STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
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Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
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| STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | |||
| Net Income | $ 5,965 | $ 2,753 | $ 3,257 |
| Other Comprehensive Income (Loss), Net of Income Taxes | |||
| Retirement benefits adjustment | 2,884 | (3) | (678) |
| Cumulative translation adjustment | 118 | 55 | (448) |
| Unrealized gain (loss) on derivatives | 16 | 2 | (75) |
| Unrealized gain (loss) on debt securities | (18) | 14 | 29 |
| Other Comprehensive Income (Loss), Net of Income Taxes | 3,000 | 68 | (1,172) |
| Comprehensive Income of Consolidated Group | 8,965 | 2,821 | 2,085 |
| Less: Comprehensive income attributable to noncontrolling interests | 2 | 2 | 4 |
| Comprehensive Income Attributable to Deere & Company | $ 8,963 | $ 2,819 | $ 2,081 |
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares |
Oct. 31, 2021 |
Nov. 01, 2020 |
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| CONSOLIDATED BALANCE SHEET | ||
| Common stock, par value (in dollars per share) | $ 1 | $ 1 |
| Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 |
| Common stock, issued shares | 536,431,204 | 536,431,204 |
| Common stock in treasury, shares | 228,366,144 | 222,775,254 |
ORGANIZATION AND CONSOLIDATION |
12 Months Ended |
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Oct. 31, 2021 | |
| ORGANIZATION AND CONSOLIDATION | |
| ORGANIZATION AND CONSOLIDATION | 1. ORGANIZATION AND CONSOLIDATION Structure of Operations The information in the notes and related commentary are presented in a format that includes data grouped as follows: Consolidated – Represents the consolidation of the equipment operations and financial services. References to “Deere & Company” or “the company” refer to the entire enterprise. Equipment Operations – Represents the enterprise without financial services, while including the company’s production and precision agriculture operations, small agriculture and turf operations, construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Financial Services – Represents the company’s financing operations. New Segment Reporting Structure In fiscal year 2021, the company implemented a new operating model and reporting structure. With this change, the company’s agriculture and turf operations were divided into two new segments: production and precision agriculture (PPA) and small agriculture and turf (SAT). There were no changes to the construction and forestry (CF) and financial services (FS) segments. At the beginning of fiscal year 2021, the company also reclassified goodwill from identifiable operating assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Additional information on the new segments and the segment financial results are presented in Note 28. Prior period segment information was recast for a consistent presentation. References to agriculture and turf include both production and precision agriculture and small agriculture and turf. Principles of Consolidation The consolidated financial statements represent the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company is the primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. Deere & Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 11). Other investments (less than 20 percent ownership) are recorded at cost. Fiscal Year The company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period, which generally occurs in October. An additional week is included in the fourth fiscal quarter every five or six years to realign the company’s fiscal quarters with the calendar. The fiscal year ends for 2021, 2020, and 2019 were October 31, 2021, November 1, 2020, and November 3, 2019, respectively. Fiscal years 2021 and 2020 contained 52 weeks compared to 53 weeks in fiscal year 2019. Unless otherwise stated, references to particular years or quarters refer to the company’s fiscal years and the associated periods in those fiscal years. Wirtgen Reporting Lag Removal Prior to November 2, 2020, the operating results of the Wirtgen Group (Wirtgen) were incorporated into the company’s consolidated financial statements using a one-month lag period. In 2021, the reporting lag was eliminated resulting in one additional month of Wirtgen activity in fiscal year 2021. The effect was an increase to “Net sales” of $270 million, which the company considers immaterial to construction and forestry’s annual net sales. Prior period results were not restated. Variable Interest Entities The company consolidates certain VIEs related to retail note securitizations (see Note 14). The company also has an interest in a joint venture that manufactures construction equipment in Indaiatuba, Brazil for local and overseas markets. The joint venture is a VIE; however, the company is not the primary beneficiary. Therefore, the entity’s financial results are not fully consolidated in the company’s consolidated financial statements but are included on the equity basis. In 2020, the investment in the joint venture was impaired. The maximum exposure to loss was $9 million and $5 million at October 31, 2021 and November 1, 2020, respectively. On August 19, 2021, the company announced the dissolution of the joint venture with Hitachi Construction Machinery Co., Ltd. and the purchase of the shares in the relevant joint venture manufacturing entities, including the above referenced factory in Indaiatuba, Brazil. Refer to Note 4 for more details. Argentina The company has equipment operations and financial services operations in Argentina. The U.S. dollar has historically been the functional currency for the company’s Argentina operations, as its business is generally indexed to the U.S. dollar due to the highly inflationary conditions. The Argentine government has certain capital and currency controls that restrict the company’s ability to access U.S. dollars in Argentina and remit earnings from its Argentine operations. As of October 31, 2021, the company's net investment in Argentina was approximately $578 million. The company's net investment in its Argentine operations is likely to increase as Deere generates net income that is unable to be remitted. Net sales and revenues from the company’s Argentine operations represented approximately 1 percent of consolidated net sales and revenues for 2021. The company has employed mechanisms to convert Argentine pesos into U.S. dollars to the extent possible. The net peso exposure as of October 31, 2021 was approximately $3 million. Argentine peso-denominated monetary assets and liabilities are remeasured at each balance sheet date using the official currency exchange rate.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
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Oct. 31, 2021 | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following are significant accounting policies in addition to those included in other notes to the consolidated financial statements. Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the company’s business, which may result in actual results differing from those estimates. Revenue Recognition Sales of equipment and service parts are recognized when each of the following criteria are met: (1) the company and an independent customer approve a contract with commercial substance, (2) the sales price is determinable and collectability of the payments are probable based on the terms outlined in the contract, and (3) control of the goods has transferred to the independent customer. In most situations, the independent customer is a dealer, which subsequently sells the equipment and service parts purchased from the company to a retail customer, who can finance the equipment with the financial services segment or another source of financing. In some situations, the company sells directly to a retail customer. The term “customer” includes both dealers and retail customers to whom the company makes direct sales. Transfer of control generally occurs for equipment and service parts when the good is delivered as specified in the contract and the risks and rewards of ownership are transferred. In the U.S. and most international locations, this transfer occurs primarily when goods are shipped. In Canada and some other international locations, certain goods are shipped to dealers on a consignment basis under which the risks and rewards of ownership are not transferred to the dealer at the time the goods are shipped. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. Generally, no right of return exists on sales of equipment. In limited instances, equipment is transferred to a customer or a financial institution with an obligation to repurchase the equipment for a specified amount, which is exercisable at the customer’s option. When the equipment is expected to be repurchased, those arrangements are accounted for as leases. No sale is recorded at the time of the equipment transfer and the difference between sale price and the specified repurchase amount is recognized as revenue on a straight-line basis until the customer’s option expires. When this equipment is not expected to be repurchased, a sale is recorded with a return obligation. Under the terms of sales agreements with dealers, interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from to twelve months for most equipment. Interest-free periods may not be extended. Interest is primarily charged to dealers on outstanding balances, from the earlier of the date when goods are sold to a retail customer by the dealer or the expiration of the interest-free period granted at the time of the sale to the dealer, until payment is received by the company. Interest charged may not be forgiven and the past due interest rates exceed market rates. In 2020 and to a much lesser extent in 2021, short-term payment relief was provided to dealers due to the economic effects of COVID (see Note 13). Dealers cannot cancel purchases after the company recognizes a sale and are responsible for payment even if the equipment is not sold to retail customers. If the interest-free or below market interest rate period exceeds one year, the company adjusts the expected sales revenue for the effects of the time value of money using a current market interest rate. The revenue related to the financing component is recognized in “Finance and interest income” using the interest method. The company does not adjust the sales price to account for a financing component if the expected interest-free or below market period is one year or less. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The estimated returns are recorded in “Other assets” for the inventory value of estimated returns, adjusted for restocking fees. The estimated dealer refund liability, adjusted for restocking fees, is recorded in “Accounts payable and accrued expenses.” The estimated returns are based on historical return rates, current dealer inventory levels, and current economic conditions. The company remanufactures used engines and components (cores) that are sold to dealers and retail customers for maintenance and repair parts. Revenue for remanufactured components is recognized using the same criteria as other parts sales. When a remanufactured part is sold, the company collects a deposit that is repaid if the customer returns a core that meets certain specifications within a defined time period. The deposit received from the customer is recognized as a liability in “Accounts payable and accrued expenses” and the used component that is expected to be returned is recognized in “Other assets” in the consolidated balance sheet. When a customer returns a core, the deposit is repaid, the liability reversed, and the returned core is recorded in inventory to be remanufactured and sold to another customer. If a core is not returned within the required time, the deposit is recognized as revenue in “Net sales,” and the estimated core return is recorded as an expense in “Cost of sales” in the statement of consolidated income. Certain equipment is sold with precision guidance, telematics, and other information gathering and analyzing capabilities. These technology solutions require hardware, software, and may include an obligation to provide services for a period of time. These solutions are generally bundled with the sale of the equipment but can also be purchased or renewed separately. The revenue related to the hardware and embedded software is generally recognized at the time of the equipment sale and recorded in “Net sales” in the statement of consolidated income. The revenue for the future services is generally deferred and recognized over the service period. The deferred revenue is recorded as a contract liability in “Accounts payable and accrued expenses” in the consolidated balance sheet and is recognized in “Other income” with the associated expenses recognized in “Other operating expenses” in the statement of consolidated income. Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of financing receivables are recognized as a reduction in “Finance and interest income” over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in “Finance and interest income.” Sales Incentives In certain markets, the company provides sales incentives to dealers. These incentives may be based on a dealer’s purchase volume or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. At the time of the sale to a dealer, the company records an estimated cost of these programs as a reduction to the sales price. The estimated cost is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to a retail customer. Actual cost differences from the original cost estimate are recognized in “Net sales.” Product Warranties For most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period. At the time a sale is recognized, the estimated future warranty costs are recorded. The company generally determines its total warranty liability by applying historical warranty claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs with consideration of current quality developments. The company also offers extended warranty arrangements for purchase at the customer’s option. The premiums for extended warranties are recognized in “Other income” in the statement of consolidated income primarily in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in “Accounts payable and accrued expenses” in the consolidated balance sheet (see Note 21). Sales and Transaction Taxes The company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with revenue producing transactions between the company and its customers. These taxes include sales, use, value-added, and some excise taxes. The company elected to exclude these taxes from the determination of the sales price (excluded from revenues). Contract Costs Incremental costs of obtaining an equipment revenue contract are recognized as an expense when incurred since the amortization period would be one year or less. Advertising Costs Advertising costs are charged to expense as incurred. This expense was $212 million in 2021, $196 million in 2020, and $215 million in 2019. Depreciation and Amortization Property and equipment, capitalized software, and other intangible assets are generally stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives generally using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and revised products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are generally charged to expense as incurred. Securitization of Receivables Certain financing receivables are periodically transferred to special purpose entities (SPEs) in securitization transactions (see Note 14). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Financing receivables securitized - net.” The company recognizes finance income over the lives of these receivables using the interest method. Receivables and Allowances All financing and trade receivables are reported on the balance sheet at outstanding principal and accrued interest, adjusted for any write-offs, the allowance for credit losses, and any unamortized deferred fees or costs on originated financing receivables. The company also records an allowance and provision for credit losses related to the receivables from sales (trade receivables and certain financing receivables). The allowance is a reduction to the receivable balances and the provision is recorded in “Selling, administrative and general expenses.” The allowance represents an estimate of the credit losses expected over the life of the receivable portfolio. The company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. Receivables are written-off to the allowance when the account is considered uncollectible (see Note 13). Impairment of Long-Lived Assets, Goodwill, and Other Intangible Assets The company evaluates the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. Goodwill and unamortized intangible assets are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances indicate a reduction in the fair value below the carrying value. Goodwill is allocated and reviewed for impairment by reporting unit. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (see Notes 5 and 26). Derivative Financial Instruments The company’s policy is derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the company has interest rate exposure at certain equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued (see Note 27). Foreign Currency Translation The functional currencies for most of the company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange derivative contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2021, 2020, and 2019 was $(134) million, $18 million, and $(13) million, respectively.
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NEW ACCOUNTING STANDARDS |
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| NEW ACCOUNTING STANDARDS | 3. NEW ACCOUNTING STANDARDS New Accounting Standards Adopted In the first quarter of 2021, the company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes Accounting Standards Codification (ASC) 326, Financial Instruments - Credit Losses. This ASU was adopted using a approach. The ASU, along with related amendments, revised the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. The company holds deposits from dealers (dealer deposits), which are recorded in “Accounts payable and accrued expenses” to absorb certain credit losses. Prior to adopting this ASU, the allowance for credit losses was estimated on probable credit losses incurred after consideration of recoveries from dealer deposits. The ASU considers dealer deposits and certain credit insurance contracts as freestanding credit enhancements. As a result, after adoption, credit losses recovered from dealer deposits and certain credit insurance contracts are presented in “Other income” and no longer as part of the allowance for credit losses or the provision for credit losses. The ASU also modified the treatment of the estimated write-off of delinquent receivables by no longer including the estimated benefit of charges to the dealer deposits in the write-off amount. This change increases the estimated write-offs on delinquent financing receivables with the benefit of credit losses recovered from dealer deposits presented in “Other income.” This benefit, in both situations, is recorded when the dealer deposits are charged and no longer based on estimated recoveries. The effects of adopting the ASU on the consolidated balance sheet were as follows in millions of dollars:
Note 13 contains additional disclosures, while the company’s updated allowance for credit losses accounting policy is included in Note 2 and the MD&A’s Critical Accounting Estimates. The company also adopted the following standards in 2021, none of which had a material effect on the company’s consolidated financial statements:
New Accounting Standards to be Adopted The company will adopt the following standards in future periods, none of which are expected to have a material effect on the company’s consolidated financial statements:
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ACQUISITIONS AND DISPOSITIONS |
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| ACQUISITIONS AND DISPOSITIONS | 4. ACQUISITIONS AND DISPOSITIONS Pending Acquisitions In August 2021, the company and Hitachi Construction Machinery Co., Ltd. (Hitachi) entered into a Joint Venture Dissolution Agreement (Dissolution Agreement) pursuant to which the parties agreed to voluntarily terminate (Termination) the joint venture agreement dated May 16, 1988 between the company and Hitachi. The joint venture agreement governs the terms of the joint venture between the company and Hitachi for the manufacture and distribution of excavators in North, Central, and South America under the John Deere and Hitachi trademarks and tradenames. In connection with the Termination, the company will purchase all of Hitachi’s shares in the relevant joint venture manufacturing entities located in Kernersville, North Carolina, U.S.; Langley, British Columbia, Canada; and Indaiatuba, Brazil. The company will receive certain intellectual property rights relating to certain manufacturing processes under a perpetual license agreement. The initial cash consideration consists of $275 million for the shares and an intellectual property license. The cash consideration will be offset by cash acquired and the settlement of intercompany balances. The company will also assume substantially all liabilities and debt of the joint venture entities. In addition to the foregoing payments, Hitachi will pay the book value of certain pre-existing inventory. Following the Termination, the company will purchase John Deere-branded excavators, components, and service parts from Hitachi under a new supply agreement with a duration that ranges from to 30 years. The company will also continue to manufacture 10-50 metric ton John Deere-branded excavators. The Termination is expected to close during the first half of fiscal year 2022, subject to the receipt of certain required regulatory approvals and satisfaction of certain other customary closing conditions. The company expects to fund the initial consideration and the transaction expenses from cash on hand. Acquisitions Bear Flag In August 2021, the company acquired Bear Flag Robotics, Inc. (Bear Flag) to further accelerate Deere’s development and delivery of advanced technology. Bear Flag’s technology is complementary to other Deere technology efforts and enables autonomous tractor operations. The total cash purchase price before final adjustments, net of cash acquired of $4 million, was $225 million, with an additional $25 million to be recognized as compensation expense over the four-year post-acquisition service period. In addition to the cash purchase price, $19 million of liabilities were assumed. The preliminary asset and liability fair values at the acquisition date in millions of dollars follow:
The identified intangible was related to technology with a seven-year amortization period. The goodwill will not be deductible for tax purposes. Unimil In September 2020, the company acquired Unimil, a leading Brazilian company in the after-sales service parts business for sugarcane harvesters, which is based in Piracicaba, Brazil. The total cash purchase price, net of cash acquired of $5 million, was $66 million, with $6 million funded to an escrow to secure certain indemnity obligations. In addition to the cash purchase price, $14 million of liabilities were assumed. The asset and liability fair values at the acquisition date in millions of dollars follow:
The identified intangibles were primarily related to customer relationships, trade name, and a non-compete agreement. The weighted-average amortization period is approximately nine years. The goodwill is not deductible for tax purposes. For the acquisitions, the goodwill was the result of future cash flows and related fair value exceeding the fair value of the identified assets and liabilities. The results of these operations have been included in the company’s consolidated financial statements in the production and precision agriculture operating segment and the pro forma results of operations as if these acquisitions had occurred at the beginning of the current or comparative fiscal year would not differ significantly from the reported results. Dispositions In September 2020, the company sold its German lawn mower business. At the time of the sale, total assets were $26 million, which were recorded in “Other assets,” and total liabilities were $5 million, which were recorded in “Accounts payable and accrued expenses.” No cash proceeds were received, resulting in a loss on sale, including transaction costs, of $24 million pretax and . The loss was recorded with a pretax and after-tax accrual recognized in the third quarter of 2020 when a definitive sale agreement was finalized. The loss was recorded in “Other operating expenses” in the small agriculture and turf segment. In October 2019, the company sold its construction and forestry retail locations in Canada. At the time of the sale, total assets were $187 million consisting of inventory of $138 million, property and equipment – net of $24 million, other assets of $3 million, and goodwill of $22 million. The liabilities consisted of $10 million of accounts payable and accrued expenses. In addition, the company accrued $15 million for transaction expenses and related costs. The total proceeds from the sale were approximately $187 million, with $93 million received in 2019. The remaining sales price was due based on standard payment terms of new equipment sales to independent dealers and separately negotiated terms ranging from 12 months to five years. A pretax loss of approximately $5 million was recorded in “Other operating expenses” in the construction and forestry segment. For the retail location disposition, the company sells equipment, service parts, and provides other services to the purchaser as an independent dealer. |
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SPECIAL ITEMS |
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| SPECIAL ITEMS | 5. SPECIAL ITEMS In 2021, the company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. The fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and . The company also continued to assess its manufacturing locations, resulting in additional long-lived asset impairments of $12 million pretax. The impairments were the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The company recognized a favorable indirect tax ruling in Brazil of $58 million pretax. See Note 26 for fair value measurement information.
