REVENUE RECOGNITION

9 Months Ended

Jul. 30, 2023

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 July 30, 2023
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	3,394	$	2,098	$	2,346	$	860	$	8,698
Canada		397		179		288		165		1,029
Western Europe		833		802		421		35		2,091
Central Europe and CIS		302		85		98		6		491
Latin America		1,326		220		371		117		2,034
Asia, Africa, Oceania, and Middle East		720		422		271		45		1,458
Total	$	6,972	$	3,806	$	3,795	$	1,228	$	15,801
Major product lines:
Production agriculture	$	6,721							$	6,721
Small agriculture			$	2,688						2,688
Turf				964						964
Construction					$	1,745				1,745
Compact construction						614				614
Roadbuilding						987				987
Forestry						334				334
Financial products		89		28		15	$	1,228		1,360
Other		162		126		100				388
Total	$	6,972	$	3,806	$	3,795	$	1,228	$	15,801
Revenue recognized:
At a point in time	$	6,857	$	3,769	$	3,767	$	30	$	14,423
Over time		115		37		28		1,198		1,378
Total	$	6,972	$	3,806	$	3,795	$	1,228	$	15,801

	Nine Months Ended July 30, 2023
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	10,079	$	6,005	$	6,807	$	2,339	$	25,230
Canada		1,303		514		865		468		3,150
Western Europe		2,092		2,254		1,278		95		5,719
Central Europe and CIS		897		420		263		26		1,606
Latin America		4,106		577		1,098		318		6,099
Asia, Africa, Oceania, and Middle East		1,709		1,291		906		129		4,035
Total	$	20,186	$	11,061	$	11,217	$	3,375	$	45,839
Major product lines:
Production agriculture	$	19,565							$	19,565
Small agriculture			$	7,835						7,835
Turf				2,782						2,782
Construction					$	5,040				5,040
Compact construction						1,750				1,750
Roadbuilding						2,939				2,939
Forestry						1,119				1,119
Financial products		149		66		40	$	3,375		3,630
Other		472		378		329				1,179
Total	$	20,186	$	11,061	$	11,217	$	3,375	$	45,839
Revenue recognized:
At a point in time	$	19,965	$	10,970	$	11,142	$	80	$	42,157
Over time		221		91		75		3,295		3,682
Total	$	20,186	$	11,061	$	11,217	$	3,375	$	45,839

	Three Months Ended July 31, 2022
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	2,904	$	2,177	$	1,789	$	602	$	7,472
Canada		451		185		288		149		1,073
Western Europe		645		646		380		25		1,696
Central Europe and CIS		348		109		111		14		582
Latin America		1,327		155		459		77		2,018
Asia, Africa, Oceania, and Middle East		510		419		296		36		1,261
Total	$	6,185	$	3,691	$	3,323	$	903	$	14,102
Major product lines:
Production agriculture	$	6,019							$	6,019
Small agriculture			$	2,705						2,705
Turf				842						842
Construction					$	1,506				1,506
Compact construction						460				460
Roadbuilding						910				910
Forestry						316				316
Financial products		17		15		6	$	903		941
Other		149		129		125				403
Total	$	6,185	$	3,691	$	3,323	$	903	$	14,102
Revenue recognized:
At a point in time	$	6,154	$	3,672	$	3,303	$	27	$	13,156
Over time		31		19		20		876		946
Total	$	6,185	$	3,691	$	3,323	$	903	$	14,102

	Nine Months Ended July 31, 2022
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	6,946	$	5,718	$	5,157	$	1,744	$	19,565
Canada		899		468		975		450		2,792
Western Europe		1,648		1,836		1,202		76		4,762
Central Europe and CIS		954		386		452		36		1,828
Latin America		3,229		393		1,020		218		4,860
Asia, Africa, Oceania, and Middle East		1,118		1,170		833		113		3,234
Total	$	14,794	$	9,971	$	9,639	$	2,637	$	37,041
Major product lines:
Production agriculture	$	14,333							$	14,333
Small agriculture			$	7,305						7,305
Turf				2,286						2,286
Construction					$	4,198				4,198
Compact construction						1,208				1,208
Roadbuilding						2,619				2,619
Forestry						946				946
Financial products		39		35		17	$	2,637		2,728
Other		422		345		651				1,418
Total	$	14,794	$	9,971	$	9,639	$	2,637	$	37,041
Revenue recognized:
At a point in time	$	14,694	$	9,919	$	9,580	$	77	$	34,270
Over time		100		52		59		2,560		2,771
Total	$	14,794	$	9,971	$	9,639	$	2,637	$	37,041

The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These relate to 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 sheets. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 16, was $1,753 million, $1,423 million, and $1,424 million at July 30, 2023, October 30, 2022, and July 31, 2022, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended July 30, 2023 and July 31, 2022, $96 million and $93 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 nine months ended July 30, 2023 and July 31, 2022, $440 million and $488 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 was $1,437 million at July 30, 2023. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2023 - $139, 2024 - $403, 2025 - $337, 2026 - $228, 2027 - $136, 2028 - $86 and later years - $108. 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 for sales of equipment, service parts, repair services, and certain telematics services.