Document and Entity Information
Document and Entity Information | 9 Months Ended |
Jul. 31, 2022 shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jul. 31, 2022 |
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 | 301,819,630 |
Current Fiscal Year End Date | --10-30 |
Document Fiscal Year Focus | 2022 |
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, $1 par value |
Trading Symbol | DE |
Security Exchange Name | NYSE |
6.55% Debentures Due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.55% Debentures Due 2028 |
Trading Symbol | DE28 |
Security Exchange Name | NYSE |
STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Net Sales and Revenues | ||||
Net sales and revenues | $ 14,102 | $ 11,527 | $ 37,041 | $ 32,697 |
Costs and Expenses | ||||
Research and development expenses | 481 | 394 | 1,336 | 1,137 |
Selling, administrative and general expenses | 959 | 841 | 2,672 | 2,448 |
Interest expense | 296 | 244 | 713 | 783 |
Other operating expenses | 316 | 324 | 954 | 1,033 |
Total | 11,563 | 9,377 | 30,799 | 26,708 |
Income of Consolidated Group before Income Taxes | 2,539 | 2,150 | 6,242 | 5,989 |
Provision for income taxes | 654 | 491 | 1,364 | 1,328 |
Income of Consolidated Group | 1,885 | 1,659 | 4,878 | 4,661 |
Equity in income of unconsolidated affiliates | 8 | 8 | 21 | |
Net Income | 1,885 | 1,667 | 4,886 | 4,682 |
Less: Net income attributable to noncontrolling interests | 1 | 1 | 2 | |
Net Income Attributable to Deere & Company | $ 1,884 | $ 1,667 | $ 4,885 | $ 4,680 |
Per Share Data | ||||
Basic (in dollars per share) | $ 6.20 | $ 5.36 | $ 15.97 | $ 14.98 |
Diluted (in dollars per share) | 6.16 | 5.32 | 15.88 | 14.86 |
Dividends declared (in dollars per share) | 1.13 | 0.90 | 3.23 | 2.56 |
Dividends paid (in dollars per share) | $ 1.05 | $ 0.90 | $ 3.15 | $ 2.42 |
Average Shares Outstanding | ||||
Basic (in shares) | 304.1 | 311 | 305.8 | 312.4 |
Diluted (in shares) | 305.7 | 313.4 | 307.7 | 314.9 |
Net Sales | ||||
Net Sales and Revenues | ||||
Net sales and revenues | $ 13,000 | $ 10,413 | $ 33,565 | $ 29,461 |
Cost of Sales | ||||
Cost of sales | 9,511 | 7,574 | 25,124 | 21,307 |
Finance and Interest Income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | 846 | 825 | 2,441 | 2,468 |
Other income | ||||
Net Sales and Revenues | ||||
Net sales and revenues | $ 256 | $ 289 | $ 1,035 | $ 768 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME | ||||
Net Income | $ 1,885 | $ 1,667 | $ 4,886 | $ 4,682 |
Other Comprehensive Income (Loss), Net of Income Taxes | ||||
Retirement benefits adjustment | 79 | 54 | (137) | 208 |
Cumulative translation adjustment | (269) | (114) | (784) | 319 |
Unrealized gain (loss) on derivatives | (1) | 1 | 41 | 8 |
Unrealized gain (loss) on debt securities | 6 | 8 | (57) | (7) |
Other Comprehensive Income (Loss), Net of Income Taxes | (185) | (51) | (937) | 528 |
Comprehensive Income of Consolidated Group | 1,700 | 1,616 | 3,949 | 5,210 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (3) | (8) | 2 | |
Comprehensive Income Attributable to Deere & Company | $ 1,703 | $ 1,616 | $ 3,957 | $ 5,208 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Assets | |||
Cash and cash equivalents | $ 4,359 | $ 8,017 | $ 7,519 |
Marketable securities | 719 | 728 | 688 |
Trade accounts and notes receivable - net | 6,696 | 4,208 | 5,268 |
Other receivables | 1,999 | 1,765 | 1,702 |
Equipment on operating leases - net | 6,554 | 6,988 | 6,982 |
Inventories | 9,121 | 6,781 | 6,410 |
Property and equipment - net | 5,666 | 5,820 | 5,649 |
Goodwill | 3,754 | 3,291 | 3,148 |
Other intangible assets - net | 1,281 | 1,275 | 1,267 |
Retirement benefits | 3,125 | 3,601 | 990 |
Deferred income taxes | 1,110 | 1,037 | 1,767 |
Other assets | 2,236 | 2,145 | 2,448 |
Total Assets | 86,817 | 84,114 | 80,688 |
Liabilities | |||
Short-term borrowings | 14,176 | 10,919 | 10,404 |
Short-term securitization borrowings | 4,920 | 4,605 | 5,277 |
Accounts payable and accrued expenses | 12,986 | 12,348 | 11,207 |
Deferred income taxes | 561 | 576 | 515 |
Long-term borrowings | 32,132 | 32,888 | 32,280 |
Retirement benefits and other liabilities | 2,911 | 4,344 | 5,272 |
Total liabilities | 67,686 | 65,680 | 64,955 |
Commitments and contingencies (Note 15) | |||
Redeemable noncontrolling interest (Note 19) | 95 | ||
Stockholders' Equity | |||
Common stock, $1 par value (issued shares at July 31, 2022 - 536,431,204) | 5,139 | 5,054 | 5,031 |
Common stock in treasury | (22,976) | (20,533) | (19,780) |
Retained earnings | 40,346 | 36,449 | 35,491 |
Accumulated other comprehensive income (loss) | (3,476) | (2,539) | (5,011) |
Total Deere & Company stockholders' equity | 19,033 | 18,431 | 15,731 |
Noncontrolling interests | 3 | 3 | 2 |
Total stockholders' equity | 19,036 | 18,434 | 15,733 |
Total Liabilities and Stockholders' Equity | 86,817 | 84,114 | 80,688 |
Unrestricted | |||
Assets | |||
Financing receivables - net | 35,056 | 33,799 | 31,449 |
Securitized | |||
Assets | |||
Financing receivables - net | $ 5,141 | $ 4,659 | $ 5,401 |
Location of liability for pledged asset | Short-term securitization borrowings | Short-term securitization borrowings | Short-term securitization borrowings |
Other assets | $ 136 | $ 107 | $ 113 |
Total Assets | $ 5,277 | $ 4,766 | $ 5,514 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Jul. 31, 2022 $ / shares shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | |
Common stock, par value (in dollars per share) | $ / shares | $ 1 |
Common stock, issued shares | shares | 536,431,204 |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2022 | Aug. 01, 2021 | |
Cash Flows from Operating Activities | ||
Net income | $ 4,886 | $ 4,682 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (credit) for credit losses | 62 | (17) |
Provision for depreciation and amortization | 1,443 | 1,569 |
Impairment charges | 81 | 50 |
Share-based compensation expense | 64 | 64 |
Gain on remeasurement of previously held equity investment | (326) | |
Undistributed earnings of unconsolidated affiliates | (1) | 4 |
Credit for deferred income taxes | (6) | (271) |
Changes in assets and liabilities: | ||
Trade, notes, and financing receivables related to sales | (2,357) | (444) |
Inventories | (2,526) | (1,817) |
Accounts payable and accrued expenses | (15) | 742 |
Accrued income taxes payable/receivable | 82 | 34 |
Retirement benefits | (1,014) | 13 |
Other | 45 | (295) |
Net cash provided by operating activities | 418 | 4,314 |
Cash Flows from Investing Activities | ||
Collections of receivables (excluding receivables related to sales) | 15,774 | 14,480 |
Proceeds from sales of equipment on operating leases | 1,501 | 1,510 |
Cost of receivables acquired (excluding receivables related to sales) | (18,578) | (17,161) |
Acquisitions of businesses, net of cash acquired | (488) | (19) |
Purchases of property and equipment | (596) | (492) |
Cost of equipment on operating leases acquired | (1,717) | (1,210) |
Collateral on derivatives - net | (193) | (189) |
Other | (133) | (21) |
Net cash used for investing activities | (4,430) | (3,102) |
Cash Flows from Financing Activities | ||
Increase in total short-term borrowings | 4,267 | 929 |
Proceeds from long-term borrowings | 6,281 | 5,877 |
Payments of long-term borrowings | (6,578) | (5,172) |
Proceeds from issuance of common stock | 55 | 136 |
Repurchases of common stock | (2,477) | (1,780) |
Dividends paid | (971) | (761) |
Other | (62) | (80) |
Net cash provided by (used for) financing activities | 515 | (851) |
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | (143) | 106 |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | (3,640) | 467 |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 8,125 | 7,172 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | 4,485 | 7,639 |
Components of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 4,359 | 7,519 |
Restricted cash (Other assets) | $ 126 | $ 120 |
Balance sheet location of restricted cash | Other assets | Other assets |
Total cash, cash equivalents, and restricted cash | $ 4,485 | $ 7,639 |
STATEMENTS OF CHANGES IN CONSOL
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Common Stock | Treasury Stock | Retained Earnings Cumulative Effect from Adoption | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Cumulative Effect from Adoption | Total |
Balance (ASU 2016-13) at Nov. 01, 2020 | $ (35) | $ (35) | ||||||
Balance at Nov. 01, 2020 | $ 4,895 | $ 31,646 | $ (5,539) | $ 7 | $ 12,944 | |||
Balance at Nov. 01, 2020 | $ (18,065) | |||||||
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 | 35,491 | (5,011) | 2 | 15,733 | |||
Balance at Aug. 01, 2021 | (19,780) | (19,780) | ||||||
Balance at May. 02, 2021 | 4,999 | 34,105 | (4,960) | 4 | 15,096 | |||
Balance at May. 02, 2021 | (19,052) | |||||||
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 | 35,491 | (5,011) | 2 | 15,733 | |||
Balance at Aug. 01, 2021 | (19,780) | (19,780) | ||||||
Balance at Oct. 31, 2021 | 5,054 | 36,449 | (2,539) | 3 | 18,434 | |||
Balance at Oct. 31, 2021 | (20,533) | (20,533) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 4,885 | 2 | 4,887 | |||||
Other comprehensive income (loss) | (937) | (937) | ||||||
Repurchases of common stock | (2,477) | (2,477) | ||||||
Treasury shares reissued | 34 | 34 | ||||||
Dividends declared | (988) | (2) | (990) | |||||
Stock options and other | 85 | 85 | ||||||
Balance at Jul. 31, 2022 | 5,139 | 40,346 | (3,476) | 3 | 19,036 | |||
Balance at Jul. 31, 2022 | (22,976) | (22,976) | ||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Acquisitions (See Note 19) | 105 | |||||||
Net income (loss) | (1) | |||||||
Other comprehensive loss | (9) | |||||||
Redeemable Noncontrolling Interest - Balance at Jul. 31, 2022 | 95 | |||||||
Balance at May. 01, 2022 | 5,117 | 38,805 | (3,291) | 3 | 18,907 | |||
Balance at May. 01, 2022 | (21,727) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,884 | 1,884 | ||||||
Other comprehensive income (loss) | (185) | (185) | ||||||
Repurchases of common stock | (1,251) | (1,251) | ||||||
Treasury shares reissued | 2 | 2 | ||||||
Dividends declared | (343) | (343) | ||||||
Stock options and other | 22 | 22 | ||||||
Balance at Jul. 31, 2022 | $ 5,139 | $ 40,346 | $ (3,476) | $ 3 | 19,036 | |||
Balance at Jul. 31, 2022 | $ (22,976) | (22,976) | ||||||
Redeemable Noncontrolling Interest - Balance at May. 01, 2022 | 99 | |||||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||||
Net income (loss) | 1 | |||||||
Other comprehensive loss | (4) | |||||||
Other | (1) | |||||||
Redeemable Noncontrolling Interest - Balance at Jul. 31, 2022 | $ 95 |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION | 9 Months Ended |
Jul. 31, 2022 | |
ORGANIZATION AND CONSOLIDATION | |
ORGANIZATION AND CONSOLIDATION | (1) Organization and Consolidation Deere & Company has been developing innovative solutions to help our customers become more profitable for 185 years. References to Deere & Company, John Deere, Deere, or the Company include our consolidated subsidiaries, including our consolidated variable interest entities (VIEs). The Company is managed through the following operating segments: production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (FS). 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 2022 and 2021 were July 31, 2022 and August 1, 2021, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years or quarters refer to the Company’s fiscal years generally ending in October and the associated periods in those fiscal years. Prior to fiscal year 2021, the operating results of the Wirtgen Group (Wirtgen) were incorporated into the Company’s consolidated financial statements using a one-month lag period. The reporting lag was eliminated resulting in one additional month of Wirtgen activity in both the first quarter and the year-to-date period of 2021. The effect was an increase to Net sales of $270 million, which the Company considers immaterial to construction and forestry’s annual Net sales. As a result of recent acquisitions (see Note 19), the Company updated the presentation on the consolidated balance sheet to remove the following lines: Receivables from unconsolidated affiliates, Investments in unconsolidated affiliates, and Payables to unconsolidated affiliates. These balances are now immaterial to the Company’s consolidated balance sheet and have been reclassified into Other receivables, Other assets, and Accounts payable and accrued expenses, respectively. The Company consolidates certain VIEs related to retail note securitizations (see Note 9). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS | 9 Months Ended |
Jul. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS | (2) Summary of Significant Accounting Policies and New Accounting Standards Quarterly Financial Statements T Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. Revenue Recognition Prior to fiscal year 2022, certain goods were shipped to Canadian dealers on a consignment basis under which the risk and rewards of ownership were not transferred to the dealer at the time the goods were delivered. Accordingly, sales were not recorded until a retail customer purchased the goods. The dealer contract in Canada was changed for goods delivered after November 1, 2021, resulting in transfer of control and revenue recognition upon delivery. For certain goods delivered to Canadian dealers prior to November 1, 2021, the dealer consignment terms already in place remain in effect. As of July 31, 2022 and October 31, 2021, the remaining consigned inventory was $26 million and $150 million, respectively. New Accounting Standards The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board and other authoritative guidance. ASUs adopted in 2022 did not have a material impact on the Company’s financial statements, and ASUs to be adopted in future periods are being evaluated and at this point are not expected to have a material impact on the Company’s financial statements |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Jul. 31, 2022 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | (3) Revenue Recognition The Company’s Net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow: Three Months Ended July 31, 2022 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 2,904 $ 2,177 $ 1,789 $ 602 $ 7,472 Canada 451 185 288 149 1,073 Western Europe 645 646 380 25 1,696 Central Europe and CIS 348 109 111 14 582 Latin America 1,327 155 459 77 2,018 Asia, Africa, Australia, New Zealand, and Middle East 510 419 296 36 1,261 Total $ 6,185 $ 3,691 $ 3,323 $ 903 $ 14,102 Major product lines: Production agriculture $ 6,019 $ 6,019 Small agriculture $ 2,705 2,705 Turf 842 842 Construction $ 1,506 1,506 Compact construction 460 460 Roadbuilding 910 910 Forestry 316 316 Financial products 17 15 6 $ 903 941 Other 149 129 125 403 Total $ 6,185 $ 3,691 $ 3,323 $ 903 $ 14,102 Revenue recognized: At a point in time $ 6,154 $ 3,672 $ 3,303 $ 27 $ 13,156 Over time 31 19 20 876 946 Total $ 6,185 $ 3,691 $ 3,323 $ 903 $ 14,102 Nine Months Ended July 31, 2022 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 6,946 $ 5,718 $ 5,157 $ 1,744 $ 19,565 Canada 899 468 975 450 2,792 Western Europe 1,648 1,836 1,202 76 4,762 Central Europe and CIS 954 386 452 36 1,828 Latin America 3,229 393 1,020 218 4,860 Asia, Africa, Australia, New Zealand, and Middle East 1,118 1,170 833 113 3,234 Total $ 14,794 $ 9,971 $ 9,639 $ 2,637 $ 37,041 Major product lines: Production agriculture $ 14,333 $ 14,333 Small agriculture $ 7,305 7,305 Turf 2,286 2,286 Construction $ 4,198 4,198 Compact construction 1,208 1,208 Roadbuilding 2,619 2,619 Forestry 946 946 Financial products 39 35 17 $ 2,637 2,728 Other 422 345 651 1,418 Total $ 14,794 $ 9,971 $ 9,639 $ 2,637 $ 37,041 Revenue recognized: At a point in time $ 14,694 $ 9,919 $ 9,580 $ 77 $ 34,270 Over time 100 52 59 2,560 2,771 Total $ 14,794 $ 9,971 $ 9,639 $ 2,637 $ 37,041 Three Months Ended August 1, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic 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 Revenue recognized: At a point in time $ 4,293 $ 3,191 $ 3,052 $ 27 $ 10,563 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 geographic 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 Revenue recognized: At a point in time $ 11,960 $ 9,137 $ 8,666 $ 77 $ 29,840 Over time 127 52 76 2,602 2,857 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily for premiums for extended warranties, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in Accounts payable and accrued expenses in the consolidated balance sheets. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 15, was $1,424 million, $1,344 million, and $1,259 million at July 31, 2022, October 31, 2021, and August 1, 2021, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended July 31, 2022 and August 1, 2021, $93 million and $108 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 July 31, 2022 and August 1, 2021, $488 million and $442 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 amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $1,167 million at July 31, 2022. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2022 2023 2024 2025 2026 2027 later years |
OTHER COMPREHENSIVE INCOME ITEM
OTHER COMPREHENSIVE INCOME ITEMS | 9 Months Ended |
Jul. 31, 2022 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