In 2020, the company closed a factory that produced small agricultural equipment in China, recognized impairments in the fixed assets in an asphalt plant factory in Germany, a construction equipment factory in Brazil, and other international locations, recorded impairments of equipment on operating leases and matured lease inventory, as well as impairments of the investment in certain affiliate companies. See Note 26 for a description of the valuation methodologies used to measure these impairments.
In the fourth quarter of 2019, the company recorded non-cash charges in “Other operating expenses” of approximately $59 million pretax for the impairment of equipment on operating leases and approximately $18 million pretax on matured operating lease inventory recorded in “Other assets.” The impairment was the result of lower estimated values of used agriculture and construction equipment than originally estimated with the probable effect that the future cash flows would not cover the carrying amount of the net assets. The assets are part of the financial services operations (see Note 26). Employee-Separation Programs During 2020, the company implemented employee-separation programs for the company’s salaried workforce in several geographic areas, including the U.S., Europe, Asia, and Latin America. The programs’ main purpose was to improve efficiency through a leaner, more flexible organization. The programs were largely voluntary in nature with the expense recorded primarily in the period in which the employees irrevocably accepted a separation offer. For the limited involuntary employee-separation programs, the expense was recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period. The programs provided for cash payments based on years of service, and in some countries subsidized healthcare for a limited period and outplacement services. The programs’ total pretax expenses in 2020 were as follows:
* Relates primarily to non-cash charges of $34 million from curtailments in certain OPEB plans (see Note 8) and other corporate expenses, both of which were recorded . Approximately $6 million of the curtailment charge was recorded by financial services. During 2019, the company also completed certain employee-separation programs designed for specific functions and geographic areas as part of its on-going efforts to create a more efficient organizational structure. These programs provided for cash payments based on years of service. The expenses were recorded in the period the employees irrevocably accepted the separation offer with the following total pretax expenses:
Redeemable Noncontrolling Interest In 2020, the minority interest holder in Hagie Manufacturing Company, LLC exercised its right to sell the remaining 20 percent interest to the company for $14 million. The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statement of consolidated income. This operation is included in the company’s production and precision agriculture segment.
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REVENUE RECOGNITION |
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| REVENUE RECOGNITION | 6. REVENUE RECOGNITION The company’s net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow:
Following is a description of the company’s major product lines: Production Agriculture – Includes net sales of large and certain mid-size tractors and associated attachments, combines, cotton pickers, cotton strippers, sugarcane harvesters, sugarcane loaders and pull behind scrapers, tillage, seeding, and application equipment, including sprayers and nutrient management and soil preparation machinery, and related attachments and service parts. Small Agriculture – Includes net sales of mid-size and utility tractors, self-propelled forage harvesters, hay and forage equipment, balers, mowers, and related attachments and service parts. Turf – Includes net sales of turf and utility equipment, including riding lawn equipment, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements, other outdoor power products, and related attachments and service parts. Construction – Includes net sales of a broad range of machines used in construction, earthmoving, and material handling, including backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, and related attachments and service parts. Compact Construction – Includes net sales of smaller construction equipment, including compact excavators, compact track loaders, compact wheel loaders, skid steers, landscape loaders, and related attachments and service parts. Roadbuilding – Includes net sales of equipment used in roadbuilding and renovation, including milling machines, recyclers, slipform pavers, surface miners, asphalt pavers, compactors, tandem and static rollers, mobile crushers and screens, mobile and stationary asphalt plants, and related attachments and service parts. Forestry – Includes net sales of equipment used in timber harvesting, including log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments and service parts. Financial Products – Includes finance and interest income primarily from retail notes related to sales of John Deere equipment to retail customers, wholesale financing to dealers of John Deere equipment, and revolving charge accounts; lease income from retail leases of John Deere equipment; and revenue from extended warranties. Other – Includes sales of components to other equipment manufacturers that are included in “Net sales”; and revenue earned over time from precision guidance, telematics, and other information enabled solutions, revenue from service performed at company owned dealerships and service centers, gains on disposition of property and businesses, trademark licensing revenue, and other miscellaneous revenue items that are included in “Other income.” The company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily for extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheet. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 21, was $1,344 million and $1,090 million at October 31, 2021 and November 1, 2020, respectively. The contract liability is reduced as the revenue is recognized. Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $485 million in 2021, $425 million in 2020, and $444 million in 2019. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $1,062 million at October 31, 2021. The estimated revenue to be recognized by fiscal year follows in millions of dollars: - $339, - $289, - $199, - $101, - $64, and - $70. As permitted, the company elected only to disclose remaining performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and retail customers for equipment, service parts, repair services, and certain telematics services. |
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CASH FLOW INFORMATION |
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| CASH FLOW INFORMATION | 7. CASH FLOW INFORMATION The company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the company’s short-term borrowings, excluding the current maturities of finance lease obligations and long-term borrowings, mature or may require payment within three months or less. The equipment operations sell a significant portion of their trade receivables to financial services. These intercompany cash flows are eliminated in the consolidated cash flows. All cash flows from the changes in trade accounts and notes receivable (see Note 13) are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the company’s customers. Cash flows from financing receivables that are related to sales to the company’s customers (see Note 13) are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities. The company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The company transferred inventory to equipment on operating leases of $662 million, $614 million, and $678 million in 2021, 2020, and 2019, respectively. The company also had accounts payable related to purchases of property and equipment of $121 million, $98 million, and $152 million at October 31, 2021, November 1, 2020, and November 3, 2019, respectively. The company’s restricted cash held at October 31, 2021, November 1, 2020, and November 3, 2019 was as follows in millions of dollars:
The restricted cash, recorded in “Other assets” in the consolidated balance sheet, primarily relates to securitization of financing receivables (see Note 14). Cash payments for interest and income taxes consisted of the following in millions of dollars:
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PENSION AND OTHER POSTRETIREMENT BENEFITS |
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| PENSION AND OTHER POSTRETIREMENT BENEFITS | 8. PENSION AND OTHER POSTRETIREMENT BENEFITS The company has several funded and unfunded defined benefit pension plans and other postretirement benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries. The company uses an October 31 measurement date for these plans. The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages:
The components of net periodic OPEB cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages:
The were a result of the employee-separation programs (see Note 5). The spot yield curve approach is used to estimate the service and interest cost components of the net periodic pension and OPEB costs by applying the specific spot rates along the yield curve used to determine the benefit plan obligations to relevant projected cash outflows. The components of net periodic pension and OPEB cost excluding the service component are primarily included in the line item “Other operating expenses” in the statement of consolidated income. The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:
The previous OPEB cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:
The benefit plan obligations, funded status, and the assumptions related to the obligations at October 31, 2021 and November 1, 2020, respectively, in millions of dollars follow:
The company remeasured the U.S. hourly pension plan as of November 30, 2021 due to the new collective bargaining agreement, which decreased the plan’s funded status and increased pension expense in 2022. See Note 29 for more information. The actuarial gain for pension for 2021 was primarily due to an increase in discount rates. The actuarial gain for OPEB for 2021 was primarily due to a decrease in health care trend rates, favorable mortality assumptions, and an increase in discount rates. The actuarial loss for pension for 2020 was primarily due to a decrease in discount rates partially offset by favorable mortality assumptions. The actuarial gain for OPEB for 2020 was primarily due to the U.S. enactment of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) that repealed the health insurance provider fee effective in 2021, favorable mortality assumptions, and a decrease in health care trend rates, partially offset by a decrease in discount rates. The mortality assumptions for the 2021 and 2020 benefit plan obligations used the most recent tables and scales issued by the Society of Actuaries at that time. The 2021 mortality assumption includes an adjustment to the scale related to COVID. The amounts recognized at October 31, 2021 and November 1, 2020, respectively, in millions of dollars consisted of the following:
The total accumulated benefit obligations for all pension plans at October 31, 2021 and November 1, 2020, were $13,787 million and $14,257 million, respectively. The accumulated benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were $2,012 million and $1,207 million, respectively, at October 31, 2021 and $2,107 million and $1,100 million, respectively, at November 1, 2020. The projected benefit obligations and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $2,163 million and $1,227 million, respectively, at October 31, 2021 and $10,792 million and $9,482 million, respectively, at November 1, 2020. Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10 percent of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. The company makes any required contributions to the plan assets under applicable regulations and voluntary contributions after evaluating the company’s liquidity position and ability to make tax-deductible contributions. Total company contributions to the plans were $258 million in 2021 and $951 million in 2020, which included both required and voluntary contributions and direct benefit payments. The voluntary contributions to plan assets were $700 million in 2020. The company expects to contribute approximately $100 million to its pension plans and approximately $1,150 million to its OPEB plans in 2022. Fiscal year 2022 OPEB contributions include a voluntary contribution of $1,000 million to a U.S. plan made on November 30, 2021 (see Note 29), which will increase plan assets. The pension and OPEB contributions exceeding the voluntary amounts primarily include direct benefit payments from company funds. The company has no significant required contributions to U.S. pension plan assets in 2022 under applicable funding regulations. The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars:
* Net of prescription drug group benefit subsidy under Medicare Part D. The annual rates of increase in the per capita cost of covered health care benefits (the health care cost trend rates) used to determine accumulated postretirement benefit obligations were based on the trends for medical and prescription drug claims for pre- and post-65 age groups due to the effects of Medicare. For the 2021 obligation, the weighted-average composite trend rates were assumed to be a 2.1 percent increase from 2021 to 2022, followed by an increase of 8.4 percent from 2022 to 2023, gradually decreasing to 4.7 from and all future years. The lower estimated increase from 2021 to 2022 resulted from a decrease in Medicare Advantage premiums. The 2020 obligations and the cost in 2021 assumed a 4.0 percent increase from 2020 to 2021, followed by an increase of 7.6 percent from 2021 to 2022, gradually decreasing to 4.7 percent from and all future years. The lower estimated increase from 2020 to 2021 resulted from the SECURE Act that repealed the health insurance provider fee effective in 2021. The discount rate assumptions used to determine the pension and OPEB obligations for all periods presented were primarily based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which the company’s benefit obligations could effectively be settled at the October 31 measurement dates. Fair value measurement levels in the following tables are defined in Note 26. The fair values of the pension plan assets at October 31, 2021 follow in millions of dollars:
The fair values of the health care assets at October 31, 2021 follow in millions of dollars:
The fair values of the pension plan assets at November 1, 2020 follow in millions of dollars:
The fair values of the health care assets at November 1, 2020 follow in millions of dollars:
Investments at net asset value in the preceding tables are measured at fair value using the net asset value per share practical expedient and are not classified in the fair value hierarchy. Fair values are determined as follows: Cash and Short-Term Investments – The investments include (1) cash accounts that are valued based on the account value, which approximates fair value; (2) investments that are valued at quoted prices in the active markets in which the investment trades or using a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data; and (3) investment funds that are valued based on a constant fund net asset value (NAV), which is based on quoted prices in the active market in which the investment fund trades, or the fund’s NAV using the NAV per share practical expedient, which is based on the fair value of the underlying securities. Equity Securities and Funds – The values are determined by quoted prices in the active market in which the equity investment trades, or the fund’s NAV, based on the fair value of the underlying securities. Fixed Income Securities and Funds and Other Funds – The securities are valued using either a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds, or they are valued using the quoted prices in the active market in which the fixed income investment trades. Fixed income and other funds are valued using the fund’s NAV, based on the fair value of the underlying securities. Real Estate, Venture Capital, Private Equity, and Hedge Funds – The investments that are structured as limited partnerships are valued at estimated fair value based on their proportionate share of the limited partnership’s fair value that is determined by the respective general partner. These investments are valued using the fund’s NAV, which is based on the fair value of the underlying investments. Real estate investment trusts are primarily valued at the quoted prices in the active markets in which the investment trades. Derivative Instruments – The derivatives are valued using either an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates, or a market approach (quoted prices in the active market in which the derivative instrument trades). The primary investment objective for the pension and health care plans assets is to fulfill the projected obligations to the beneficiaries over a long period of time, while meeting the company’s fiduciary responsibilities. The asset allocation policy is the most important decision in managing the assets and it is reviewed regularly. The asset allocation policy considers the company’s long-term asset class risk/return expectations for each plan since the obligations are long-term in nature. The current target allocations for pension assets are approximately 26 percent for equity, 55 percent for debt, 4 percent for real estate, and 15 percent for other investments. The target allocations for health care assets are approximately 58 percent for equity, 35 percent for debt, 2 percent for real estate, and 5 percent for other investments. The allocation percentages above include the effects of combining derivatives with other investments to manage asset allocations and exposures to interest rates and foreign currency exchange. The assets are well diversified and are managed by professional investment firms as well as by investment professionals who are company employees. As a result of the company’s diversified investment policy, there were no significant concentrations of risk. The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value. The expected return is based on the outlook for inflation and for returns in multiple asset classes, while also considering historical returns, asset allocation, and investment strategy. The company’s approach has emphasized the long-term nature of the return estimate such that the return assumption is not changed significantly unless there are fundamental changes in capital markets that affect the company’s expectations for returns over an extended period of time (i.e., 10 to 20 years). The average annual return of the company’s U.S. pension fund was approximately 11.0 percent during the past ten years and approximately 9.3 percent during the past 20 years. Since return premiums over inflation and total returns for major asset classes vary widely even over ten-year periods, recent history is not necessarily indicative of long-term future expected returns. The company’s systematic methodology for determining the long-term rate of return for the company’s investment strategies supports its long-term expected return assumptions. The company has created certain Voluntary Employees’ Beneficiary Association trusts (VEBAs) for the funding of postretirement health care benefits. The future expected asset returns for these VEBAs are lower than the expected return on the other pension and health care plan assets due to investment in a higher proportion of liquid securities. These assets are in addition to the other postretirement health care plan assets that have been funded under Section 401(h) of the U.S. Internal Revenue Code and maintained in a separate account in the company’s pension plan trust. The company has defined contribution plans related to employee investment and savings plans primarily in the U.S. The company’s contributions and costs under these plans were $207 million in 2021, $160 million in 2020, and $192 million in 2019. The contribution rate varies primarily based on the company’s performance in the prior year and employee participation in the plans.
