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SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012 | 12 Months Ended
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Oct. 31, 2014
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012 |
SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012 | 28. SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012 The company’s operations are presently organized and reported in three major business segments described as follows: The agriculture and turf segment primarily manufactures and distributes a full line of agriculture and turf equipment and related service parts – including large, medium and utility tractors; loaders; combines, corn pickers, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders; tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery; hay and forage equipment, including self-propelled forage harvesters and attachments, balers and mowers; turf and utility equipment, including riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements; integrated agricultural management systems technology and solutions; and other outdoor power products. The construction and forestry segment primarily manufactures and distributes a broad range of machines and service parts used in construction, earthmoving, material handling and timber harvesting – including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders, feller bunchers, log loaders, log forwarders, log harvesters and related attachments. The products and services produced by the segments above are marketed primarily through independent retail dealer networks and major retail outlets. The financial services segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts and offers crop risk mitigation products and extended equipment warranties. The company signed an agreement in December 2014 to sell the stock of the Crop Insurance operations (see Note 30). Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment and geographic area data. Intersegment sales and revenues represent sales of components and finance charges, which are generally based on market prices. Information relating to operations by operating segment in millions of dollars follows. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2014, 2013 and 2012 were as follows: agriculture and turf net sales of $89 million, $69 million and $84 million, construction and forestry net sales of $1 million, $2 million and $1 million, and financial services revenues of $228 million, $220 million and $219 million, respectively.
OPERATING SEGMENTS |  | 2014 |  | 2013 |  | 2012
Net sales and revenues |  |  |  |  |  |
Unaffiliated customers: |  |  |  |  |  |
Agriculture and turf net sales |  | $ | 26,380 |  | $ | 29,132 |  | $ | 27,123
Construction and forestry net sales |  | 6,581 |  | 5,866 |  | 6,378
Total net sales |  | 32,961 |  | 34,998 |  | 33,501
Financial services revenues |  | 2,577 |  | 2,349 |  | 2,235
Other revenues* |  | 529 |  | 448 |  | 421
Total |  | $ | 36,067 |  | $ | 37,795 |  | $ | 36,157
* | Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income as disclosed in Note 31, net of certain intercompany eliminations.
Operating profit |  |  |  |  |  |
Agriculture and turf |  | $ | 3,649 |  | $ | 4,680 |  | $ | 3,921
Construction and forestry |  | 648 |  | 378 |  | 476
Financial services* |  | 921 |  | 870 |  | 712
Total operating profit |  | 5,218 |  | 5,928 |  | 5,109
Interest income |  | 57 |  | 55 |  | 43
Investment income |  | 2 |  | 2 |  | 2
Interest expense |  | (289 | ) | (297 | ) | (231)
Foreign exchange losses from equipment operations’ financing activities |  | (2 | ) | (8 | ) | (11)
Corporate expenses — net |  | (196 | ) | (197 | ) | (181)
Income taxes |  | (1,627 | ) | (1,946 | ) | (1,659)
Total |  | (2,055 | ) | (2,391 | ) | (2,037)
Net income |  | 3,163 |  | 3,537 |  | 3,072
Less: Net income attributable to noncontrolling interests |  | 1 |  |  |  | 7
Net income attributable to |  |  |  |  |  |
Deere & Company |  | $ | 3,162 |  | $ | 3,537 |  | $ | 3,065
* | Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses.
OPERATING SEGMENTS |  | 2014 |  | 2013 |  | 2012
Interest income* |  |  |  |  |  |
Agriculture and turf |  | $ | 17 |  | $ | 24 |  | $ | 29
Construction and forestry |  | 1 |  | 2 |  | 2
Financial services |  | 1,754 |  | 1,668 |  | 1,610
Corporate |  | 57 |  | 55 |  | 43
Intercompany |  | (268 | ) | (247 | ) | (248)
Total |  | $ | 1,561 |  | $ | 1,502 |  | $ | 1,436
* Does not include finance rental income for equipment on operating leases.