OTHER COMPREHENSIVE INCOME ITEMS | (4) Other Comprehensive Income Items The after-tax components of accumulated other comprehensive income (loss) in millions of dollars follow: July 31 October 31 August 1 2022 2021 2021 Retirement benefits adjustment $ (1,171) $ (1,034) $ (3,710) Cumulative translation adjustment (2,262) (1,478) (1,277) Unrealized loss on derivatives (1) (42) (50) Unrealized gain (loss) on debt securities (42) 15 26 Total accumulated other comprehensive income (loss) $ (3,476) $ (2,539) $ (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/curtailment are included in net periodic pension and other postretirement benefit costs (see Note 6). Before Tax After Tax (Expense) Tax Three Months Ended July 31, 2022 Amount Credit Amount Cumulative translation adjustment $ (267) $ (2) $ (269) 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) 6 (1) 5 Reclassification of realized (gain) loss – Other income 1 1 Net unrealized gain (loss) on debt securities 7 (1) 6 Retirement benefits adjustment: Net actuarial gain (loss) 34 (9) 25 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 27 (7) 20 Prior service (credit) cost 8 (2) 6 Settlements/curtailment 36 (8) 28 Net unrealized gain (loss) on retirement benefits adjustment 105 (26) 79 Total other comprehensive income (loss) $ (157) $ (28) $ (185) Before Tax After Tax (Expense) Tax Nine Months Ended July 31, 2022 Amount Credit Amount Cumulative translation adjustment $ (774) $ (10) $ (784) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 52 (11) 41 Net unrealized gain (loss) on derivatives 52 (11) 41 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (74) 16 (58) Reclassification of realized (gain) loss – Other income 1 1 Net unrealized gain (loss) on debt securities (73) 16 (57) Retirement benefits adjustment: Net actuarial gain (loss) and prior service (cost) (338) 81 (257) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 94 (24) 70 Prior service (credit) cost 22 (6) 16 Settlements/curtailment 44 (10) 34 Net unrealized gain (loss) on retirement benefits adjustment (178) 41 (137) Total other comprehensive income (loss) $ (973) $ 36 $ (937) 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 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Jul. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | (5) 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 July 31 August 1 July 31 August 1 2022 2021 2022 2021 Net income attributable to Deere & Company $ 1,884 $ 1,667 $ 4,885 $ 4,680 Average shares outstanding 304.1 311.0 305.8 312.4 Basic per share $ 6.20 $ 5.36 $ 15.97 $ 14.98 Average shares outstanding 304.1 311.0 305.8 312.4 Effect of dilutive share-based compensation 1.6 2.4 1.9 2.5 Total potential shares outstanding 305.7 313.4 307.7 314.9 Diluted per share $ 6.16 $ 5.32 $ 15.88 $ 14.86 During both the third quarter and first nine months of 2022, .2 million shares were excluded from the computation because the incremental shares would have been antidilutive. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 9 Months Ended |
Jul. 31, 2022 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | (6) 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 components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 July 31 August 1 2022 2021 2022 2021 Service cost $ 86 $ 83 $ 265 $ 251 Interest cost 85 69 242 207 Expected return on plan assets (182) (199) (544) (599) Amortization of actuarial loss 31 64 107 192 Amortization of prior service cost 9 2 25 8 Settlements/curtailment 36 4 44 22 Net cost $ 65 $ 23 $ 139 $ 81 The components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 July 31 August 1 2022 2021 2022 2021 Service cost $ 11 $ 12 $ 34 $ 36 Interest cost 25 25 74 76 Expected return on plan assets (28) (19) (83) (58) Amortization of actuarial (gain) loss (4) 7 (13) 21 Amortization of prior service credit (1) (1) (3) (3) Net cost $ 3 $ 24 $ 9 $ 72 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 statements of consolidated income. On November 17, 2021, employees represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) approved a new collective bargaining agreement. In the first quarter of 2022, the Company remeasured the U.S. hourly pension plan due to the new collective bargaining agreement, which decreased the plan’s funded status by approximately $495 million and will increase pension expense in 2022 by nearly $80 million with $35 million negatively impacting operating profit in 2022. During the third quarter of 2022 During the first nine months of 2022, the Company contributed $67 million to its pension plans and $1,109 million to its OPEB plans. The OPEB contributions include a voluntary contribution of $1,000 million to a U.S. plan on November 30, 2021. The Company presently anticipates contributing an additional $16 million to its pension plans and $28 million to its OPEB plans during the remainder of 2022. The remaining pension and OPEB contributions are primarily direct benefit payments from Company funds. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Jul. 31, 2022 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | (7) Segment Reporting Worldwide Net sales and revenues, operating profit, and identifiable assets by segment were as follows in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 % July 31 August 1 % 2022 2021 Change 2022 2021 Change Net sales and revenues: Production & precision ag net sales $ 6,096 $ 4,250 +43 $ 14,568 $ 11,848 +23 Small ag & turf net sales 3,635 3,147 +16 9,836 9,051 +9 Construction & forestry net sales 3,269 3,016 +8 9,161 8,562 +7 Financial services revenues 903 902 2,637 2,679 -2 Other revenues 199 212 -6 839 557 +51 Total net sales and revenues $ 14,102 $ 11,527 +22 $ 37,041 $ 32,697 +13 Operating profit: Production & precision ag $ 1,293 $ 906 +43 $ 2,646 $ 2,557 +3 Small ag & turf 552 583 -5 1,443 1,699 -15 Construction & forestry 514 463 +11 1,599 1,220 +31 Financial services 287 291 -1 864 844 +2 Total operating profit 2,646 2,243 +18 6,552 6,320 +4 Reconciling items (108) (85) +27 (303) (312) -3 Income taxes (654) (491) +33 (1,364) (1,328) +3 Net income attributable to Deere & Company $ 1,884 $ 1,667 +13 $ 4,885 $ 4,680 +4 Intersegment sales and revenues: Production & precision ag net sales $ 5 $ 8 -38 $ 15 $ 21 -29 Small ag & turf net sales 2 2 8 9 -11 Construction & forestry net sales Financial services revenues 81 61 +33 214 172 +24 Operating profit is income from continuing operations before reconciling items 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. July 31 October 31 August 1 2022 2021 2021 Identifiable assets: Production & precision ag $ 8,728 $ 7,021 $ 6,910 Small ag & turf 4,361 3,959 3,643 Construction & forestry 6,824 6,457 6,378 Financial services 56,008 51,624 51,647 Corporate 10,896 15,053 12,110 Total assets $ 86,817 $ 84,114 $ 80,688 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 9 Months Ended |
Jul. 31, 2022 | |
FINANCING RECEIVABLES | |
FINANCING RECEIVABLES | (8) 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 receivables for which the Company has ceased accruing finance income. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows in millions of dollars: July 31, 2022 2022 2021 2020 2019 2018 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 9,161 $ 9,169 $ 4,713 $ 2,234 $ 935 $ 378 $ 3,962 $ 30,552 30-59 days past due 40 70 38 23 8 4 18 201 60-89 days past due 15 24 15 7 3 1 5 70 90+ days past due Non-performing 17 62 48 37 19 27 7 217 Construction and forestry Current 2,336 2,249 1,004 382 106 20 102 6,199 30-59 days past due 47 54 26 12 4 1 3 147 60-89 days past due 14 14 12 4 1 1 46 90+ days past due 11 3 1 3 18 Non-performing 13 63 49 25 9 4 1 164 Total retail customer receivables $ 11,643 $ 11,716 $ 5,908 $ 2,725 $ 1,085 $ 438 $ 4,099 $ 37,614 October 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 12,877 $ 6,676 $ 3,463 $ 1,738 $ 728 $ 211 $ 3,704 $ 29,397 30-59 days past due 43 53 29 16 7 3 14 165 60-89 days past due 16 23 12 6 3 1 4 65 90+ days past due 1 1 Non-performing 23 57 53 32 17 23 7 212 Construction and forestry Current 3,122 1,575 754 273 57 7 92 5,880 30-59 days past due 50 40 27 7 4 1 3 132 60-89 days past due 15 11 9 6 1 1 43 90+ days past due 1 2 3 3 4 2 15 Non-performing 26 56 39 17 7 3 148 Total retail customer receivables $ 16,173 $ 8,494 $ 4,389 $ 2,098 $ 828 $ 251 $ 3,825 $ 36,058 August 1, 2021 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Retail 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 retail customer receivables $ 11,614 $ 9,614 $ 5,075 $ 2,515 $ 1,045 $ 372 $ 3,772 $ 34,007 The credit quality analysis of wholesale receivables by year of origination was as follows in millions of dollars: July 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 289 $ 99 $ 34 $ 6 $ 1 $ 1 $ 2,022 $ 2,452 30+ days past due Non-performing 1 1 Construction and forestry Current 11 32 3 1 1 283 331 30+ days past due 1 1 Non-performing Total wholesale receivables $ 300 $ 131 $ 37 $ 8 $ 1 $ 3 $ 2,305 $ 2,785 October 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 346 $ 80 $ 22 $ 9 $ 3 $ 1,696 $ 2,156 30+ days past due Non-performing 12 12 Construction and forestry Current 41 7 7 1 $ 1 340 397 30+ days past due 1 1 Non-performing Total wholesale receivables $ 387 $ 87 $ 41 $ 9 $ 4 $ 2 $ 2,036 $ 2,566 August 1, 2021 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+ days past due Non-performing 18 18 Construction and forestry Current 8 8 8 1 1 1 287 314 30+ days past due 1 1 Non-performing Total wholesale receivables $ 271 $ 118 $ 64 $ 14 $ 4 $ 3 $ 2,543 $ 3,017 An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended July 31, 2022 Allowance: Beginning of period balance $ 168 $ 17 $ 5 $ 190 Provision (credit) 14 3 (1) 16 Write-offs (12) (10) (22) Recoveries 8 7 15 Translation adjustments 3 3 End of period balance $ 181 $ 17 $ 4 $ 202 Nine Months Ended July 31, 2022 Allowance: Beginning of period balance $ 138 $ 21 $ 7 $ 166 Provision (credit) 66 (4) (3) 59 Write-offs (47) (22) (69) Recoveries 17 22 39 Translation adjustments 7 7 End of period balance $ 181 $ 17 $ 4 $ 202 Financing receivables: End of period balance $ 33,515 $ 4,099 $ 2,785 $ 40,399 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 The allowance for credit losses increased in the third quarter and the first nine months of 2022 mainly due to higher reserves related to the events in Russia / Ukraine and higher portfolio balances. As part of the allowance setting process, the Company continues to monitor the economy, including potential impacts of inflation, commodity prices, and interest rates on portfolio performance and adjustments to the allowance are incorporated, as necessary. A troubled debt restructuring is 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 2022, the Company identified 230 receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $10 million pre-modification and $9 million post-modification. 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 these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At July 31, 2022, 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 |
Jul. 31, 2022 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
SECURITIZATION OF FINANCING RECEIVABLES | (9) Securitization of Financing Receivables As a part of its overall funding strategy, the Company 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 does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. The components of consolidated restricted assets, secured borrowings, and other liabilities related to secured borrowings in securitization transactions were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Financing receivables securitized (retail notes) $ 5,156 $ 4,673 $ 5,421 Allowance for credit losses (15) (14) (20) Other assets (primarily restricted cash) 136 107 113 Total restricted securitized assets $ 5,277 $ 4,766 $ 5,514 Short-term securitization borrowings $ 4,920 $ 4,605 $ 5,277 Accrued interest on borrowings 4 2 2 Total liabilities related to restricted securitized assets $ 4,924 $ 4,607 $ 5,279 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Jul. 31, 2022 | |
INVENTORIES | |
INVENTORIES | (10) Inventories Most inventories owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost on the last-in, first-out (LIFO) basis. If all of the Company’s inventories had been valued on a first-in, first-out (FIFO) basis, estimated inventories by major classification in millions of dollars would have been as follows: July 31 October 31 August 1 2022 2021 2021 Raw materials and supplies $ 4,508 $ 3,524 $ 2,895 Work-in-process 1,621 994 1,124 Finished goods and parts 5,434 4,373 4,176 Total FIFO value 11,563 8,891 8,195 Less adjustment to LIFO value 2,442 2,110 1,785 Inventories $ 9,121 $ 6,781 $ 6,410 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 9 Months Ended |
Jul. 31, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET | (11) 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 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments 13 (3) 45 55 Goodwill at August 1, 2021 $ 358 $ 265 $ 2,525 $ 3,148 Goodwill at October 31, 2021 $ 542 $ 265 $ 2,484 $ 3,291 Acquisitions 132 69 597 798 Translation adjustments (23) (11) (301) (335) Goodwill at July 31, 2022 $ 651 $ 323 $ 2,780 $ 3,754 There were no accumulated goodwill impairment losses in the reported periods. The components of other intangible assets were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Amortized intangible assets: Customer lists and relationships $ 507 $ 542 $ 545 Technology, patents, trademarks, and other 1,320 1,104 1,080 Total at cost 1,827 1,646 1,625 Less accumulated amortization: Customer lists and relationships 162 151 144 Technology, patents, trademarks, and other 384 343 337 Total accumulated amortization 546 494 481 Amortized intangible assets, net 1,281 1,152 1,144 Unamortized intangible assets: In-process research and development 123 123 Other intangible assets – net $ 1,281 $ 1,275 $ 1,267 In September 2017, the Company acquired Blue River Technology’s in-process research and development related to machine learning technology to optimize the use of farm inputs. Those research and development activities were completed, and the Company started amortizing the acquired technology in the second quarter of 2022. The amortization of other intangible assets in the third quarter and the first nine months of 2022 was $42 million and $104 million, and for 2021 was $27 million and $89 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2022 – $62, 2023 – $164, 2024 – $160, 2025 – $133, 2026 – $113, and 2027 – $112. |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 9 Months Ended |
Jul. 31, 2022 | |
SHORT-TERM BORROWINGS | |
SHORT-TERM BORROWINGS | (12) Short-Term Borrowings Short-term borrowings were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Commercial paper $ 6,035 $ 2,230 $ 1,882 Notes payable to banks 427 336 133 Finance lease obligations due within one year 21 23 23 Long-term borrowings due within one year 7,693 8,330 8,366 Short-term borrowings $ 14,176 $ 10,919 $ 10,404 |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 9 Months Ended |
Jul. 31, 2022 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | (13) Long-Term Borrowings Long-term borrowings were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Underwritten term debt U.S. dollar notes and debentures: 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) 510 584 594 1.375% notes due 2024 (€800 principal) 816 934 951 1.85% notes due 2028 (€600 principal) 612 701 713 2.20% notes due 2032 (€600 principal) 612 701 713 1.65% notes due 2039 (€650 principal) 663 759 773 Serial issuances Medium-term notes (principal as of: July 31, 2022 - $22,983 , October 31, 2021 - $22,647 , August 1, 2021 - $21,892 ) 22,593 22,899 22,346 Other notes and finance lease obligations 1,191 1,178 1,059 Less debt issuance costs and debt discounts (115) (118) (119) Long-term borrowings $ 32,132 $ 32,888 $ 32,280 Medium-term notes serially due 2023 through 2032 are primarily offered by prospectus and issued at fixed and variable rates. These notes are presented in the table above with fair value adjustments related to interest rate swaps. All outstanding notes and debentures are senior unsecured borrowings and generally rank equally with each other. In April 2022, the Company issued $600 million of sustainability-linked medium-term notes with an initial interest rate of 3.35 percent, which are due in 2029. This transaction supports the Company’s commitment to environmental sustainability. Failure to meet the stated sustainability performance target will result in a 25-basis point increase to the interest rate payable on the 2029 notes from and including April 2026. |
LEASES - LESSOR
LEASES - LESSOR | 9 Months Ended |
Jul. 31, 2022 | |
LEASES - LESSOR | |
LEASES - LESSOR | (14) Leases - Lessor The Company leases equipment manufactured or sold by the Company and a limited amount of non-John Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in Financing receivables - net on the consolidated balance sheets, while operating leases are reported in Equipment on operating leases - net. Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Nine Months Ended July 31, 2022 August 1, 2021 July 31, 2022 August 1, 2021 Sales-type and direct finance lease revenues $ 39 $ 37 $ 113 $ 107 Operating lease revenues 326 359 991 1,079 Variable lease revenues 6 8 20 23 Total lease revenues $ 371 $ 404 $ 1,124 $ 1,209 Variable lease revenues reported above primarily relate to separately invoiced property taxes on leased equipment in certain markets, late fees, and excess use and damage fees. Excess use and damage fees are reported in other income on the statements of consolidated income. Excess use and damage fees were $1 million and $2 million for the third quarter and first nine months ended July 31, 2022, respectively, compared with $2 million and $5 million for the same periods last year, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jul. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (15) 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 $839 million and $709 million at July 31, 2022 and August 1, 2021, 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 July 31 August 1 July 31 August 1 2022 2021 2022 2021 Beginning of period balance $ 2,095 $ 1,876 $ 2,086 $ 1,743 Payments (240) (209) (657) (626) Amortization of premiums received (70) (66) (200) (193) Accruals for warranties 358 299 762 794 Premiums received 103 96 277 258 Foreign exchange (10) (2) (32) 18 End of period balance $ 2,236 $ 1,994 $ 2,236 $ 1,994 At July 31, 2022, the Company had approximately $330 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 July 31, 2022, the Company had accrued losses of $4 million under these agreements. The maximum remaining term of the receivables guaranteed at July 31, 2022 was approximately six years. At July 31, 2022, the Company had commitments of $468 million for the construction and acquisition of property and equipment. Also, at July 31, 2022, the Company had restricted assets of $77 million, classified as Other assets. See Note 9 for additional restricted assets associated with borrowings related to securitizations. The Company also had other miscellaneous contingent liabilities totaling approximately $90 million at July 31, 2022. The accrued liability for these contingencies was not material at July 31, 2022. 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, trademark, and antitrust 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 |