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INCOME TAXES |
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| INCOME TAXES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | 9. INCOME TAXES The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars:
Based upon the location of the company’s operations, the consolidated income before income taxes in the U.S. in 2021, 2020, and 2019 was $4,061 million, $2,082 million, and $2,166 million, respectively, and in foreign countries was $3,541 million, $1,801 million, and $1,922 million, respectively. Certain foreign operations are branches or partnerships of Deere & Company and are subject to U.S. as well as foreign income tax regulations. The pretax income by location and the preceding analysis of the income tax provision by taxing jurisdiction are not directly related. A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follow:
At October 31, 2021, accumulated earnings in certain subsidiaries outside the U.S. totaled $2,155 million. A provision for foreign withholding taxes has not been made since these earnings are expected to remain indefinitely reinvested outside the U.S. Determination of the amount of a foreign withholding tax liability on these unremitted earnings is not practicable. Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of the deferred income tax assets and liabilities at October 31, 2021 and November 1, 2020 in millions of dollars follows:
Deere & Company files a consolidated federal income tax return in the U.S., which includes the wholly-owned financial services subsidiaries. These subsidiaries account for income taxes generally as if they filed separate income tax returns, with a modification for realizability of certain tax benefits. At October 31, 2021, tax loss and tax credit carryforwards of $1,542 million were available with $1,068 million expiring from 2022 through 2041 and $474 million with an indefinite carryforward period. A reconciliation of the total amounts of unrecognized tax benefits at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follows:
The amount of unrecognized tax benefits at October 31, 2021 and November 1, 2020 that would impact the effective tax rate if the tax benefits were recognized was $227 million and $134 million, respectively. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant. The company files its tax returns according to the tax laws of the jurisdictions in which it operates, which includes the U.S. federal jurisdiction and various state and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed the examination of the company’s federal income tax returns for periods prior to 2015. The federal income tax returns for years 2015, 2016, and 2017 are currently under examination. Various state and foreign income tax returns, including major tax jurisdictions in Argentina, Australia, Brazil, Canada, China, Finland, France, Germany, India, Luxembourg, Mexico, Russia, Singapore, and Spain also remain subject to examination by taxing authorities. The company’s policy is to recognize interest related to income taxes in interest expense and interest income and recognize penalties in selling, administrative and general expenses. During 2021 and 2019, the total amount of expense from interest and penalties was $7 million and $13 million. During 2020, interest and penalties previously recorded were reversed when tax positions were effectively settled resulting in a $3 million net benefit. The interest income in 2021, 2020, and 2019 was $8 million, $11 million, and $25 million, respectively. At October 31, 2021 and November 1, 2020, the liability for accrued interest and penalties totaled $75 million and $72 million, respectively, and the receivable for interest was $11 million and $6 million, respectively. |
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OTHER INCOME AND OTHER OPERATING EXPENSES |
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| OTHER INCOME AND OTHER OPERATING EXPENSES | 10. OTHER INCOME AND OTHER OPERATING EXPENSES The major components of other income and other operating expenses consisted of the following in millions of dollars:
* Primarily related to extended warranties (see Note 21).
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UNCONSOLIDATED AFFILIATED COMPANIES |
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| UNCONSOLIDATED AFFILIATED COMPANIES | 11. UNCONSOLIDATED AFFILIATED COMPANIES Unconsolidated affiliated companies are companies in which Deere & Company generally owns 20 percent to 50 percent of the outstanding voting shares. Deere & Company does not control these companies and accounts for its investments in them on the equity basis. The investments in these companies primarily consist of Deere-Hitachi Construction Machinery Corporation (50 percent ownership) and Deere-Hitachi Maquinas de Construcao do Brasil S.A. (50 percent ownership). During 2021, the company sold its investment in Bell Equipment Limited, resulting in no material gain or loss. The company also entered into a Dissolution Agreement with Hitachi to terminate the joint venture agreement. The termination is expected to occur in 2022 (see Note 4). The unconsolidated affiliated companies primarily manufacture or market equipment. Deere & Company’s share of the income or loss of these companies is reported in the consolidated income statement under “Equity in income (loss) of unconsolidated affiliates.” In 2020, the company recorded impairments on certain unconsolidated affiliates. The impairments were the result of an other-than-temporary decline in value (see Note 5). The investment in these companies is reported in the consolidated balance sheet under “Investments in unconsolidated affiliates.” Combined financial information of the unconsolidated affiliated companies in millions of dollars follows:
Consolidated retained earnings at October 31, 2021 include undistributed earnings of the unconsolidated affiliates of $48 million. Dividends from unconsolidated affiliates were $21 million in 2021, none in 2020, and $30 million in 2019. In the ordinary course of business, the company purchases and sells components and finished goods to the unconsolidated affiliated companies. Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow:
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MARKETABLE SECURITIES |
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| MARKETABLE SECURITIES | 12. MARKETABLE SECURITIES All marketable securities are classified as available-for-sale. Realized gains or losses from the sales of marketable securities are based on the specific identification method. The amortized cost and fair value of marketable securities at October 31, 2021 and November 1, 2020 in millions of dollars follow:
* Primarily issued by U.S. government sponsored enterprises. Equity Securities Proceeds of equity securities sold during 2021, 2020, and 2019 were not material. Unrealized gains on equity securities during 2021 and 2020 in millions of dollars follow:
Debt Securities The contractual maturities of debt securities at October 31, 2021 in millions of dollars follow:
Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Proceeds from the sales of debt securities, realized gains, realized losses, the increase (decrease) in net unrealized gains or losses, and unrealized losses that have been continuous for over twelve months were not significant in 2021, 2020, and 2019. Unrealized losses at October 31, 2021 and November 1, 2020 were not recognized in income due to the ability and intent to hold to maturity. There were no significant impairment write-downs in the periods reported.
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RECEIVABLES |
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| RECEIVABLES | 13. RECEIVABLES Trade Accounts and Notes Receivable Trade accounts and notes receivable at October 31, 2021 and November 1, 2020 in millions of dollars follow:
Trade accounts and notes receivable have significant concentrations of credit risk in the agriculture and turf market and construction and forestry market as shown in the previous table. On a geographic basis, there is no disproportionate concentration of credit risk in any area. The allowance for credit losses on trade accounts and notes receivable at October 31, 2021, November 1, 2020, and November 3, 2019, as well as the related activity, in millions of dollars follow:
The equipment operations sell a significant portion of their trade receivables to financial services and provide compensation to financial services at approximate market interest rates. Trade accounts and notes receivable primarily arise from sales of goods to independent dealers. See Note 2 for the company’s revenue recognition policy. The company evaluates and assesses dealers on an ongoing basis as to their creditworthiness and generally secures the receivables by retaining a security interest in the goods associated with the trade receivables or with other financial instruments. In certain jurisdictions, the company is obligated to repurchase goods sold to a dealer upon cancellation or termination of the dealer’s contract for such causes as change in ownership and closeout of the business. During 2020 and to a much lesser extent in 2021, the company provided short-term payment relief on trade accounts and notes receivable to customers that were negatively affected by the economic effects of COVID. The relief was provided both in regional programs and case-by-case situations with creditworthy customers. This relief generally included payment deferrals not exceeding three months, extending interest-free periods for up to an additional three months with the total interest-free period not to exceed one year, or reducing interest rates for a maximum of three months. The trade receivables granted relief that remained outstanding at October 31, 2021 were not material. This balance at November 1, 2020 was $75 million, or approximately 2 percent of the trade receivable portfolio. Outside of these actions, the company did not modify its normal sales terms with customers that are outlined in Note 2. For customers who obtained payment relief, subsequent sales transactions are evaluated to confirm the revenue recognition criteria are met, including that the sales price is determinable and collectability of the payments is probable based on the terms outlined in the contract. Financing Receivables While the company implemented a new operating model in fiscal year 2021 resulting in new operating segments, assets managed by financial services, including most financing receivables and equipment on operating leases, continue to be evaluated by market (agriculture and turf or construction and forestry). Financing receivables at October 31, 2021 and November 1, 2020 in millions of dollars follow:
Financing receivables have significant concentrations of credit risk in the agriculture and turf and construction and forestry markets as shown in the previous table. On a geographic basis, there is no disproportionate concentration of credit risk in any area. The company generally retains as collateral a security interest in the equipment associated with retail notes, wholesale notes, and financing leases. Financing receivables at October 31, 2021 and November 1, 2020 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars:
* These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales. Financing receivable installments, including unearned finance income, at October 31, 2021 and November 1, 2020 were scheduled as follows in millions of dollars:
The maximum terms for retail notes are generally seven years for agriculture and turf equipment, and five years for construction and forestry equipment. The maximum term for financing leases is generally seven years. The average term for wholesale notes is less than twelve months. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. The company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. Due to the significant, negative effects of COVID on dealers and retail customers, the company provided short-term payment relief to dealers and retail customers during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and case-by-case situations with customers that were generally current in their payment obligations. This relief generally included payment deferrals or reduced financing rates of three months or less. The financing receivables granted relief that remained outstanding at October 31, 2021 and November 1, 2020 represented approximately 3 percent and 4 percent of the financing receivable portfolio, respectively. The majority of financing receivables granted short-term relief are beyond the deferral period and have either resumed making payments or are reported as delinquent based on the modified payment schedule. The company monitors the credit quality of financing receivables based on delinquency status. The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) was as follows in millions of dollars at October 31, 2021:
The credit quality analysis of retail customer receivables was as follows in millions of dollars at November 1, 2020:
The credit quality analysis of wholesale receivables was as follows in millions of dollars at October 31, 2021:
The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020:
An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars:
* Individual allowances were not significant. In 2021, the allowance for credit losses on retail notes and financing lease receivables increased due to the adoption of ASU No. 2016-13. This was partially offset by lower expected losses in the construction and forestry market and better than expected performance of accounts granted payment relief due to the economic effects of COVID. The allowance for credit losses on revolving charge accounts decreased in 2021, reflecting a decrease due to the adoption of ASU No. 2016-13 and continued improvement in the agricultural and turf market. In 2020, the negative economic effects related to COVID and other macroeconomic issues significantly affected certain retail customers, particularly purchasers of construction equipment. Past-due amounts over 30 days represented 1.09 percent and 1.16 percent of the receivables financed at October 31, 2021 and November 1, 2020, respectively. Non-performing receivables comprised .96 percent and 1.22 percent of the financing receivables at October 31, 2021 and November 1, 2020, respectively. The allowance for credit losses represented .43 percent and .53 percent of financing receivables outstanding at October 31, 2021 and November 1, 2020, respectively. In addition, at October 31, 2021 and November 1, 2020, the company’s financial services operations had $154 million and $136 million, respectively, of deposits primarily withheld from dealers and merchants as credit enhancements. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During 2021, 2020, and 2019, the company identified 397, 574, and 522 receivable contracts as troubled debt restructurings with aggregate balances of $18 million, $108 million, and $36 million pre-modification and $17 million, $95 million, and $35 million post-modification, respectively. Troubled debt restructurings in 2021 and 2019 primarily related to retail notes, while 2020 modifications primarily related to wholesale receivables in Argentina. The short-term relief related to COVID did not meet the definition of a troubled debt restructuring. In 2021 and 2020, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At October 31, 2021, the company had no commitments to lend to customers whose accounts were modified in troubled debt restructurings. Other Receivables Other receivables at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
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SECURITIZATION OF FINANCING RECEIVABLES |
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| SECURITIZATION OF FINANCING RECEIVABLES | 14. SECURITIZATION OF FINANCING RECEIVABLES The company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into VIEs that are SPEs, or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. In these securitizations, the retail notes are transferred to certain SPEs, which in turn issue debt to investors, or to non-VIE banking operations, which provide funding directly to the company. The funding provided by these third-parties result in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized - net” on the balance sheet. The total restricted assets on the balance sheet related to these securitizations include the financing receivables securitized, less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the financing receivables securitized or a fixed percentage of the outstanding balance of the securitized financing receivables. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs, and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $3,094 million and $2,898 million at October 31, 2021 and November 1, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $3,024 million and $2,856 million at October 31, 2021 and November 1, 2020, respectively. The credit holders of these SPEs do not have legal recourse to the company’s general credit. The company has a revolving credit agreement to utilize bank conduit facilities to secure retail notes, described further in the following paragraphs. At October 31, 2021, the revolving credit agreement had a total capacity, or “financing limit,” of up to $2,000 million of secured financings at any time. The agreement was renewed in November 2021 with an expiration in November 2022 and a capacity of $1,000 million. As a result of the reduced capacity, the company repurchased $511 million of outstanding short-term securitization borrowings in November 2021, in addition to the normal monthly liquidations as a result of payments collected on the retail notes. Through the revolving credit agreement, the company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,176 million and $1,327 million at October 31, 2021 and November 1, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,113 million and $1,275 million at October 31, 2021 and November 1, 2020, respectively. The company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows at October 31, 2021 in millions of dollars:
The total assets of the unconsolidated conduits related to securitizations were approximately $40 billion at October 31, 2021. In addition, through the revolving credit agreement, the company transfers retail notes to banks, which may elect to fund the retail notes through the use of their own funding sources. These non-VIE banking operations are not consolidated since the company does not have a controlling interest in them. The company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses and other assets) of $496 million and $576 million at October 31, 2021 and November 1, 2020, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $470 million and $554 million at October 31, 2021 and November 1, 2020, respectively. The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 31, 2021 and November 1, 2020 were as follows in millions of dollars:
The components of consolidated secured borrowings and other liabilities related to securitizations at October 31, 2021 and November 1, 2020 were as follows in millions of dollars:
The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At October 31, 2021, the maximum remaining term of all securitized retail notes was approximately seven years.
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INVENTORIES |
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| INVENTORIES | 15. INVENTORIES A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the “last-in, first-out” (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the “first-in, first-out” (FIFO) basis, or net realizable value. The value of gross inventories on the LIFO basis at October 31, 2021 and November 1, 2020 represented 54 percent and 52 percent, respectively, of worldwide gross inventories at FIFO value. The pretax favorable income effect from the liquidation of LIFO inventory during 2020 was $33 million. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31, 2021 and November 1, 2020 in millions of dollars would have been as follows:
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PROPERTY AND DEPRECIATION |
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| PROPERTY AND DEPRECIATION | 16. PROPERTY AND DEPRECIATION A summary of property and equipment at October 31, 2021 and November 1, 2020 in millions of dollars follows:
* Weighted-averages Total property and equipment additions in 2021, 2020, and 2019 were $897 million, $815 million, and $1,107 million and depreciation was $830 million, $800 million, and $779 million, respectively. Capitalized interest was $3 million, $6 million, and $7 million in the same periods, respectively. The cost of leased property and equipment under finance leases of $131 million and $99 million and accumulated depreciation of $60 million and $36 million at October 31, 2021 and November 1, 2020, respectively, is included in property and equipment. Capitalized software has an estimated useful life of three years. The amounts of total capitalized software costs, including purchased and internally developed software, classified as “Other assets” at October 31, 2021 and November 1, 2020 were $1,326 million and $1,339 million, less accumulated amortization of $1,044 million and $1,070 million, respectively. Capitalized interest on software was $2 million and $3 million at October 31, 2021 and November 1, 2020, respectively. Amortization of these software costs in 2021, 2020, and 2019 was $121 million, $133 million, and $150 million, respectively. The cost of compliance with foreseeable environmental requirements has been accrued and did not have a material effect on the company’s consolidated financial statements.
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GOODWILL AND OTHER INTANGIBLE ASSETS-NET |
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| GOODWILL AND OTHER INTANGIBLE ASSETS-NET | 17. GOODWILL AND OTHER INTANGIBLE ASSETS – NET The changes in amounts of goodwill by operating segments were as follows in millions of dollars:
There were no accumulated goodwill impairment losses in the reported periods. The components of other intangible assets are as follows in millions of dollars:
Other intangible assets are stated at cost less accumulated amortization. The amortization of other intangible assets in 2021, 2020, and 2019 was $116 million, $102 million, and $109 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: 2022 - $113, 2023 - $112, 2024 - $108, 2025 - $105, and 2026 - $103. |
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TOTAL SHORT-TERM BORROWINGS |
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| TOTAL SHORT-TERM BORROWINGS | 18. TOTAL SHORT-TERM BORROWINGS Total short-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
* Includes unamortized fair value adjustments related to interest rate swaps. The short-term securitization borrowings are secured by financing receivables (retail notes) on the balance sheet (see Note 14) and presented net of debt acquisition costs. Although these securitization borrowings are classified as short-term since payment is required if the retail notes are liquidated early, the payment schedule for these borrowings at October 31, 2021 based on the expected liquidation of the retail notes in millions of dollars is as follows: 2022 - $2,556, 2023 - $1,150, 2024 - $623, 2025 - $231, 2026 - $44, and later years - $6. The weighted-average interest rates on total short-term borrowings, excluding current maturities of finance lease obligations and long-term borrowings, at October 31, 2021 and November 1, 2020 were .9 percent and 1.6 percent, respectively. Lines of credit available from U.S. and foreign banks were $8,336 million at October 31, 2021. At October 31, 2021, $5,770 million of these worldwide lines of credit were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were primarily considered to constitute utilization. Included in the total credit lines at October 31, 2021 was a 364-day credit facility agreement of $3,000 million, expiring in fiscal April 2022. In addition, total credit lines included long-term credit facility agreements of $2,500 million, expiring in fiscal April 2025, and $2,500 million, expiring in fiscal March 2026. The agreements are mutually extendable and the annual facility fees are not significant. These credit agreements require Capital Corporation to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. The credit agreements also require the equipment operations to maintain a ratio of total debt to total capital (total debt and stockholders’ equity excluding accumulated other comprehensive income (loss)) of 65 percent or less at the end of each fiscal quarter. Under this provision, the company’s excess equity capacity and retained earnings balance free of restriction at October 31, 2021 was $15,388 million. Alternatively under this provision, the equipment operations had the capacity to incur additional debt of $28,579 million at October 31, 2021. All of these credit agreement requirements have been met during the periods included in the consolidated financial statements. Deere & Company has an agreement with Capital Corporation pursuant to which it has agreed to continue to own, directly or through one or more wholly-owned subsidiaries, at least 51 percent of the voting shares of capital stock of Capital Corporation and to maintain Capital Corporation’s consolidated tangible net worth at not less than $50 million. This agreement also obligates Deere & Company to make payments to Capital Corporation such that its consolidated ratio of earnings to fixed charges is not less than 1.05 to 1 for each fiscal quarter. Deere & Company’s obligations to make payments to Capital Corporation under the agreement are independent of whether Capital Corporation is in default on its indebtedness, obligations or other liabilities. Further, Deere & Company’s obligations under the agreement are not measured by the amount of Capital Corporation’s indebtedness, obligations, or other liabilities. Deere & Company’s obligations to make payments under this agreement are expressly stated not to be a guaranty of any specific indebtedness, obligation, or liability of Capital Corporation and are enforceable only by or in the name of Capital Corporation. No payments were required under this agreement during the periods included in the consolidated financial statements. At October 31, 2021, Deere & Company indirectly owned 100 percent of the voting shares of Capital Corporation’s capital stock and Capital Corporation’s consolidated tangible net worth was $4,524 million.
