John Deere 2010 Annual Report Download - page 50

50
2010 2009
Not Designated as Hedges
Interest rate contracts – Interest expense* ............... $ 25 $ (5)
Foreign exchange contracts – Cost of sales ............. (19) (64)
Foreign exchange contracts – Other expense* ......... (92) (90)
Total .................................................................. $ (86) $ (159)
* Includes interest and foreign exchange gains (losses) from cross-currency interest
rate contracts.
** The amount is not material.
28. SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS
ENDED OCTOBER 31, 2010, 2009 AND 2008
The company’s operations are presently organized and reported
in three major business segments described as follows:
The agriculture and turf segment manufactures and
distributes a full line of farm and turf equipment and related
service parts – including large, medium and utility tractors;
loaders; combines, 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 manufactures,
distributes to dealers and sells at retail 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 credit segment primarily fi nances sales and leases
by John Deere dealers of new and used agriculture and turf
equipment and construction and forestry equipment. In addition,
the credit segment provides wholesale fi nancing to dealers of the
foregoing equipment, provides operating loans, fi nances retail
revolving charge accounts, offers crop risk mitigation products
and held residual wind energy generation investments until
December 2010 (see Note 30).
Certain operations do not meet the materiality threshold
of reporting and are included in the “Other” category.
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 fi nance 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
unaffi liated sales and revenues by segment, intersegment sales
and revenues in 2010, 2009 and 2008 were as follows:
agriculture and turf net sales of $59 million, $32 million and
$40 million, construction and forestry net sales of $7 million,
$4 million and $8 million, and credit revenues of $219 million,
$248 million and $257 million, respectively.
OPERATING SEGMENTS 2010 2009 2008
Net sales and revenues
Unaffi liated customers:
Agriculture and turf net sales ................. $ 19,868 $ 18,122 $ 20,985
Construction and forestry
net sales ........................................... 3,705 2,634 4,818
Total net sales ................................... 23,573 20,756 25,803
Credit revenues ......................................... 1,977 1,930 2,190
Other revenues* ........................................ 455 426 445
Total ........................................................ $ 26,005 $ 23,112 $ 28,438
* Other revenues are primarily the Equipment Operations’ revenues for fi nance
and interest income, and other income as disclosed in Note 31, net of certain
intercompany eliminations.
Operating profi t (loss)
Agriculture and turf .................................... $ 2,790 $ 1,448 $ 2,461
Construction and forestry ........................... 119 (83) 466
Credit* ...................................................... 465 223 478
Other ........................................................ 34 19 15
Total operating profi t.............................. 3,408 1,607 3,420
Interest income .......................................... 42 46 87
Investment income .................................... 10
Interest expense ........................................ (184) (163) (184)
Foreign exchange gain (loss) from
equipment operations’ fi nancing
activities ............................................... (30) (40) (13)
Corporate expenses – net .......................... (200) (117) (155)
Income taxes ............................................. (1,162) (460) (1,111)
Total ..................................................... (1,534) (734) (1,366)
Net income ................................................ 1,874 873 2,054
Less: Net income attributable to
noncontrolling interests .......................... 9 1
Net income attributable to
Deere & Company ................................. $ 1,865 $ 873 $ 2,053
* Operating profi t of the credit business segment includes the effect of its interest
expense and foreign exchange gains or losses.
Interest income*
Agriculture and turf .................................... $ 20 $ 28 $ 17
Construction and forestry ........................... 3 4 3
Credit ........................................................ 1,528 1,584 1,753
Corporate .................................................. 42 46 87
Intercompany ............................................ (229) (273) (288)
Total ..................................................... $ 1,364 $ 1,389 $ 1,572
* Does not include fi nance rental income for equipment on operating leases.
(continued)