Jul. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | (16) 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. July 31, 2022 October 31, 2021 August 1, 2021 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net $ 35,056 $ 34,158 $ 33,799 $ 33,718 $ 31,449 $ 31,515 Financing receivables securitized – net 5,141 4,990 4,659 4,704 5,401 5,467 Short-term securitization borrowings 4,920 4,862 4,605 4,610 5,277 5,302 Long-term borrowings due within one year 7,693 7,608 8,330 8,364 8,366 8,440 Long-term borrowings 32,101 31,741 32,850 34,506 32,238 34,345 Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. Assets and liabilities measured at 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. July 31 October 31 August 1 2022 2021 2021 Level 1: Marketable securities International equity securities $ 2 $ 2 $ 3 U.S. equity fund 75 75 74 U.S. government debt securities 63 59 60 Total Level 1 marketable securities 140 136 137 Level 2: Marketable securities U.S. government debt securities 134 139 124 Municipal debt securities 70 73 71 Corporate debt securities 213 224 217 International debt securities 1 2 3 Mortgage-backed securities 161 154 136 Total Level 2 marketable securities 579 592 551 Other assets Derivatives 280 275 432 Accounts payable and accrued expenses Derivatives 667 228 152 Level 3: Accounts payable and accrued expenses – Deferred consideration 252 The contractual maturities of debt securities at July 31, 2022 in millions of dollars are shown below. Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Mortgage-backed securities were primarily issued by U.S. government-sponsored enterprises. Unrealized losses of debt securities at July 31, 2022 were not recognized in income due to the ability and intent to hold to maturity. Amortized Fair Cost Value Due in one year or less $ 23 $ 23 Due after one through five years 98 95 Due after five through 10 years 189 175 Due after 10 years 211 188 Mortgage-backed securities 176 161 Debt securities $ 697 $ 642 Fair value, nonrecurring Level 3 measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. Property and equipment – net and Other assets fair values for October 31, 2021 represent the fair value assessments at January 31, 2021. Fair Value Losses Three Months Ended Nine Months Ended July 31 October 31 August 1 July 31 August 1 July 31 August 1 2022 2021 2021 2022 2021 2022 2021 Inventories $ 13 $ 4 $ 12 Property and equipment – net $ 41 $ 41 $ 44 Other intangible assets – net $ 28 Other assets $ 1 $ 6 The following is a description of the valuation methodologies the Company uses to measure certain balance sheet items 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. Inventories – The service parts inventory impairment was based on net realizable value, less reasonably predictable selling and disposal costs. Property and equipment – net – The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence. Other intangible assets – net – The Company considered external valuations based on the Company’s probability weighted cash flow analysis. Other assets – The impairments were measured at the fair value of the right of use operating lease asset. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Jul. 31, 2022 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | (17) 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 and foreign currency exposures for sales incentive programs. 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. The cash flows from these contracts are recorded in operating activities in the statements of consolidated cash flows. 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 July 31, 2022, October 31, 2021, and August 1, 2021 were $2,350 million, $2,700 million, and $1,750 million, respectively. Fair value gains or losses on cash flow hedges were recorded in other comprehensive income (OCI) and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affects earnings. These amounts offset the effects of interest rate changes on the related borrowings. The amount of gain recorded in OCI at July 31, 2022 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $31 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 July 31, 2022, October 31, 2021, and August 1, 2021 were $8,303 million, $8,043 million, and $8,658 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. Fair value hedging adjustments are included in the carrying amount of the hedged item. Active Hedging Relationships Discontinued Hedging Relationships Carrying Amount Cumulative Fair Value Carrying Amount of Cumulative Fair Value of Hedged Item Hedging Amount Formerly Hedged Item Hedging Amount July 31, 2022 Short-term borrowings $ 2,605 $ 5 Long-term borrowings $ 7,835 $ (430) 5,728 39 October 31, 2021 Short-term borrowings $ 191 $ 3 $ 1,997 $ (2) Long-term borrowings 7,847 29 6,287 223 August 1, 2021 Short-term borrowings $ 189 $ 4 $ 1,898 $ (1) Long-term borrowings 8,698 263 5,831 190 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 sales incentive programs. The total notional amounts of these interest rate swaps at July 31, 2022, October 31, 2021, and August 1, 2021 were $9,880 million, $10,848 million, and $9,195 million, the foreign exchange contracts were $7,457 million, $7,584 million, and $6,328 million, and the cross-currency interest rate contracts were $276 million, $238 million, and $197 million, respectively. The fair value gains or losses from derivatives not designated as hedging instruments were recorded in the statements of consolidated income, generally offsetting over time the exposure on the hedged item. Fair values of derivative instruments in the condensed consolidated balance sheets were as follows in millions of dollars: July 31 October 31 August 1 Other Assets 2022 2021 2021 Designated as hedging instruments: Interest rate contracts $ 82 $ 166 $ 332 Not designated as hedging instruments: Interest rate contracts 163 73 57 Foreign exchange contracts 30 31 41 Cross-currency interest rate contracts 5 5 2 Total not designated 198 109 100 Total derivative assets $ 280 $ 275 $ 432 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 434 $ 99 $ 40 Not designated as hedging instruments: Interest rate contracts 79 33 43 Foreign exchange contracts 149 94 67 Cross-currency interest rate contracts 5 2 2 Total not designated 233 129 112 Total derivative liabilities $ 667 $ 228 $ 152 The classification and gains (losses) including accrued interest expense related to derivative instruments consisted of the following in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 July 31 August 1 2022 2021 2022 2021 Fair Value Hedges: Interest rate contracts - Interest expense $ 149 $ 146 $ (507) $ (79) Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) $ 1 $ (1) $ 52 $ (1) Reclassified from OCI Interest rate contracts - Interest expense 3 (3) (11) Not Designated as Hedges: Interest rate contracts - Net sales $ (2) $ 44 $ 3 Interest rate contracts - Interest expense * $ (18) (2) 41 (6) Foreign exchange contracts - Net sales (1) (2) Foreign exchange contracts - Cost of sales (29) (7) (109) (107) Foreign exchange contracts - Other operating expenses * (20) (5) 153 (209) Total not designated $ (68) $ (16) $ 127 $ (319) * 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 July 31, 2022, October 31, 2021, and August 1, 2021, was $518 million, $135 million, and $87 million, respectively. In accordance with the limits established in these agreements, the Company posted $238 million of cash collateral at July 31, 2022. The Company posted no cash collateral in accordance with the limits established in those agreements at either October 31, 2021 or August 1, 2021. In addition, the Company paid $8 million of cash collateral that was outstanding at July 31, 2022, October 31, 2021, and 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 July 31, 2022 Recognized Arrangements Collateral Net Amount Assets $ 280 $ (125) $ (40) $ 115 Liabilities 667 (125) (238) 304 Gross Amounts Netting October 31, 2021 Recognized Arrangements Collateral Net Amount Assets $ 275 $ (105) $ 170 Liabilities 228 (105) $ (5) 118 Gross Amounts Netting August 1, 2021 Recognized Arrangements Collateral Net Amount Assets $ 432 $ (94) $ (88) $ 250 Liabilities 152 (94) (2) 56 |
STOCK OPTION AND RESTRICTED STO
STOCK OPTION AND RESTRICTED STOCK AWARDS | 9 Months Ended |
Jul. 31, 2022 | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | |
STOCK OPTION AND RESTRICTED STOCK AWARDS | (18) Stock Option and Restricted Stock Awards In December 2021, the Company granted stock options to employees for the purchase of 197 thousand shares of common stock at an exercise price of $343.94 per share and a binomial lattice model fair value of $89.20 per share at the grant date. At July 31, 2022, options for 2.1 million shares were outstanding with a weighted-average exercise price of $152.12 per share. The Company also granted 165 thousand restricted stock units to employees and non-employee directors in the first nine months of 2022, of which 128 thousand are subject to service-based only conditions and 37 thousand are subject to performance/service-based conditions. The weighted-average fair value of the service-based only units at the grant date was $346.46 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 $331.47 per unit based on the market price of a share of underlying common stock excluding dividends. At July 31, 2022, the Company was authorized to grant an additional 17.3 million shares under the equity incentive plan. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Jul. 31, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | (19) Acquisitions Kreisel Acquisition On February 7, 2022, the Company acquired majority ownership in Kreisel Electric Inc. (Kreisel), a pioneer in the development of immersion-cooled battery technology. The Austrian company manufactures high-density, high-durability electric battery modules and packs for high-performance and off-highway applications and has created a battery-buffered, high-powered charging infrastructure platform. The transaction includes a call option to purchase the remaining ownership interest in Kreisel in 2027. The minority interest holders also have a put option that would require the Company to purchase the holder’s ownership interest in 2027. The put and call options cannot be separated from the noncontrolling interest. Due to the redemption features, the minority interest is classified as redeemable noncontrolling interest in the Company’s consolidated balance sheets. The total cash purchase price was $276 million, consisting of $253 million for the acquired equity interests, $21 million to reduce the option price, and customary working capital adjustments, net of cash acquired. The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at July 31, 2022 follows: February 7 2022 Trade accounts and notes receivable $ 2 Other receivables 11 Inventories 11 Property and equipment 11 Goodwill 218 Other intangible assets 178 Other assets 6 Total assets $ 437 Accounts payable and accrued expenses $ 27 Deferred income taxes 38 Redeemable noncontrolling interest $ 96 The identifiable intangible assets were related to technology, trade name, and customer relationships with a weighted average amortization period of 12 years. The goodwill is not deductible for income tax purposes. Kreisel will be allocated amongst the Company’s production and precision agriculture, small agriculture and turf, and construction and forestry segments. Acquisition of Excavator Factories On February 28, 2022, the Company acquired full ownership of three former Deere-Hitachi joint venture factories and began new license and supply agreements with Hitachi Construction Machinery (Hitachi). The two companies also ended their joint venture manufacturing and marketing agreements. The former joint venture factories will continue to manufacture Deere-branded construction excavators and forestry equipment. Through a new supply agreement with Hitachi, Deere will continue to offer a full portfolio of excavators. Deere’s marketing arrangement for Hitachi-branded construction excavators and mining equipment in the Americas has ended with Hitachi assuming distribution and support of these products. John Deere dealers may continue to support their existing field population of Hitachi-branded excavators. With the completion of this acquisition, the Company now has complete control over its excavator design, product, and feature updates, making it possible to more rapidly respond to customer requirements and integrate excavators with other construction products in the John Deere product portfolio. The Company can leverage technology developed for other product lines and production systems across the enterprise and extend those advanced solutions to Deere-designed excavators, strengthening the entire product portfolio. The total invested capital follows: February 28 2022 Cash consideration for factories $ 205 Cash consideration for license agreement 70 Deferred consideration 271 Total purchase price consideration 546 Less: Cash obtained (187) Less: Settlement of intercompany balances (113) Net purchase price consideration 246 Fair value of previously held equity investment 444 Total invested capital $ 690 The total purchase price consideration includes deferred consideration that will be paid as the Company purchases Deere-branded excavators, components, and service parts from Hitachi under the new supply agreement with a duration that ranges from 5 after-tax Prior to the acquisition, the Company purchased Deere and Hitachi-branded excavators, components, and parts from the Deere-Hitachi joint venture factories for sale to John Deere dealers. These purchases were included in Cost of sales, while the sales to John Deere dealers were included in Net sales. Cost of sales also included profit-sharing payments to Hitachi in accordance with the previous marketing agreements. Following the acquisition, Net sales will only include the sale of Deere-branded excavators to John Deere dealers, while Cost of sales will reflect market pricing to purchase and manufacture excavators, as well as the related components and service parts. The preliminary fair values assigned to the assets and liabilities of the acquired factories in millions of dollars, which are based on information as of the acquisition date and available at July 31, 2022, follows: February 28 2022 Other receivables $ 29 Inventories 286 Property and equipment 182 Goodwill 527 Other intangible assets 70 Deferred income taxes 56 Total assets $ 1,150 Accounts payable and accrued expenses $ 297 Long-term borrowings 163 Total liabilities $ 460 The identifiable intangible assets were related to technology with a 10-year Other Acquisitions In the first nine months of the year, the Company acquired AgriSync Inc. (AgriSync), a technology service provider; an 80 percent stake in both SureFire Ag Systems, Inc. and SureFire Electronics, LLC (together SureFire), which design and manufacture liquid fertilizer application and spray tendering systems; a 40 percent equity method investment in GUSS Automation LLC (GUSS Automation), a pioneer in semi-autonomous orchard and vineyard sprayers; and LGT, LLC (Light), which specializes in depth sensing and camera-based perception for autonomous vehicles. The combined cost of the acquisitions was $124 million, net of cash acquired of $3 million. The preliminary asset and liability fair values at the respective acquisition dates follow in millions of dollars: July 31 2022 Trade accounts and notes receivable $ 8 Inventories 8 Property and equipment 4 Goodwill 53 Other intangible assets 21 Other assets 50 Total assets $ 144 Accounts payable and accrued expenses $ 6 Deferred income taxes 5 Total liabilities $ 11 Redeemable noncontrolling interest $ 9 The identifiable intangible assets were related to trade name, technology, and customer relationships with a weighted average amortization period of 7 years. AgriSync will be allocated amongst the Company’s production and precision agriculture, small agriculture and turf, and construction and forestry segments, while SureFire and Light will be allocated to the production and precision agriculture segment. GUSS Automation will be assigned to the small agriculture and turf segment. For all acquisitions, the goodwill was the result of future cash flows and related fair value exceeding the fair value of the identified assets and liabilities. Presenting the pro forma results of operations as if these acquisitions had occurred at the beginning of the current or comparative fiscal year would not differ significantly from the reported results. |
SPECIAL ITEMS
SPECIAL ITEMS | 9 Months Ended |
Jul. 31, 2022 | |
SPECIAL ITEMS | |
SPECIAL ITEMS | (20) S pecial Items 2022 Special Items Impact of Events in Russia / Ukraine The events in Russia / Ukraine have resulted in the Company suspending shipments of machines and service parts to Russia. The Company manufactures and markets equipment in Russia / Ukraine, and provides financial services in Russia. As of July 31, 2022, the Company’s net exposure in Russia / Ukraine was approximately $436 million. Net sales from the Company’s Russian operations represented 2 percent of consolidated annual Net sales from 2017 to 2021. The Ukraine operations were not material to the consolidated financial statements. The suspension of shipments to Russia will reduce forecasted revenue for the region, which makes it probable future cash flows will not cover the carrying value of certain assets. The accounting consequences during the second quarter of 2022 were impairments of most long-lived assets, an increase in reserves of certain financial assets, and an accrual for various contractual uncertainties. No significant reserves were established on trade receivables or complete goods inventory, as the Company continues to experience strong payment performance and requires prepayment of existing inventories. During the third quarter of 2022, the Company initiated a voluntary employee-separation program, updated reserves on assets, and reassessed accruals for contractual uncertainties. The Russian government has imposed certain restrictions on companies’ abilities to repatriate or remit cash from their Russian-based operations to locations outside of Russia. Cash in excess of what is required to fund operations in Russia has been reclassified as restricted and recorded in Other assets. The Company continues to closely monitor all financial risks to its operations in the region. A summary of the reserves, impairments, voluntary-separation costs, and contingent liabilities recorded in the first nine months of 2022 follows in millions of dollars: Nine Months Ended July 31, 2022 PPA SAT CF FS Total 2022 Expense: Inventory reserve – Cost of sales $ 8 $ 4 $ 12 Fixed asset impairment – Cost of sales 30 11 41 Intangible asset impairment – Cost of sales 28 28 Allowance for credit losses – Financing receivables – SA&G expenses $ 32 32 Voluntary-separation program – Cost of sales 1 1 Voluntary-separation program – SA&G expenses 3 4 1 8 Contingent liabilities – Other operating expenses 3 $ 1 1 5 Total Russia/Ukraine events pretax expense $ 45 $ 1 $ 48 $ 33 127 Net tax impact (8) Total Russia/Ukraine events after-tax expense $ 119 Gain on Previously Held Equity Investment On February 28, 2022, the Company acquired full ownership of three former Deere-Hitachi joint venture factories and began new license and supply agreements with Hitachi. The fair value of the previous equity investment resulted in a non-cash gain of $326 million (pretax and after-tax UAW Collective Bargaining Agreement On November 17, 2021, employees represented by the UAW approved a new collective bargaining agreement. The agreement, which has a term of six years, covers the wages, hours, benefits, and other terms and conditions of employment for the Company’s UAW-represented employees at 14 U.S. facilities. The labor agreement includes a lump sum ratification bonus payment of $8,500 per eligible employee, totaling $90 million, and an immediate wage increase of 10 percent plus further wage increases over the term of the contract. The lump sum payment was expensed in the first quarter of 2022. The Company remeasured the U.S. hourly pension plan as of November 30, 2021 due to the new collective bargaining agreement. See Note 6 for more information on the U.S. hourly plan remeasurement. 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 following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and nine months ended July 31, 2022 and August 1, 2021: Three Months Nine Months PPA SAT CF FS Total PPA SAT CF FS Total 2022 Expense (benefit): Gain on remeasurement of equity investment – Other income (see Note 19) $ (326) $ (326) Total Russia/Ukraine events pretax expense $ (1) $ 1 $ 7 $ 7 $ 45 $ 1 48 $ 33 127 UAW ratification bonus – Cost of sales 53 9 28 90 Total expense (benefit) (1) 1 7 7 98 10 (250) 33 (109) 2021 Expense (benefit): Gain on sale – Other income $ (27) (27) (27) (27) Long-lived asset impairments – Cost of sales 5 3 42 50 Brazil indirect tax – Cost of sales (53) (5) (58) Total expense (benefit) (27) (27) (48) (24) 37 (35) Period over period change $ (1) $ 27 $ 1 $ 7 $ 34 $ 146 $ 34 $ (287) $ 33 $ (74) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Policies) | 9 Months Ended |