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
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| ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 19. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
* Primarily sales incentive accruals with a right of set-off against trade receivables. At October 31, 2021 and November 1, 2020, $836 million and $1,073 million, respectively, of sales incentive accruals were classified as accrued expenses by the equipment operations as the related trade receivables had been sold to financial services.
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LONG-TERM BORROWINGS |
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| LONG-TERM BORROWINGS | 20. LONG-TERM BORROWINGS Long-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
* Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year-end. The principal amounts of the equipment operations’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2022 - $1,214, 2023 - $585, 2024 - $935, 2025 - $700, and 2026 - $0. The principal amounts of the financial services’ long-term borrowings maturing in each of the next five years in millions of dollars are as follows: 2022 - $7,120, 2023 - $6,834, 2024 - $6,089, 2025 - $2,305, and 2026 - $3,373.
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COMMITMENTS AND CONTINGENCIES |
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| COMMITMENTS AND CONTINGENCIES | 21. COMMITMENTS AND CONTINGENCIES The company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments. The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) included in the following table totaled $774 million and $638 million at October 31, 2021 and November 1, 2020, respectively. A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows:
At October 31, 2021, the company had approximately $409 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At October 31, 2021, the company had accrued losses of approximately $6 million under these agreements. The maximum remaining term of the receivables guaranteed at October 31, 2021 was about six years. At October 31, 2021, the company had commitments of approximately $254 million for the construction and acquisition of property and equipment. Also at October 31, 2021, the company had restricted assets of $68 million, classified as “Other assets.” See Note 14 for additional restricted assets associated with borrowings related to securitizations. The company also had other miscellaneous contingent liabilities totaling approximately $75 million at October 31, 2021. The accrued liability for these contingencies was not material at October 31, 2021. The company has commitments to extend credit to customers through lines of credit and other pre-approved credit arrangements. The amount of unused commitments to extend credit to John Deere dealers was approximately $14 billion at October 31, 2021. The amount of unused commitments to extend credit to retail customers was approximately $30 billion at October 31, 2021, primarily related to revolving charge accounts. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. The company recorded a provision for credit losses on unused commitments that are not unconditionally cancellable of $2 million in 2021. The company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, and trademark matters. The company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its financial statements.
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CAPITAL STOCK |
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| CAPITAL STOCK | 22. CAPITAL STOCK The $1 par value common stock of Deere & Company is listed on the New York Stock Exchange under the symbol “DE”. At October 31, 2021, there were 18,466 holders of record of the company’s common stock. The number of common shares the company is authorized to issue is 1,200 million. The number of common shares issued at October 31, 2021, November 1, 2020, and November 3, 2019 was 536.4 million. The number of authorized preferred shares, none of which has been issued, is nine million. The Board of Directors at a meeting in December 2019 authorized the repurchase of up to $8,000 million of common stock. At the end of fiscal year 2021, this repurchase program had $5,811 million (17.0 million shares based on the fiscal year end closing common stock price of $342.31 per share) remaining to be repurchased. Repurchases of the company’s common stock under this plan will be made from time to time, at the company’s discretion, in the open market. A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:
All stock options outstanding were included in the computation except .6 million in 2020 and .7 million in 2019 that had an antidilutive effect under the treasury stock method. |
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STOCK OPTION AND RESTRICTED STOCK AWARDS |
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| STOCK OPTION AND RESTRICTED STOCK AWARDS | 23. STOCK OPTION AND RESTRICTED STOCK AWARDS The company issues stock options and restricted stock unit awards to key employees under plans approved by stockholders. Restricted stock units are also issued to nonemployee directors for their services as directors under a plan approved by stockholders. Options are awarded with the exercise price equal to the market price and become exercisable in to three years after grant. Options expire ten years after the date of grant. Restricted stock awards generally vest after three years. The compensation cost for stock options and service-based restricted stock units, which is based on the fair value at the grant date, is recognized on a straight-line basis over the requisite period the employee is required to render service. The compensation cost for performance/service-based units, which is based on the fair value at the grant date excluding dividends, is recognized over the employees’ requisite service period and periodically adjusted for the probable number of shares to be awarded. The company recognizes the effect of award forfeitures as an adjustment to compensation expense in the period the forfeiture occurs. According to these plans, at October 31, 2021, the company is authorized to grant an additional 17.7 million shares related to stock options or restricted stock units. The company currently uses shares that have been repurchased through its stock repurchase programs to satisfy share option exercises. The fair value of each option award was estimated on the date of grant using a binomial lattice option valuation model. Expected volatilities are based on implied volatilities from traded call options on the company’s stock. The expected volatilities are constructed from the following three components: the starting implied volatility of short-term call options traded within a few days of the valuation date; the predicted implied volatility of long-term call options; and the trend in implied volatilities over the span of the call options’ time to maturity. The company uses historical data to estimate option exercise behavior. The expected term of options granted is derived from the output of the option valuation model based on the underlying distribution of historical exercise behavior and represents the weighted-average period of time that options granted are expected to be outstanding. The risk-free rates utilized for periods throughout the contractual life of the options are based on U.S. Treasury security yields at the time of grant. The assumptions used for the binomial lattice model to determine the fair value of options follow:
* Weighted-averages Stock option activity at October 31, 2021, and changes during 2021 in millions of dollars and shares follow:
* Weighted-averages The weighted-average grant-date fair values of options granted during 2021, 2020, and 2019 were $62.73, $35.83, and $46.96, respectively. The total intrinsic values of options exercised during 2021, 2020, and 2019 were $318 million, $398 million, and $186 million, respectively. During 2021, 2020, and 2019, cash received from stock option exercises was $148 million, $331 million, and $178 million, respectively, with tax benefits of $71 million, $93 million, and $44 million, respectively. The service-only based units award one share of common stock for each unit at the end of the vesting period and include dividend equivalent payments. The performance/service based units are subject to a performance metric based on the company’s compound annual revenue growth rate, compared to a benchmark group of companies over the vesting period. The performance/service based units award common stock in a range of zero to 200 percent for each unit granted based on the level of the metric achieved and do not include dividend equivalent payments over the vesting period. The weighted-average fair values of the service-only based units at the grant dates during 2021, 2020, and 2019 were $258.86, $168.94, and $149.54 per unit, respectively, based on the market price of a share of underlying common stock. The fair value of the performance/service based units at the grant date during 2021, 2020, and 2019 were $245.73, $160.81, and $140.49 per unit, respectively, based on the market price of a share of underlying common stock excluding dividends. The company’s restricted stock units at October 31, 2021 and changes during 2021 in millions of shares follow:
* Weighted-averages During 2021, 2020, and 2019, the total share-based compensation expense was $82 million, $81 million, and $82 million, respectively, with recognized income tax benefits of $16 million, $19 million, and $20 million, respectively. At October 31, 2021, there was $63 million of total unrecognized compensation cost from share-based compensation arrangements granted under the plans, which is related to restricted shares and options. This compensation is expected to be recognized over a weighted-average period of approximately two years. The total grant-date fair values of stock options and restricted shares vested during 2021, 2020, and 2019 were $93 million, $79 million, and $66 million, respectively.
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| OTHER COMPREHENSIVE INCOME ITEMS | 24. OTHER COMPREHENSIVE INCOME ITEMS The after-tax components of accumulated other comprehensive income at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follow:
Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:
* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.
* These accumulated other comprehensive income amounts are primarily included in net periodic pension and OPEB costs. See Note 8 for additional detail.
* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.
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LEASES |
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| LEASES | 25. LEASES The company is both a lessee and a lessor. The company leases for its own use primarily warehouse facilities, office space, production equipment, information technology equipment, and vehicles. The expected use periods generally range from less than one year to 20 years. The company’s financial services segment leases to users equipment produced or sold by the company, and a limited amount of other equipment. These leases are usually written for periods of less than one year to seven years. The company determines if an arrangement is or contains a lease at the contract inception. Lessee The company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than one year for both operating and finance leases. The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than one year and that do not meet the finance lease criteria are classified as operating leases. Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from to ten years. Options that the company is reasonably certain to exercise are included in the lease term. The company has elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. Leases with an initial term of one year or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. Variable lease expense primarily includes warehouse facilities leases with payments based on utilization exceeding contractual minimum amounts and leases with payments indexed to inflation when the index changes after lease commencement. The lease expense by type consisted of the following in millions of dollars:
Operating and finance lease right of use assets and lease liabilities follow in millions of dollars:
The weighted-average remaining lease terms in years and discount rates follows:
Lease payment amounts in each of the next five years at October 31, 2021 follow in millions of dollars:
Cash paid for amounts included in the measurement of lease liabilities follows in millions of dollars:
Right of use assets obtained in exchange for lease liabilities follow in millions of dollars:
Lessor The company leases equipment manufactured or sold by the company and a limited amount of non-John Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in “Financing receivables - net” on the consolidated balance sheet. Operating leases are reported in “Equipment on operating leases - net” on the consolidated balance sheet. Leases offered by the company may include early termination and renewal options. At the end of a lease, the lessee generally has the option to purchase the underlying equipment for a fixed price or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to the company for remarketing. The company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates change. Lease agreements include usage limits and specifications on machine condition, which allow the company to assess lessees for excess use or damages to the underlying equipment. In 2020 and 2019, the company recorded impairment losses on operating leases of $22 million and $59 million, respectively, due to higher expected equipment return rates and lower estimated values of used construction equipment. Operating lease impairments were recorded in “Other operating expenses.” The company has elected to combine lease and nonlease components. The nonlease components primarily relate to preventative maintenance and extended warranty agreements financed by the retail customer. The company has also elected to report consideration related to sales and value added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in “Finance and interest income” and “Other operating expenses” on the statement of consolidated income. Variable lease revenues primarily relate to property taxes on leased assets in certain markets and late fees. Variable lease revenues also include excess use and damage fees of $7 million and $8 million for 2021 and 2020, respectively, which were reported in “Other income” on the statement of consolidated income. Due to the significant, negative effects of COVID, the company provided short-term relief to lessees during 2020, and to a much lesser extent in 2021. The relief, which included payment deferrals of three months or less, was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief represented approximately 2 percent and 4 percent of the company’s operating lease portfolio at October 31, 2021 and November 1, 2020, respectively. The majority of operating leases granted short-term relief are beyond the deferral period and have resumed making payments. See Note 13 for sales-type and direct financing leases provided payment relief. Lease revenues earned by the company follow in millions of dollars:
At the time of accepting a lease that qualifies as a sales-type or direct financing lease, the company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method. Sales-type and direct financing lease receivables by market follow in millions of dollars:
Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at October 31, 2021 follow in millions of dollars:
Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The cost of equipment on operating leases by market follow in millions of dollars:
The total operating lease residual values at October 31, 2021 and November 1, 2020 were $5,025 million and $5,254 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $950 million and $757 million at October 31, 2021 and November 1, 2020, respectively. The residual value guarantees at October 31, 2021 and November 1, 2020 include $3 million and $5 million, respectively, of dealer deposits available for potential losses on residual values. The equipment is depreciated on a straight-line basis over the term of the lease. The corresponding depreciation expense was $983 million in 2021, $1,083 million in 2020, and $981 million in 2019. Lease payments for equipment on operating leases at October 31, 2021 were scheduled as follows in millions of dollars:
Past due balances of operating leases represent the total balance held (net book value plus accrued lease payments) and still accruing financing income with any payment amounts 30 days or more past the contractual payment due date. These amounts were $70 million and $87 million at October 31, 2021 and November 1, 2020, respectively. The delinquency status of operating leases granted relief due to COVID is based on the modified payment schedule. The company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the company upon termination of leases is remarketed by the company and recorded in “Other assets” at the lower of net book value or estimated fair value of the equipment less costs to sell and is not depreciated. The matured operating lease inventory balances at October 31, 2021 and November 1, 2020 were $30 million and $70 million, respectively. In 2020, the company recorded impairment losses on matured operating lease inventory of $10 million due to lower estimated values of used construction equipment. Impairment losses on matured operating lease inventory were included in “Other operating expenses.” |
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FAIR VALUE MEASUREMENTS |
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| FAIR VALUE MEASUREMENTS | 26. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the company uses various methods including market and income approaches. The company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. The fair values of financial instruments that do not approximate the carrying values at October 31, 2021 and November 1, 2020 in millions of dollars follow:
* Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.
Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges. Assets and liabilities measured at October 31, 2021 and November 1, 2020 at fair value on a recurring basis in millions of dollars follow, excluding the company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021.
* Primarily issued by U.S. government sponsored enterprises.
Fair value, nonrecurring measurements from impairments at October 31, 2021 and November 1, 2020 in millions of dollars follow:
1 Fair value as of August 2, 2020. 2 Fair value as of May 3, 2020. 3 2021 fair value of $41 million at January 31, 2021. 2020 fair value of $70 million at May 3, 2020, $8 million at August 2, 2020, and $57 million at November 1, 2020. 4 Fair value as of November 1, 2020. 5 2021 fair value as of January 31, 2021. 2020 fair value as of May 3, 2020. The following is a description of the valuation methodologies the company uses to measure certain financial instruments on the balance sheet at fair value: Marketable securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities were primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data. Derivatives – The company’s derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Financing receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values (see Note 13). Other receivables – The impairment was based on the expected realization of value-added tax receivables related to a closed factory operation (see Note 5). Equipment on operating leases – net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of return rates and equipment sale price at lease maturity. Inputs include historical return rates and realized sales values (see Note 5). Property and equipment – net – The impairments are measured at the lower of the carrying amount, or fair value. The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence, or quoted prices when available (see Note 5). Investment in unconsolidated affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value or the estimated realization amount, and the carrying value. The fair value for publicly traded entities is the share price multiplied by the shares owned, or the estimated realization amount (see Note 5). Other intangible assets – net – The impairment was measured at the remaining net book value of customer relationships related to a closed factory operation (see Note 5). Other assets – The impairments of the matured operating lease inventory were measured at the fair value of that equipment. The valuations were based on a market approach. The inputs include sales of comparable assets. The impairment of the German lawn mower business was measured at the estimated realizable value. Fair value was based on estimates of the final sale price (see Note 5).
