SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2011, 2010 AND 2009

12 Months Ended

Oct. 31, 2011

SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2011, 2010 AND 2009

SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2011, 2010 AND 2009

28. SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2011, 2010 AND 2009

At the beginning of fiscal year 2011, the company combined the reporting of the credit segment and the “Other” segment into the financial services segment. The “Other” segment consisted of an insurance business related to extended warranty policies that did not meet the materiality threshold of reporting. The segment information for previous periods was revised accordingly.

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 farm 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; precision agricultural irrigation equipment and supplies; landscape and nursery products; 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, provides operating loans, finances retail revolving charge accounts and offers crop risk mitigation products and 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. In addition to the following unaffiliated sales and revenues by segment, intersegment sales and revenues in 2011, 2010 and 2009 were as follows: agriculture and turf net sales of $98 million, $59 million and $32 million, construction and forestry net sales of $3 million, $7 million and $4 million, and financial services revenues of $210 million, $224 million and $255 million, respectively.

OPERATING SEGMENTS	2011		2010		2009
Net sales and revenues
Unaffiliated customers:
Agriculture and turf net sales	$	24,094	$	19,868	$	18,122
Construction and forestry net sales	5,372		3,705		2,634
Total net sales	29,466		23,573		20,756
Financial services revenues	2,163		2,074		2,028
Other revenues*	384		358		328
Total	$	32,013	$	26,005	$	23,112

* 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 (loss)
Agriculture and turf	$	3,447		$	2,790		$	1,448
Construction and forestry	392			119			(83		)
Financial services*	725			499			242
Total operating profit	4,564			3,408			1,607
Interest income	47			42			46
Interest expense	(191		)	(184		)	(163		)
Foreign exchange losses from equipment operations’ financing activities	(11		)	(30		)	(40		)
Corporate expenses — net	(177		)	(200		)	(117		)
Income taxes	(1,424		)	(1,162		)	(460		)
Total	(1,756		)	(1,534		)	(734		)
Net income	2,808			1,874			873
Less: Net income attributable to noncontrolling interests	8			9
Net income attributable to Deere & Company	$	2,800		$	1,865		$	873

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

OPERATING SEGMENTS	2011			2010			2009
Interest income*
Agriculture and turf	$	23		$	20		$	28
Construction and forestry	3			3			4
Financial services	1,581			1,528			1,584
Corporate	47			42			46
Intercompany	(231		)	(229		)	(273		)
Total	$	1,423		$	1,364		$	1,389

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

Interest expense
Agriculture and turf	$	152		$	165		$	208
Construction and forestry	26			21			19
Financial services	621			670			925
Corporate	191			184			163
Intercompany	(231		)	(229		)	(273		)
Total	$	759		$	811		$	1,042

Depreciation* and amortization expense
Agriculture and turf	$	505	$	470	$	438
Construction and forestry	82		79		78
Financial services	328		366		357
Total	$	915	$	915	$	873

* Includes depreciation for equipment on operating leases.

Equity in income (loss) of unconsolidated affiliates
Agriculture and turf	$	5	$	13		$	14
Construction and forestry	3		(3		)	(21		)
Financial services	1		1			1
Total	$	9	$	11		$	(6	)
Identifiable operating assets
Agriculture and turf	$	9,178	$	7,593		$	6,526
Construction and forestry	2,915		2,353			2,132
Financial services	29,795		27,507			25,964
Corporate*	6,319		5,814			6,511
Total	$	48,207	$	43,267		$	41,133

* 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	$	909	$	729	$	702
Construction and forestry	148		73		95
Financial services	2				1
Total	$	1,059	$	802	$	798

Investments in unconsolidated affiliates
Agriculture and turf	$	35	$	66	$	57
Construction and forestry	159		172		149
Financial services	8		7		7
Total	$	202	$	245	$	213

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	2011		2010		2009
Net sales and revenues
Unaffiliated customers:
U.S. and Canada:
Equipment operations net sales (88%)*	$	17,357	$	14,794	$	13,022
Financial services revenues (81%)*	1,857		1,817		1,801
Total	19,214		16,611		14,823
Outside U.S. and Canada:
Equipment operations net sales	12,109		8,779		7,734
Financial services revenues	306		257		227
Total	12,415		9,036		7,961
Other revenues	384		358		328
Total	$	32,013	$	26,005	$	23,112

* 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 2011, 2010 and 2009.

Operating profit
U.S. and Canada:
Equipment operations	$	2,898	$	2,302	$	1,129
Financial services	593		400		156
Total	3,491		2,702		1,285
Outside U.S. and Canada:
Equipment operations	941		607		236
Financial services	132		99		86
Total	1,073		706		322
Total	$	4,564	$	3,408	$	1,607
Property and equipment
U.S.	$	2,329	$	2,035	$	2,907
Germany	572		489		442
Other countries	1,451		1,267		1,183
Total	$	4,352	$	3,791	$	4,532