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ACQUISITIONS | 3 Months Ended
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Jan. 28, 2018
ACQUISITIONS |
ACQUISITIONS | (18) On December 1, 2017, the Company acquired the stock and certain assets of substantially all of Wirtgen. Wirtgen, which was a privately-held international company, is the leading manufacturer worldwide of road construction equipment. Headquartered in Germany, Wirtgen has six brands across the road construction sector spanning processing, mixing, paving, compaction, and rehabilitation. Wirtgen sells products in more than 100 countries and has approximately 8,200 employees. The total cash purchase price, net of cash acquired of $197 million, was $5,130 million, a portion of which is held in escrow to secure certain indemnity obligations of Wirtgen. In addition to the cash purchase price, the Company assumed $1,724 million in liabilities, which represented substantially all of Wirtgen’s liabilities. The Company financed the acquisition and associated transaction expenses from a combination of cash and new debt financing, which consisted of medium-term notes, including €850 million issued in September 2017. The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at January 28, 2018 follows:
Trade accounts and notes receivable |  | $ | 463 |
Financing receivables |  |  | 36 |
Financing receivables securitized |  |  | 126 |
Other receivables |  |  | 100 |
Inventories |  |  | 1,568 |
Property and equipment |  |  | 755 |
Goodwill |  |  | 2,062 |
Other intangible assets |  |  | 1,453 |
Deferred income taxes |  |  | 79 |
Other assets |  |  | 221 |
Total assets |  | $ | 6,863 |
Short-term borrowings |  | $ | 257 |
Short-term securitization borrowings |  |  | 127 |
Accounts payable and accrued expenses |  |  | 729 |
Deferred income taxes |  |  | 504 |
Long-term borrowings |  |  | 79 |
Retirement benefits and other liabilities |  |  | 28 |
Total liabilities |  | $ | 1,724 |
Noncontrolling interests |  | $ | 9 |
The Company continues to review the fair value of the assets and liabilities acquired, which may be updated during the measurement period. The identifiable intangible assets’ preliminary fair values in millions of dollars and weighted-average useful lives in years follows:
|  | Weighted-Average Useful Lives |  | Preliminary Fair Values |
Customer lists and relationships |  | 16 |  | $ | 544 |
Technology, patents, trademarks, and other |  | 19 |  | $ | 909 |
The goodwill was the result of future cash flows and related fair value of Wirtgen exceeding the fair value of the identified assets and liabilities. The goodwill is not expected to be deductible for income tax purposes and is included in the construction and forestry segment. Wirtgen’s results were included in the Company’s consolidated financial statements beginning on the acquisition date. The results are incorporated using a 30-day lag period and are included in the construction and forestry segment. The net sales and revenues and loss before income taxes, which includes interest expense not included in operating profit, included in the Company’s statement of consolidated income in the first quarter of 2018 were $255 million and $98 million, respectively. The Company also recognized $50 million of acquisition related costs in the first quarter of 2018, which were recorded $23 million in selling, administrative and general expenses and $27 million in other operating expenses. The unaudited pro forma consolidated net sales and revenues and net income (loss) are prepared as if the acquisition closed at the beginning of fiscal year 2017 and follow in millions of dollars:
|  | Three Months Ended |
|  | January 28 |  | January 29 |
|  | 2018 |  | 2017 |
Net sales and revenues |  | $ | 7,378 |  | $ | 6,208 |
Net income (loss) attributable to Deere & Company |  | $ | (433) |  | $ | 105 |
The pro forma amounts have been calculated using policies consistent with the Company’s accounting policies and include the additional expense from the amortization from the allocated purchase price adjustments. The pro forma results exclude acquisition related costs incurred in both periods and assume the medium-term notes used to fund the acquisition were issued in fiscal year 2016 at the interest rate of the actual notes. In addition, the pro forma results for the quarter ended January 29, 2017 include nonrecurring pretax expenses of $162 million for the higher cost basis from the inventory fair value adjustment and $21 million for the amortization of identifiable intangible assets. Anticipated synergies or other expected benefits of the acquisition are not included in the pro forma results. As a result, the unaudited pro forma financial information may not be indicative of the results for future operations or the results if the acquisition closed at the beginning of fiscal year 2017.

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