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DERIVATIVE INSTRUMENTS |
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| DERIVATIVE INSTRUMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE INSTRUMENTS | 27. DERIVATIVE INSTRUMENTS Cash Flow Hedges Certain interest rate and cross-currency interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at October 31, 2021 and November 1, 2020 were $2,700 million and $1,550 million, respectively. During 2019, the company hedged a portion of its exposure to interest rate changes on a forecasted debt issuance using an interest rate contract with a term of 30 years. The hedge was terminated upon issuance of the debt, resulting in a fair value loss of $70 million. Fair value gains or losses on cash flow hedges were recorded in OCI and are subsequently reclassified into interest expense or other operating expenses (foreign currency exchange) in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate or foreign currency exchange rate changes on the related borrowings. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of loss recorded in OCI at October 31, 2021 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $4 million after-tax. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at October 31, 2021 and November 1, 2020 were $8,043 million and $7,239 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense. The amounts recorded, at October 31, 2021 and November 1, 2020, in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow:
* Presented in short-term borrowings. Derivatives Not Designated as Hedging Instruments The company has certain interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings, purchases or sales of inventory, and below market retail financing programs. The total notional amounts of the interest rate swaps at October 31, 2021 and November 1, 2020 were $10,848 million and $8,514 million, the foreign currency exchange contracts were $7,584 million and $4,903 million, and the cross-currency interest rate contracts were $238 million and $113 million, respectively. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign currency exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows. Fair values of derivative instruments in the consolidated balance sheet at October 31, 2021 and November 1, 2020 in millions of dollars follow:
The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars:
* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. Counterparty Risk and Collateral Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination. Certain of the company’s derivative agreements contain credit support provisions that may require the company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at October 31, 2021 and November 1, 2020, was $135 million and $89 million, respectively. In accordance with the limits established in these agreements, the company posted no cash collateral at October 31, 2021 or November 1, 2020. In addition, the company paid $8 million of collateral either in cash or pledged securities that was outstanding at both October 31, 2021 and November 1, 2020 to participate in an international futures market to hedge currency exposure, not included in the table below. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral at October 31, 2021 and November 1, 2020 in millions of dollars follows:
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SEGMENT AND GEOGRAPHIC AREA DATA |
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| SEGMENT REPORTING | 28. SEGMENT AND GEOGRAPHIC AREA DATA In fiscal year 2021, the company implemented a new operating model and reporting structure. With this change, the company’s agriculture and turf operations were divided into two new segments: production and precision agriculture and small agriculture and turf. There were no changes to the construction and forestry and financial services segments. This presentation is consistent with how the chief operating decision maker assesses the performance of the segments and makes decisions about resource allocations. The company’s operations are presently organized and reported in four business segments described as follows: The production and precision agriculture segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for production-scale growers of large grains, small grains, cotton, and sugar. Main products include large and certain mid-size tractors, combines, cotton pickers, sugarcane harvesters and loaders, and soil preparation, seeding, application and crop care equipment. The small agriculture and turf segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for dairy and livestock producers, high-value crop producers, and turf and utility customers. The segment’s primary products include certain mid-size and small tractors, as well as hay and forage equipment, riding and commercial lawn equipment, golf course equipment, and utility vehicles. The construction and forestry segment defines, develops, and delivers a broad range of machines and technology solutions organized along the earthmoving, forestry, and roadbuilding production systems. The segment’s primary products include crawler dozers and loaders, four-wheel-drive loaders, excavators, skid-steer loaders, milling machines, and log harvesters. The products and services produced by the segments above are marketed primarily through independent retail dealer networks and major retail outlets, and, as it relates to roadbuilding products in certain markets outside the U.S. and Canada, primarily through company-owned sales and service subsidiaries. The financial services segment primarily finances sales and leases by John Deere dealers of new and used production and precision agriculture equipment, small agriculture and turf equipment, and construction and forestry equipment. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties. Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment and geographic area data. Intersegment sales and revenues represent sales of components and finance charges, which are generally based on market prices. At the beginning of fiscal year 2021, the company reclassified goodwill from identifiable operating segment assets to corporate assets for segment reporting, as goodwill is no longer considered in evaluating the operating performance of the segments. Prior period amounts have been restated for a consistent presentation. Information relating to operations by operating segment in millions of dollars follows for the years ended October 31, 2021, November 1, 2020 and November 3, 2019. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2021, 2020, and 2019 were as follows: production and precision agriculture net sales of $27 million, $22 million, and $31 million; small agriculture and turf net sales of $11 million, $2 million, and $3 million; construction and forestry had no intersegment sales in 2021, $1 million in 2020, and $1 million in 2019; and financial services revenues of $246 million, $278 million, and $348 million, respectively.
* Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income.
* Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses.
* Does not include finance rental income for equipment on operating leases.
* Includes depreciation for equipment on operating leases. (continued)
* Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, goodwill, marketable securities, and cash and cash equivalents.
The company views and has historically disclosed its operations as consisting of two geographic areas (the U.S. and Canada, and outside the U.S. and Canada) for net sales and revenues and operating profit shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. For property and equipment, a material amount does reside in the country of Germany, separately disclosed below in millions of dollars.
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SUBSEQUENT EVENTS |
12 Months Ended |
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Oct. 31, 2021 | |
| SUBSEQUENT EVENTS | |
| SUBSEQUENT EVENT | 29. SUBSEQUENT EVENTS In November 2021, the company renewed its outstanding bank conduit facility revolving credit agreement, which reduced the facility capacity from $2,000 million to $1,000 million. As a result of the facility renewal at a reduced capacity, the company repurchased $511 million of outstanding short-term securitization borrowings in November 2021, in addition to the normal monthly collection of payments on the retail notes. On November 17, 2021, employees represented by the UAW approved a new collective bargaining agreement and terminated a strike that began on October 14, 2021. The agreement, which has a term of six years, covers the wages, hours, benefits, and other terms and conditions of employment for the company’s UAW-represented employees at 14 U.S. facilities. The labor agreement includes a lump sum ratification bonus payment of $8,500 per eligible employee, totaling $90 million, and an immediate wage increase of 10 percent plus further wage increases over the term of the contract. The lump sum payment will be expensed in the first quarter of 2022. The company remeasured the U.S. hourly pension plan as of November 30, 2021 due to the new collective bargaining agreement, which decreased the plan’s funded status by approximately $495 million and will increase pension expense in 2022 by nearly $80 million. The U.S. hourly pension plan changes will continue to impact pension expense through the remaining term of the contract as well as years beyond the current contract as employees continue to accumulate years of service. The UAW strike is expected to have an adverse effect on the company’s results of operations for the three months ending January 30, 2022 as a result of reduced production and shipments. On November 30, 2021, the company voluntarily contributed $1,000 million to a U.S. OPEB plan. The expected return on this contribution was included in the 2022 pension and OPEB cost estimates in the MD&A. A quarterly dividend of $1.05 per share was declared at the Board of Directors meeting on December 8, 2021, payable on February 8, 2022 to stockholders of record on December 31, 2021. On December 14, 2021, the company announced a definitive agreement to acquire majority ownership in Kreisel Electric, Inc. (Kreisel), a battery technology provider based in Austria. Kreisel has differentiated battery technology for high-performance and off-highway applications as well as charging infrastructure offerings globally and across multiple end markets. This will provide Deere with the high-density battery technology necessary to optimally integrate and efficiently design vehicles and power trains while leveraging Kreisel’s charging technology to build out infrastructure to enable global customer adoption. The transaction is expected to close in the first half of fiscal year 2022, subject to the receipt of certain required regulatory approvals and satisfaction of certain other customary closing conditions. Total cash consideration will be €221 million and paid out of cash on hand. Kreisel will be allocated amongst the company’s production and precision agriculture, small agriculture and turf, and construction and forestry segments. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended |
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Oct. 31, 2021 | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| Consolidation, Policy | The consolidated financial statements represent the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the company is the primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. Deere & Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 11). Other investments (less than 20 percent ownership) are recorded at cost. |
| Fiscal Period, Policy | The company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period, which generally occurs in October. An additional week is included in the fourth fiscal quarter every five or six years to realign the company’s fiscal quarters with the calendar. The fiscal year ends for 2021, 2020, and 2019 were October 31, 2021, November 1, 2020, and November 3, 2019, respectively. Fiscal years 2021 and 2020 contained 52 weeks compared to 53 weeks in fiscal year 2019. Unless otherwise stated, references to particular years or quarters refer to the company’s fiscal years and the associated periods in those fiscal years. |
| Use of Estimates in Financial Statements | The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the company’s business, which may result in actual results differing from those estimates. |
| Revenue Recognition | Sales of equipment and service parts are recognized when each of the following criteria are met: (1) the company and an independent customer approve a contract with commercial substance, (2) the sales price is determinable and collectability of the payments are probable based on the terms outlined in the contract, and (3) control of the goods has transferred to the independent customer. In most situations, the independent customer is a dealer, which subsequently sells the equipment and service parts purchased from the company to a retail customer, who can finance the equipment with the financial services segment or another source of financing. In some situations, the company sells directly to a retail customer. The term “customer” includes both dealers and retail customers to whom the company makes direct sales. Transfer of control generally occurs for equipment and service parts when the good is delivered as specified in the contract and the risks and rewards of ownership are transferred. In the U.S. and most international locations, this transfer occurs primarily when goods are shipped. In Canada and some other international locations, certain goods are shipped to dealers on a consignment basis under which the risks and rewards of ownership are not transferred to the dealer at the time the goods are shipped. Accordingly, in these locations, sales are not recorded until a retail customer has purchased the goods. Generally, no right of return exists on sales of equipment. In limited instances, equipment is transferred to a customer or a financial institution with an obligation to repurchase the equipment for a specified amount, which is exercisable at the customer’s option. When the equipment is expected to be repurchased, those arrangements are accounted for as leases. No sale is recorded at the time of the equipment transfer and the difference between sale price and the specified repurchase amount is recognized as revenue on a straight-line basis until the customer’s option expires. When this equipment is not expected to be repurchased, a sale is recorded with a return obligation. Under the terms of sales agreements with dealers, interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from to twelve months for most equipment. Interest-free periods may not be extended. Interest is primarily charged to dealers on outstanding balances, from the earlier of the date when goods are sold to a retail customer by the dealer or the expiration of the interest-free period granted at the time of the sale to the dealer, until payment is received by the company. Interest charged may not be forgiven and the past due interest rates exceed market rates. In 2020 and to a much lesser extent in 2021, short-term payment relief was provided to dealers due to the economic effects of COVID (see Note 13). Dealers cannot cancel purchases after the company recognizes a sale and are responsible for payment even if the equipment is not sold to retail customers. If the interest-free or below market interest rate period exceeds one year, the company adjusts the expected sales revenue for the effects of the time value of money using a current market interest rate. The revenue related to the financing component is recognized in “Finance and interest income” using the interest method. The company does not adjust the sales price to account for a financing component if the expected interest-free or below market period is one year or less. Service parts and certain attachments returns are estimable and accrued at the time a sale is recognized. The estimated returns are recorded in “Other assets” for the inventory value of estimated returns, adjusted for restocking fees. The estimated dealer refund liability, adjusted for restocking fees, is recorded in “Accounts payable and accrued expenses.” The estimated returns are based on historical return rates, current dealer inventory levels, and current economic conditions. The company remanufactures used engines and components (cores) that are sold to dealers and retail customers for maintenance and repair parts. Revenue for remanufactured components is recognized using the same criteria as other parts sales. When a remanufactured part is sold, the company collects a deposit that is repaid if the customer returns a core that meets certain specifications within a defined time period. The deposit received from the customer is recognized as a liability in “Accounts payable and accrued expenses” and the used component that is expected to be returned is recognized in “Other assets” in the consolidated balance sheet. When a customer returns a core, the deposit is repaid, the liability reversed, and the returned core is recorded in inventory to be remanufactured and sold to another customer. If a core is not returned within the required time, the deposit is recognized as revenue in “Net sales,” and the estimated core return is recorded as an expense in “Cost of sales” in the statement of consolidated income. Certain equipment is sold with precision guidance, telematics, and other information gathering and analyzing capabilities. These technology solutions require hardware, software, and may include an obligation to provide services for a period of time. These solutions are generally bundled with the sale of the equipment but can also be purchased or renewed separately. The revenue related to the hardware and embedded software is generally recognized at the time of the equipment sale and recorded in “Net sales” in the statement of consolidated income. The revenue for the future services is generally deferred and recognized over the service period. The deferred revenue is recorded as a contract liability in “Accounts payable and accrued expenses” in the consolidated balance sheet and is recognized in “Other income” with the associated expenses recognized in “Other operating expenses” in the statement of consolidated income. Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of financing receivables are recognized as a reduction in “Finance and interest income” over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in “Finance and interest income.” Sales Incentives In certain markets, the company provides sales incentives to dealers. These incentives may be based on a dealer’s purchase volume or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. At the time of the sale to a dealer, the company records an estimated cost of these programs as a reduction to the sales price. The estimated cost is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to a retail customer. Actual cost differences from the original cost estimate are recognized in “Net sales.” |
| Product Warranties | For most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period. At the time a sale is recognized, the estimated future warranty costs are recorded. The company generally determines its total warranty liability by applying historical warranty claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs with consideration of current quality developments. The company also offers extended warranty arrangements for purchase at the customer’s option. The premiums for extended warranties are recognized in “Other income” in the statement of consolidated income primarily in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in “Accounts payable and accrued expenses” in the consolidated balance sheet (see Note 21). |
| Sales and Transaction Taxes | The company collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with revenue producing transactions between the company and its customers. These taxes include sales, use, value-added, and some excise taxes. The company elected to exclude these taxes from the determination of the sales price (excluded from revenues). |
| Contract Costs | Incremental costs of obtaining an equipment revenue contract are recognized as an expense when incurred since the amortization period would be one year or less. |
| Advertising Costs | Advertising costs are charged to expense as incurred. This expense was $212 million in 2021, $196 million in 2020, and $215 million in 2019. |
| Depreciation and Amortization | Property and equipment, capitalized software, and other intangible assets are generally stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives generally using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and revised products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are generally charged to expense as incurred. |
| Securitization of Receivables | Certain financing receivables are periodically transferred to special purpose entities (SPEs) in securitization transactions (see Note 14). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Financing receivables securitized - net.” The company recognizes finance income over the lives of these receivables using the interest method. |
| Receivables and Allowances | All financing and trade receivables are reported on the balance sheet at outstanding principal and accrued interest, adjusted for any write-offs, the allowance for credit losses, and any unamortized deferred fees or costs on originated financing receivables. The company also records an allowance and provision for credit losses related to the receivables from sales (trade receivables and certain financing receivables). The allowance is a reduction to the receivable balances and the provision is recorded in “Selling, administrative and general expenses.” The allowance represents an estimate of the credit losses expected over the life of the receivable portfolio. The company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. Receivables are written-off to the allowance when the account is considered uncollectible (see Note 13). |
| Impairment of Long-Lived Assets, Goodwill, and Other Intangible Assets | The company evaluates the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. Goodwill and unamortized intangible assets are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances indicate a reduction in the fair value below the carrying value. Goodwill is allocated and reviewed for impairment by reporting unit. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the excess of the reporting unit’s carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (see Notes 5 and 26). |
| Derivative Financial Instruments | The company’s policy is derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the company has interest rate exposure at certain equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued (see Note 27). |
| Foreign Currency Translation | The functional currencies for most of the company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange derivative contracts are included in net income. The pretax net gain (loss) for foreign exchange in 2021, 2020, and 2019 was $(134) million, $18 million, and $(13) million, respectively. |
| Cash and Cash Equivalents, Policy | The company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the company’s short-term borrowings, excluding the current maturities of finance lease obligations and long-term borrowings, mature or may require payment within three months or less. |
| Pension and Other Postretirement Plans | The spot yield curve approach is used to estimate the service and interest cost components of the net periodic pension and OPEB costs by applying the specific spot rates along the yield curve used to determine the benefit plan obligations to relevant projected cash outflows. The components of net periodic pension and OPEB cost excluding the service component are primarily included in the line item “Other operating expenses” in the statement of consolidated income. Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10 percent of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. The company makes any required contributions to the plan assets under applicable regulations and voluntary contributions after evaluating the company’s liquidity position and ability to make tax-deductible contributions. Total company contributions to the plans were $258 million in 2021 and $951 million in 2020, which included both required and voluntary contributions and direct benefit payments. The voluntary contributions to plan assets were $700 million in 2020. The discount rate assumptions used to determine the pension and OPEB obligations for all periods presented were primarily based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which the company’s benefit obligations could effectively be settled at the October 31 measurement dates. The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value. |
| Unremitted Earnings in Foreign Investment, Policy | At October 31, 2021, accumulated earnings in certain subsidiaries outside the U.S. totaled $2,155 million. A provision for foreign withholding taxes has not been made since these earnings are expected to remain indefinitely reinvested outside the U.S. Determination of the amount of a foreign withholding tax liability on these unremitted earnings is not practicable. |
| Marketable Securities, Policy | Realized gains or losses from the sales of marketable securities are based on the specific identification method. |
| Financing Receivables - Non-Performing, Policy | Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the company has ceased accruing finance income. The company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. |
| Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
| Inventory Valuation, Policy | A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the “last-in, first-out” (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the “first-in, first-out” (FIFO) basis, or net realizable value. |
| Extended Product Warranty, Policy | The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. |
| Stock Option and Restricted Stock Awards, Policy | The company issues stock options and restricted stock unit awards to key employees under plans approved by stockholders. Restricted stock units are also issued to nonemployee directors for their services as directors under a plan approved by stockholders. Options are awarded with the exercise price equal to the market price and become exercisable in to three years after grant. Options expire ten years after the date of grant. Restricted stock awards generally vest after three years. The compensation cost for stock options and service-based restricted stock units, which is based on the fair value at the grant date, is recognized on a straight-line basis over the requisite period the employee is required to render service. The compensation cost for performance/service-based units, which is based on the fair value at the grant date excluding dividends, is recognized over the employees’ requisite service period and periodically adjusted for the probable number of shares to be awarded. The company recognizes the effect of award forfeitures as an adjustment to compensation expense in the period the forfeiture occurs. |
| Lessee Lease, Policy | The company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than one year for both operating and finance leases. The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than one year and that do not meet the finance lease criteria are classified as operating leases. Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from to ten years. Options that the company is reasonably certain to exercise are included in the lease term. |
| Lease and Non-lease Components, Policy | The company has elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. |
| Short-term lease, Policy | Leases with an initial term of one year or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. |
| Lessor Leases, Policy | The company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates change. Lease agreements include usage limits and specifications on machine condition, which allow the company to assess lessees for excess use or damages to the underlying equipment. |
| Fair Value of Financial Instruments, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the company uses various methods including market and income approaches. The company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. |
NEW ACCOUNTING STANDARDS (Tables) |
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| Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Measurement of Credit Losses on Financial Instruments Guidance | The effects of adopting the ASU on the consolidated balance sheet were as follows in millions of dollars:
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ACQUISITIONS AND DISPOSITIONS (Tables) |
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| Bear Flag | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset and Liability Fair Values at the Acquisition Date | In August 2021, the company acquired Bear Flag Robotics, Inc. (Bear Flag) to further accelerate Deere’s development and delivery of advanced technology. Bear Flag’s technology is complementary to other Deere technology efforts and enables autonomous tractor operations. The total cash purchase price before final adjustments, net of cash acquired of $4 million, was $225 million, with an additional $25 million to be recognized as compensation expense over the four-year post-acquisition service period. In addition to the cash purchase price, $19 million of liabilities were assumed. The preliminary asset and liability fair values at the acquisition date in millions of dollars follow:
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| Unimil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset and Liability Fair Values at the Acquisition Date | In September 2020, the company acquired Unimil, a leading Brazilian company in the after-sales service parts business for sugarcane harvesters, which is based in Piracicaba, Brazil. The total cash purchase price, net of cash acquired of $5 million, was $66 million, with $6 million funded to an escrow to secure certain indemnity obligations. In addition to the cash purchase price, $14 million of liabilities were assumed. The asset and liability fair values at the acquisition date in millions of dollars follow:
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SPECIAL ITEMS (Tables) |
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| Schedule of Impairments and Other Charges (Benefits) | In 2021, the company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. The fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and . The company also continued to assess its manufacturing locations, resulting in additional long-lived asset impairments of $12 million pretax. The impairments were the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The company recognized a favorable indirect tax ruling in Brazil of $58 million pretax. See Note 26 for fair value measurement information.