Jul. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS | |
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 2022 and 2021 were July 31, 2022 and August 1, 2021, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years or quarters 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. Actual results could differ from those estimates. |
Revenue Recognition | Prior to fiscal year 2022, certain goods were shipped to Canadian dealers on a consignment basis under which the risk and rewards of ownership were not transferred to the dealer at the time the goods were delivered. Accordingly, sales were not recorded until a retail customer purchased the goods. The dealer contract in Canada was changed for goods delivered after November 1, 2021, resulting in transfer of control and revenue recognition upon delivery. For certain goods delivered to Canadian dealers prior to November 1, 2021, the dealer consignment terms already in place remain in effect. |
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 receivables for which the Company has ceased accruing finance income. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is 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 are valued at cost on the last-in, first-out (LIFO) basis. |
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 and foreign currency exposures for sales incentive programs. 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. The cash flows from these contracts are recorded in operating activities in the statements of consolidated cash flows. 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. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
REVENUE RECOGNITION | |
Schedule of Revenue Recognition | The Company’s Net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow: Three Months Ended July 31, 2022 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 2,904 $ 2,177 $ 1,789 $ 602 $ 7,472 Canada 451 185 288 149 1,073 Western Europe 645 646 380 25 1,696 Central Europe and CIS 348 109 111 14 582 Latin America 1,327 155 459 77 2,018 Asia, Africa, Australia, New Zealand, and Middle East 510 419 296 36 1,261 Total $ 6,185 $ 3,691 $ 3,323 $ 903 $ 14,102 Major product lines: Production agriculture $ 6,019 $ 6,019 Small agriculture $ 2,705 2,705 Turf 842 842 Construction $ 1,506 1,506 Compact construction 460 460 Roadbuilding 910 910 Forestry 316 316 Financial products 17 15 6 $ 903 941 Other 149 129 125 403 Total $ 6,185 $ 3,691 $ 3,323 $ 903 $ 14,102 Revenue recognized: At a point in time $ 6,154 $ 3,672 $ 3,303 $ 27 $ 13,156 Over time 31 19 20 876 946 Total $ 6,185 $ 3,691 $ 3,323 $ 903 $ 14,102 Nine Months Ended July 31, 2022 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 6,946 $ 5,718 $ 5,157 $ 1,744 $ 19,565 Canada 899 468 975 450 2,792 Western Europe 1,648 1,836 1,202 76 4,762 Central Europe and CIS 954 386 452 36 1,828 Latin America 3,229 393 1,020 218 4,860 Asia, Africa, Australia, New Zealand, and Middle East 1,118 1,170 833 113 3,234 Total $ 14,794 $ 9,971 $ 9,639 $ 2,637 $ 37,041 Major product lines: Production agriculture $ 14,333 $ 14,333 Small agriculture $ 7,305 7,305 Turf 2,286 2,286 Construction $ 4,198 4,198 Compact construction 1,208 1,208 Roadbuilding 2,619 2,619 Forestry 946 946 Financial products 39 35 17 $ 2,637 2,728 Other 422 345 651 1,418 Total $ 14,794 $ 9,971 $ 9,639 $ 2,637 $ 37,041 Revenue recognized: At a point in time $ 14,694 $ 9,919 $ 9,580 $ 77 $ 34,270 Over time 100 52 59 2,560 2,771 Total $ 14,794 $ 9,971 $ 9,639 $ 2,637 $ 37,041 Three Months Ended August 1, 2021 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic 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 Revenue recognized: At a point in time $ 4,293 $ 3,191 $ 3,052 $ 27 $ 10,563 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 geographic 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 Revenue recognized: At a point in time $ 11,960 $ 9,137 $ 8,666 $ 77 $ 29,840 Over time 127 52 76 2,602 2,857 Total $ 12,087 $ 9,189 $ 8,742 $ 2,679 $ 32,697 |
OTHER COMPREHENSIVE INCOME IT_2
OTHER COMPREHENSIVE INCOME ITEMS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
OTHER COMPREHENSIVE INCOME ITEMS | |
Schedule of After-Tax Components of Accumulated Other Comprehensive Income (Loss) | The after-tax components of accumulated other comprehensive income (loss) in millions of dollars follow: July 31 October 31 August 1 2022 2021 2021 Retirement benefits adjustment $ (1,171) $ (1,034) $ (3,710) Cumulative translation adjustment (2,262) (1,478) (1,277) Unrealized loss on derivatives (1) (42) (50) Unrealized gain (loss) on debt securities (42) 15 26 Total accumulated other comprehensive income (loss) $ (3,476) $ (2,539) $ (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/curtailment are included in net periodic pension and other postretirement benefit costs (see Note 6). Before Tax After Tax (Expense) Tax Three Months Ended July 31, 2022 Amount Credit Amount Cumulative translation adjustment $ (267) $ (2) $ (269) 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) 6 (1) 5 Reclassification of realized (gain) loss – Other income 1 1 Net unrealized gain (loss) on debt securities 7 (1) 6 Retirement benefits adjustment: Net actuarial gain (loss) 34 (9) 25 Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 27 (7) 20 Prior service (credit) cost 8 (2) 6 Settlements/curtailment 36 (8) 28 Net unrealized gain (loss) on retirement benefits adjustment 105 (26) 79 Total other comprehensive income (loss) $ (157) $ (28) $ (185) Before Tax After Tax (Expense) Tax Nine Months Ended July 31, 2022 Amount Credit Amount Cumulative translation adjustment $ (774) $ (10) $ (784) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 52 (11) 41 Net unrealized gain (loss) on derivatives 52 (11) 41 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (74) 16 (58) Reclassification of realized (gain) loss – Other income 1 1 Net unrealized gain (loss) on debt securities (73) 16 (57) Retirement benefits adjustment: Net actuarial gain (loss) and prior service (cost) (338) 81 (257) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss 94 (24) 70 Prior service (credit) cost 22 (6) 16 Settlements/curtailment 44 (10) 34 Net unrealized gain (loss) on retirement benefits adjustment (178) 41 (137) Total other comprehensive income (loss) $ (973) $ 36 $ (937) 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 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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 July 31 August 1 July 31 August 1 2022 2021 2022 2021 Net income attributable to Deere & Company $ 1,884 $ 1,667 $ 4,885 $ 4,680 Average shares outstanding 304.1 311.0 305.8 312.4 Basic per share $ 6.20 $ 5.36 $ 15.97 $ 14.98 Average shares outstanding 304.1 311.0 305.8 312.4 Effect of dilutive share-based compensation 1.6 2.4 1.9 2.5 Total potential shares outstanding 305.7 313.4 307.7 314.9 Diluted per share $ 6.16 $ 5.32 $ 15.88 $ 14.86 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
Schedule of Components of Net Periodic Pension and OPEB Cost | The components of net periodic pension cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 July 31 August 1 2022 2021 2022 2021 Service cost $ 86 $ 83 $ 265 $ 251 Interest cost 85 69 242 207 Expected return on plan assets (182) (199) (544) (599) Amortization of actuarial loss 31 64 107 192 Amortization of prior service cost 9 2 25 8 Settlements/curtailment 36 4 44 22 Net cost $ 65 $ 23 $ 139 $ 81 The components of net periodic OPEB cost consisted of the following in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 July 31 August 1 2022 2021 2022 2021 Service cost $ 11 $ 12 $ 34 $ 36 Interest cost 25 25 74 76 Expected return on plan assets (28) (19) (83) (58) Amortization of actuarial (gain) loss (4) 7 (13) 21 Amortization of prior service credit (1) (1) (3) (3) Net cost $ 3 $ 24 $ 9 $ 72 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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: Three Months Ended Nine Months Ended July 31 August 1 % July 31 August 1 % 2022 2021 Change 2022 2021 Change Net sales and revenues: Production & precision ag net sales $ 6,096 $ 4,250 +43 $ 14,568 $ 11,848 +23 Small ag & turf net sales 3,635 3,147 +16 9,836 9,051 +9 Construction & forestry net sales 3,269 3,016 +8 9,161 8,562 +7 Financial services revenues 903 902 2,637 2,679 -2 Other revenues 199 212 -6 839 557 +51 Total net sales and revenues $ 14,102 $ 11,527 +22 $ 37,041 $ 32,697 +13 Operating profit: Production & precision ag $ 1,293 $ 906 +43 $ 2,646 $ 2,557 +3 Small ag & turf 552 583 -5 1,443 1,699 -15 Construction & forestry 514 463 +11 1,599 1,220 +31 Financial services 287 291 -1 864 844 +2 Total operating profit 2,646 2,243 +18 6,552 6,320 +4 Reconciling items (108) (85) +27 (303) (312) -3 Income taxes (654) (491) +33 (1,364) (1,328) +3 Net income attributable to Deere & Company $ 1,884 $ 1,667 +13 $ 4,885 $ 4,680 +4 Intersegment sales and revenues: Production & precision ag net sales $ 5 $ 8 -38 $ 15 $ 21 -29 Small ag & turf net sales 2 2 8 9 -11 Construction & forestry net sales Financial services revenues 81 61 +33 214 172 +24 Operating profit is income from continuing operations before reconciling items 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. July 31 October 31 August 1 2022 2021 2021 Identifiable assets: Production & precision ag $ 8,728 $ 7,021 $ 6,910 Small ag & turf 4,361 3,959 3,643 Construction & forestry 6,824 6,457 6,378 Financial services 56,008 51,624 51,647 Corporate 10,896 15,053 12,110 Total assets $ 86,817 $ 84,114 $ 80,688 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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 in millions of dollars during the periods follows: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended July 31, 2022 Allowance: Beginning of period balance $ 168 $ 17 $ 5 $ 190 Provision (credit) 14 3 (1) 16 Write-offs (12) (10) (22) Recoveries 8 7 15 Translation adjustments 3 3 End of period balance $ 181 $ 17 $ 4 $ 202 Nine Months Ended July 31, 2022 Allowance: Beginning of period balance $ 138 $ 21 $ 7 $ 166 Provision (credit) 66 (4) (3) 59 Write-offs (47) (22) (69) Recoveries 17 22 39 Translation adjustments 7 7 End of period balance $ 181 $ 17 $ 4 $ 202 Financing receivables: End of period balance $ 33,515 $ 4,099 $ 2,785 $ 40,399 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 Customer Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows in millions of dollars: July 31, 2022 2022 2021 2020 2019 2018 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 9,161 $ 9,169 $ 4,713 $ 2,234 $ 935 $ 378 $ 3,962 $ 30,552 30-59 days past due 40 70 38 23 8 4 18 201 60-89 days past due 15 24 15 7 3 1 5 70 90+ days past due Non-performing 17 62 48 37 19 27 7 217 Construction and forestry Current 2,336 2,249 1,004 382 106 20 102 6,199 30-59 days past due 47 54 26 12 4 1 3 147 60-89 days past due 14 14 12 4 1 1 46 90+ days past due 11 3 1 3 18 Non-performing 13 63 49 25 9 4 1 164 Total retail customer receivables $ 11,643 $ 11,716 $ 5,908 $ 2,725 $ 1,085 $ 438 $ 4,099 $ 37,614 October 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 12,877 $ 6,676 $ 3,463 $ 1,738 $ 728 $ 211 $ 3,704 $ 29,397 30-59 days past due 43 53 29 16 7 3 14 165 60-89 days past due 16 23 12 6 3 1 4 65 90+ days past due 1 1 Non-performing 23 57 53 32 17 23 7 212 Construction and forestry Current 3,122 1,575 754 273 57 7 92 5,880 30-59 days past due 50 40 27 7 4 1 3 132 60-89 days past due 15 11 9 6 1 1 43 90+ days past due 1 2 3 3 4 2 15 Non-performing 26 56 39 17 7 3 148 Total retail customer receivables $ 16,173 $ 8,494 $ 4,389 $ 2,098 $ 828 $ 251 $ 3,825 $ 36,058 August 1, 2021 2021 2020 2019 2018 2017 Prior Revolving Charge Accounts Total Retail 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 retail customer receivables $ 11,614 $ 9,614 $ 5,075 $ 2,515 $ 1,045 $ 372 $ 3,772 $ 34,007 |
Wholesale Receivables | |
Financing Receivables | |
Credit Quality Analysis | The credit quality analysis of wholesale receivables by year of origination was as follows in millions of dollars: July 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 289 $ 99 $ 34 $ 6 $ 1 $ 1 $ 2,022 $ 2,452 30+ days past due Non-performing 1 1 Construction and forestry Current 11 32 3 1 1 283 331 30+ days past due 1 1 Non-performing Total wholesale receivables $ 300 $ 131 $ 37 $ 8 $ 1 $ 3 $ 2,305 $ 2,785 October 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 346 $ 80 $ 22 $ 9 $ 3 $ 1,696 $ 2,156 30+ days past due Non-performing 12 12 Construction and forestry Current 41 7 7 1 $ 1 340 397 30+ days past due 1 1 Non-performing Total wholesale receivables $ 387 $ 87 $ 41 $ 9 $ 4 $ 2 $ 2,036 $ 2,566 August 1, 2021 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+ days past due Non-performing 18 18 Construction and forestry Current 8 8 8 1 1 1 287 314 30+ days past due 1 1 Non-performing Total wholesale receivables $ 271 $ 118 $ 64 $ 14 $ 4 $ 3 $ 2,543 $ 3,017 |
SECURITIZATION OF FINANCING R_2
SECURITIZATION OF FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
SECURITIZATION OF FINANCING RECEIVABLES | |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets, secured borrowings, and other liabilities related to secured borrowings in securitization transactions were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Financing receivables securitized (retail notes) $ 5,156 $ 4,673 $ 5,421 Allowance for credit losses (15) (14) (20) Other assets (primarily restricted cash) 136 107 113 Total restricted securitized assets $ 5,277 $ 4,766 $ 5,514 Short-term securitization borrowings $ 4,920 $ 4,605 $ 5,277 Accrued interest on borrowings 4 2 2 Total liabilities related to restricted securitized assets $ 4,924 $ 4,607 $ 5,279 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
INVENTORIES | |
Major Classification of Inventories | If all of the Company’s inventories had been valued on a first-in, first-out (FIFO) basis, estimated inventories by major classification in millions of dollars would have been as follows: July 31 October 31 August 1 2022 2021 2021 Raw materials and supplies $ 4,508 $ 3,524 $ 2,895 Work-in-process 1,621 994 1,124 Finished goods and parts 5,434 4,373 4,176 Total FIFO value 11,563 8,891 8,195 Less adjustment to LIFO value 2,442 2,110 1,785 Inventories $ 9,121 $ 6,781 $ 6,410 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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 1, 2020 $ 333 $ 268 $ 2,480 $ 3,081 Acquisition 12 12 Translation adjustments 13 (3) 45 55 Goodwill at August 1, 2021 $ 358 $ 265 $ 2,525 $ 3,148 Goodwill at October 31, 2021 $ 542 $ 265 $ 2,484 $ 3,291 Acquisitions 132 69 597 798 Translation adjustments (23) (11) (301) (335) Goodwill at July 31, 2022 $ 651 $ 323 $ 2,780 $ 3,754 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: July 31 October 31 August 1 2022 2021 2021 Amortized intangible assets: Customer lists and relationships $ 507 $ 542 $ 545 Technology, patents, trademarks, and other 1,320 1,104 1,080 Total at cost 1,827 1,646 1,625 Less accumulated amortization: Customer lists and relationships 162 151 144 Technology, patents, trademarks, and other 384 343 337 Total accumulated amortization 546 494 481 Amortized intangible assets, net 1,281 1,152 1,144 Unamortized intangible assets: In-process research and development 123 123 Other intangible assets – net $ 1,281 $ 1,275 $ 1,267 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
SHORT-TERM BORROWINGS | |
Short-Term Borrowings | Short-term borrowings were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Commercial paper $ 6,035 $ 2,230 $ 1,882 Notes payable to banks 427 336 133 Finance lease obligations due within one year 21 23 23 Long-term borrowings due within one year 7,693 8,330 8,366 Short-term borrowings $ 14,176 $ 10,919 $ 10,404 |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
LONG-TERM BORROWINGS | |
Long-Term Borrowings | Long-term borrowings were as follows in millions of dollars: July 31 October 31 August 1 2022 2021 2021 Underwritten term debt U.S. dollar notes and debentures: 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) 510 584 594 1.375% notes due 2024 (€800 principal) 816 934 951 1.85% notes due 2028 (€600 principal) 612 701 713 2.20% notes due 2032 (€600 principal) 612 701 713 1.65% notes due 2039 (€650 principal) 663 759 773 Serial issuances Medium-term notes (principal as of: July 31, 2022 - $22,983 , October 31, 2021 - $22,647 , August 1, 2021 - $21,892 ) 22,593 22,899 22,346 Other notes and finance lease obligations 1,191 1,178 1,059 Less debt issuance costs and debt discounts (115) (118) (119) Long-term borrowings $ 32,132 $ 32,888 $ 32,280 |
LEASES - LESSOR (Tables)
LEASES - LESSOR (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
