance | $ 1,994 | $ 1,731 | $ 1,994 | $ 1,731 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 9 Months Ended |
Aug. 01, 2021USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 312 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 72 |
Miscellaneous contingent liabilities | 65 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 419 |
Guarantee obligations accrued losses | $ 7 |
Guarantee obligations term | 7 years |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 02, 2020 | Nov. 01, 2020 | Aug. 02, 2020 |
Fair Values of Financial Instruments | ||||
Financing receivables - net | $ 31,449 | $ 29,723 | $ 29,750 | $ 27,814 |
Financing receivables securitized - net | 5,401 | $ 4,699 | 4,703 | 5,469 |
Short-term securitization borrowings | 5,277 | 4,682 | 5,361 | |
Long-term borrowings | 32,280 | 32,734 | 34,037 | |
Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 8,440 | 7,014 | 6,672 | |
Long-term borrowings | 34,345 | 35,007 | 36,627 | |
Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 31,515 | 29,941 | 28,031 | |
Financing receivables securitized - net | 5,467 | 4,799 | 5,578 | |
Level 2 and Level 3 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 5,302 | 4,724 | 5,418 | |
Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 31,449 | 29,750 | 27,814 | |
Financing receivables securitized - net | 5,401 | 4,703 | 5,469 | |
Short-term securitization borrowings | 5,277 | 4,682 | 5,361 | |
Long-term borrowings due within one year | 8,366 | 6,949 | 6,621 | |
Long-term borrowings | 32,238 | 32,695 | 34,004 | |
Equipment Operations | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 12 | 26 | 37 | |
Long-term borrowings | 8,982 | 10,124 | 10,217 | |
Equipment Operations | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Long-term borrowings due within one year | 1,257 | 78 | 504 | |
Long-term borrowings | 10,586 | 11,837 | 12,163 | |
Equipment Operations | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 85 | 103 | 102 | |
Financing receivables securitized - net | 13 | 26 | 34 | |
Short-term securitization borrowings | 13 | 26 | 37 | |
Equipment Operations | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 89 | 105 | 111 | |
Financing receivables securitized - net | 13 | 26 | 37 | |
Short-term securitization borrowings | 12 | 26 | 37 | |
Long-term borrowings due within one year | 1,239 | 79 | 507 | |
Long-term borrowings | 8,940 | 10,085 | 10,184 | |
Financial Services | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 5,265 | 4,656 | 5,324 | |
Long-term borrowings | 23,298 | 22,610 | 23,820 | |
Financial Services | Level 2 | ||||
Fair Values of Financial Instruments | ||||
Short-term securitization borrowings | 5,289 | 4,698 | 5,381 | |
Long-term borrowings due within one year | 7,183 | 6,936 | 6,168 | |
Long-term borrowings | 23,759 | 23,170 | 24,464 | |
Financial Services | Level 3 | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 31,430 | 29,838 | 27,929 | |
Financing receivables securitized - net | 5,454 | 4,773 | 5,544 | |
Financial Services | Carrying Value | ||||
Fair Values of Financial Instruments | ||||
Financing receivables - net | 31,360 | 29,645 | 27,703 | |
Financing receivables securitized - net | 5,388 | 4,677 | 5,432 | |
Short-term securitization borrowings | 5,265 | 4,656 | 5,324 | |
Long-term borrowings due within one year | 7,127 | 6,870 | 6,114 | |
Long-term borrowings | $ 23,298 | $ 22,610 | $ 23,820 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 688 | $ 641 | $ 640 |
Derivative assets | 432 | 725 | 961 |
Derivative liabilities | 152 | 115 | 170 |
Other Assets Member | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 432 | 725 | 961 |
Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 152 | 115 | 170 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 137 | 119 | 120 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | International Equity Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 3 | 2 | 2 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Equity Fund | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 74 | 62 | 68 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 60 | 55 | 50 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 551 | 518 | 515 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Other Assets Member | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 432 | 725 | 961 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 152 | 115 | 170 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets Member | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 389 | 669 | 895 |
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 | 83 | 88 | 115 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets Member | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 41 | 48 | 57 |
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 | 67 | 26 | 55 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets Member | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 2 | 8 | 9 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 2 | 1 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | U.S. Government Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 124 | 113 | 105 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 71 | 68 | 64 |
