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SEGMENT AND GEOGRAPHIC AREA DATA

12 Months Ended

Nov. 03, 2019

SEGMENT AND GEOGRAPHIC AREA DATA

SEGMENT AND GEOGRAPHIC AREA DATA

29. SEGMENT AND GEOGRAPHIC AREA DATA

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; tractor loaders; combines, cotton pickers, cotton strippers, and sugarcane harvesters; harvesting front-end equipment; sugarcane loaders and pull-behind scrapers; 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, road building, 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; milling machines; recyclers; slipform pavers; surface miners; asphalt pavers; compactors; tandem and static rollers; mobile crushers and screens; mobile and stationary asphalt plants; log skidders; feller bunchers; log loaders; log forwarders; log harvesters; and related logging 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 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.

Information relating to operations by operating segment in millions of dollars follows for the years ended November 3, 2019, October 28, 2018, and October 29, 2017. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2019, 2018, and 2017 were as follows: agriculture and turf net sales of $34 million, $47 million, and $39 million, construction and forestry net sales of $1 million, none, and $1 million, and financial services revenues of $348 million, $308 million, and $244 million, respectively.

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​	​	​	​	​	​	​	​	​	​	​
OPERATING SEGMENTS	​	2019			2018			2017
Net sales and revenues		​		​	​		​	​		​
Unaffiliated customers:	​	​	​	​	​	​	​	​	​	​
Agriculture and turf net sales	​	$	23,666	​	$	23,191	​	$	20,167	​
Construction and forestry net sales	​		11,220	​		10,160	​		5,718	​
Total net sales	​		34,886	​		33,351	​		25,885	​
Financial services revenues	​		3,621	​		3,252	​		2,935	​
Other revenues*	​		751	​		755	​		918	​
Total	​	$	39,258	​	$	37,358	​	$	29,738	​

*    Other revenues are primarily the equipment operations’ revenues for finance and interest income, and other income as disclosed in Note 32, net of certain intercompany eliminations.

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​	​	​	​	​	​	​	​	​	​	​
Operating profit		​		​	​		​	​		​
Agriculture and turf	​	$	2,506	​	$	2,816	​	$	2,513	​
Construction and forestry	​		1,215	​		868	​		346	​
Financial services*	​		694	​		792	​		715	​
Total operating profit*	​		4,415	​		4,476	​		3,574	​
Interest income	​		85	​		80	​		55	​
Interest expense	​		(256)	​		(298)	​		(264)	​
Foreign exchange gains (losses) from equipment operations’ financing activities	​		(22)	​		36	​		(12)	​
Pension and OPEB benefit (cost), excluding service cost component	​	​	67	​	​	(15)	​	​	(31)	​
Corporate expenses – net	​		(180)	​		(181)	​		(192)	​
Income taxes	​		(852)	​		(1,727)	​		(971)	​
Total	​		(1,158)	​		(2,105)	​		(1,415)	​
Net income	​		3,257	​		2,371	​		2,159	​
Less: Net income attributable to noncontrolling interests	​		4	​	​	3	​		​	​
Net income attributable to Deere & Company	​	$	3,253	​	$	2,368	​	$	2,159	​

*    Operating profit of the financial services business segment includes the effect of its interest expense and foreign exchange gains or losses.

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(continued)

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​	​	​	​	​	​	​	​	​	​	​
OPERATING SEGMENTS		2019			2018			2017
Interest income*		​		​	​		​	​		​
Agriculture and turf	​	$	22	​	$	14	​	$	16	​
Construction and forestry	​		11	​		33	​		1	​
Financial services	​		2,316	​		1,997	​		1,771	​
Corporate	​		85	​		80	​		55	​
Intercompany	​		(360)	​		(330)	​		(268)	​
Total	​	$	2,074	​	$	1,794	​	$	1,575	​

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*    Does not include finance rental income for equipment on operating leases.

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​	​	​	​	​	​	​	​	​	​	​
Interest expense		​		​	​		​	​		​
Agriculture and turf	​	$	245	​	$	229	​	$	182	​
Construction and forestry	​		91	​		71	​		52	​
Financial services	​		1,234	​		936	​		669	​
Corporate	​		256	​		298	​		264	​
Intercompany	​		(360)	​		(330)	​		(268)	​
Total	​	$	1,466	​	$	1,204	​	$	899	​
​		​	​	​	​	​	​	​	​	​
Depreciation* and amortization expense		​		​	​		​	​		​
Agriculture and turf	​	$	723	​	$	723	​	$	695	​
Construction and forestry	​		292	​		251	​		145	​
Financial services	​		1,004	​		953	​		876	​
Total	​	$	2,019	​	$	1,927	​	$	1,716	​

*    Includes depreciation for equipment on operating leases.