LEASES - LESSOR | |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows in millions of dollars: Three Months Ended Nine Months Ended July 31, 2022 August 1, 2021 July 31, 2022 August 1, 2021 Sales-type and direct finance lease revenues $ 39 $ 37 $ 113 $ 107 Operating lease revenues 326 359 991 1,079 Variable lease revenues 6 8 20 23 Total lease revenues $ 371 $ 404 $ 1,124 $ 1,209 Variable lease revenues reported above primarily relate to separately invoiced property taxes on leased equipment in certain markets, late fees, and excess use and damage fees. Excess use and damage fees are reported in other income on the statements of consolidated income. Excess use and damage fees were $1 million and $2 million for the third quarter and first nine months ended July 31, 2022, respectively, compared with $2 million and $5 million for the same periods last year, respectively. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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 July 31 August 1 July 31 August 1 2022 2021 2022 2021 Beginning of period balance $ 2,095 $ 1,876 $ 2,086 $ 1,743 Payments (240) (209) (657) (626) Amortization of premiums received (70) (66) (200) (193) Accruals for warranties 358 299 762 794 Premiums received 103 96 277 258 Foreign exchange (10) (2) (32) 18 End of period balance $ 2,236 $ 1,994 $ 2,236 $ 1,994 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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. July 31, 2022 October 31, 2021 August 1, 2021 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net $ 35,056 $ 34,158 $ 33,799 $ 33,718 $ 31,449 $ 31,515 Financing receivables securitized – net 5,141 4,990 4,659 4,704 5,401 5,467 Short-term securitization borrowings 4,920 4,862 4,605 4,610 5,277 5,302 Long-term borrowings due within one year 7,693 7,608 8,330 8,364 8,366 8,440 Long-term borrowings 32,101 31,741 32,850 34,506 32,238 34,345 Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at 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. July 31 October 31 August 1 2022 2021 2021 Level 1: Marketable securities International equity securities $ 2 $ 2 $ 3 U.S. equity fund 75 75 74 U.S. government debt securities 63 59 60 Total Level 1 marketable securities 140 136 137 Level 2: Marketable securities U.S. government debt securities 134 139 124 Municipal debt securities 70 73 71 Corporate debt securities 213 224 217 International debt securities 1 2 3 Mortgage-backed securities 161 154 136 Total Level 2 marketable securities 579 592 551 Other assets Derivatives 280 275 432 Accounts payable and accrued expenses Derivatives 667 228 152 Level 3: Accounts payable and accrued expenses – Deferred consideration 252 |
Contractual Maturities of Debt Securities | The contractual maturities of debt securities at July 31, 2022 in millions of dollars are shown below. Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Mortgage-backed securities were primarily issued by U.S. government-sponsored enterprises. Unrealized losses of debt securities at July 31, 2022 were not recognized in income due to the ability and intent to hold to maturity. Amortized Fair Cost Value Due in one year or less $ 23 $ 23 Due after one through five years 98 95 Due after five through 10 years 189 175 Due after 10 years 211 188 Mortgage-backed securities 176 161 Debt securities $ 697 $ 642 |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring Level 3 measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. Property and equipment – net and Other assets fair values for October 31, 2021 represent the fair value assessments at January 31, 2021. Fair Value Losses Three Months Ended Nine Months Ended July 31 October 31 August 1 July 31 August 1 July 31 August 1 2022 2021 2021 2022 2021 2022 2021 Inventories $ 13 $ 4 $ 12 Property and equipment – net $ 41 $ 41 $ 44 Other intangible assets – net $ 28 Other assets $ 1 $ 6 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
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. Fair value hedging adjustments are included in the carrying amount of the hedged item. Active Hedging Relationships Discontinued Hedging Relationships Carrying Amount Cumulative Fair Value Carrying Amount of Cumulative Fair Value of Hedged Item Hedging Amount Formerly Hedged Item Hedging Amount July 31, 2022 Short-term borrowings $ 2,605 $ 5 Long-term borrowings $ 7,835 $ (430) 5,728 39 October 31, 2021 Short-term borrowings $ 191 $ 3 $ 1,997 $ (2) Long-term borrowings 7,847 29 6,287 223 August 1, 2021 Short-term borrowings $ 189 $ 4 $ 1,898 $ (1) Long-term borrowings 8,698 263 5,831 190 |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the condensed consolidated balance sheets were as follows in millions of dollars: July 31 October 31 August 1 Other Assets 2022 2021 2021 Designated as hedging instruments: Interest rate contracts $ 82 $ 166 $ 332 Not designated as hedging instruments: Interest rate contracts 163 73 57 Foreign exchange contracts 30 31 41 Cross-currency interest rate contracts 5 5 2 Total not designated 198 109 100 Total derivative assets $ 280 $ 275 $ 432 Accounts Payable and Accrued Expenses Designated as hedging instruments: Interest rate contracts $ 434 $ 99 $ 40 Not designated as hedging instruments: Interest rate contracts 79 33 43 Foreign exchange contracts 149 94 67 Cross-currency interest rate contracts 5 2 2 Total not designated 233 129 112 Total derivative liabilities $ 667 $ 228 $ 152 |
Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income | The classification and gains (losses) including accrued interest expense related to derivative instruments consisted of the following in millions of dollars: Three Months Ended Nine Months Ended July 31 August 1 July 31 August 1 2022 2021 2022 2021 Fair Value Hedges: Interest rate contracts - Interest expense $ 149 $ 146 $ (507) $ (79) Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) $ 1 $ (1) $ 52 $ (1) Reclassified from OCI Interest rate contracts - Interest expense 3 (3) (11) Not Designated as Hedges: Interest rate contracts - Net sales $ (2) $ 44 $ 3 Interest rate contracts - Interest expense * $ (18) (2) 41 (6) Foreign exchange contracts - Net sales (1) (2) Foreign exchange contracts - Cost of sales (29) (7) (109) (107) Foreign exchange contracts - Other operating expenses * (20) (5) 153 (209) Total not designated $ (68) $ (16) $ 127 $ (319) * |
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 July 31, 2022 Recognized Arrangements Collateral Net Amount Assets $ 280 $ (125) $ (40) $ 115 Liabilities 667 (125) (238) 304 Gross Amounts Netting October 31, 2021 Recognized Arrangements Collateral Net Amount Assets $ 275 $ (105) $ 170 Liabilities 228 (105) $ (5) 118 Gross Amounts Netting August 1, 2021 Recognized Arrangements Collateral Net Amount Assets $ 432 $ (94) $ (88) $ 250 Liabilities 152 (94) (2) 56 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Kreisel | |
Preliminary Fair Values Assigned to Assets and Liabilities as of the Acquisition Date | The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at July 31, 2022 follows: February 7 2022 Trade accounts and notes receivable $ 2 Other receivables 11 Inventories 11 Property and equipment 11 Goodwill 218 Other intangible assets 178 Other assets 6 Total assets $ 437 Accounts payable and accrued expenses $ 27 Deferred income taxes 38 Redeemable noncontrolling interest $ 96 |
Excavator Factories | |
Total Invested Capital | The total invested capital follows: February 28 2022 Cash consideration for factories $ 205 Cash consideration for license agreement 70 Deferred consideration 271 Total purchase price consideration 546 Less: Cash obtained (187) Less: Settlement of intercompany balances (113) Net purchase price consideration 246 Fair value of previously held equity investment 444 Total invested capital $ 690 |
Preliminary Fair Values Assigned to Assets and Liabilities as of the Acquisition Date | The preliminary fair values assigned to the assets and liabilities of the acquired factories in millions of dollars, which are based on information as of the acquisition date and available at July 31, 2022, follows: February 28 2022 Other receivables $ 29 Inventories 286 Property and equipment 182 Goodwill 527 Other intangible assets 70 Deferred income taxes 56 Total assets $ 1,150 Accounts payable and accrued expenses $ 297 Long-term borrowings 163 Total liabilities $ 460 |
Other Acquisitions | |
Preliminary Fair Values Assigned to Assets and Liabilities as of the Acquisition Date | The preliminary asset and liability fair values at the respective acquisition dates follow in millions of dollars: July 31 2022 Trade accounts and notes receivable $ 8 Inventories 8 Property and equipment 4 Goodwill 53 Other intangible assets 21 Other assets 50 Total assets $ 144 Accounts payable and accrued expenses $ 6 Deferred income taxes 5 Total liabilities $ 11 Redeemable noncontrolling interest $ 9 |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
SPECIAL ITEMS | |
Schedule of Special Items | A summary of the reserves, impairments, voluntary-separation costs, and contingent liabilities recorded in the first nine months of 2022 follows in millions of dollars: Nine Months Ended July 31, 2022 PPA SAT CF FS Total 2022 Expense: Inventory reserve – Cost of sales $ 8 $ 4 $ 12 Fixed asset impairment – Cost of sales 30 11 41 Intangible asset impairment – Cost of sales 28 28 Allowance for credit losses – Financing receivables – SA&G expenses $ 32 32 Voluntary-separation program – Cost of sales 1 1 Voluntary-separation program – SA&G expenses 3 4 1 8 Contingent liabilities – Other operating expenses 3 $ 1 1 5 Total Russia/Ukraine events pretax expense $ 45 $ 1 $ 48 $ 33 127 Net tax impact (8) Total Russia/Ukraine events after-tax expense $ 119 The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and nine months ended July 31, 2022 and August 1, 2021: Three Months Nine Months PPA SAT CF FS Total PPA SAT CF FS Total 2022 Expense (benefit): Gain on remeasurement of equity investment – Other income (see Note 19) $ (326) $ (326) Total Russia/Ukraine events pretax expense $ (1) $ 1 $ 7 $ 7 $ 45 $ 1 48 $ 33 127 UAW ratification bonus – Cost of sales 53 9 28 90 Total expense (benefit) (1) 1 7 7 98 10 (250) 33 (109) 2021 Expense (benefit): Gain on sale – Other income $ (27) (27) (27) (27) Long-lived asset impairments – Cost of sales 5 3 42 50 Brazil indirect tax – Cost of sales (53) (5) (58) Total expense (benefit) (27) (27) (48) (24) 37 (35) Period over period change $ (1) $ 27 $ 1 $ 7 $ 34 $ 146 $ 34 $ (287) $ 33 $ (74) |
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Aug. 01, 2021 | Jan. 31, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Fiscal period duration | 91 days | 91 days | 273 days | 273 days | |
Wirtgen Group Holding GmbH (Wirtgen) | |||||
Net sales | $ 270 | $ 270 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 |
Canada | ||
Revenue Recognition | ||
Remaining consigned inventory | $ 26 | $ 150 |
REVENUE RECOGNITION - Primary G
REVENUE RECOGNITION - Primary Geographic Market, Major Product Line, and Timing (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Revenue Recognition | ||||
Net sales and revenues | $ 14,102 | $ 11,527 | $ 37,041 | $ 32,697 |
Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 13,156 | 10,563 | 34,270 | 29,840 |
Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 946 | 964 | 2,771 | 2,857 |
Production Agriculture | ||||
Revenue Recognition | ||||
Net sales | 6,019 | 4,179 | 14,333 | 11,656 |
Small Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,705 | 2,355 | 7,305 | 6,583 |
Turf | ||||
Revenue Recognition | ||||
Net sales | 842 | 719 | 2,286 | 2,268 |
Construction | ||||
Revenue Recognition | ||||
Net sales | 1,506 | 1,283 | 4,198 | 3,402 |
Compact Construction | ||||
Revenue Recognition | ||||
Net sales | 460 | 398 | 1,208 | 1,140 |
Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 910 | 948 | 2,619 | 2,924 |
Forestry | ||||
Revenue Recognition | ||||
Net sales | 316 | 342 | 946 | 975 |
Financial Products | ||||
Revenue Recognition | ||||
Financial | 941 | 932 | 2,728 | 2,769 |
Other | ||||
Revenue Recognition | ||||
Other net sales and revenues | 403 | 371 | 1,418 | 980 |
United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 7,472 | 5,912 | 19,565 | 16,882 |
Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,073 | 853 | 2,792 | 2,255 |
Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,696 | 1,727 | 4,762 | 4,992 |
Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 582 | 766 | 1,828 | 2,107 |
Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,018 | 1,170 | 4,860 | 3,072 |
Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,261 | 1,099 | 3,234 | 3,389 |
Production & Precision Ag (PPA) | ||||
Revenue Recognition | ||||
Net sales and revenues | 6,185 | 4,338 | 14,794 | 12,087 |
Production & Precision Ag (PPA) | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 6,154 | 4,293 | 14,694 | 11,960 |
Production & Precision Ag (PPA) | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 31 | 45 | 100 | 127 |
Production & Precision Ag (PPA) | Production Agriculture | ||||
Revenue Recognition | ||||
Net sales | 6,019 | 4,179 | 14,333 | 11,656 |
Production & Precision Ag (PPA) | Financial Products | ||||
Revenue Recognition | ||||
Financial | 17 | 13 | 39 | 41 |
Production & Precision Ag (PPA) | Other | ||||
Revenue Recognition | ||||
Other net sales and revenues | 149 | 146 | 422 | 390 |
Production & Precision Ag (PPA) | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,904 | 1,995 | 6,946 | 5,814 |
Production & Precision Ag (PPA) | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 451 | 253 | 899 | 617 |
Production & Precision Ag (PPA) | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 645 | 566 | 1,648 | 1,604 |
Production & Precision Ag (PPA) | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 348 | 398 | 954 | 1,090 |
Production & Precision Ag (PPA) | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,327 | 758 | 3,229 | 1,971 |
Production & Precision Ag (PPA) | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 510 | 368 | 1,118 | 991 |
Small Ag & Turf (SAT) | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,691 | 3,212 | 9,971 | 9,189 |
Small Ag & Turf (SAT) | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,672 | 3,191 | 9,919 | 9,137 |
Small Ag & Turf (SAT) | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 19 | 21 | 52 | 52 |
Small Ag & Turf (SAT) | Small Agriculture | ||||
Revenue Recognition | ||||
Net sales | 2,705 | 2,355 | 7,305 | 6,583 |
Small Ag & Turf (SAT) | Turf | ||||
Revenue Recognition | ||||
Net sales | 842 | 719 | 2,286 | 2,268 |
Small Ag & Turf (SAT) | Financial Products | ||||
Revenue Recognition | ||||
Financial | 15 | 12 | 35 | 32 |
Small Ag & Turf (SAT) | Other | ||||
Revenue Recognition | ||||
Other net sales and revenues | 129 | 126 | 345 | 306 |
Small Ag & Turf (SAT) | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 2,177 | 1,753 | 5,718 | 5,014 |
Small Ag & Turf (SAT) | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 185 | 153 | 468 | 376 |
Small Ag & Turf (SAT) | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 646 | 679 | 1,836 | 1,903 |
Small Ag & Turf (SAT) | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 109 | 117 | 386 | 361 |
Small Ag & Turf (SAT) | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 155 | 125 | 393 | 305 |
Small Ag & Turf (SAT) | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 419 | 385 | 1,170 | 1,230 |
Construction & Forestry (CF) | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,323 | 3,075 | 9,639 | 8,742 |
Construction & Forestry (CF) | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 3,303 | 3,052 | 9,580 | 8,666 |
Construction & Forestry (CF) | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Net sales and revenues | 20 | 23 | 59 | 76 |
Construction & Forestry (CF) | Construction | ||||
Revenue Recognition | ||||
Net sales | 1,506 | 1,283 | 4,198 | 3,402 |
Construction & Forestry (CF) | Compact Construction | ||||
Revenue Recognition | ||||
Net sales | 460 | 398 | 1,208 | 1,140 |
Construction & Forestry (CF) | Roadbuilding | ||||
Revenue Recognition | ||||
Net sales | 910 | 948 | 2,619 | 2,924 |
Construction & Forestry (CF) | Forestry | ||||
Revenue Recognition | ||||
Net sales | 316 | 342 | 946 | 975 |
Construction & Forestry (CF) | Financial Products | ||||
Revenue Recognition | ||||
Financial | 6 | 5 | 17 | 17 |
Construction & Forestry (CF) | Other | ||||
Revenue Recognition | ||||
Other net sales and revenues | 125 | 99 | 651 | 284 |
Construction & Forestry (CF) | United States | ||||
Revenue Recognition | ||||
Net sales and revenues | 1,789 | 1,559 | 5,157 | 4,242 |
Construction & Forestry (CF) | Canada | ||||
Revenue Recognition | ||||
Net sales and revenues | 288 | 285 | 975 | 793 |
Construction & Forestry (CF) | Western Europe | ||||
Revenue Recognition | ||||
Net sales and revenues | 380 | 455 | 1,202 | 1,408 |
Construction & Forestry (CF) | Central Europe and CIS | ||||
Revenue Recognition | ||||
Net sales and revenues | 111 | 241 | 452 | 628 |
Construction & Forestry (CF) | Latin America | ||||
Revenue Recognition | ||||
Net sales and revenues | 459 | 227 | 1,020 | 617 |
Construction & Forestry (CF) | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Net sales and revenues | 296 | 308 | 833 | 1,054 |
Financial Services (FS) | ||||
Revenue Recognition | ||||
Financial | 903 | 902 | 2,637 | 2,679 |
Financial Services (FS) | Revenue Recognized at a Point in Time | ||||
Revenue Recognition | ||||
Financial | 27 | 27 | 77 | 77 |
Financial Services (FS) | Revenue Recognized Over Time | ||||
Revenue Recognition | ||||
Financial | 876 | 875 | 2,560 | 2,602 |
Financial Services (FS) | Financial Products | ||||
Revenue Recognition | ||||
Financial | 903 | 902 | 2,637 | 2,679 |
Financial Services (FS) | United States | ||||
Revenue Recognition | ||||
Financial | 602 | 605 | 1,744 | 1,812 |
Financial Services (FS) | Canada | ||||
Revenue Recognition | ||||
Financial | 149 | 162 | 450 | 469 |
Financial Services (FS) | Western Europe | ||||
Revenue Recognition | ||||
Financial | 25 | 27 | 76 | 77 |
Financial Services (FS) | Central Europe and CIS | ||||
Revenue Recognition | ||||
Financial | 14 | 10 | 36 | 28 |
Financial Services (FS) | Latin America | ||||
Revenue Recognition | ||||
Financial | 77 | 60 | 218 | 179 |
Financial Services (FS) | Asia, Africa, Australia, New Zealand, and Middle East | ||||
Revenue Recognition | ||||
Financial | $ 36 | $ 38 | $ 113 | $ 114 |
REVENUE RECOGNITION - Advanced
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | |
Advanced customer payments | |||||
Deferred revenue received | $ 1,424 | $ 1,259 | $ 1,424 | $ 1,259 | $ 1,344 |
Revenue recognized from deferred revenue | $ 93 | $ 108 | $ 488 | $ 442 |