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 | 217 | 188 | 185 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 3 | 2 | 2 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-backed Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 136 | 147 | 159 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 4 | $ 5 |
FAIR VALUE MEASUREMENTS - Contr
FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions | Aug. 01, 2021USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 21 |
Amortized cost, due after one through five years | 82 |
Amortized cost, due after five through 10 years | 136 |
Amortized cost, due after 10 years | 213 |
Amortized cost, mortgage-backed securities | 132 |
Amortized cost, debt securities | 584 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 21 |
Fair value, due after one through five years | 86 |
Fair value, due after five through 10 years | 142 |
Fair value, due after 10 years | 226 |
Fair value, mortgage-backed securities | 136 |
Fair value, debt securities | $ 611 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | Nov. 01, 2020 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||
Other receivables | $ 1,217 | $ 1,673 | $ 1,217 | $ 1,220 |
Equipment on operating leases - net | 7,158 | 6,982 | 7,158 | 7,298 |
Fair Value, Nonrecurring Measurements | Level 1 | ||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||
Losses, Investments in unconsolidated affiliates | 20 | |||
Fair Value, Nonrecurring Measurements | Level 3 | ||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||
Other receivables | 1 | 1 | 1 | |
Losses, Other receivables | 2 | 2 | ||
Equipment on operating leases - net | 371 | |||
Losses, Equipment on operating leases - net | 22 | |||
Property and equipment - net | 8 | 8 | 135 | |
Losses, Property and equipment - net | 5 | 44 | 67 | |
Investments in unconsolidated affiliates | 19 | |||
Losses, Other intangible assets - net | 2 | 2 | ||
Other assets | 19 | 19 | $ 59 | |
Losses, Other assets | $ 24 | $ 6 | $ 34 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 | |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ (4) | ||
Gains or losses reclassified from OCI to earnings | 0 | ||
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amount of cash flow hedge derivatives | $ 1,750 | $ 1,550 | $ 1,900 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Fair Value Hedges Member | Designated as Hedging Instruments | |||
Fair Value Hedges | |||
Notional amount of interest rate fair value hedge derivatives | $ 8,658 | $ 7,239 | $ 8,850 |
Long-term Borrowings Due in One Year | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 188 | 155 | 480 |
Active Hedging Relationships | 4 | 2 | 6 |
Discontinued Relationships | (1) | 3 | 2 |
Total | 3 | 5 | 8 |
Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 8,888 | 7,725 | 9,140 |
Active Hedging Relationships | 263 | 543 | 754 |
Discontinued Relationships | 190 | 122 | 40 |
Total | $ 453 | $ 665 | $ 794 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 9,195 | $ 8,514 | $ 7,522 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 6,328 | 4,903 | 4,790 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 197 | $ 113 | $ 125 |
DERIVATIVE INSTRUMENTS - Fair_2
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 432 | $ 725 | $ 961 |
Total derivative liabilities | 152 | 115 | 170 |
Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 432 | 725 | 961 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 152 | 115 | 170 |
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 332 | 586 | 806 |
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 40 | 14 | 24 |
Not Designated as Hedging Instruments | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 100 | 139 | 155 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 112 | 101 | 146 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 57 | 83 | 89 |
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 43 | 74 | 91 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 41 | 48 | 57 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 67 | 26 | 55 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 2 | 8 | $ 9 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 2 | $ 1 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Aug. 02, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (16) | $ (80) | $ (319) | $ 165 |
Interest Rate Contracts | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI | (1) | (1) | (1) | (18) |
Interest Rate Contracts | Net Sales Related to Derivative Instruments | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (2) | (2) | 3 | (26) |
Interest Rate Contracts | Interest Expense Member | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | 146 | 78 | (79) | 589 |
Cash flow hedges, reclassified from OCI | (3) | (7) | (11) | (13) |
Not designated as hedges, gains (losses) | (2) | (1) | (6) | 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) | (7) | (28) | (107) | 64 |
Foreign Exchange Contracts | Other Operating Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (5) | $ (49) | $ (209) | $ 125 |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Aug. 01, 2021 | Nov. 01, 2020 | Aug. 02, 2020 |
