John Deere 2013 Annual Report Download - page 47

The corresponding depreciation expense was $389 million in
2013, $339 million in 2012 and $306 million in 2011.
Future payments to be received on operating leases
totaled $1,274 million at October 31, 2013 and are scheduled
in millions of dollars as follows: 2014 – $522, 2015 – $360,
2016 – $229, 2017 – $136 and 2018 – $27.
15. INVENTORIES
Most inventories owned by Deere & Company and its
U.S. equipment subsidiaries are valued at cost, on the “last-in,
first-out” (LIFO) basis. Remaining inventories are generally
valued at the lower of cost, on the “first-in, first-out” (FIFO)
basis, or market. The value of gross inventories on the LIFO
basis represented 63 percent and 61 percent of worldwide gross
inventories at FIFO value at October 31, 2013 and 2012,
respectively. If all inventories had been valued on a FIFO basis,
estimated inventories by major classification at October 31 in
millions of dollars would have been as follows:
2013 2012
Raw materials and supplies ........................................... $ 1,954 $ 1,874
Work-in-process ........................................................... 753 652
Finished goods and parts .............................................. 3,757 4,065
Total FIFO value ........................................................ 6,464 6,591
Less adjustment to LIFO value ....................................... 1,529 1,421
Inventories ................................................................. $ 4,935 $ 5,170
16. PROPERTY AND DEPRECIATION
A summary of property and equipment at October 31 in millions
of dollars follows:
Useful Lives*
(Years) 2013 2012
Equipment Operations
Land .................................................. $ 123 $ 137
Buildings and building equipment ........ 23 2,875 2,584
Machinery and equipment ................... 11 4,931 4,393
Dies, patterns, tools, etc ..................... 8 1,492 1,330
All other ............................................. 6 866 819
Construction in progress ..................... 728 938
Total at cost ................................... 11,015 10,201
Less accumulated depreciation ........... 5,606 5,250
Total .............................................. 5,409 4,951
Financial Services
Land .................................................. 4 4
Buildings and building equipment ........ 27 71 70
All other ............................................. 6 36 36
Total at cost ................................... 111 110
Less accumulated depreciation ........... 53 49
Total .............................................. 58 61
Property and equipment-net .......... $ 5,467 $ 5,012
* Weighted-averages
Total property and equipment additions in 2013, 2012
and 2011 were $1,158 million, $1,376 million and $1,059
million and depreciation was $637 million, $555 million and
$516 million, respectively. Capitalized interest was $13 million,
$7 million and $8 million in the same periods, respectively.
The cost of leased property and equipment under capital leases
of $58 million and $47 million and accumulated depreciation
of $29 million and $25 million at October 31, 2013 and 2012,
respectively, is included in property and equipment.
Capitalized software has an estimated useful life of three
years. The amounts of total capitalized software costs, including
purchased and internally developed software, classified as
“Other Assets” at October 31, 2013 and 2012 were $778 million
and $684 million, less accumulated amortization of $584 million
and $493 million, respectively. Amortization of these software
costs was $93 million in 2013, $89 million in 2012 and $73
million in 2011. The cost of leased software assets under capital
leases amounting to $46 million and $42 million at October 31,
2013 and 2012, respectively, is included in other assets.
The cost of compliance with foreseeable environmental
requirements has been accrued and did not have a material
effect on the company’s consolidated financial statements.
17. GOODWILL AND OTHER INTANGIBLE ASSETS-NET
The changes in amounts of goodwill by operating segments
were as follows in millions of dollars:
Agriculture Construction
and and
Turf Forestry Total
Balance at October 31, 2011 .............. $ 701 $ 615 $ 1,316
Less accumulated
impairment losses ...................... 316 316
Net balance ................................... 385 615 1,000
Impairment loss* ................................ (33) (33)
Translation adjustments and other ....... (15) (31) (46)
Balance at October 31, 2012 .............. 686 584 1,270
Less accumulated
impairment losses ...................... 349 349
Net balance ................................... 337 584 921
Reclassification to assets
held for sale** ................................ (395) (395)
Acquisition* ........................................ 13 13
Translation adjustments and other ....... (2) 19 17
Balance at October 31, 2013 .............. 302 603 905
Less accumulated
impairment losses** ................... 60 60
Goodwill ........................................... $ 242 $ 603 $ 845
* See Notes 4 and 5.
** Accumulated impairment losses were also reduced by $289 million related to
Landscapes reclassification to held for sale (see Note 4).
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