REVENUE RECOGNITION - Unsatisfi
REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions | Jul. 31, 2022 USD ($) |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 1,167 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-08-01 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 104 |
Period estimated revenue to be recognized | 3 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 | $ 337 |
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 | $ 283 |
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 | $ 196 |
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 | $ 109 |
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 | $ 60 |
Period estimated revenue to be recognized | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-11-01 | |
Unsatisfied performance obligations | |
Unsatisfied performance obligations for contracts with an original duration greater than one year | $ 78 |
Period estimated revenue to be recognized | 24 months |
OTHER COMPREHENSIVE INCOME IT_3
OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Components (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | $ 19,033 | $ 18,431 | $ 15,731 |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (3,476) | (2,539) | (5,011) |
Retirement Benefits Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (1,171) | (1,034) | (3,710) |
Cumulative Translation Adjustment | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (2,262) | (1,478) | (1,277) |
Unrealized Gain (Loss) on Derivatives | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | (1) | (42) | (50) |
Unrealized Gain (Loss) on Debt Securities | |||
Accumulated other comprehensive income (loss) | |||
Total accumulated other comprehensive income (loss) | $ (42) | $ 15 | $ 26 |
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 | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | $ (296) | $ (244) | $ (713) | $ (783) |
Total other comprehensive income (loss), before tax | (157) | (28) | (973) | 598 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (28) | (23) | 36 | (70) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss), net of income taxes | (185) | (51) | (937) | 528 |
Cumulative Translation Adjustment | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Total other comprehensive income (loss), before tax | (267) | (112) | (774) | 319 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Total other comprehensive income (loss), tax (expense) credit | (2) | (2) | (10) | |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss), net of income taxes | (269) | (114) | (784) | 319 |
Unrealized Gain (Loss) on Derivatives | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 1 | (1) | 52 | (1) |
Total other comprehensive income (loss), before tax | (2) | 2 | 52 | 10 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (11) | |||
Total other comprehensive income (loss), tax (expense) credit | 1 | (1) | (11) | (2) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 1 | (1) | 41 | (1) |
Other comprehensive income (loss), net of income taxes | (1) | 1 | 41 | 8 |
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts (Swaps) | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Interest expense | (3) | 3 | 11 | |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | 1 | (1) | (2) | |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | (2) | 2 | 9 | |
Unrealized Gain (Loss) on Debt Securities | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other comprehensive income (loss) before reclassification, before tax | 6 | 11 | (74) | (6) |
Total other comprehensive income (loss), before tax | 7 | 11 | (73) | (6) |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (1) | (3) | 16 | (1) |
Total other comprehensive income (loss), tax (expense) credit | (1) | (3) | 16 | (1) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 5 | 8 | (58) | (7) |
Other comprehensive income (loss), net of income taxes | 6 | 8 | (57) | (7) |
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 | 34 | (5) | (338) | 35 |
Total other comprehensive income (loss), before tax | 105 | 71 | (178) | 275 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | (9) | 1 | 81 | (8) |
Total other comprehensive income (loss), tax (expense) credit | (26) | (17) | 41 | (67) |
Other Comprehensive Income (Loss), After Tax | ||||
Other comprehensive income (loss) before reclassification, after tax | 25 | (4) | (257) | 27 |
Other comprehensive income (loss), net of income taxes | 79 | 54 | (137) | 208 |
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 27 | 71 | 94 | 213 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (7) | (17) | (24) | (53) |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 20 | 54 | 70 | 160 |
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 8 | 1 | 22 | 5 |
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (2) | (6) | (1) | |
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | 6 | 1 | 16 | 4 |
Settlements/curtailments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 36 | 44 | ||
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (8) | (10) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 28 | $ 34 | ||
Settlements | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Before Tax | ||||
Other operating expenses | 4 | 22 | ||
Other Comprehensive Income (Loss), Tax (Expense) Credit | ||||
Reclassification from accumulated other comprehensive income, tax (expense) credit | (1) | (5) | ||
Other Comprehensive Income (Loss), After Tax | ||||
Reclassification from accumulated other comprehensive income, after tax | $ 3 | $ 17 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
EARNINGS PER SHARE | ||||
Net income attributable to Deere & Company | $ 1,884 | $ 1,667 | $ 4,885 | $ 4,680 |
Average shares outstanding | 304.1 | 311 | 305.8 | 312.4 |
Basic (in dollars per share) | $ 6.20 | $ 5.36 | $ 15.97 | $ 14.98 |
Diluted Earnings Per Share | ||||
Average shares outstanding | 304.1 | 311 | 305.8 | 312.4 |
Effect of dilutive share-based compensation (in shares) | 1.6 | 2.4 | 1.9 | 2.5 |
Total potential shares outstanding | 305.7 | 313.4 | 307.7 | 314.9 |
Diluted (in dollars per share) | $ 6.16 | $ 5.32 | $ 15.88 | $ 14.86 |
Antidilutive incremental shares excluded from computation of earnings per share | 0.2 | 0.2 |
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 | 12 Months Ended | ||||
Nov. 30, 2021 | Jul. 31, 2022 | Jan. 30, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 30, 2022 | |
Pensions | |||||||
Net Periodic Cost | |||||||
Service cost | $ 86 | $ 83 | $ 265 | $ 251 | |||
Interest cost | $ 85 | $ 69 | $ 242 | $ 207 | |||
Location of interest cost | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Expected return on plan assets | $ (182) | $ (199) | $ (544) | $ (599) | |||
Location of expected return on plan assets | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Amortization of actuarial (gain) loss | $ 31 | $ 64 | $ 107 | $ 192 | |||
Location of amortization of actuarial (gain) loss | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Amortization of prior service (credit) cost | $ 9 | $ 2 | $ 25 | $ 8 | |||
Location of amortization of prior service (credit) cost | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Settlements/curtailment | $ 36 | $ 4 | $ 44 | $ 22 | |||
Location of settlements/curtailment | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Net cost | $ 65 | $ 23 | $ 139 | $ 81 | |||
Employer Contributions | |||||||
Defined benefit plan employer contributions | 67 | ||||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $ 16 | 16 | |||||
Pensions | United States | |||||||
Net Periodic Cost | |||||||
Percent of active eligible hourly employees that elected to change to an enhanced defined contribution benefit (as a percent) | 10% | ||||||
Curtailment loss | $ 34 | ||||||
Location of curtailment loss | Other operating expenses | ||||||
Pensions | UAW Collective Bargaining Arrangement | United States | |||||||
UAW Contract Remeasurement | |||||||
Decrease in plan's funded status | $ (495) | ||||||
Pensions | UAW Collective Bargaining Arrangement | United States | Forecast | |||||||
UAW Contract Remeasurement | |||||||
Pension expense increase | $ 80 | ||||||
Pensions | UAW Collective Bargaining Arrangement | United States | Forecast | Operating Profit | |||||||
UAW Contract Remeasurement | |||||||
Pension expense increase | $ 35 | ||||||
OPEB | |||||||
Net Periodic Cost | |||||||
Service cost | $ 11 | 12 | 34 | 36 | |||
Interest cost | $ 25 | $ 25 | $ 74 | $ 76 | |||
Location of interest cost | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Expected return on plan assets | $ (28) | $ (19) | $ (83) | $ (58) | |||
Location of expected return on plan assets | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Amortization of actuarial (gain) loss | $ (4) | $ 7 | $ (13) | $ 21 | |||
Location of amortization of actuarial (gain) loss | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Amortization of prior service (credit) cost | $ (1) | $ (1) | $ (3) | $ (3) | |||
Location of amortization of prior service (credit) cost | Other operating expenses | Other operating expenses | Other operating expenses | Other operating expenses | |||
Net cost | $ 3 | $ 24 | $ 9 | $ 72 | |||
Employer Contributions | |||||||
Defined benefit plan employer contributions | 1,109 | ||||||
Defined benefit plan employer contributions expected for the remainder of the fiscal year | $ 28 | $ 28 | |||||
OPEB | United States | |||||||
Employer Contributions | |||||||
Defined benefit plan employer voluntary contributions | $ 1,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | |
Net Sales and Revenues | |||||
Net sales and revenues | $ 14,102 | $ 11,527 | $ 37,041 | $ 32,697 | |
% Change - Net sales and revenues | 22% | 13% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 2,646 | 2,243 | $ 6,552 | 6,320 | |
% Change - Operating profit | 18% | 4% | |||
Net income attributable to Deere & Company | $ 1,884 | 1,667 | $ 4,885 | 4,680 | |
% Change - Net income attributable to Deere & Company | 13% | 4% | |||
Identifiable Assets | |||||
Total Assets | $ 86,817 | 80,688 | $ 86,817 | 80,688 | $ 84,114 |
Operating Segments (Other) | |||||
Reconciling items | $ (108) | (85) | $ (303) | (312) | |
% Change - Reconciling items | 27% | (3.00%) | |||
Income taxes | $ (654) | (491) | $ (1,364) | (1,328) | |
% Change - Income taxes | 33% | 3% | |||
Corporate | |||||
Identifiable Assets | |||||
Total Assets | $ 10,896 | 12,110 | $ 10,896 | 12,110 | 15,053 |
Other Revenues | |||||
Net Sales and Revenues | |||||
Other revenues | $ 199 | 212 | $ 839 | 557 | |
% Change - Other revenues | (6.00%) | 51% | |||
Production & Precision Ag (PPA) | |||||
Net Sales and Revenues | |||||
Net sales and revenues | $ 6,185 | 4,338 | $ 14,794 | 12,087 | |
Intersegment sales and revenues | $ 5 | 8 | $ 15 | 21 | |
% Change - Intersegment sales and revenues | (38.00%) | (29.00%) | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 1,293 | 906 | $ 2,646 | 2,557 | |
% Change - Operating profit | 43% | 3% | |||
Identifiable Assets | |||||
Total Assets | $ 8,728 | 6,910 | $ 8,728 | 6,910 | 7,021 |
Small Ag & Turf (SAT) | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 3,691 | 3,212 | 9,971 | 9,189 | |
Intersegment sales and revenues | 2 | 2 | $ 8 | 9 | |
% Change - Intersegment sales and revenues | (11.00%) | ||||
Operating Profit (Loss) | |||||
Total operating profit | $ 552 | 583 | $ 1,443 | 1,699 | |
% Change - Operating profit | (5.00%) | (15.00%) | |||
Identifiable Assets | |||||
Total Assets | $ 4,361 | 3,643 | $ 4,361 | 3,643 | 3,959 |
Construction & Forestry (CF) | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 3,323 | 3,075 | 9,639 | 8,742 | |
Operating Profit (Loss) | |||||
Total operating profit | $ 514 | 463 | $ 1,599 | 1,220 | |
% Change - Operating profit | 11% | 31% | |||
Identifiable Assets | |||||
Total Assets | $ 6,824 | 6,378 | $ 6,824 | 6,378 | 6,457 |
Financial Services (FS) | |||||
Net Sales and Revenues | |||||
Financial revenues | 903 | 902 | $ 2,637 | 2,679 | |
% Change - Financial revenues | (2.00%) | ||||
Intersegment sales and revenues | $ 81 | 61 | $ 214 | 172 | |
% Change - Intersegment sales and revenues | 33% | 24% | |||
Operating Profit (Loss) | |||||
Total operating profit | $ 287 | 291 | $ 864 | 844 | |
% Change - Operating profit | (1.00%) | 2% | |||
Identifiable Assets | |||||
Total Assets | $ 56,008 | 51,647 | $ 56,008 | 51,647 | $ 51,624 |
Net Sales | |||||
Net Sales and Revenues | |||||
Net sales and revenues | 13,000 | 10,413 | 33,565 | 29,461 | |
Net Sales | Production & Precision Ag (PPA) | |||||
Net Sales and Revenues | |||||
Net sales | $ 6,096 | 4,250 | $ 14,568 | 11,848 | |
% Change - Net sales | 43% | 23% | |||
Net Sales | Small Ag & Turf (SAT) | |||||
Net Sales and Revenues | |||||
Net sales | $ 3,635 | 3,147 | $ 9,836 | 9,051 | |
% Change - Net sales | 16% | 9% | |||
Net Sales | Construction & Forestry (CF) | |||||
Net Sales and Revenues | |||||
Net sales | $ 3,269 | $ 3,016 | $ 9,161 | $ 8,562 | |
% Change - Net sales | 8% | 7% |
FINANCING RECEIVABLES - Financi
FINANCING RECEIVABLES - Financing Receivables Past Due (Details) | 9 Months Ended |
Jul. 31, 2022 | |
FINANCING RECEIVABLES | |
Financing Receivable, Practical Expedient, Accrued Interest Exclusion [true false] | false |
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 |
FINANCING RECEIVABLES - Retail
FINANCING RECEIVABLES - Retail Notes, Financing Leases, and Revolving Charge Accounts Credit Quality Analysis (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Credit Quality Analysis | |||
Total retail customer receivables | $ 40,399 | $ 37,024 | |
Retail Customer Receivables | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 11,643 | $ 16,173 | 11,614 |
2021 and 2020, respectively | 11,716 | 8,494 | 9,614 |
2020 and 2019, respectively | 5,908 | 4,389 | 5,075 |
2019 and 2018, respectively | 2,725 | 2,098 | 2,515 |
2018 and 2017, respectively | 1,085 | 828 | 1,045 |
Prior years | 438 | 251 | 372 |
Revolving | 4,099 | 3,825 | 3,772 |
Total retail customer receivables | 37,614 | 36,058 | 34,007 |
Retail Customer Receivables | Agriculture and Turf | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 40 | 43 | 38 |
2021 and 2020, respectively | 70 | 53 | 54 |
2020 and 2019, respectively | 38 | 29 | 35 |
2019 and 2018, respectively | 23 | 16 | 19 |
2018 and 2017, respectively | 8 | 7 | 7 |
Prior years | 4 | 3 | 3 |
Revolving | 18 | 14 | 13 |
Total retail customer receivables | 201 | 165 | 169 |
Retail Customer Receivables | Agriculture and Turf | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 15 | 16 | 14 |
2021 and 2020, respectively | 24 | 23 | 28 |
2020 and 2019, respectively | 15 | 12 | 15 |
2019 and 2018, respectively | 7 | 6 | 6 |
2018 and 2017, respectively | 3 | 3 | 3 |
Prior years | 1 | 1 | 1 |
Revolving | 5 | 4 | 4 |
Total retail customer receivables | 70 | 65 | 71 |
Retail Customer Receivables | Agriculture and Turf | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2021 and 2020, respectively | 1 | 1 | |
Total retail customer receivables | 1 | 1 | |
Retail Customer Receivables | Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 9,161 | 12,877 | 9,159 |
2021 and 2020, respectively | 9,169 | 6,676 | 7,516 |
2020 and 2019, respectively | 4,713 | 3,463 | 3,938 |
2019 and 2018, respectively | 2,234 | 1,738 | 2,053 |
2018 and 2017, respectively | 935 | 728 | 910 |
Prior years | 378 | 211 | 317 |
Revolving | 3,962 | 3,704 | 3,658 |
Total retail customer receivables | 30,552 | 29,397 | 27,551 |
Retail Customer Receivables | Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 17 | 23 | 12 |
2021 and 2020, respectively | 62 | 57 | 58 |
2020 and 2019, respectively | 48 | 53 | 63 |
2019 and 2018, respectively | 37 | 32 | 42 |
2018 and 2017, respectively | 19 | 17 | 22 |
Prior years | 27 | 23 | 30 |
Revolving | 7 | 7 | 6 |
Total retail customer receivables | 217 | 212 | 233 |
Retail Customer Receivables | Construction and Forestry | 30-59 Days Past Due | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 47 | 50 | 35 |
2021 and 2020, respectively | 54 | 40 | 44 |
2020 and 2019, respectively | 26 | 27 | 26 |
2019 and 2018, respectively | 12 | 7 | 9 |
2018 and 2017, respectively | 4 | 4 | 4 |
Prior years | 1 | 1 | 1 |
Revolving | 3 | 3 | 3 |
Total retail customer receivables | 147 | 132 | 122 |
Retail Customer Receivables | Construction and Forestry | 60-89 Days Past Due | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 14 | 15 | 13 |
2021 and 2020, respectively | 14 | 11 | 19 |
2020 and 2019, respectively | 12 | 9 | 10 |
2019 and 2018, respectively | 4 | 6 | 5 |
2018 and 2017, respectively | 1 | 1 | 1 |
Prior years | 1 | ||
Revolving | 1 | 1 | 1 |
Total retail customer receivables | 46 | 43 | 50 |
Retail Customer Receivables | Construction and Forestry | 90 Days or Greater Past Due | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 1 | 4 | |
2021 and 2020, respectively | 11 | 2 | 2 |
2020 and 2019, respectively | 3 | 3 | 9 |
2019 and 2018, respectively | 1 | 3 | 5 |
2018 and 2017, respectively | 4 | 6 | |
Prior years | 3 | 2 | 2 |
Total retail customer receivables | 18 | 15 | 28 |
Retail Customer Receivables | Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 2,336 | 3,122 | 2,327 |
2021 and 2020, respectively | 2,249 | 1,575 | 1,845 |
2020 and 2019, respectively | 1,004 | 754 | 938 |
2019 and 2018, respectively | 382 | 273 | 357 |
2018 and 2017, respectively | 106 | 57 | 84 |
Prior years | 20 | 7 | 13 |
Revolving | 102 | 92 | 86 |
Total retail customer receivables | 6,199 | 5,880 | 5,650 |
Retail Customer Receivables | Construction and Forestry | Non-performing | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 13 | 26 | 12 |
2021 and 2020, respectively | 63 | 56 | 47 |
2020 and 2019, respectively | 49 | 39 | 41 |
2019 and 2018, respectively | 25 | 17 | 19 |
2018 and 2017, respectively | 9 | 7 | 8 |
Prior years | 4 | 3 | 4 |
Revolving | 1 | 1 | |
Total retail customer receivables | $ 164 | $ 148 | $ 132 |
FINANCING RECEIVABLES - Wholesa
FINANCING RECEIVABLES - Wholesale Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Credit Quality Analysis | |||
Total wholesale receivables | $ 40,399 | $ 37,024 | |
Wholesale Receivables | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 300 | $ 387 | 271 |
2021 and 2020, respectively | 131 | 87 | 118 |
2020 and 2019, respectively | 37 | 41 | 64 |
2019 and 2018, respectively | 8 | 9 | 14 |
2018 and 2017, respectively | 1 | 4 | 4 |
Prior years | 3 | 2 | 3 |
Revolving | 2,305 | 2,036 | 2,543 |
Total wholesale receivables | 2,785 | 2,566 | 3,017 |
Wholesale Receivables | Agriculture and Turf | Current | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 289 | 346 | 263 |