Derivative instruments | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 87 | $ 89 | $ 115 |
Cash collateral posted | 0 | 0 | 0 |
Derivative Assets | |||
Gross amounts recognized | 432 | 725 | 961 |
Netting arrangements | (94) | (93) | (120) |
Collateral received | (88) | (274) | (332) |
Net amount | 250 | 358 | 509 |
Derivative Liabilities | |||
Gross amounts recognized | 152 | 115 | 170 |
Netting arrangements | (94) | (93) | (120) |
Collateral paid | (2) | ||
Net amount | 56 | $ 22 | $ 50 |
International Futures Market | |||
Derivative instruments | |||
Collateral to participate in an international futures market | $ 8 |
STOCK OPTION AND RESTRICTED S_2
STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands | 1 Months Ended | 9 Months Ended |
Dec. 27, 2020 | Aug. 01, 2021 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant under the equity incentive plan | 17,700 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 269 | |
Options granted, exercise price (in dollars per share) | $ 254.83 | |
Options granted, fair value (in dollars per share) | $ 62.73 | |
Options outstanding (in shares) | 2,600 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 126.13 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 212 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 165 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 258.67 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 47 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 245.73 |
SPECIAL ITEMS - Impairments, Ot
SPECIAL ITEMS - Impairments, Other Charges (Benefits), and Dispositions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Aug. 01, 2021 | Jan. 31, 2021 | Aug. 02, 2020 | May 03, 2020 | Aug. 01, 2021 | Aug. 02, 2020 | |
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | $ 50 | |||||
Total expense, pretax | $ 127 | |||||
Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Factory closure, pretax | 13 | |||||
Long-lived asset impairments, pretax | 62 | |||||
Equity in Loss of Unconsolidated Affiliate | ||||||
Impairments and Other Charges (Benefits) | ||||||
Investments in unconsolidated affiliates impairment, pretax | 20 | |||||
Other Operating Expenses | ||||||
Impairments and Other Charges (Benefits) | ||||||
Equipment on operating leases impairment, pretax | $ 22 | |||||
Operating lease inventory impairment, pretax | 10 | |||||
Equipment on operating leases & matured operating lease inventory impairments, pretax | 32 | |||||
Small Ag & Turf | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense, pretax | 13 | |||||
Small Ag & Turf | Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Factory closure, pretax | 13 | |||||
Construction & Forestry | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense, pretax | 82 | |||||
Construction & Forestry | Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 62 | |||||
Construction & Forestry | Equity in Loss of Unconsolidated Affiliate | ||||||
Impairments and Other Charges (Benefits) | ||||||
Investments in unconsolidated affiliates impairment, pretax | 20 | |||||
Financial Services Segment | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense, pretax | 32 | |||||
Financial Services Segment | Other Operating Expenses | ||||||
Impairments and Other Charges (Benefits) | ||||||
Equipment on operating leases & matured operating lease inventory impairments, pretax | $ 32 | |||||
Sale Of German Walk-behind Lawn Mower Business | Other Operating Expenses | ||||||
Impairments and Other Charges (Benefits) | ||||||
Non-cash impairments, pretax | $ 24 | |||||
Non-cash impairments charge, after-tax | 24 | |||||
Impairments and Other Benefits | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense (benefit), pretax | (35) | |||||
Impairments and Other Benefits | Foreign Tax Authority | Brazil | ||||||
Impairments and Other Charges (Benefits) | ||||||
Indirect tax benefit, pretax | $ (58) | |||||
Impairments and Other Benefits | Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 50 | |||||
Indirect tax benefit, pretax | (58) | |||||
Impairments and Other Benefits | Other Income | ||||||
Impairments and Other Charges (Benefits) | ||||||
Gain on sale | $ (27) | (27) | ||||
Impairments and Other Benefits | Production & Precision Ag | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense (benefit), pretax | (48) | |||||
Impairments and Other Benefits | Production & Precision Ag | Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 5 | |||||
Indirect tax benefit, pretax | (53) | |||||
Impairments and Other Benefits | Small Ag & Turf | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense (benefit), pretax | (24) | |||||
Impairments and Other Benefits | Small Ag & Turf | Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 3 | |||||
Impairments and Other Benefits | Small Ag & Turf | Other Income | ||||||
Impairments and Other Charges (Benefits) | ||||||
Gain on sale | (27) | |||||
Impairments and Other Benefits | Construction & Forestry | ||||||
Impairments and Other Charges (Benefits) | ||||||
Total expense (benefit), pretax | 37 | |||||
Impairments and Other Benefits | Construction & Forestry | Cost of Sales | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 42 | |||||
