REVENUE RECOGNITION

12 Months Ended

Oct. 31, 2021

REVENUE RECOGNITION

REVENUE RECOGNITION

6. REVENUE RECOGNITION

The company’s net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow:

	PPA		SAT		CF		FS		Total
2021
Primary geographic markets:
United States	$	8,223	$	6,505	$	5,697	$	2,389	$	22,814
Canada		853		498		1,047		617		3,015
Western Europe		2,086		2,433		1,807		103		6,429
Central Europe and CIS		1,322		475		828		39		2,664
Latin America		2,916		456		903		247		4,522
Asia, Africa, Australia, New Zealand, and Middle East		1,417		1,679		1,331		153		4,580
Total	$	16,817	$	12,046	$	11,613	$	3,548	$	44,024
Major product lines:
Production agriculture	$	16,248							$	16,248
Small agriculture			$	8,619						8,619
Turf				2,853						2,853
Construction					$	4,684				4,684
Compact construction						1,489				1,489
Roadbuilding						3,749				3,749
Forestry						1,280				1,280
Financial products		55		46		20	$	3,548		3,669
Other		514		528		391				1,433
Total	$	16,817	$	12,046	$	11,613	$	3,548	$	44,024
Revenue recognized:
At a point in time	$	16,659	$	11,969	$	11,522	$	105	$	40,255
Over time		158		77		91		3,443		3,769
Total	$	16,817	$	12,046	$	11,613	$	3,548	$	44,024

	PPA		SAT		CF		FS		Total
2020
Primary geographic markets:
United States	$	6,889	$	5,059	$	4,548	$	2,500	$	18,996
Canada		640		350		802		598		2,390
Western Europe		1,827		1,937		1,479		90		5,333
Central Europe and CIS		898		493		646		35		2,072
Latin America		1,902		334		553		234		3,023
Asia, Africa, Australia, New Zealand, and Middle East		1,119		1,322		1,153		132		3,726
Total	$	13,275	$	9,495	$	9,181	$	3,589	$	35,540
Major product lines:
Production agriculture	$	12,662							$	12,662
Small agriculture			$	6,827						6,827
Turf				2,390						2,390
Construction					$	3,521				3,521
Compact construction						1,269				1,269
Roadbuilding						2,924				2,924
Forestry						1,100				1,100
Financial products		69		37		25	$	3,589		3,720
Other		544		241		342				1,127
Total	$	13,275	$	9,495	$	9,181	$	3,589	$	35,540
Revenue recognized:
At a point in time	$	13,106	$	9,439	$	9,071	$	106	$	31,722
Over time		169		56		110		3,483		3,818
Total	$	13,275	$	9,495	$	9,181	$	3,589	$	35,540

	PPA		SAT		CF		FS		Total
2019
Primary geographic markets:
United States	$	6,772	$	5,590	$	6,082	$	2,482	$	20,926
Canada		675		421		1,107		617		2,820
Western Europe		1,813		2,053		1,586		87		5,539
Central Europe and CIS		859		564		749		37		2,209
Latin America		2,527		367		719		272		3,885
Asia, Africa, Australia, New Zealand, and Middle East		1,039		1,449		1,265		126		3,879
Total	$	13,685	$	10,444	$	11,508	$	3,621	$	39,258
Major product lines:
Production agriculture	$	13,001							$	13,001
Small agriculture			$	7,422						7,422
Turf				2,650						2,650
Construction					$	5,188				5,188
Compact construction						1,279				1,279
Roadbuilding						3,193				3,193
Forestry						1,403				1,403
Financial products		78		22		30	$	3,621		3,751
Other		606		350		415				1,371
Total	$	13,685	$	10,444	$	11,508	$	3,621	$	39,258
Revenue recognized:
At a point in time	$	13,509	$	10,406	$	11,391	$	111	$	35,417
Over time		176		38		117		3,510		3,841
Total	$	13,685	$	10,444	$	11,508	$	3,621	$	39,258

Following is a description of the company’s major product lines:

Production Agriculture – Includes net sales of large and certain mid-size tractors and associated attachments, combines, cotton pickers, cotton strippers, sugarcane harvesters, sugarcane loaders and pull behind scrapers, tillage, seeding, and application equipment, including sprayers and nutrient management and soil preparation machinery, and related attachments and service parts.

Small Agriculture – Includes net sales of mid-size and utility tractors, self-propelled forage harvesters, hay and forage equipment, balers, mowers, and related attachments and service parts.

Turf – Includes net sales of turf and utility equipment, including riding lawn equipment, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements, other outdoor power products, and related attachments and service parts.

Construction – Includes net sales of a broad range of machines used in construction, earthmoving, and material handling, including backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, and related attachments and service parts.

Compact Construction – Includes net sales of smaller construction equipment, including compact excavators, compact track loaders, compact wheel loaders, skid steers, landscape loaders, and related attachments and service parts.

Roadbuilding – Includes net sales of equipment used in roadbuilding and renovation, including milling machines, recyclers, slipform pavers, surface miners, asphalt pavers, compactors, tandem and static rollers, mobile crushers and screens, mobile and stationary asphalt plants, and related attachments and service parts.

Forestry – Includes net sales of equipment used in timber harvesting, including log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments and service parts.

Financial Products – Includes finance and interest income primarily from retail notes related to sales of John Deere equipment to retail customers, wholesale financing to dealers of John Deere equipment, and revolving charge accounts; lease income from retail leases of John Deere equipment; and revenue from extended warranties.

Other – Includes sales of components to other equipment manufacturers that are included in “Net sales”; and revenue earned over time from precision guidance, telematics, and other information enabled solutions, revenue from service performed at company owned dealerships and service centers, gains on disposition of property and businesses, trademark licensing revenue, and other miscellaneous revenue items that are included in “Other income.”

The company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are

primarily for extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheet. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 21, was $1,344 million and $1,090 million at October 31, 2021 and November 1, 2020, respectively. The contract liability is reduced as the revenue is recognized. Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $485 million in 2021, $425 million in 2020, and $444 million in 2019.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $1,062 million at October 31, 2021. The estimated revenue to be recognized by fiscal year follows in millions of dollars: 2022 - $339, 2023 - $289, 2024 - $199, 2025 - $101, 2026 - $64, and later years - $70. As permitted, the company elected only to disclose remaining performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and retail customers for equipment, service parts, repair services, and certain telematics services.