2021 and 2020, respectively | 99 | 80 | 110 |
2020 and 2019, respectively | 34 | 22 | 38 |
2019 and 2018, respectively | 6 | 9 | 13 |
2018 and 2017, respectively | 1 | 3 | 3 |
Prior years | 1 | 1 | |
Revolving | 2,022 | 1,696 | 2,256 |
Total wholesale receivables | 2,452 | 2,156 | 2,684 |
Wholesale Receivables | Agriculture and Turf | Non-performing | |||
Credit Quality Analysis | |||
2020 and 2019, respectively | 12 | 18 | |
2019 and 2018, respectively | 1 | ||
Total wholesale receivables | 1 | 12 | 18 |
Wholesale Receivables | Construction and Forestry | 30+ days past due | |||
Credit Quality Analysis | |||
Prior years | 1 | 1 | 1 |
Total wholesale receivables | 1 | 1 | 1 |
Wholesale Receivables | Construction and Forestry | Current | |||
Credit Quality Analysis | |||
2022 and 2021, respectively | 11 | 41 | 8 |
2021 and 2020, respectively | 32 | 7 | 8 |
2020 and 2019, respectively | 3 | 7 | 8 |
2019 and 2018, respectively | 1 | 1 | |
2018 and 2017, respectively | 1 | 1 | |
Prior years | 1 | 1 | 1 |
Revolving | 283 | 340 | 287 |
Total wholesale receivables | $ 331 | $ 397 | $ 314 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | |
Allowance: | |||||
Beginning of period balance | $ 190 | $ 178 | $ 166 | $ 184 | |
Provision (credit) | 16 | 3 | 59 | (26) | |
Write-offs | (22) | (23) | (69) | (61) | |
Recoveries | 15 | 16 | 39 | 44 | |
Translation adjustments | 3 | 7 | 2 | ||
End of period balance | 202 | 174 | 202 | 174 | |
Financing receivables: | |||||
End of period balance | 40,399 | 37,024 | 40,399 | 37,024 | |
Cumulative Effect from Adoption | ASU 2016-13 | |||||
Allowance: | |||||
Beginning of period balance | 31 | ||||
Retail Customer Receivables | |||||
Financing receivables: | |||||
End of period balance | 37,614 | 34,007 | 37,614 | 34,007 | $ 36,058 |
Retail Notes and Financing Leases | |||||
Allowance: | |||||
Beginning of period balance | 168 | 152 | 138 | 133 | |
Provision (credit) | 14 | 3 | 66 | (9) | |
Write-offs | (12) | (14) | (47) | (38) | |
Recoveries | 8 | 8 | 17 | 17 | |
Translation adjustments | 3 | 7 | 2 | ||
End of period balance | 181 | 149 | 181 | 149 | |
Financing receivables: | |||||
End of period balance | 33,515 | 30,235 | 33,515 | 30,235 | |
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 | 17 | 19 | 21 | 43 | |
Provision (credit) | 3 | (4) | (16) | ||
Write-offs | (10) | (9) | (22) | (23) | |
Recoveries | 7 | 8 | 22 | 27 | |
End of period balance | 17 | 18 | 17 | 18 | |
Financing receivables: | |||||
End of period balance | 4,099 | 3,772 | 4,099 | 3,772 | |
Revolving Charge Accounts | Cumulative Effect from Adoption | ASU 2016-13 | |||||
Allowance: | |||||
Beginning of period balance | (13) | ||||
Wholesale Receivables | |||||
Allowance: | |||||
Beginning of period balance | 5 | 7 | 7 | 8 | |
Provision (credit) | (1) | (3) | (1) | ||
End of period balance | 4 | 7 | 4 | 7 | |
Financing receivables: | |||||
End of period balance | $ 2,785 | $ 3,017 | $ 2,785 | $ 3,017 | $ 2,566 |
FINANCING RECEIVABLES - Trouble
FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions | 9 Months Ended | |
Jul. 31, 2022 USD ($) item | Aug. 01, 2021 USD ($) item | |
Financing Receivables Related to Troubled Debt Restructurings | ||
Financing receivable contracts in troubled debt restructuring, number | item | 230 | 304 |
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 10 | $ 12 |
Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 9 | $ 10 |
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 | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Securitization of Financing Receivables | |||
Other assets | $ 2,236 | $ 2,145 | $ 2,448 |
Total Assets | 86,817 | 84,114 | 80,688 |
Short-term securitization borrowings | 4,920 | 4,605 | 5,277 |
Accrued interest on borrowings - securitization transactions | 4 | 2 | 2 |
Total liabilities related to restricted securitized assets | 4,924 | 4,607 | 5,279 |
Securitized | |||
Securitization of Financing Receivables | |||
Financing receivables securitized (retail notes) | 5,156 | 4,673 | 5,421 |
Allowance for credit losses | (15) | (14) | (20) |
Other assets | 136 | 107 | 113 |
Total Assets | $ 5,277 | $ 4,766 | $ 5,514 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
INVENTORIES | |||
Raw materials and supplies | $ 4,508 | $ 3,524 | $ 2,895 |
Work-in-process | 1,621 | 994 | 1,124 |
Finished goods and parts | 5,434 | 4,373 | 4,176 |
Total FIFO value | 11,563 | 8,891 | 8,195 |
Less adjustment to LIFO value | 2,442 | 2,110 | 1,785 |
Inventories | $ 9,121 | $ 6,781 | $ 6,410 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2022 | Aug. 01, 2021 | |
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | $ 3,291 | $ 3,081 |
Acquisitions | 798 | 12 |
Translation adjustments | (335) | 55 |
Goodwill - net, ending balance | 3,754 | 3,148 |
Accumulated goodwill impairment losses | 0 | 0 |
Production & Precision Ag (PPA) | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 542 | 333 |
Acquisitions | 132 | 12 |
Translation adjustments | (23) | 13 |
Goodwill - net, ending balance | 651 | 358 |
Small Ag & Turf (SAT) | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 265 | 268 |
Acquisitions | 69 | |
Translation adjustments | (11) | (3) |
Goodwill - net, ending balance | 323 | 265 |
Construction & Forestry (CF) | ||
Changes in Amounts of Goodwill | ||
Goodwill - net, beginning balance | 2,484 | 2,480 |
Acquisitions | 597 | |
Translation adjustments | (301) | 45 |
Goodwill - net, ending balance | $ 2,780 | $ 2,525 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Amortized intangible assets: | |||
Total at cost | $ 1,827 | $ 1,646 | $ 1,625 |
Total accumulated amortization | 546 | 494 | 481 |
Amortized intangible assets - net | 1,281 | 1,152 | 1,144 |
Unamortized intangible assets: | |||
Other intangible assets - net | 1,281 | 1,275 | 1,267 |
Customer Lists and Relationships | |||
Amortized intangible assets: | |||
Total at cost | 507 | 542 | 545 |
Total accumulated amortization | 162 | 151 | 144 |
Technology, Patents, Trademarks and Other | |||
Amortized intangible assets: | |||
Total at cost | 1,320 | 1,104 | 1,080 |
Total accumulated amortization | $ 384 | 343 | 337 |
In-process Research and Development | |||
Unamortized intangible assets: | |||
Unamortized intangible assets | $ 123 | $ 123 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Amortized Intangible Assets: | ||||
Amortization expense of other intangible assets | $ 42 | $ 27 | $ 104 | $ 89 |
Amortization expense of other intangible assets - remainder of 2022 | 62 | 62 | ||
Amortization expense of other intangible assets - 2023 | 164 | 164 | ||
Amortization expense of other intangible assets - 2024 | 160 | 160 | ||
Amortization expense of other intangible assets - 2025 | 133 | 133 | ||
Amortization expense of other intangible assets - 2026 | 113 | 113 | ||
Amortization expense of other intangible assets - 2027 | $ 112 | $ 112 |
SHORT-TERM BORROWINGS (Details)
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Short-term borrowings | |||
Short-term borrowings | $ 14,176 | $ 10,919 | $ 10,404 |
Commercial Paper | |||
Short-term borrowings | |||
Short-term borrowings | 6,035 | 2,230 | 1,882 |
Notes Payable to Banks | |||
Short-term borrowings | |||
Short-term borrowings | 427 | 336 | 133 |
Finance Lease Obligations Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | 21 | 23 | 23 |
Long-term Borrowings Due Within One Year | |||
Short-term borrowings | |||
Short-term borrowings | $ 7,693 | $ 8,330 | $ 8,366 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) € in Millions, $ in Millions | Apr. 12, 2022 USD ($) | Jul. 31, 2022 USD ($) | Jul. 31, 2022 EUR (€) | Oct. 31, 2021 USD ($) | Oct. 31, 2021 EUR (€) | Aug. 01, 2021 USD ($) | Aug. 01, 2021 EUR (€) |
Long-term borrowings | |||||||
Less debt issuance costs and debt discounts | $ (115) | $ (118) | $ (119) | ||||
Total long-term borrowings | 32,132 | 32,888 | 32,280 | ||||
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% | |
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% | |
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% | |
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% | |
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% | |
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% | |
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% | |
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% | |
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% | |
.5% Notes Due 2023 | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 510 | $ 584 | $ 594 | ||||
Debt instrument, stated interest rate | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | |
Principal amount | € | € 500 | € 500 | € 500 | ||||
1.375% Notes Due 2024 | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 816 | $ 934 | $ 951 | ||||
Debt instrument, stated interest rate | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% | |
Principal amount | € | € 800 | € 800 | € 800 | ||||
1.85% Notes Due 2028 | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 612 | $ 701 | $ 713 | ||||
Debt instrument, stated interest rate | 1.85% | 1.85% | 1.85% | 1.85% | 1.85% | 1.85% | |
Principal amount | € | € 600 | € 600 | € 600 | ||||
2.20% Notes Due 2032 | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 612 | $ 701 | $ 713 | ||||
Debt instrument, stated interest rate | 2.20% | 2.20% | 2.20% | 2.20% | 2.20% | 2.20% | |
Principal amount | € | € 600 | € 600 | € 600 | ||||
1.65% Notes Due 2039 | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 663 | $ 759 | $ 773 | ||||
Debt instrument, stated interest rate | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% | |
Principal amount | € | € 650 | € 650 | € 650 | ||||
Medium-term Notes | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 22,593 | $ 22,899 | $ 22,346 | ||||
Principal amount | 22,983 | 22,647 | 21,892 | ||||
Other Notes and Finance Lease Obligations | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 1,191 | $ 1,178 | $ 1,059 | ||||
3.35% Sustainability-Linked Medium Term Notes Due 2029 | |||||||
Long-term borrowings | |||||||
Long-term borrowings, gross | $ 600 | ||||||
Debt instrument, stated interest rate | 3.35% | ||||||
3.35% Sustainability-Linked Medium Term Notes Due 2029 | Stated Sustainability Performance Target | |||||||
Long-term borrowings | |||||||
Interest rate increase (as a percent) | 0.25% |
LEASES - LESSOR - Lease Revenue
LEASES - LESSOR - Lease Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Leases - Lessor | ||||
Sales-type and direct finance lease revenues | $ 39 | $ 37 | $ 113 | $ 107 |
Operating lease revenues | 326 | 359 | 991 | 1,079 |
Variable lease revenues | 6 | 8 | 20 | 23 |
Total lease revenues | 371 | 404 | 1,124 | 1,209 |
Other Income | ||||
Leases - Lessor | ||||
Excess use and damage fees | $ 1 | $ 2 | $ 2 | $ 5 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
COMMITMENTS AND CONTINGENCIES | ||||
Historical claims rate, review period | 5 years | |||
Unamortized extended warranty premiums (deferred revenue) | $ 839 | $ 709 | $ 839 | $ 709 |
Change in Warranty Liability and Unearned Premiums | ||||
Beginning of period balance | 2,095 | 1,876 | 2,086 | 1,743 |
Payments | (240) | (209) | (657) | (626) |
Amortization of premiums received | (70) | (66) | (200) | (193) |
Accruals for warranties | 358 | 299 | 762 | 794 |
Premiums received | 103 | 96 | 277 | 258 |
Foreign exchange | (10) | (2) | (32) | 18 |
End of period balance | $ 2,236 | $ 1,994 | $ 2,236 | $ 1,994 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2022 USD ($) | |
Long Term Purchase Commitments | |
Commitments for the construction and acquisition of property and equipment | $ 468 |
Restricted Assets and Other Contingent Liabilities | |
Other restricted assets | 77 |
Miscellaneous contingent liabilities | 90 |
Guarantees, Third-party Receivables | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 330 |
Guarantee obligations accrued losses | $ 4 |
Guarantee obligations term | 6 years |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | $ 4,920 | $ 4,605 | $ 5,277 |
Unrestricted | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 35,056 | 33,799 | 31,449 |
Securitized | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | $ 5,141 | $ 4,659 | $ 5,401 |
Location of liability for pledged asset | Short-term securitization borrowings | Short-term securitization borrowings | Short-term securitization borrowings |
Level 2 | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | $ 4,862 | $ 4,610 | $ 5,302 |
Long-term borrowings due within one year | 7,608 | 8,364 | 8,440 |
Long-term borrowings | 31,741 | 34,506 | 34,345 |
Level 3 | Unrestricted | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 34,158 | 33,718 | 31,515 |
Level 3 | Securitized | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | $ 4,990 | $ 4,704 | $ 5,467 |
Location of liability for pledged asset | Short-term securitization borrowings | Short-term securitization borrowings | Short-term securitization borrowings |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Short-term securitization borrowings | $ 4,920 | $ 4,605 | $ 5,277 |
Long-term borrowings due within one year | 7,693 | 8,330 | 8,366 |
Long-term borrowings | 32,101 | 32,850 | 32,238 |
Carrying Value | Unrestricted | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | 35,056 | 33,799 | 31,449 |
Carrying Value | Securitized | |||
Fair Values of Financial Instruments | |||
Financing receivables - net | $ 5,141 | $ 4,659 | $ 5,401 |
Location of liability for pledged asset | Short-term securitization borrowings | Short-term securitization borrowings | Short-term securitization borrowings |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | $ 719 | $ 728 | $ 688 |
Derivative assets | 280 | 275 | 432 |
Derivative liabilities | 667 | 228 | 152 |
Other Assets Member | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative assets | 280 | 275 | 432 |
Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Derivative liabilities | 667 | 228 | 152 |
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 | 140 | 136 | 137 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | International Equity Securities | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 2 | 2 | 3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Equity Fund | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Marketable securities | 75 | 75 | 74 |
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 | 63 | 59 | 60 |
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 | 579 | 592 | 551 |
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 | 280 | 275 | 432 |
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 | 667 | 228 | 152 |
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 | 134 | 139 | 124 |
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 | 70 | 73 | 71 |
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 | 213 | 224 | 217 |
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 | 1 | 2 | 3 |
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 | 161 | $ 154 | $ 136 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | Accounts Payable and Accrued Expenses | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Deferred consideration | $ 252 |
FAIR VALUE MEASUREMENTS - Contr
FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions | Jul. 31, 2022 USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 23 |
Amortized cost, due after one through five years | 98 |
Amortized cost, due after five through 10 years | 189 |
Amortized cost, due after 10 years | 211 |
Amortized cost, mortgage-backed securities | 176 |
Amortized cost, debt securities | 697 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | 23 |
Fair value, due after one through five years | 95 |
Fair value, due after five through 10 years | 175 |
Fair value, due after 10 years | 188 |
Fair value, mortgage-backed securities | 161 |
Fair value, debt securities | $ 642 |
FAIR VALUE MEASUREMENTS - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||
Inventories | $ 9,121 | $ 9,121 | $ 6,410 | $ 6,781 |
Fair Value, Nonrecurring Measurements | Level 3 | ||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||
Inventories | 13 | 13 | ||
Losses, Inventories | $ 4 | 12 | ||
Property and equipment - net | 41 | |||
Losses, Property and equipment - net | $ 41 | $ 44 | ||
Location of property and equipment - net impairment | Cost of Revenue | Cost of Revenue | ||
Losses, Other intangible assets - net | $ 28 | |||
Location of intangible asset impairment | Cost of sales | |||
Other assets | $ 1 | |||
Losses, Other assets | $ 6 |
DERIVATIVE INSTRUMENTS - Cash F
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | |
Cash Flow Hedges | |||||
Cash flow hedge gain (loss) recorded in OCI expected to be reclassified within twelve months | $ 31 | ||||
Gains or losses reclassified from OCI to earnings | 0 | ||||
Interest Rate Contracts (Swaps) | |||||
Cash Flow Hedges | |||||
Cash flow hedges, recognized in OCI | $ 1 | $ (1) | 52 | $ (1) | |
Interest Rate Contracts (Swaps) | Cash Flow Hedges Member | Designated as Hedging Instruments | |||||
Cash Flow Hedges | |||||
Notional amount of cash flow hedge derivatives | $ 2,350 | $ 1,750 | $ 2,350 | $ 1,750 | $ 2,700 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts (Swaps) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Fair Value Hedges Member | Designated as Hedging Instruments | |||
Fair Value Hedges | |||
Notional amount of interest rate fair value hedge derivatives | $ 8,303 | $ 8,043 | $ 8,658 |
Short-term Borrowings | |||
Active Hedging Relationships | |||
Carrying Amount of Hedged Item | 191 | 189 | |
Cumulative Fair Value Hedging Amount | 3 | 4 | |
Discontinued Hedging Relationships | |||
Carrying Amount of Formerly Hedged Item | 2,605 | 1,997 | 1,898 |
Cumulative Fair Value Hedging Amount - Discontinued | 5 | (2) | (1) |
Long-term Borrowings | |||
Active Hedging Relationships | |||
Carrying Amount of Hedged Item | 7,835 | 7,847 | 8,698 |
Cumulative Fair Value Hedging Amount | (430) | 29 | 263 |
Discontinued Hedging Relationships | |||
Carrying Amount of Formerly Hedged Item | 5,728 | 6,287 | 5,831 |
Cumulative Fair Value Hedging Amount - Discontinued | $ 39 | $ 223 | $ 190 |
DERIVATIVE INSTRUMENTS - Not De
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Interest Rate Contracts (Swaps) | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 9,880 | $ 10,848 | $ 9,195 |
Foreign Exchange Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 7,457 | 7,584 | 6,328 |
Cross-Currency Interest Rate Contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 276 | $ 238 | $ 197 |
DERIVATIVE INSTRUMENTS - Fair_2
DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 280 | $ 275 | $ 432 |
Total derivative liabilities | 667 | 228 | 152 |
Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 280 | 275 | 432 |
Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 667 | 228 | 152 |
Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 82 | 166 | 332 |
Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 434 | 99 | 40 |
Not Designated as Hedging Instruments | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 198 | 109 | 100 |
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 233 | 129 | 112 |
Not Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 163 | 73 | 57 |
Not Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 79 | 33 | 43 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 30 | 31 | 41 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 149 | 94 | 67 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets Member | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 5 | 5 | 2 |
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 5 | $ 2 | $ 2 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (68) | $ (16) | $ 127 | $ (319) |
Interest Rate Contracts (Swaps) | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI | 1 | (1) | 52 | (1) |
Interest Rate Contracts (Swaps) | 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) | 44 | 3 | |
Interest Rate Contracts (Swaps) | Interest Expense Member | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | 149 | 146 | (507) | (79) |
Cash flow hedges, reclassified from OCI | 3 | (3) | (11) | |
Not designated as hedges, gains (losses) | (18) | (2) | 41 | (6) |
Foreign Exchange 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) | (1) | (2) | ||
Foreign Exchange Contracts | Cost of Sales | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | (29) | (7) | (109) | (107) |
Foreign Exchange Contracts | Other Operating Expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ (20) | $ (5) | $ 153 | $ (209) |
DERIVATIVE INSTRUMENTS - Counte
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 |
Derivative instruments | |||
Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 518 | $ 135 | $ 87 |
Cash collateral posted | 238 | 0 | 0 |
Derivative Assets | |||
Gross amounts recognized | 280 | 275 | 432 |
Netting arrangements | (125) | (105) | (94) |
Collateral received | (40) | (88) | |
Net amount | 115 | 170 | 250 |
Derivative Liabilities | |||
Gross amounts recognized | 667 | 228 | 152 |
Netting arrangements | (125) | (105) | (94) |
Collateral paid | (238) | (5) | (2) |
Net amount | 304 | 118 | 56 |
International Futures Market | |||
Derivative instruments | |||
Collateral to participate in an international futures market | $ 8 | $ 8 | $ 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. 26, 2021 | Jul. 31, 2022 | |
Share-based Compensation, Aggregate Disclosures | ||
Number of additional shares authorized for grant under the equity incentive plan | 17,300 | |
Stock Options | ||
Share-based Compensation, Aggregate Disclosures | ||
Options granted (in shares) | 197 | |
Options granted, exercise price (in dollars per share) | $ 343.94 | |
Options granted, fair value (in dollars per share) | $ 89.20 | |
Options outstanding (in shares) | 2,100 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 152.12 | |
Fair value assumptions method used | lattice model | |
Restricted Stock Units | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 165 | |
Restricted Stock Units Subject to Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 128 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 346.46 | |
Restricted Stock Units Subject to Performance/Service-based Conditions | ||
Share-based Compensation, Aggregate Disclosures | ||
Restricted stock units granted (in shares) | 37 | |
Restricted stock units granted, weighted-average fair value (in dollars per unit) | $ 331.47 |
ACQUISITIONS - Kreisel Acquisit
ACQUISITIONS - Kreisel Acquisition (Details) - USD ($) $ in Millions | 9 Months Ended | ||||
Feb. 07, 2022 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | Nov. 01, 2020 | |
Acquisitions | |||||
Cash purchase price, net of cash acquired | $ 488 | $ 19 | |||
Preliminary Asset and Liability Fair Values at the Acquisition Date | |||||
Goodwill | $ 3,754 | $ 3,148 | $ 3,291 | $ 3,081 | |
Kreisel | |||||
Acquisitions | |||||
Cash purchase price, net of cash acquired | $ 276 | ||||
Cash consideration for acquired equity interests | 253 | ||||
Cash consideration to reduce the option price | 21 | ||||
Preliminary Asset and Liability Fair Values at the Acquisition Date | |||||
Trade accounts and notes receivable | 2 | ||||
Other receivables | 11 | ||||
Inventories | 11 | ||||
Property and equipment | 11 | ||||
Goodwill | 218 | ||||
Other intangible assets | 178 | ||||
Other assets | 6 | ||||
Total assets | 437 | ||||
Accounts payable and accrued expenses | 27 | ||||
Deferred income taxes | 38 | ||||
Redeemable noncontrolling interest | $ 96 | ||||
Identifiable Intangible Assets | |||||
Weighted average amortization period (in years) | 12 years |
ACQUISITIONS - Acquisition of E
ACQUISITIONS - Acquisition of Excavator Factories (Details) - USD ($) $ in Millions | 9 Months Ended | ||||
Feb. 28, 2022 | Jul. 31, 2022 | Oct. 31, 2021 | Aug. 01, 2021 | Nov. 01, 2020 | |
Invested Capital | |||||
Non-cash gain on remeasurement of previously held equity investment, pretax | $ 326 | ||||
Preliminary Asset and Liability Fair Values at the Acquisition Date | |||||
Goodwill | 3,754 | $ 3,291 | $ 3,148 | $ 3,081 | |
Construction & Forestry (CF) | |||||
Preliminary Asset and Liability Fair Values at the Acquisition Date | |||||
Goodwill | 2,780 | $ 2,484 | $ 2,525 | $ 2,480 | |
Excavator Factories | |||||
Invested Capital | |||||
Deferred consideration | $ 271 | ||||
Total purchase price consideration | 546 | ||||
Less: Cash obtained | (187) | ||||
Less: Settlement of intercompany balances | (113) | ||||
Net purchase price consideration | 246 | ||||
Fair value of previously held equity investment | 444 | ||||
Total invested capital | 690 | ||||
Net present value of deferred consideration | $ 252 | ||||
Non-cash gain on remeasurement of previously held equity investment, after-tax | 326 | ||||
Preliminary Asset and Liability Fair Values at the Acquisition Date | |||||
Other receivables | 29 | ||||
Inventories | 286 | ||||
Property and equipment | 182 | ||||
Goodwill | 527 | ||||
Other intangible assets | 70 | ||||
Deferred income taxes | 56 | ||||
Total assets | 1,150 | ||||
Accounts payable and accrued expenses | 297 | ||||
Long-term borrowings | 163 | ||||
Total liabilities | $ 460 | ||||
Identifiable Intangible Assets | |||||
Weighted average amortization period (in years) | 10 years | ||||
Excavator Factories | Other Income | Construction & Forestry (CF) | |||||
Invested Capital | |||||
Non-cash gain on remeasurement of previously held equity investment, pretax | $ 326 | ||||
Excavator Factories | Deere-branded Excavators, Components, and Service Parts | |||||
Invested Capital | |||||
Price increases (as a percent) | 27% | ||||
Excavator Factories | Deere-branded Excavators, Components, and Service Parts | Minimum | |||||
Invested Capital | |||||
Supply agreement period | 5 years | ||||
Excavator Factories | Deere-branded Excavators, Components, and Service Parts | Maximum | |||||
Invested Capital | |||||
Supply agreement period | 30 years | ||||
Excavator Factories | License Agreement | |||||
Invested Capital | |||||
Cash consideration | $ 70 | ||||
Excavator Factories | Factories | |||||
Invested Capital | |||||
Cash consideration | $ 205 |
ACQUISITIONS - Other Acquisitio
ACQUISITIONS - Other Acquisitions (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | Nov. 01, 2020 | |
Acquisitions | ||||
Cash purchase price, net of cash acquired | $ 488 | $ 19 | ||
Preliminary Asset and Liability Fair Values at the Acquisition Date | ||||
Goodwill | $ 3,754 | $ 3,148 | $ 3,291 | $ 3,081 |
GUSS Automation | ||||
Acquisitions | ||||
Equity method investment ownership acquired (as a percent) | 40% | |||
Other Acquisitions | ||||
Acquisitions | ||||
Cash purchase price, net of cash acquired | $ 124 | |||
Cash acquired | 3 | |||
Preliminary Asset and Liability Fair Values at the Acquisition Date | ||||
Trade accounts and notes receivable | 8 | |||
Inventories | 8 | |||
Property and equipment | 4 | |||
Goodwill | 53 | |||
Other intangible assets | 21 | |||
Other assets | 50 | |||
Total assets | 144 | |||
Accounts payable and accrued expenses | 6 | |||
Deferred income taxes | 5 | |||
Total liabilities | 11 | |||
Redeemable noncontrolling interest | $ 9 | |||
Identifiable Intangible Assets | ||||
Weighted average amortization period (in years) | 7 years | |||
SureFire Ag Systems and SureFire Electronics | ||||
Acquisitions | ||||
Interest acquired (as a percent) | 80% |
SPECIAL ITEMS - Impact of Event
SPECIAL ITEMS - Impact of Events in Russia and Ukraine (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 60 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | Oct. 31, 2021 | |
Special Items | |||||
Allowance for credit losses | $ 16 | $ 3 | $ 59 | $ (26) | |
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | |||||
Special Items | |||||
Fixed asset impairment | $ 41 | ||||
Location of fixed asset impairment | Cost of sales | ||||
Intangible asset impairment | $ 28 | ||||
Location of intangible asset impairment | Cost of sales | ||||
Total Russia/Ukraine events pretax expense | $ 127 | ||||
Net tax impact | (8) | ||||
Total Russia/Ukraine events after-tax expense | 119 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Cost of Sales | |||||
Special Items | |||||
Inventory reserve | 12 | ||||
Voluntary-separation program | 1 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Selling, Administrative and General Expenses | |||||
Special Items | |||||
Allowance for credit losses | 32 | ||||
Voluntary-separation program | 8 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Other Operating Expenses | |||||
Special Items | |||||
Contingent liabilities | 5 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Production & Precision Ag (PPA) | |||||
Special Items | |||||
Fixed asset impairment | $ 30 | ||||
Location of fixed asset impairment | Cost of sales | ||||
Total Russia/Ukraine events pretax expense | $ 45 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Production & Precision Ag (PPA) | Cost of Sales | |||||
Special Items | |||||
Inventory reserve | 8 | ||||
Voluntary-separation program | 1 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Production & Precision Ag (PPA) | Selling, Administrative and General Expenses | |||||
Special Items | |||||
Voluntary-separation program | 3 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Production & Precision Ag (PPA) | Other Operating Expenses | |||||
Special Items | |||||
Contingent liabilities | 3 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Small Ag & Turf (SAT) | |||||
Special Items | |||||
Total Russia/Ukraine events pretax expense | 1 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Small Ag & Turf (SAT) | Other Operating Expenses | |||||
Special Items | |||||
Contingent liabilities | 1 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Construction & Forestry (CF) | |||||
Special Items | |||||
Fixed asset impairment | $ 11 | ||||
Location of fixed asset impairment | Cost of sales | ||||
Intangible asset impairment | $ 28 | ||||
Location of intangible asset impairment | Cost of sales | ||||
Total Russia/Ukraine events pretax expense | $ 48 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Construction & Forestry (CF) | Cost of Sales | |||||
Special Items | |||||
Inventory reserve | 4 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Construction & Forestry (CF) | Selling, Administrative and General Expenses | |||||
Special Items | |||||
Voluntary-separation program | 4 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Construction & Forestry (CF) | Other Operating Expenses | |||||
Special Items | |||||
Contingent liabilities | 1 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Financial Services (FS) | |||||
Special Items | |||||
Total Russia/Ukraine events pretax expense | 33 | ||||
Reserves, Impairments, Voluntary-Separation Costs, and Contingent Liabilities | Financial Services (FS) | Selling, Administrative and General Expenses | |||||
Special Items | |||||
Allowance for credit losses | 32 | ||||
Voluntary-separation program | 1 | ||||
Russia / Ukraine | |||||
Special Items | |||||
Net exposure | $ 436 | $ 436 | |||
Russia | |||||
Special Items | |||||
Net sales and revenues (as a percent) | 2% |
SPECIAL ITEMS - Gain on Previou
SPECIAL ITEMS - Gain on Previously Held Equity Investment (Details) - USD ($) $ in Millions | 9 Months Ended | |
Feb. 28, 2022 | Jul. 31, 2022 | |
Special Items | ||
Non-cash gain on remeasurement of previously held equity investment, pretax | $ 326 | |
Excavator Factories | ||
Special Items | ||
Non-cash gain on remeasurement of previously held equity investment, after-tax | $ 326 | |
Gain | Excavator Factories | ||
Special Items | ||
Non-cash gain on remeasurement of previously held equity investment, pretax | 326 | |
Non-cash gain on remeasurement of previously held equity investment, after-tax | $ 326 |
SPECIAL ITEMS - UAW Collective
SPECIAL ITEMS - UAW Collective Bargaining Agreement (Details) - UAW Collective Bargaining Arrangement | 3 Months Ended | |
Nov. 17, 2021 USD ($) facility | Jan. 30, 2022 USD ($) | |
Special Items | ||
Term of collective bargaining agreement | 6 years | |
Immediate wage increase (as a percent) | 10% | |
United States | ||
Special Items | ||
Number of facilities represented under collective bargaining agreement | facility | 14 | |
Ratification Bonus | ||
Special Items | ||
Ratification bonus payment per eligible employee | $ 8,500 | |
UAW ratification bonus | $ 90,000,000 |
SPECIAL ITEMS - 2021 Special It
SPECIAL ITEMS - 2021 Special Items (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2021 | Jan. 31, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Special Items | ||||
Long-lived asset impairments, pretax | $ 81 | $ 50 | ||
Impairments and Other Benefits | ||||
Special Items | ||||
Gain on sale, pretax | $ 27 | |||
Impairments and Other Benefits | Brazil | Foreign Tax Authority | ||||
Special Items | ||||
Indirect tax benefit, pretax | $ (58) | |||
Impairments and Other Benefits | German Asphalt Plant Factory | ||||
Special Items | ||||
Long-lived asset impairments, pretax | 38 | |||
Fixed asset impairment, after-tax | 38 | |||
Impairments and Other Benefits | Manufacturing Locations | ||||
Special Items | ||||
Long-lived asset impairments, pretax | $ 12 |
SPECIAL ITEMS - Operating Profi
SPECIAL ITEMS - Operating Profit Impact (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2022 | Aug. 01, 2021 | |
Special Items | ||||
Gain on remeasurement of previously held equity investment | $ (326) | |||
Long-lived asset impairments, pretax | 81 | $ 50 | ||
Period over period change | $ 34 | (74) | ||
Production & Precision Ag (PPA) | ||||
Special Items | ||||
Period over period change | (1) | 146 | ||
Small Ag & Turf (SAT) | ||||
Special Items | ||||
Period over period change | 27 | 34 | ||
Construction & Forestry (CF) | ||||
Special Items | ||||
Period over period change | 1 | (287) | ||
Financial Services (FS) | ||||
Special Items | ||||
Period over period change | 7 | 33 | ||
Reserves, Impairments, Gain, and Ratification Bonus | ||||
Special Items | ||||
Total Russia/Ukraine events pretax expense | 7 | 127 | ||
Total pretax expense (benefit) | 7 | (109) | ||
Reserves, Impairments, Gain, and Ratification Bonus | Other Income | ||||
Special Items | ||||
Gain on remeasurement of previously held equity investment | (326) | |||
Reserves, Impairments, Gain, and Ratification Bonus | Cost of Sales | ||||
Special Items | ||||
UAW ratification bonus | 90 | |||
Reserves, Impairments, Gain, and Ratification Bonus | Production & Precision Ag (PPA) | ||||
Special Items | ||||
Total Russia/Ukraine events pretax expense | (1) | 45 | ||
Total pretax expense (benefit) | (1) | 98 | ||
Reserves, Impairments, Gain, and Ratification Bonus | Production & Precision Ag (PPA) | Cost of Sales | ||||
Special Items | ||||
UAW ratification bonus | 53 | |||
Reserves, Impairments, Gain, and Ratification Bonus | Small Ag & Turf (SAT) | ||||
Special Items | ||||
Total Russia/Ukraine events pretax expense | 1 | |||
Total pretax expense (benefit) | 10 | |||
Reserves, Impairments, Gain, and Ratification Bonus | Small Ag & Turf (SAT) | Cost of Sales | ||||
Special Items | ||||
UAW ratification bonus | 9 | |||
Reserves, Impairments, Gain, and Ratification Bonus | Construction & Forestry (CF) | ||||
Special Items | ||||
Total Russia/Ukraine events pretax expense | 1 | 48 | ||
Total pretax expense (benefit) | 1 | (250) | ||
Reserves, Impairments, Gain, and Ratification Bonus | Construction & Forestry (CF) | Other Income | ||||
Special Items | ||||
Gain on remeasurement of previously held equity investment | (326) | |||
Reserves, Impairments, Gain, and Ratification Bonus | Construction & Forestry (CF) | Cost of Sales | ||||
Special Items | ||||
UAW ratification bonus | 28 | |||
Reserves, Impairments, Gain, and Ratification Bonus | Financial Services (FS) | ||||
Special Items | ||||
Total Russia/Ukraine events pretax expense | 7 | 33 | ||
Total pretax expense (benefit) | $ 7 | $ 33 | ||
Impairments and Other Benefits | ||||
Special Items | ||||
Gain on sale, pretax | $ (27) | |||
Total pretax expense (benefit) | (27) | (35) | ||
Impairments and Other Benefits | Other Income | ||||
Special Items | ||||
Gain on sale, pretax | (27) | (27) | ||
Impairments and Other Benefits | Cost of Sales | ||||
Special Items | ||||
Long-lived asset impairments, pretax | 50 | |||
Indirect tax benefit, pretax | (58) | |||
Impairments and Other Benefits | Production & Precision Ag (PPA) | ||||
Special Items | ||||
Total pretax expense (benefit) | (48) | |||
Impairments and Other Benefits | Production & Precision Ag (PPA) | Cost of Sales | ||||
Special Items | ||||
Long-lived asset impairments, pretax | 5 | |||
Indirect tax benefit, pretax | (53) | |||
Impairments and Other Benefits | Small Ag & Turf (SAT) | ||||
Special Items | ||||
Total pretax expense (benefit) | (27) | (24) | ||
Impairments and Other Benefits | Small Ag & Turf (SAT) | Other Income | ||||
Special Items | ||||
Gain on sale, pretax | $ (27) | (27) | ||
Impairments and Other Benefits | Small Ag & Turf (SAT) | Cost of Sales | ||||
Special Items | ||||
Long-lived asset impairments, pretax | 3 | |||
Impairments and Other Benefits | Construction & Forestry (CF) | ||||
Special Items | ||||
Total pretax expense (benefit) | 37 | |||
Impairments and Other Benefits | Construction & Forestry (CF) | Cost of Sales | ||||
Special Items | ||||
Long-lived asset impairments, pretax | 42 | |||
Indirect tax benefit, pretax | $ (5) |