REVENUE RECOGNITION

6 Months Ended

May 01, 2022

REVENUE RECOGNITION

REVENUE RECOGNITION

(3)  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:

	Three Months Ended May 1, 2022
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	2,434	$	2,103	$	2,108	$	569	$	7,214
Canada		309		161		355		149		974
Western Europe		536		658		464		25		1,683
Central Europe and CIS		404		151		146		11		712
Latin America		1,126		134		333		73		1,666
Asia, Africa, Australia, New Zealand, and Middle East		367		399		318		37		1,121
Total	$	5,176	$	3,606	$	3,724	$	864	$	13,370
Major product lines:
Production agriculture	$	5,032							$	5,032
Small agriculture			$	2,668						2,668
Turf				817						817
Construction					$	1,516				1,516
Compact construction						427				427
Roadbuilding						1,017				1,017
Forestry						325				325
Financial products		10		9		6	$	864		889
Other		134		112		433				679
Total	$	5,176	$	3,606	$	3,724	$	864	$	13,370
Revenue recognized:
At a point in time	$	5,144	$	3,593	$	3,707	$	26	$	12,470
Over time		32		13		17		838		900
Total	$	5,176	$	3,606	$	3,724	$	864	$	13,370

	Six Months Ended May 1, 2022
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	4,042	$	3,541	$	3,368	$	1,142	$	12,093
Canada		448		283		687		301		1,719
Western Europe		1,003		1,190		822		51		3,066
Central Europe and CIS		606		277		341		22		1,246
Latin America		1,902		238		561		141		2,842
Asia, Africa, Australia, New Zealand, and Middle East		608		751		537		77		1,973
Total	$	8,609	$	6,280	$	6,316	$	1,734	$	22,939
Major product lines:
Production agriculture	$	8,315							$	8,315
Small agriculture			$	4,600						4,600
Turf				1,444						1,444
Construction					$	2,691				2,691
Compact construction						748				748
Roadbuilding						1,709				1,709
Forestry						630				630
Financial products		22		20		11	$	1,734		1,787
Other		272		216		527				1,015
Total	$	8,609	$	6,280	$	6,316	$	1,734	$	22,939
Revenue recognized:
At a point in time	$	8,540	$	6,247	$	6,277	$	50	$	21,114
Over time		69		33		39		1,684		1,825
Total	$	8,609	$	6,280	$	6,316	$	1,734	$	22,939

	Three Months Ended May 2, 2021
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	2,211	$	1,838	$	1,481	$	608	$	6,138
Canada		252		144		320		153		869
Western Europe		589		738		514		26		1,867
Central Europe and CIS		531		160		209		9		909
Latin America		700		103		220		60		1,083
Asia, Africa, Australia, New Zealand, and Middle East		319		444		393		36		1,192
Total	$	4,602	$	3,427	$	3,137	$	892	$	12,058
Major product lines:
Production agriculture	$	4,466							$	4,466
Small agriculture			$	2,417						2,417
Turf				898						898
Construction					$	1,232				1,232
Compact construction						396				396
Roadbuilding						1,066				1,066
Forestry						343				343
Financial products		12		10		5	$	892		919
Other		124		102		95				321
Total	$	4,602	$	3,427	$	3,137	$	892	$	12,058
Revenue recognized:
At a point in time	$	4,562	$	3,412	$	3,114	$	26	$	11,114
Over time		40		15		23		866		944
Total	$	4,602	$	3,427	$	3,137	$	892	$	12,058

	Six Months Ended May 2, 2021
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	3,820	$	3,261	$	2,683	$	1,206	$	10,970
Canada		364		223		508		307		1,402
Western Europe		1,038		1,224		953		50		3,265
Central Europe and CIS		692		244		387		18		1,341
Latin America		1,213		180		390		119		1,902
Asia, Africa, Australia, New Zealand, and Middle East		623		845		746		76		2,290
Total	$	7,750	$	5,977	$	5,667	$	1,776	$	21,170
Major product lines:
Production agriculture	$	7,478							$	7,478
Small agriculture			$	4,228						4,228
Turf				1,549						1,549
Construction					$	2,119				2,119
Compact construction						742				742
Roadbuilding						1,976				1,976
Forestry						633				633
Financial products		28		20		12	$	1,776		1,836
Other		244		180		185				609
Total	$	7,750	$	5,977	$	5,667	$	1,776	$	21,170
Revenue recognized:
At a point in time	$	7,668	$	5,946	$	5,614	$	50	$	19,278
Over time		82		31		53		1,726		1,892
Total	$	7,750	$	5,977	$	5,667	$	1,776	$	21,170

The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily for premiums for extended warranties, 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 sheets. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 15, was $1,423 million, $1,344 million, and $1,249 million at May 1, 2022, October 31, 2021, and May 2, 2021, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended May 1, 2022 and May 2, 2021, $130 million and $111 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the six months ended May 1, 2022 and May 2, 2021, $395 million and $335 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $1,116 million at May 1, 2022. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2022 - $173, 2023 - $311, 2024 - $260, 2025 - $168, 2026 - $87, 2027 - $52 and later years - $65. 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 of equipment, service parts, repair services, and certain telematics services.