Indirect tax benefit, pretax | $ (5) | |||||
Impairments and Other Benefits | German Asphalt Plant Factory | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 38 | |||||
Fixed asset impairment, after-tax | 38 | |||||
Impairments and Other Benefits | Manufacturing Locations | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | $ 12 | |||||
Impairments and Closure Costs | ||||||
Impairments and Other Charges (Benefits) | ||||||
Equipment on operating leases impairment, pretax | 22 | |||||
Operating lease inventory impairment, pretax | 10 | |||||
Income tax benefit for the equipment on operating leases and matured operating lease inventory impairments | 9 | |||||
Impairments and Closure Costs | South African Construction Equipment Company | ||||||
Impairments and Other Charges (Benefits) | ||||||
Investments in unconsolidated affiliates impairment, pretax | 20 | |||||
Investments in unconsolidated affiliates impairment, after-tax | 20 | |||||
Impairments and Closure Costs | Closure of Small Agriculture Equipment Factory in China | ||||||
Impairments and Other Charges (Benefits) | ||||||
Non-cash impairments, pretax | 9 | |||||
Non-cash impairments charge, after-tax | 9 | |||||
Severance payments, pretax | 4 | |||||
Severance payments, after-tax | $ 4 | |||||
Impairments and Closure Costs | German Asphalt Plant Factory | ||||||
Impairments and Other Charges (Benefits) | ||||||
Long-lived asset impairments, pretax | 62 | |||||
Fixed asset impairments, after-tax | $ 62 |
SPECIAL ITEMS - Employee-Separa
SPECIAL ITEMS - Employee-Separation Program (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Feb. 02, 2020 | Aug. 02, 2020 | |
OPEB | ||
Employee-Separation Program | ||
Curtailment expense | $ 21 | |
2020 Employee-Separation Program | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 138 | |
2020 Employee-Separation Program | OPEB | ||
Employee-Separation Program | ||
Curtailment expense | $ 21 | |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | Other Cost of Operating Revenue | |
2020 Employee-Separation Program | Cost of Sales | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 41 | |
2020 Employee-Separation Program | Research and Development | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 19 | |
2020 Employee-Separation Program | Selling, Administrative and General Expenses | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 55 | |
2020 Employee-Separation Program | Operating Profit | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 115 | |
2020 Employee-Separation Program | Other Operating Expenses | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 23 | |
2020 Employee-Separation Program | Production & Precision Ag | Cost of Sales | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 21 | |
2020 Employee-Separation Program | Production & Precision Ag | Research and Development | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 8 | |
2020 Employee-Separation Program | Production & Precision Ag | Selling, Administrative and General Expenses | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 19 | |
2020 Employee-Separation Program | Production & Precision Ag | Operating Profit | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 48 | |
2020 Employee-Separation Program | Small Ag & Turf | Cost of Sales | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 11 | |
2020 Employee-Separation Program | Small Ag & Turf | Research and Development | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 7 | |
2020 Employee-Separation Program | Small Ag & Turf | Selling, Administrative and General Expenses | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 19 | |
2020 Employee-Separation Program | Small Ag & Turf | Operating Profit | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 37 | |
2020 Employee-Separation Program | Construction & Forestry | Cost of Sales | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 9 | |
2020 Employee-Separation Program | Construction & Forestry | Research and Development | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 4 | |
2020 Employee-Separation Program | Construction & Forestry | Selling, Administrative and General Expenses | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 14 | |
2020 Employee-Separation Program | Construction & Forestry | Operating Profit | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 27 | |
2020 Employee-Separation Program | Financial Services Segment | Selling, Administrative and General Expenses | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | 3 | |
2020 Employee-Separation Program | Financial Services Segment | Operating Profit | ||
Employee-Separation Program | ||
Total employee-separation program's expenses, pretax | $ 3 |
SPECIAL ITEMS - Redeemable Nonc
SPECIAL ITEMS - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
May 03, 2020 | Aug. 02, 2020 | |
Redeemable Noncontrolling Interest | ||
Noncontrolling interest redemption | $ 14 | |
Production & Precision Ag | ||
Redeemable Noncontrolling Interest | ||
Noncontrolling interest redemption (as a percent) | 20.00% | |
Noncontrolling interest redemption | $ 14 | |
Noncontrolling interest redemption gain or loss | $ 0 |