Interest expense |  |  |  |  |  |
Agriculture and turf |  | $ | 175 |  | $ | 167 |  | $ | 168
Construction and forestry |  | 37 |  | 36 |  | 36
Financial services |  | 431 |  | 488 |  | 596
Corporate |  | 289 |  | 297 |  | 231
Intercompany |  | (268 | ) | (247 | ) | (248)
Total |  | $ | 664 |  | $ | 741 |  | $ | 783
Depreciation* and amortization expense |  |  |  |  |  |
Agriculture and turf |  | $ | 681 |  | $ | 627 |  | $ | 550
Construction and forestry |  | 115 |  | 106 |  | 93
Financial services |  | 511 |  | 407 |  | 361
Total |  | $ | 1,307 |  | $ | 1,140 |  | $ | 1,004
* Includes depreciation for equipment on operating leases.
Equity in income (loss) of unconsolidated affiliates |  |  |  |  |  |
Agriculture and turf |  | $ | 8 |  | $ | (1 | ) | $ | (2)
Construction and forestry |  | (18 | ) |  |  | (2)
Financial services |  | 2 |  | 1 |  | 1
Total |  | $ | (8 | ) |  |  | $ | (3)
Identifiable operating assets |  |  |  |  |  |
Agriculture and turf |  | $ | 9,442 |  | $ | 10,799 |  | $ | 10,429
Construction and forestry |  | 3,405 |  | 3,461 |  | 3,365
Financial services |  | 42,784 |  | 38,646 |  | 34,495
Corporate* |  | 5,705 |  | 6,615 |  | 7,977
Total |  | $ | 61,336 |  | $ | 59,521 |  | $ | 56,266
* | Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, marketable securities and cash and cash equivalents as disclosed in Note 31, net of certain intercompany eliminations.
Capital additions |  |  |  |  |  |
Agriculture and turf |  | $ | 868 |  | $ | 981 |  | $ | 1,145
Construction and forestry |  | 145 |  | 174 |  | 228
Financial services |  | 3 |  | 3 |  | 3
Total |  | $ | 1,016 |  | $ | 1,158 |  | $ | 1,376
Investments in unconsolidated affiliates |  |  |  |  |  |
Agriculture and turf |  | $ | 110 |  | $ | 24 |  | $ | 32
Construction and forestry |  | 182 |  | 187 |  | 174
Financial services |  | 11 |  | 10 |  | 9
Total |  | $ | 303 |  | $ | 221 |  | $ | 215
The company views and has historically disclosed its operations as consisting of two geographic areas, the U.S. and Canada, and outside the U.S. and Canada, shown below in millions of dollars. No individual foreign country’s net sales and revenues were material for disclosure purposes.
GEOGRAPHIC AREAS |  | 2014 |  | 2013 |  | 2012
Net sales and revenues |  |  |  |  |  |
Unaffiliated customers: |  |  |  |  |  |
U.S. and Canada: |  |  |  |  |  |
Equipment operations net sales (87%)* |  | $ | 20,171 |  | $ | 21,821 |  | $ | 20,807
Financial services revenues (78%)* |  | 2,220 |  | 2,031 |  | 1,930
Total |  | 22,391 |  | 23,852 |  | 22,737
Outside U.S. and Canada: |  |  |  |  |  |
Equipment operations net sales |  | 12,790 |  | 13,177 |  | 12,694
Financial services revenues |  | 357 |  | 318 |  | 305
Total |  | 13,147 |  | 13,495 |  | 12,999
Other revenues |  | 529 |  | 448 |  | 421
Total |  | $ | 36,067 |  | $ | 37,795 |  | $ | 36,157
* | The percentages indicate the approximate proportion of each amount that relates to the U.S. only and are based upon a three-year average for 2014, 2013 and 2012.
Operating profit |  |  |  |  |  |
U.S. and Canada: |  |  |  |  |  |
Equipment operations |  | $ | 3,311 |  | $ | 4,062 |  | $ | 3,836
Financial services |  | 727 |  | 706 |  | 566
Total |  | 4,038 |  | 4,768 |  | 4,402
Outside U.S. and Canada: |  |  |  |  |  |
Equipment operations |  | 986 |  | 996 |  | 561
Financial services |  | 194 |  | 164 |  | 146
Total |  | 1,180 |  | 1,160 |  | 707
Total |  | $ | 5,218 |  | $ | 5,928 |  | $ | 5,109
Property and equipment |  |  |  |  |  |
U.S. |  | $ | 3,154 |  | $ | 2,997 |  | $ | 2,742
Germany |  | 640 |  | 647 |  | 568
Other countries |  | 1,784 |  | 1,823 |  | 1,702
Total |  | $ | 5,578 |  | $ | 5,467 |  | $ | 5,012

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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