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​	​	​	​	​	​	​	​	​	​	​
Equity in income (loss) of unconsolidated affiliates		​		​	​		​	​		​
Agriculture and turf	​	$	6	​	$	6	​	$	2	​
Construction and forestry	​		14	​	​	19	​		(27)	​
Financial services	​		1	​		2	​		1	​
Total	​	$	21	​	$	27	​	$	(24)	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Identifiable operating assets		​		​	​		​	​		​
Agriculture and turf	​	$	10,379	​	$	10,161	​	$	9,359	​
Construction and forestry	​		9,387	​		9,855	​		3,212	​
Financial services	​		48,483	​		45,720	​		42,596	​
Corporate*	​		4,762	​		4,372	​		10,619	​
Total	​	$	73,011	​	$	70,108	​	$	65,786	​

*    Corporate assets are primarily the equipment operations’ retirement benefits, deferred income tax assets, marketable securities, and cash and cash equivalents as disclosed in Note 32, net of certain intercompany eliminations.

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​	​	​	​	​	​	​	​	​	​	​
Capital additions		​		​	​		​	​
Agriculture and turf	​	$	859	​	$	675	​	$	485	​
Construction and forestry	​		245	​		308	​		114	​
Financial services	​		3	​		2	​		3	​
Total	​	$	1,107	​	$	985	​	$	602	​
​	​	​	​	​	​	​	​	​	​	​
​		​	​	​	​	​	​	​	​	​
Investments in unconsolidated affiliates		​		​	​		​	​		​
Agriculture and turf	​	$	28	​	$	26	​	$	25	​
Construction and forestry	​		171	​		166	​		143	​
Financial services	​		16	​		15	​		14	​
Total	​	$	215	​	$	207	​	$	182	​

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(continued)

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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.

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​	​	​	​	​	​	​	​	​	​	​
GEOGRAPHIC AREAS	​	2019		​	2018		​	2017
Net sales and revenues		​		​	​		​	​		​
Unaffiliated customers:	​	​	​	​	​	​	​	​	​	​
U.S. and Canada:	​	​	​	​	​	​	​	​	​	​
Equipment operations net sales and revenues*	​	$	20,647	​	$	18,847	​	$	15,031	​
Financial services revenues*	​		3,099	​		2,785	​		2,526	​
Total	​		23,746	​		21,632	​		17,557	​
Outside U.S. and Canada:	​	​	​	​	​	​	​	​	​	​
Equipment operations net sales and revenues	​		14,990	​		14,504	​		10,854	​
Financial services revenues	​		522	​		467	​		409	​
Total	​		15,512	​		14,971	​		11,263	​
Other revenues	​		​	​		755	​		918	​
Total	​	$	39,258	​	$	37,358	​	$	29,738	​

*    The 2018 and 2017 equipment operations’ amounts are only for net sales and approximate the proportion of each amount that relates to the U.S. only based on a three-year average. The equipment operations’ percentages for 2018 and 2017 were 88%. The financial services’ U.S. only percentages were 79% for both fiscal years. See Note 6 for additional 2019 geographic net sales and revenues information.

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​	​	​	​	​	​	​	​	​	​	​
Operating profit		​		​	​		​	​		​
U.S. and Canada:	​	​	​	​	​	​	​	​	​	​
Equipment operations	​	$	2,335	​	$	2,356	​	$	1,754	​
Financial services	​		506	​		604	​		515	​
Total	​		2,841	​		2,960	​		2,269	​
Outside U.S. and Canada:	​	​	​	​	​	​	​	​	​	​
Equipment operations	​		1,386	​		1,328	​		1,105	​
Financial services	​		188	​		188	​		200	​
Total	​		1,574	​		1,516	​		1,305	​
Total	​	$	4,415	​	$	4,476	​	$	3,574	​

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​	​	​	​	​	​	​	​	​	​	​
Property and equipment		​		​	​		​	​		​
U.S.	​	$	3,169	​	$	3,031	​	$	2,976	​
Germany	​		1,137	​		1,164	​		598	​
Other countries	​		1,667	​		1,673	​		1,494	​
Total	​	$	5,973	​	$	5,868	​	$	5,068	​

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- References

No definition available.

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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