In 2020, the company closed a factory that produced small agricultural equipment in China, recognized impairments in the fixed assets in an asphalt plant factory in Germany, a construction equipment factory in Brazil, and other international locations, recorded impairments of equipment on operating leases and matured lease inventory, as well as impairments of the investment in certain affiliate companies. See Note 26 for a description of the valuation methodologies used to measure these impairments.
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| Schedule of Employee-Separation Programs Pretax Expenses | The programs’ total pretax expenses in 2020 were as follows:
* Relates primarily to non-cash charges of $34 million from curtailments in certain OPEB plans (see Note 8) and other corporate expenses, both of which were recorded . Approximately $6 million of the curtailment charge was recorded by financial services.
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| Schedule of Employee-Separation Programs Pretax Expenses | During 2019, the company also completed certain employee-separation programs designed for specific functions and geographic areas as part of its on-going efforts to create a more efficient organizational structure. These programs provided for cash payments based on years of service. The expenses were recorded in the period the employees irrevocably accepted the separation offer with the following total pretax expenses:
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REVENUE RECOGNITION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REVENUE RECOGNITION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Revenue Recognition | The company’s net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow:
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CASH FLOW INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CASH FLOW INFORMATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted Cash Held | The company’s restricted cash held at October 31, 2021, November 1, 2020, and November 3, 2019 was as follows in millions of dollars:
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| Cash Payments for Interest and Income Taxes | Cash payments for interest and income taxes consisted of the following in millions of dollars:
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PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PENSION AND OTHER POSTRETIREMENT BENEFITS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Components of Net Periodic Pension and OPEB Cost | The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages:
The components of net periodic OPEB cost and the assumptions related to the cost consisted of the following in millions of dollars and in percentages:
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| Schedule of Benefit Plan Costs Recorded in Net Income and Other Changes in Plan Assets and Benefit Obligations Recorded in Other Comprehensive Income | The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:
The previous OPEB cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:
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| Schedule of Benefit Plan Obligations, Funded Status and the Assumptions Related to Obligations | The benefit plan obligations, funded status, and the assumptions related to the obligations at October 31, 2021 and November 1, 2020, respectively, in millions of dollars follow:
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| Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income - Pretax | The amounts recognized at October 31, 2021 and November 1, 2020, respectively, in millions of dollars consisted of the following:
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| Schedule of Future Benefits Expected to be Paid from the Benefit Plans | The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars:
* Net of prescription drug group benefit subsidy under Medicare Part D.
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| Fair Values of Pension Plan and Health Care Assets | The fair values of the pension plan assets at October 31, 2021 follow in millions of dollars:
The fair values of the health care assets at October 31, 2021 follow in millions of dollars:
The fair values of the pension plan assets at November 1, 2020 follow in millions of dollars:
The fair values of the health care assets at November 1, 2020 follow in millions of dollars:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for Income Taxes by Taxing Jurisdiction and by Significant Component | The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars:
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| Comparison of Statutory and Effective Income Tax Provision | A comparison of the statutory and effective income tax provision and reasons for related differences in millions of dollars follow:
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| Analysis of the Deferred Income Tax Assets and Liabilities | An analysis of the deferred income tax assets and liabilities at October 31, 2021 and November 1, 2020 in millions of dollars follows:
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| Reconciliation of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follows:
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OTHER INCOME AND OTHER OPERATING EXPENSES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER INCOME AND OTHER OPERATING EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Major Components of Other Income and Other Operating Expenses | The major components of other income and other operating expenses consisted of the following in millions of dollars:
* Primarily related to extended warranties (see Note 21).
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UNCONSOLIDATED AFFILIATED COMPANIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UNCONSOLIDATED AFFILIATED COMPANIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unconsolidated Affiliated Companies | Combined financial information of the unconsolidated affiliated companies in millions of dollars follows:
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| Transactions with Unconsolidated Affiliated Companies | Transactions with unconsolidated affiliated companies reported in the statement of consolidated income in millions of dollars follow:
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MARKETABLE SECURITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MARKETABLE SECURITIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost and Fair Value of Marketable Securities | The amortized cost and fair value of marketable securities at October 31, 2021 and November 1, 2020 in millions of dollars follow:
* Primarily issued by U.S. government sponsored enterprises.
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| Unrealized Gains on Equity Securities | Unrealized gains on equity securities during 2021 and 2020 in millions of dollars follow:
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| Contractual Maturities of Debt Securities | The contractual maturities of debt securities at October 31, 2021 in millions of dollars follow:
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RECEIVABLES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts, Notes, Loans and Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Financing Receivable Installments | Financing receivable installments, including unearned finance income, at October 31, 2021 and November 1, 2020 were scheduled as follows in millions of dollars:
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| Analysis of the Allowance for Credit Losses and Investment in Financing Receivables | An analysis of the allowance for credit losses and investment in financing receivables follows in millions of dollars:
* Individual allowances were not significant. |
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| Schedule of Other Receivables | Other receivables at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
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| Retail Customer Receivables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts, Notes, Loans and Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit Quality Analysis | The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) was as follows in millions of dollars at October 31, 2021:
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| Age Credit Quality Analysis | The credit quality analysis of retail customer receivables was as follows in millions of dollars at November 1, 2020:
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| Wholesale Receivables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts, Notes, Loans and Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at October 31, 2021:
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| Age Credit Quality Analysis | The credit quality analysis of wholesale receivables was as follows in millions of dollars at November 1, 2020:
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| Trade Accounts and Notes Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts, Notes, Loans and Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Trade accounts and notes receivable at October 31, 2021 and November 1, 2020 in millions of dollars follow:
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| Schedule of Allowance for Credit Losses on Trade Accounts and Notes Receivable | The allowance for credit losses on trade accounts and notes receivable at October 31, 2021, November 1, 2020, and November 3, 2019, as well as the related activity, in millions of dollars follow:
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| Financing Receivables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts, Notes, Loans and Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Financing receivables at October 31, 2021 and November 1, 2020 in millions of dollars follow:
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| Financing Receivables | Related to Sales of Equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts, Notes, Loans and Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Trade Accounts and Notes Receivable, Financing Receivables, and Financing Receivables Related to the Sale of Equipment | Financing receivables at October 31, 2021 and November 1, 2020 related to the company’s sales of equipment that were included in the table above consisted of the following in millions of dollars:
* These retail notes generally arise from sales of equipment by company-owned dealers or through direct sales.
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SECURITIZATION OF FINANCING RECEIVABLES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SECURITIZATION OF FINANCING RECEIVABLES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows at October 31, 2021 in millions of dollars:
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| Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 31, 2021 and November 1, 2020 were as follows in millions of dollars:
The components of consolidated secured borrowings and other liabilities related to securitizations at October 31, 2021 and November 1, 2020 were as follows in millions of dollars:
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INVENTORIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Major Classification of Inventories | If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31, 2021 and November 1, 2020 in millions of dollars would have been as follows:
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PROPERTY AND DEPRECIATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY AND DEPRECIATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment | A summary of property and equipment at October 31, 2021 and November 1, 2020 in millions of dollars follows:
* Weighted-averages
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GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL AND OTHER INTANGIBLE ASSETS-NET | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Goodwill by Operating Segments | The changes in amounts of goodwill by operating segments were as follows in millions of dollars:
|
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| Components of Other Intangible Assets | The components of other intangible assets are as follows in millions of dollars:
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TOTAL SHORT-TERM BORROWINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL SHORT-TERM BORROWINGS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Borrowings | Total short-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
* Includes unamortized fair value adjustments related to interest rate swaps.
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
* Primarily sales incentive accruals with a right of set-off against trade receivables. At October 31, 2021 and November 1, 2020, $836 million and $1,073 million, respectively, of sales incentive accruals were classified as accrued expenses by the equipment operations as the related trade receivables had been sold to financial services.
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LONG-TERM BORROWINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LONG-TERM BORROWINGS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Borrowings | Long-term borrowings at October 31, 2021 and November 1, 2020 consisted of the following in millions of dollars:
* Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year-end.
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of the Changes in Warranty Liability and Unearned Premiums | A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows:
|
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CAPITAL STOCK (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAPITAL STOCK | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Basic and Diluted Net Income Per Share | A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:
|
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STOCK OPTION AND RESTRICTED STOCK AWARDS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK OPTION AND RESTRICTED STOCK AWARDS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assumptions Used for the Binomial Lattice Model to Determine Fair Value of Options | The assumptions used for the binomial lattice model to determine the fair value of options follow:
* Weighted-averages
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| Stock Option Activity | Stock option activity at October 31, 2021, and changes during 2021 in millions of dollars and shares follow:
* Weighted-averages
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| Restricted Stock Units Activity | The company’s restricted stock units at October 31, 2021 and changes during 2021 in millions of shares follow:
* Weighted-averages
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OTHER COMPREHENSIVE INCOME ITEMS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER COMPREHENSIVE INCOME ITEMS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of After-Tax Components of Accumulated Other Comprehensive Income | The after-tax components of accumulated other comprehensive income at October 31, 2021, November 1, 2020, and November 3, 2019 in millions of dollars follow:
|
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| 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:
* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.
* These accumulated other comprehensive income amounts are primarily included in net periodic pension and OPEB costs. See Note 8 for additional detail.
* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Lease Expense by Type | The lease expense by type consisted of the following in millions of dollars:
|
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| Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Consolidated Balance Sheet | Operating and finance lease right of use assets and lease liabilities follow in millions of dollars:
|
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| Schedule of Weighted-Average Remaining Lease Terms in Years and Discount Rates | The weighted-average remaining lease terms in years and discount rates follows:
|
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| Schedule of Operating Lease Payment Amounts | Lease payment amounts in each of the next five years at October 31, 2021 follow in millions of dollars:
|
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| Schedule of Finance Lease Payment Amounts | Lease payment amounts in each of the next five years at October 31, 2021 follow in millions of dollars:
|
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| Schedule of Cash Paid for Amounts Included in the Measurement of Lease Liabilities and Right of Use Assets Obtained in Exchange for Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities follows in millions of dollars:
Right of use assets obtained in exchange for lease liabilities follow in millions of dollars:
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| Schedule of Lease Revenues Earned | Lease revenues earned by the company follow in millions of dollars:
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| Schedule of Sales-type and Direct Financing Lease Receivables by Market | Sales-type and direct financing lease receivables by market follow in millions of dollars:
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| Schedule of Payments, Including Guaranteed Residual Values, on Sales-type and Direct Financing Lease Receivables | Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at October 31, 2021 follow in millions of dollars:
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| Schedule of Cost of Equipment on Operating Leases by Market | The cost of equipment on operating leases by market follow in millions of dollars:
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| Schedule of Lease Payments for Equipment on Operating Leases | Lease payments for equipment on operating leases at October 31, 2021 were scheduled as follows in millions of dollars:
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at October 31, 2021 and November 1, 2020 in millions of dollars follow:
* Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.
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| Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at October 31, 2021 and November 1, 2020 at fair value on a recurring basis in millions of dollars follow, excluding the company’s cash equivalents, which were carried at cost that approximates fair value and consisted primarily of money market funds and time deposits. Level 3 marketable securities were transferred to Level 2 in 2021.
* Primarily issued by U.S. government sponsored enterprises.
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| Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring measurements from impairments at October 31, 2021 and November 1, 2020 in millions of dollars follow:
1 Fair value as of August 2, 2020. 2 Fair value as of May 3, 2020. 3 2021 fair value of $41 million at January 31, 2021. 2020 fair value of $70 million at May 3, 2020, $8 million at August 2, 2020, and $57 million at November 1, 2020. 4 Fair value as of November 1, 2020. 5 2021 fair value as of January 31, 2021. 2020 fair value as of May 3, 2020.
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DERIVATIVE INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE INSTRUMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts Recorded in the Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships | The amounts recorded, at October 31, 2021 and November 1, 2020, in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow:
* Presented in short-term borrowings.
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| Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet at October 31, 2021 and November 1, 2020 in millions of dollars follow:
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| Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income | The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars:
* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. |
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| Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral | The impact on the derivative assets and liabilities related to netting arrangements and collateral at October 31, 2021 and November 1, 2020 in millions of dollars follows:
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SEGMENT AND GEOGRAPHIC AREA DATA (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| SEGMENT AND GEOGRAPHIC AREA DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information | Information relating to operations by operating segment in millions of dollars follows for the years ended October 31, 2021, November 1, 2020 and November 3, 2019. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2021, 2020, and 2019 were as follows: production and precision agriculture net sales of $27 million, $22 million, and $31 million; small agriculture and turf net sales of $11 million, $2 million, and $3 million; construction and forestry had no intersegment sales in 2021, $1 million in 2020, and $1 million in 2019; and financial services revenues of $246 million, $278 million, and $348 million, respectively.
* Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income.
* Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses.
* Does not include finance rental income for equipment on operating leases.
* Includes depreciation for equipment on operating leases. (continued)
* Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, goodwill, marketable securities, and cash and cash equivalents.
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| Schedule of Geographic Area Reporting Information | The company views and has historically disclosed its operations as consisting of two geographic areas (the U.S. and Canada, and outside the U.S. and Canada) for net sales and revenues and operating profit shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes. For property and equipment, a material amount does reside in the country of Germany, separately disclosed below in millions of dollars.
