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INCOME TAXES | 12 Months Ended
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Oct. 30, 2022
INCOME TAXES |
INCOME TAXES | 8. INCOME TAXES The provision for income taxes by taxing jurisdiction and by significant component consisted of the following in millions of dollars: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020 |
Current: | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
U.S.: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | 514 | ​ | $ | 899 | ​ | $ | 400 | ​
State | ​ |  | 136 | ​ |  | 183 | ​ |  | 53 | ​
Foreign | ​ |  | 1,423 | ​ |  | 1,017 | ​ |  | 640 | ​
Total current | ​ |  | 2,073 | ​ |  | 2,099 | ​ |  | 1,093 | ​
Deferred: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S.: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ |  | 29 | ​ |  | (303) | ​ |  | (68) | ​
State | ​ |  | 24 | ​ |  | (45) | ​ |  | 9 | ​
Foreign | ​ |  | (119) | ​ |  | (93) | ​ |  | 48 | ​
Total deferred | ​ |  | (66) | ​ |  | (441) | ​ |  | (11) | ​
Provision for income taxes | ​ | $ | 2,007 | ​ | $ | 1,658 | ​ | $ | 1,082 | ​
​ Based upon the location of the company’s operations, the consolidated income before income taxes in the U.S. in 2022, 2021, and 2020 was $4,977 million, $4,061 million, and $2,082 million, respectively, and in foreign countries was $4,150 million, $3,541 million, and $1,801 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: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020 |
U.S. federal income tax provision at the U.S. statutory rate (21 percent) | ​ | $ | 1,917 | ​ | $ | 1,597 | ​ | $ | 815 | ​
State and local taxes, net of federal effect | ​ | ​ | 133 | ​ | ​ | 119 | ​ | ​ | 59 | ​
Other impacts of Tax Cuts and Jobs Act of 2017 | ​ | ​ | (29) | ​ | ​ | (85) | ​ | ​ | 39 | ​
Rate differential on foreign subsidiaries | ​ |  | 121 | ​ |  | 148 | ​ |  | 106 | ​
Research and business tax credits | ​ |  | (65) | ​ |  | (48) | ​ |  | (50) | ​
Excess tax benefits on equity compensation | ​ | ​ | (55) | ​ | ​ | (79) | ​ | ​ | (87) | ​
Valuation allowances | ​ |  | 179 | ​ |  | 18 | ​ |  | 139 | ​
Other - net | ​ |  | (194) | ​ | ​ | (12) | ​ | ​ | 61 | ​
Provision for income taxes | ​ | $ | 2,007 | ​ | $ | 1,658 | ​ | $ | 1,082 | ​
​ At October 30, 2022, undistributed profits of subsidiaries outside the U.S. of approximately $5,043 million are considered indefinitely reinvested. 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 30, 2022 and October 31, 2021 in millions of dollars follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2022 | ​ | 2021 | ​
​ | ​ | Deferred | ​ | Deferred | ​ | Deferred | ​ | Deferred | ​
​ | ​ | Tax | ​ | Tax | ​ | Tax | ​ | Tax | ​
​ |  | Assets |  | Liabilities |  | Assets |  | Liabilities |
OPEB - net | ​ | $ | 213 | ​ | ​ | ​ | ​ | $ | 676 | ​ | ​ | ​ | ​
Lessor lease transactions | ​ | ​ | ​ | ​ | $ | 310 | ​ | ​ | ​ | ​ | $ | 399 | ​
Tax loss and tax credit carryforwards | ​ |  | 1,405 | ​ | ​ | ​ | ​ |  | 1,542 | ​ | ​ | ​ | ​
Accrual for sales allowances | ​ |  | 579 | ​ | ​ | ​ | ​ |  | 466 | ​ | ​ | ​ | ​
Tax over book depreciation | ​ | ​ | ​ | ​ | ​ | 174 | ​ | ​ | ​ | ​ | ​ | 154 | ​
Goodwill and other intangible assets | ​ | ​ | ​ | ​ |  | 178 | ​ | ​ | ​ | ​ |  | 337 | ​
Pension - net | ​ |  | ​ | ​ | ​ | 532 | ​ |  | ​ | ​ | ​ | 448 | ​
Allowance for credit losses | ​ |  | 90 | ​ | ​ | ​ | ​ |  | 78 | ​ | ​ | ​ | ​
Accrual for employee benefits | ​ |  | 304 | ​ | ​ | ​ | ​ |  | 298 | ​ | ​ | ​ | ​
Share-based compensation | ​ |  | 41 | ​ | ​ | ​ | ​ |  | 53 | ​ | ​ | ​ | ​
Deferred compensation | ​ |  | 44 | ​ | ​ | ​ | ​ |  | 49 | ​ | ​ | ​ | ​
Lessee lease transactions | ​ | ​ | 62 | ​ | ​ | 57 | ​ | ​ | 46 | ​ | ​ | 43 | ​
Unearned revenue | ​ | ​ | 154 | ​ |  | ​ | ​ | ​ | 172 | ​ |  | ​ | ​
Other items | ​ |  | 487 | ​ |  | 254 | ​ |  | 333 | ​ |  | 341 | ​
Less valuation allowances | ​ |  | (1,545) | ​ | ​ | ​ | ​ |  | (1,530) | ​ | ​ | ​ | ​
Deferred income tax assets and liabilities | ​ | $ | 1,834 | ​ | $ | 1,505 | ​ | $ | 2,183 | ​ | $ | 1,722 | ​
​ 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 as if they filed separate income tax returns, with a modification for realizability of certain tax benefits. At October 30, 2022, tax loss and tax credit carryforwards of $1,405 million were available with $940 million expiring from 2023 through 2042 and $465 million with an indefinite carryforward period. A reconciliation of the total amounts of unrecognized tax benefits at October 30, 2022, October 31, 2021, and November 1, 2020 in millions of dollars follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020 |
Beginning of year balance | ​ | $ | 811 | ​ | $ | 668 | ​ | $ | 553 | ​
Increases to tax positions taken during the current year | ​ |  | 98 | ​ |  | 81 | ​ |  | 63 | ​
Increases to tax positions taken during prior years | ​ |  | 29 | ​ |  | 100 | ​ |  | 95 | ​
Decreases to tax positions taken during prior years | ​ |  | (18) | ​ |  | (23) | ​ |  | (30) | ​
Decreases due to lapse of statute of limitations | ​ |  | (7) | ​ |  | (12) | ​ |  | (9) | ​
Other | ​ | ​ | 2 | ​ | ​ | (3) | ​ | ​ | (1) | ​
Foreign exchange | ​ |  | (24) | ​ |  | ​ | ​ |  | (3) | ​
End of year balance | ​ | $ | 891 | ​ | $ | 811 | ​ | $ | 668 | ​
​ The amount of unrecognized tax benefits at October 30, 2022 and October 31, 2021 that would impact the effective tax rate if the tax benefits were recognized was $303 million and $227 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 to 2020 are currently under examination. Various state and foreign income tax returns 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 2022 and 2021, the total amount of expense from interest and penalties was $23 million and $7 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 2022, 2021, and 2020 was $12 million, $8 million, and $11 million, respectively. At October 30, 2022 and October 31, 2021, the liability for accrued interest and penalties totaled $80 million and $75 million, respectively, and the receivable for interest was $19 million and $11 million, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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