SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2012, 2011 AND 2010

12 Months Ended

Oct. 31, 2012

SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2012, 2011 AND 2010

SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2012, 2011 AND 2010

28. SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS ENDED OCTOBER 31, 2012, 2011 AND 2010

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; 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, finances retail revolving charge accounts and operating loans 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 2012, 2011 and 2010 were as follows: agriculture and turf net sales of $84 million, $98 million and $59 million, construction and forestry net sales of $1 million, $3 million and $7 million, and financial services revenues of $219 million, $210 million and $224 million, respectively.

OPERATING SEGMENTS	2012		2011		2010
Net sales and revenues
Unaffiliated customers:
Agriculture and turf net sales	$	27,123	$	24,094	$	19,868
Construction and forestry net sales	6,378		5,372		3,705
Total net sales	33,501		29,466		23,573
Financial services revenues	2,235		2,163		2,074
Other revenues*	421		384		358
Total	$	36,157	$	32,013	$	26,005

*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	$	3,921		$	3,447		$	2,790
Construction and forestry	476			392			119
Financial services*	712			725			499
Total operating profit	5,109			4,564			3,408
Interest income	43			47			42
Investment income	2
Interest expense	(231		)	(191		)	(184		)
Foreign exchange losses from equipment operations’ financing activities	(11		)	(11		)	(30		)
Corporate expenses — net	(181		)	(177		)	(200		)
Income taxes	(1,659		)	(1,424		)	(1,162		)
Total	(2,037		)	(1,756		)	(1,534		)
Net income	3,072			2,808			1,874
Less: Net income attributable to noncontrolling interests	7			8			9
Net income attributable to Deere & Company	$	3,065		$	2,800		$	1,865

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

Interest income*
Agriculture and turf	$	29		$	23		$	20
Construction and forestry	2			3			3
Financial services	1,610			1,581			1,528
Corporate	43			47			42
Intercompany	(248		)	(231		)	(229		)
Total	$	1,436		$	1,423		$	1,364

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

Interest expense
Agriculture and turf	$	168		$	152		$	165
Construction and forestry	36			26			21
Financial services	596			621			670
Corporate	231			191			184
Intercompany	(248		)	(231		)	(229		)
Total	$	783		$	759		$	811
Depreciation* and amortization expense
Agriculture and turf	$	550		$	505		$	470
Construction and forestry	93			82			79
Financial services	361			328			366
Total	$	1,004		$	915		$	915

* Includes depreciation for equipment on operating leases.

Equity in income (loss) of unconsolidated affiliates
Agriculture and turf	$	(2	)	$	5	$	13
Construction and forestry	(2		)	3		(3		)
Financial services	1			1		1
Total	$	(3	)	$	9	$	11
Identifiable operating assets
Agriculture and turf	$	10,429		$	9,178	$	7,593
Construction and forestry	3,365			2,915		2,353
Financial services	34,495			29,795		27,507
Corporate*	7,977			6,319		5,814
Total	$	56,266		$	48,207	$	43,267

*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	$	1,145	$	909	$	729
Construction and forestry	228		148		73
Financial services	3		2
Total	$	1,376	$	1,059	$	802
Investments in unconsolidated affiliates
Agriculture and turf	$	32	$	35	$	66
Construction and forestry	174		159		172
Financial services	9		8		7
Total	$	215	$	202	$	245

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	2012		2011		2010
Net sales and revenues
Unaffiliated customers:
U.S. and Canada:
Equipment operations net sales (87%)*	$	20,807	$	17,357	$	14,794
Financial services revenues (79%)*	1,930		1,857		1,817
Total	22,737		19,214		16,611
Outside U.S. and Canada:
Equipment operations net sales	12,694		12,109		8,779
Financial services revenues	305		306		257
Total	12,999		12,415		9,036
Other revenues	421		384		358
Total	$	36,157	$	32,013	$	26,005

*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 2012, 2011 and 2010.

Operating profit
U.S. and Canada:
Equipment operations	$	3,836	$	2,898	$	2,302
Financial services	566		593		400
Total	4,402		3,491		2,702
Outside U.S. and Canada:
Equipment operations	561		941		607
Financial services	146		132		99
Total	707		1,073		706
Total	$	5,109	$	4,564	$	3,408
Property and equipment
U.S.	$	2,742	$	2,329	$	2,035
Germany	568		572		489
Other countries	1,702		1,451		1,267
Total	$	5,012	$	4,352	$	3,791