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ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Fiscal year duration | 364 days | 364 days | 371 days |
| VIE-Not Primary Beneficiary | |||
| Maximum Exposure to Losses | |||
| Maximum exposure to loss | $ 1,176 | ||
| VIE-Not Primary Beneficiary | Brazilian Construction Equipment Manufacturer Joint Venture | |||
| Maximum Exposure to Losses | |||
| Maximum exposure to loss | 9 | $ 5 | |
| Argentine Peso | |||
| Argentina | |||
| Net Peso Exposure | 3 | ||
| Argentina | |||
| Argentina | |||
| Net investment | $ 578 | ||
| Net sales and revenues (as a percent) | 1.00% | ||
| Wirtgen Group Holding GmbH (Wirtgen) | |||
| Net sales | $ 270 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Revenue Recognition | |||
| Interest-free periods granted at the time of sale to the dealer, low end of range | 1 month | ||
| Interest-free periods granted at the time of sale to the dealer, high end of range | 12 months | ||
| Revenue, Practical Expedient, Financing Component [true false] | true | ||
| Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | ||
| Historical claims rate, review period | 5 years | ||
| Advertising Costs | |||
| Advertising costs | $ 212 | $ 196 | $ 215 |
| Foreign Currency Translation | |||
| Foreign exchange pretax net gain (loss) | $ (134) | $ 18 | $ (13) |
ACQUISITIONS AND DISPOSITIONS - Hitachi Construction Machinery Co., Ltd Joint Venture (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
|---|---|---|---|
May 01, 2022 |
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Acquisitions | |||
| Cash purchase price, net of cash acquired | $ 244 | $ 66 | |
| Hitachi Construction Machinery Co., Ltd Joint Venture | Forecasted | |||
| Acquisitions | |||
| Cash purchase price, net of cash acquired | $ 275 | ||
| Hitachi Construction Machinery Co., Ltd Joint Venture | Forecasted | John Deere-branded Excavators, Components, and Service Parts | Minimum | |||
| Acquisitions | |||
| Supply agreement period | 5 years | ||
| Hitachi Construction Machinery Co., Ltd Joint Venture | Forecasted | John Deere-branded Excavators, Components, and Service Parts | Maximum | |||
| Acquisitions | |||
| Supply agreement period | 30 years | ||
ACQUISITIONS AND DISPOSITIONS - Bear Flag Robotics, Inc (Details) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Aug. 29, 2021 |
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Acquisitions | ||||
| Cash purchase price, net of cash acquired | $ 244 | $ 66 | ||
| Asset and Liability Fair Values at the Acquisition Date | ||||
| Goodwill | $ 3,291 | $ 3,081 | $ 2,917 | |
| Bear Flag | ||||
| Acquisitions | ||||
| Cash acquired | $ 4 | |||
| Cash purchase price, net of cash acquired | 225 | |||
| Compensation expense to be recognized | $ 25 | |||
| Post-acquisition service period | 4 years | |||
| Liabilities assumed | $ 19 | |||
| Asset and Liability Fair Values at the Acquisition Date | ||||
| Property and equipment | 1 | |||
| Goodwill | 189 | |||
| Other intangible assets | 54 | |||
| Total assets | 244 | |||
| Accounts payable and accrued expenses | 1 | |||
| Deferred income taxes | 18 | |||
| Total liabilities | $ 19 | |||
| Identifiable Intangible Assets | ||||
| Weighted-average useful lives (in years) | 7 years | |||
ACQUISITIONS AND DISPOSITIONS - Unimil Purchase Price and Asset and Liability Fair Values at the Acquisition Date (Details) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Sep. 27, 2020 |
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Acquisitions | ||||
| Cash purchase price, net of cash acquired | $ 244 | $ 66 | ||
| Asset and Liability Fair Values at the Acquisition Date | ||||
| Goodwill | $ 3,291 | $ 3,081 | $ 2,917 | |
| Unimil | ||||
| Acquisitions | ||||
| Cash acquired | $ 5 | |||
| Cash purchase price, net of cash acquired | 66 | |||
| Escrow to secure indemnity obligations | 6 | |||
| Liabilities assumed | 14 | |||
| Asset and Liability Fair Values at the Acquisition Date | ||||
| Trade accounts and notes receivable | 5 | |||
| Other receivables | 2 | |||
| Inventories | 10 | |||
| Property and equipment | 22 | |||
| Goodwill | 28 | |||
| Other intangible assets | 13 | |||
| Total assets | 80 | |||
| Accounts payable and accrued expenses | 5 | |||
| Deferred income taxes | 9 | |||
| Total liabilities | $ 14 | |||
| Identifiable Intangible Assets | ||||
| Weighted-average useful lives (in years) | 9 years | |||
SPECIAL ITEMS - Redeemable Noncontrolling Interest (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Nov. 01, 2020
USD ($)
| |
| Redeemable Noncontrolling Interest | |
| Noncontrolling interest redemption | $ 14 |
| Production & Precision Ag (PPA) | |
| Redeemable Noncontrolling Interest | |
| Noncontrolling interest redemption (as a percent) | 20.00% |
| Noncontrolling interest redemption | $ 14 |
| Noncontrolling interest redemption gain or loss | $ 0 |
REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Advanced customer payments | |||
| Deferred revenue received | $ 1,344 | $ 1,090 | |
| Revenue recognized from deferred revenue | $ 485 | $ 425 | $ 444 |
CASH FLOW INFORMATION (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Cash Flow Information | |||
| Transfer of inventory to equipment on operating leases | $ 662 | $ 614 | $ 678 |
| Accounts payable related to purchases of property and equipment | 121 | 98 | 152 |
| Restricted cash | |||
| Restricted cash | 108 | 106 | 99 |
| Interest: | |||
| Interest | 1,041 | 1,279 | 1,460 |
| Income taxes: | |||
| Income taxes | 2,075 | 1,069 | 1,111 |
| Intercompany Eliminations | |||
| Interest: | |||
| Interest | (279) | (272) | (360) |
| Income taxes: | |||
| Income taxes | (269) | (228) | 150 |
| Equipment Operations | |||
| Restricted cash | |||
| Restricted cash | 12 | 11 | 21 |
| Interest: | |||
| Interest | 584 | 553 | 666 |
| Income taxes: | |||
| Income taxes | 1,996 | 1,000 | 1,018 |
| Financial Services | |||
| Restricted cash | |||
| Restricted cash | 96 | 95 | 78 |
| Interest: | |||
| Interest | 736 | 998 | 1,154 |
| Income taxes: | |||
| Income taxes | $ 348 | $ 297 | $ (57) |
PENSION AND OTHER POSTRETIREMENT BENEFITS - Assumptions (Details) - Health Care |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Health care costs trend rates | ||
| Weighted-average health care cost trend rate, next fiscal year (as a percent) | 2.10% | 4.00% |
| Weighted-average health care cost trend rate, second fiscal year (as a percent) | 8.40% | 7.60% |
| Ultimate weighted-average health care cost trend rate (as a percent) | 4.70% | 4.70% |
| Year that weighted-average health care cost trend rate reaches ultimate rate (year) | 2028 2029 | 2027 2028 |
PENSION AND OTHER POSTRETIREMENT BENEFITS - Defined Contributions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| PENSION AND OTHER POSTRETIREMENT BENEFITS | |||
| Defined contribution plans employer contributions and costs (primarily in the U.S.) | $ 207 | $ 160 | $ 192 |
INCOME TAXES - Provision for Income Taxes and Income Before Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Current: | |||
| U.S. - Federal | $ 899 | $ 400 | $ 545 |
| U.S. - State | 183 | 53 | 72 |
| Foreign | 1,017 | 640 | 700 |
| Total current | 2,099 | 1,093 | 1,317 |
| Deferred: | |||
| U.S. - Federal | (303) | (68) | (345) |
| U.S. - State | (45) | 9 | (26) |
| Foreign | (93) | 48 | (94) |
| Total deferred | (441) | (11) | (465) |
| Provision for income taxes | 1,658 | 1,082 | 852 |
| Consolidated income before income taxes, U.S. | 4,061 | 2,082 | 2,166 |
| Consolidated income before income taxes, foreign | $ 3,541 | $ 1,801 | $ 1,922 |
INCOME TAXES - Statutory and Effective (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Comparison of the statutory and effective income tax provision | |||
| Federal corporate statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
| U.S. federal income tax provision at the U.S. statutory rate (21 percent) | $ 1,597 | $ 815 | $ 859 |
| State and local taxes, net of federal tax effect | 119 | 59 | 47 |
| Other Impacts of Tax Cuts and Jobs Act of 2017 | (85) | 39 | (101) |
| Rate differential on foreign subsidiaries | 148 | 106 | 89 |
| Research and business tax credits | (48) | (50) | (85) |
| Excess tax benefits on equity compensation | (79) | (87) | (40) |
| Valuation allowances | 18 | 139 | 28 |
| Other - net | (12) | 61 | 55 |
| Provision for income taxes | 1,658 | $ 1,082 | $ 852 |
| Accumulated earnings of certain foreign subsidiaries for which no provision for U.S. income or foreign withholding taxes has been made | 2,155 | ||
| Provision for foreign withholding taxes for earnings expected to remain indefinitely reinvested outside the U.S. | $ 0 | ||
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Deferred Tax Assets | ||
| OPEB liabilities | $ 676 | $ 804 |
| Tax loss and tax credit carryforwards | 1,542 | 937 |
| Accrual for sales allowances | 466 | 362 |
| Pension - net | 316 | |
| Allowance for credit losses | 78 | 81 |
| Accrual for employee benefits | 298 | 249 |
| Share-based compensation | 53 | 41 |
| Deferred compensation | 49 | 40 |
| Lessee lease transactions | 46 | 56 |
| Unearned revenue | 172 | 22 |
| Other items, assets | 333 | 344 |
| Less valuation allowances | (1,530) | (858) |
| Deferred income tax, assets | 2,183 | 2,394 |
| Deferred Tax Liabilities | ||
| Lessor lease transactions | 399 | 489 |
| Tax over book depreciation | 154 | 196 |
| Goodwill and other intangible assets | 337 | 368 |
| Pension - net | 448 | |
| Lessee lease transactions | 43 | 56 |
| Other items, liabilities | 341 | 305 |
| Deferred income tax, liabilities | $ 1,722 | $ 1,414 |
INCOME TAXES - Additional Deferred Income Tax Information (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Additional Deferred Income Tax Information | ||
| Tax loss and tax credit carryforwards | $ 1,542 | $ 937 |
| Tax loss and tax credit carryforwards, expiring from 2022 through 2041 | 1,068 | |
| Tax loss and tax credit carryforwards with an indefinite carryforward period | $ 474 |
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Reconciliation of the Total Amounts of Unrecognized Tax Benefits | |||
| Beginning of year balance | $ 668 | $ 553 | $ 279 |
| Increases to tax positions taken during the current year | 81 | 63 | 30 |
| Increases to tax positions taken during prior years | 100 | 95 | 357 |
| Decreases to tax positions taken during prior years | (23) | (30) | (30) |
| Decreases due to lapse of statute of limitations | (12) | (9) | (6) |
| Settlements | (3) | (1) | (75) |
| Foreign exchange | (3) | (2) | |
| End of year balance | 811 | 668 | 553 |
| Unrecognized tax benefits affecting effective tax rate if recognized | 227 | 134 | |
| Total amount of expense from interest and penalties | 7 | 13 | |
| Net tax benefit from tax positions settled | 3 | ||
| Interest income on income tax examination | 8 | 11 | $ 25 |
| Accrued interest and penalties on income tax | 75 | 72 | |
| Interest income receivable on income tax examination | $ 11 | $ 6 | |
OTHER INCOME AND OTHER OPERATING EXPENSES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Other Income | |||
| Total | $ 44,024 | $ 35,540 | $ 39,258 |
| Other operating expenses | |||
| Depreciation of equipment on operating leases | 983 | 1,083 | 981 |
| Other | |||
| Other Income | |||
| Revenues from services | 322 | 314 | 348 |
| Insurance premiums and fees earned | 227 | 223 | 214 |
| Trademark licensing income | 87 | 73 | 66 |
| Operating lease disposition gains | 65 | ||
| Investment income | 41 | 26 | 25 |
| Other | 249 | 182 | 226 |
| Total | 991 | 818 | 879 |
| Other operating expenses | |||
| Depreciation of equipment on operating leases | 983 | 1,083 | 981 |
| Insurance claims and expenses | 235 | 231 | 210 |
| Cost of services | 202 | 188 | 228 |
| Operating lease residual losses and impairments | 52 | 159 | |
| Pension and OPEB benefit, excluding service cost component | (183) | (31) | (67) |
| Other | 106 | 89 | 67 |
| Total | $ 1,343 | $ 1,612 | $ 1,578 |
MARKETABLE SECURITIES - Contractual Maturities (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Contractual Maturities of Debt Securities, Amortized Cost | |||
| Amortized cost, due in one year or less | $ 28 | ||
| Amortized cost, due after one through five years | 80 | ||
| Amortized cost, due after five through 10 years | 144 | ||
| Amortized cost, due after 10 years | 233 | ||
| Amortized cost, mortgage-backed securities | 152 | ||
| Amortized cost, debt securities | 637 | ||
| Contractual Maturities of Debt Securities, Fair Value | |||
| Fair value, due in one year or less | 28 | ||
| Fair value, due after one through five years | 82 | ||
| Fair value, due after five through 10 years | 147 | ||
| Fair value, due after 10 years | 240 | ||
| Fair value, mortgage-backed securities | 154 | ||
| Fair value, debt securities | 651 | ||
| Losses related to impairment write-downs | $ 0 | $ 0 | $ 0 |
RECEIVABLES - Wholesale Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|---|---|---|---|
| Credit Quality Analysis | |||
| Total wholesale receivables | $ 38,624 | $ 34,637 | $ 33,728 |
| Wholesale Receivables | |||
| Credit Quality Analysis | |||
| 2021 | 387 | ||
| 2020 | 87 | ||
| 2019 | 41 | ||
| 2018 | 9 | ||
| 2017 | 4 | ||
| Prior Years | 2 | ||
| Revolving | 2,036 | ||
| Total wholesale receivables | 2,566 | $ 3,529 | $ 4,634 |
| Wholesale Receivables | Agriculture and Turf | Current | |||
| Credit Quality Analysis | |||
| 2021 | 346 | ||
| 2020 | 80 | ||
| 2019 | 22 | ||
| 2018 | 9 | ||
| 2017 | 3 | ||
| Revolving | 1,696 | ||
| Total wholesale receivables | 2,156 | ||
| Wholesale Receivables | Agriculture and Turf | Non-performing | |||
| Credit Quality Analysis | |||
| 2019 | 12 | ||
| Total wholesale receivables | 12 | ||
| Wholesale Receivables | Construction and Forestry | 60-89 Days Past Due | |||
| Credit Quality Analysis | |||
| Prior Years | 1 | ||
| Total wholesale receivables | 1 | ||
| Wholesale Receivables | Construction and Forestry | Current | |||
| Credit Quality Analysis | |||
| 2021 | 41 | ||
| 2020 | 7 | ||
| 2019 | 7 | ||
| 2017 | 1 | ||
| Prior Years | 1 | ||
| Revolving | 340 | ||
| Total wholesale receivables | $ 397 |
RECEIVABLES - Wholesale Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|---|---|---|---|
| Age Credit Quality Analysis | |||
| Total wholesale receivables | $ 38,624 | $ 34,637 | $ 33,728 |
| Wholesale Receivables | |||
| Age Credit Quality Analysis | |||
| Total wholesale receivables | 2,566 | 3,529 | $ 4,634 |
| Wholesale Receivables | Agriculture and Turf | |||
| Age Credit Quality Analysis | |||
| Non-performing | 47 | ||
| Wholesale Receivables | Agriculture and Turf | Current | |||
| Age Credit Quality Analysis | |||
| Total wholesale receivables | 3,010 | ||
| Wholesale Receivables | Construction and Forestry | Current | |||
| Age Credit Quality Analysis | |||
| Total wholesale receivables | $ 472 | ||
| Wholesale Receivables | Construction and Forestry | 60-89 Days Past Due | |||
| Age Credit Quality Analysis | |||
| Total wholesale receivables | $ 1 |
RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
|
Oct. 31, 2021
USD ($)
item
|
Nov. 01, 2020
USD ($)
item
|
Nov. 03, 2019
USD ($)
item
|
|
| Financing Receivables Related to Troubled Debt Restructurings | |||
| Financing receivable contracts in troubled debt restructuring, number | item | 397 | 574 | 522 |
| Financing receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 18 | $ 108 | $ 36 |
| Financing receivables in troubled debt restructurings, aggregate balances, post-modification | 17 | $ 95 | $ 35 |
| Commitments to lend additional funds to customers whose accounts were modified in troubled debt restructurings | $ 0 | ||
RECEIVABLES - Other (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Other Receivables: | ||
| Taxes receivable | $ 1,436 | $ 931 |
| Other | 302 | 289 |
| Other receivables | $ 1,738 | $ 1,220 |
INVENTORIES (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Nov. 01, 2020 |
Oct. 31, 2021 |
|
| INVENTORIES | ||
| Gross inventories on LIFO basis expressed as percentage of worldwide gross inventories at FIFO | 52.00% | 54.00% |
| Pretax favorable income effect from the liquidation of LIFO inventory | $ 33 | |
| Raw materials and supplies | 1,995 | $ 3,524 |
| Work-in-process | 648 | 994 |
| Finished goods and parts | 4,006 | 4,373 |
| Total FIFO value | 6,649 | 8,891 |
| Less adjustment to LIFO value | 1,650 | 2,110 |
| Inventories | $ 4,999 | $ 6,781 |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Changes in Amounts of Goodwill | ||
| Goodwill - net, beginning balance | $ 3,081 | $ 2,917 |
| Acquisitions (Note 4) | 201 | 28 |
| Translation adjustments and other | 9 | 136 |
| Goodwill - net, ending balance | 3,291 | 3,081 |
| Accumulated goodwill impairment losses | 0 | 0 |
| Production & Precision Ag (PPA) | ||
| Changes in Amounts of Goodwill | ||
| Goodwill - net, beginning balance | 333 | 310 |
| Acquisitions (Note 4) | 201 | 28 |
| Translation adjustments and other | 8 | (5) |
| Goodwill - net, ending balance | 542 | 333 |
| Small Ag & Turf (SAT) | ||
| Changes in Amounts of Goodwill | ||
| Goodwill - net, beginning balance | 268 | 264 |
| Translation adjustments and other | (3) | 4 |
| Goodwill - net, ending balance | 265 | 268 |
| Construction & Forestry (CF) | ||
| Changes in Amounts of Goodwill | ||
| Goodwill - net, beginning balance | 2,480 | 2,343 |
| Translation adjustments and other | 4 | 137 |
| Goodwill - net, ending balance | $ 2,484 | $ 2,480 |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Amortized intangible assets: | ||
| Total at cost | $ 1,646 | $ 1,591 |
| Total accumulated amortization | 494 | 387 |
| Amortized intangible assets - net | 1,152 | 1,204 |
| Unamortized intangible assets: | ||
| Other intangible assets - net | 1,275 | 1,327 |
| Customer Lists and Relationships | ||
| Amortized intangible assets: | ||
| Total at cost | 542 | 535 |
| Total accumulated amortization | 151 | 113 |
| Technology, Patents, Trademarks and Other | ||
| Amortized intangible assets: | ||
| Total at cost | 1,104 | 1,056 |
| Total accumulated amortization | 343 | 274 |
| In-process Research and Development | ||
| Unamortized intangible assets: | ||
| Unamortized intangible assets | $ 123 | $ 123 |
GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Amortized Intangible Assets: | |||
| Amortization expense of other intangible assets | $ 116 | $ 102 | $ 109 |
| Amortization expense of other intangible assets - 2022 | 113 | ||
| Amortization expense of other intangible assets - 2023 | 112 | ||
| Amortization expense of other intangible assets - 2024 | 108 | ||
| Amortization expense of other intangible assets - 2025 | 105 | ||
| Amortization expense of other intangible assets - 2026 | $ 103 | ||
COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| COMMITMENTS AND CONTINGENCIES | ||
| Historical claims rate, review period | 5 years | |
| Unamortized extended warranty premiums (deferred revenue) | $ 774 | $ 638 |
| Change in Warranty Liability and Unearned Premiums | ||
| Beginning of year balance | 1,743 | 1,800 |
| Payments | (864) | (942) |
| Amortization of premiums received | (227) | (222) |
| Accruals for warranties | 1,071 | 851 |
| Premiums received | 358 | 276 |
| Foreign exchange | 5 | (20) |
| End of year balance | $ 2,086 | $ 1,743 |
COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Oct. 31, 2021
USD ($)
| |
| Long Term Purchase Commitments | |
| Commitments for the construction and acquisition of property and equipment | $ 254 |
| Restricted Assets and Other Contingent Liabilities | |
| Other restricted assets | 68 |
| Miscellaneous contingent liabilities | 75 |
| Guarantees, Third-party Receivables | |
| Guarantee Obligations | |
| Guarantee obligations maximum exposure | 409 |
| Guarantee obligations accrued losses | $ 6 |
| Guarantee obligations term | 6 years |
COMMITMENTS AND CONTINGENCIES - Commitments to Extend Credit (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Oct. 31, 2021
USD ($)
| |
| Commitments to Extend Credit | |
| Provision for credit losses | $ (18) |
| Commitments to Extend Credit | |
| Commitments to Extend Credit | |
| Provision for credit losses | 2 |
| Wholesale Receivables | |
| Commitments to Extend Credit | |
| Unused commitments to extend credit | 14,000 |
| Provision for credit losses | (1) |
| Retail Customer Receivables | |
| Commitments to Extend Credit | |
| Unused commitments to extend credit | $ 30,000 |
LEASES - Lease Terms (Details) |
12 Months Ended |
|---|---|
Oct. 31, 2021 | |
| Lessee | |
| Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
| Lessee, Finance Lease, Existence of Option to Extend [true false] | true |
| Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
| Lessee, Finance Lease, Existence of Option to Terminate [true false] | true |
| Minimum | |
| Lessee | |
| Expected use period under lease | 1 year |
| Renewal Term | 1 year |
| Lessor | |
| Financial Services segment lease period | 1 year |
| Maximum | |
| Lessee | |
| Expected use period under lease | 20 years |
| Renewal Term | 10 years |
| Lessor | |
| Financial Services segment lease period | 7 years |
LEASES - Lease Expense By Type - (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Lease Expense by Type | ||
| Operating lease expense | $ 116 | $ 126 |
| Short-term lease expense | 29 | 23 |
| Variable lease expense | 53 | 41 |
| Finance lease: | ||
| Depreciation expense | 26 | 20 |
| Interest on lease liabilities | 1 | 2 |
| Total lease expense | $ 225 | $ 212 |
LEASES - Weighted Average Remaining Lease Term and Discount Rates - (Details) |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Lessee | ||
| Weighted-average remaining lease term - operating leases | 5 years | 5 years |
| Weighted-average remaining lease term - finance leases | 2 years | 3 years |
| Weighted-average discount rate - operating leases (as a percent) | 2.30% | 2.10% |
| Weighted-average discount rate - finance leases (as a percent) | 2.30% | 2.20% |
LEASES - Lease Payments - (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Operating Leases | ||
| 2022 | $ 83 | |
| 2023 | 69 | |
| 2024 | 54 | |
| 2025 | 32 | |
| 2026 | 15 | |
| Later years | 41 | |
| Total lease payments | 294 | |
| Less imputed interest | 15 | |
| Total operating lease liabilities | 279 | $ 305 |
| Finance Leases | ||
| 2022 | 25 | |
| 2023 | 19 | |
| 2024 | 11 | |
| 2025 | 5 | |
| 2026 | 1 | |
| Later years | 3 | |
| Total lease payments | 64 | |
| Less imputed interest | 3 | |
| Total finance lease liabilities | $ 61 | $ 60 |
LEASES - Right of Use Assets Obtained in Exchange for Lease Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Cash Paid Amounts Included in the Measurement of Lease Liabilities | ||
| Operating cash flows from operating leases | $ 104 | $ 124 |
| Operating cash flows from finance leases | 1 | 2 |
| Financing cash flows from finance leases | 25 | 17 |
| Right of Use Assets Obtained in Exchange for Lease Liabilities | ||
| Operating leases | 101 | 40 |
| Finance leases | $ 27 | $ 46 |
LEASES - Lease Revenues (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Lessor | ||
| Sales-type and direct finance lease revenues | $ 145 | $ 135 |
| Operating lease revenues | 1,423 | 1,469 |
| Variable lease revenues | 30 | 31 |
| Total lease revenues | $ 1,598 | $ 1,635 |
LEASES - Sales-type and Direct Financing Lease Receivables (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Sales-type and Direct Financing Lease Receivables | ||
| Total sales-type and direct financing lease receivables | $ 2,415 | $ 2,015 |
| Guaranteed residual values | 394 | 278 |
| Unguaranteed residual values | 70 | 71 |
| Less unearned finance income | (258) | (217) |
| Financing lease receivables | 2,621 | 2,147 |
| Agriculture and Turf | ||
| Sales-type and Direct Financing Lease Receivables | ||
| Total sales-type and direct financing lease receivables | 1,131 | 985 |
| Construction and Forestry | ||
| Sales-type and Direct Financing Lease Receivables | ||
| Total sales-type and direct financing lease receivables | $ 1,284 | $ 1,030 |
LEASES - Scheduled Payments on Sales-type and Direct Financing Leases Receivables (Details) $ in Millions |
Oct. 31, 2021
USD ($)
|
|---|---|
| Payments on Sales-type and Direct Financing Leases Receivables | |
| 2022 | $ 1,223 |
| 2023 | 712 |
| 2024 | 461 |
| 2025 | 229 |
| 2026 | 161 |
| Later years | 23 |
| Total | $ 2,809 |
LEASES - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Cost of Equipment on Operating Leases | |||
| Equipment on operating leases - gross | $ 8,933 | $ 9,287 | |
| Less accumulated depreciation | (1,945) | (1,989) | |
| Equipment on operating leases - net | 6,988 | 7,298 | |
| Operating lease residual value | 5,025 | 5,254 | |
| Operating lease residual value guarantees | 950 | 757 | |
| Dealer deposits available for potential losses on residual values | 3 | 5 | |
| Depreciation expense for equipment on operating leases | 983 | 1,083 | $ 981 |
| Agriculture and Turf | |||
| Cost of Equipment on Operating Leases | |||
| Equipment on operating leases - gross | 7,317 | 7,366 | |
| Construction and Forestry | |||
| Cost of Equipment on Operating Leases | |||
| Equipment on operating leases - gross | $ 1,616 | $ 1,921 | |
LEASES - Lease Payments for Equipment on Operating Leases (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
|
| Lease Payments for Equipment on Operating Leases | ||
| 2022 | $ 1,027 | |
| 2023 | 693 | |
| 2024 | 409 | |
| 2025 | 207 | |
| 2026 | 50 | |
| Later years | 6 | |
| Total | $ 2,392 | |
| Minimum number of days for an operating lease receivable to be considered past due | 30 days | |
| Operating leases past due | $ 70 | $ 87 |
| Matured operating lease inventory | $ 30 | 70 |
| Other Operating Expenses | ||
| Lease Payments for Equipment on Operating Leases | ||
| Impairment losses on matured operating lease inventory | $ 10 | |
FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
|---|---|---|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
Jan. 31, 2021 |
Aug. 02, 2020 |
May 03, 2020 |
|
| Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||||
| Other receivables | $ 1,738 | $ 1,220 | ||||
| Equipment on operating leases - net | 6,988 | 7,298 | ||||
| Fair Value, Nonrecurring Measurements | Level 3 | ||||||
| Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||||
| Other receivables | $ 1 | |||||
| Losses, Other receivables | 2 | |||||
| Equipment on operating leases - net | $ 371 | |||||
| Losses, Equipment on operating leases - net | 22 | $ 59 | ||||
| Property and equipment - net | 135 | $ 41 | ||||
| Losses, Property and equipment - net | 44 | 102 | ||||
| Property and Equipment - net, alternate measurement date value | 57 | 41 | $ 8 | 70 | ||
| Investments in unconsolidated affiliates | 19 | |||||
| Losses, Investments in unconsolidated affiliates | 50 | |||||
| Losses, Other intangible assets - net | 2 | |||||
| Other assets | $ 1 | $ 59 | ||||
| Losses, Other assets | $ 6 | $ 16 | $ 18 | |||
DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Cash Flow Hedges | |||
| Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ (4) | ||
| Gains or losses reclassified from OCI to earnings | 0 | ||
| Interest Rate Contracts | |||
| Cash Flow Hedges | |||
| Cash flow hedges, recognized in OCI | 8 | $ (18) | $ (92) |
| Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments | |||
| Cash Flow Hedges | |||
| Notional amount of cash flow hedge derivatives | $ 2,700 | $ 1,550 | |
| Interest Rate Contracts | 2.875% Notes Due 2049 | |||
| Cash Flow Hedges | |||
| Maximum maturity of terminated cash flow interest rate contract | 30 years | ||
| Cash flow hedges, recognized in OCI | $ (70) | ||
DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Fair Value Hedges Member | Designated as Hedging Instruments | ||
| Fair Value Hedges | ||
| Notional amount of interest rate fair value hedge derivatives | $ 8,043 | $ 7,239 |
| Long-term Borrowings Due in One Year | ||
| Borrowings Designated in Fair Value Hedging Relationships | ||
| Carrying Amount of Hedged Item | 189 | 155 |
| Active Hedging Relationships | 3 | 2 |
| Discontinued Relationships | (2) | 3 |
| Total | 1 | 5 |
| Long-term Borrowings | ||
| Borrowings Designated in Fair Value Hedging Relationships | ||
| Carrying Amount of Hedged Item | 8,070 | 7,725 |
| Active Hedging Relationships | 29 | 543 |
| Discontinued Relationships | 223 | 122 |
| Total | $ 252 | $ 665 |
DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Interest Rate Contracts | ||
| Derivatives Not Designated as Hedging Instruments | ||
| Notional amounts | $ 10,848 | $ 8,514 |
| Foreign Exchange Contracts | ||
| Derivatives Not Designated as Hedging Instruments | ||
| Notional amounts | 7,584 | 4,903 |
| Cross-Currency Interest Rate Contracts | ||
| Derivatives Not Designated as Hedging Instruments | ||
| Notional amounts | $ 238 | $ 113 |
DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
|---|---|---|
| Derivative instruments | ||
| Fair value of derivatives with credit-risk-related contingent features in a liability position | $ 135 | $ 89 |
| Cash collateral posted | 0 | 0 |
| Derivative Assets | ||
| Gross amounts recognized | 275 | 725 |
| Netting arrangements | (105) | (93) |
| Collateral received | (274) | |
| Net amount | 170 | 358 |
| Derivative Liabilities | ||
| Gross amounts recognized | 228 | 115 |
| Netting arrangements | (105) | (93) |
| Collateral paid | (5) | |
| Net amount | 118 | 22 |
| International Futures Market | ||
| Derivative instruments | ||
| Collateral to participate in an international futures market | $ 8 | $ 8 |
SEGMENT AND GEOGRAPHIC AREA DATA - Segment Interest Income and Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Operating Segments | |||
| Interest income | $ 1,854 | $ 1,962 | $ 2,074 |
| Interest expense | 993 | 1,247 | 1,466 |
| Operating Segment | Production & Precision Ag (PPA) | |||
| Operating Segments | |||
| Interest income | 21 | 22 | 16 |
| Interest expense | 84 | 76 | 87 |
| Operating Segment | Small Ag & Turf (SAT) | |||
| Operating Segments | |||
| Interest income | 21 | 16 | 6 |
| Interest expense | 87 | 111 | 158 |
| Operating Segment | Construction & Forestry (CF) | |||
| Operating Segments | |||
| Interest income | 10 | 12 | 11 |
| Interest expense | 46 | 61 | 91 |
| Operating Segment | Financial Services (FS) | |||
| Operating Segments | |||
| Interest income | 1,999 | 2,122 | 2,316 |
| Interest expense | 687 | 942 | 1,234 |
| Corporate | |||
| Operating Segments | |||
| Interest income | 82 | 62 | 85 |
| Interest expense | 368 | 329 | 256 |
| Intercompany Eliminations | |||
| Operating Segments | |||
| Interest income | (279) | (272) | (360) |
| Interest expense | $ (279) | $ (272) | $ (360) |
SEGMENT AND GEOGRAPHIC AREA DATA - Geographic Areas Net Sales and Revenue and Operating Profit (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Geographic Area Information | |||
| Net sales and revenues | $ 44,024 | $ 35,540 | $ 39,258 |
| Operating profit | 8,012 | 4,305 | 4,415 |
| U.S. and Canada | |||
| Geographic Area Information | |||
| Net sales and revenues | 25,829 | 21,386 | 23,746 |
| Operating profit | 4,774 | 2,775 | 2,841 |
| Outside U.S. and Canada | |||
| Geographic Area Information | |||
| Net sales and revenues | 18,195 | 14,154 | 15,512 |
| Operating profit | $ 3,238 | $ 1,530 | $ 1,574 |
SEGMENT AND GEOGRAPHIC AREA DATA - Geographic Areas Property and Equipment (Details) - USD ($) $ in Millions |
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|---|---|---|---|
| Geographic Area Information | |||
| Property and equipment | $ 5,820 | $ 5,817 | $ 5,973 |
| U.S. and Canada | |||
| Geographic Area Information | |||
| Property and equipment | 3,164 | 3,178 | 3,197 |
| Germany | |||
| Geographic Area Information | |||
| Property and equipment | 1,096 | 1,113 | 1,137 |
| Other Countries | |||
| Geographic Area Information | |||
| Property and equipment | $ 1,560 | $ 1,526 | $ 1,639 |
SUBSEQUENT EVENTS - Securitization Borrowings (Details) - Bank Conduit Facility Revolving Credit Agreement - USD ($) $ in Millions |
1 Months Ended | |
|---|---|---|
Nov. 28, 2021 |
Oct. 31, 2021 |
|
| Subsequent Events | ||
| Bank conduit facility capacity | $ 2,000 | |
| Subsequent Event | ||
| Subsequent Events | ||
| Bank conduit facility capacity | $ 1,000 | |
| Repurchase of short-term securitization borrowings | $ 511 |
SUBSEQUENT EVENTS - Collective Bargaining Agreement (Details) - Subsequent Events - UAW Collective Bargaining Arrangement |
12 Months Ended | ||
|---|---|---|---|
|
Nov. 30, 2021
USD ($)
|
Nov. 17, 2021
USD ($)
facility
|
Oct. 30, 2022
USD ($)
|
|
| Subsequent Events | |||
| Term of collective bargaining agreement | 6 years | ||
| Ratification bonus payment per eligible employee | $ 8,500 | ||
| Total ratification bonus amount | $ 90,000,000 | ||
| Immediate wage increase (as a percent) | 10.00% | ||
| Pensions | United States | |||
| Subsequent Events | |||
| Decrease in plan's funded status due to remeasurement | $ (495,000,000) | ||
| Pension expense increase | $ 80,000,000 | ||
| United States | |||
| Subsequent Events | |||
| Number of facilities represented under collective bargaining agreement | facility | 14 |
SUBSEQUENT EVENTS - Voluntary Contribution (Details) - OPEB - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Nov. 30, 2021 |
Nov. 01, 2020 |
|
| Subsequent Events | ||
| Defined benefit plan employer voluntary contributions | $ 700 | |
| Subsequent Events | United States | ||
| Subsequent Events | ||
| Defined benefit plan employer voluntary contributions | $ 1,000 |
SUBSEQUENT EVENTS - Quarterly Dividend (Details) - $ / shares |
12 Months Ended | |||
|---|---|---|---|---|
Dec. 08, 2021 |
Oct. 31, 2021 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
| Subsequent Events | ||||
| Quarterly dividend declared (in dollars per share) | $ 3.61 | $ 3.04 | $ 3.04 | |
| Subsequent Event | ||||
| Subsequent Events | ||||
| Quarterly dividend declared (in dollars per share) | $ 1.05 | |||
SUBSEQUENT EVENTS - Kreisel Electric, Inc (Details) € in Millions |
6 Months Ended |
|---|---|
|
May 01, 2022
EUR (€)
| |
| Subsequent Event | Kreisel | |
| Subsequent Events | |
| Total cash consideration | € 221 |