REVENUE RECOGNITION

6 Months Ended

Apr. 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 April 30, 2023
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	4,058	$	2,241	$	2,561	$	766	$	9,626
Canada		546		189		302		153		1,190
Western Europe		758		888		492		31		2,169
Central Europe and CIS		393		212		90		8		703
Latin America		1,543		201		388		106		2,238
Asia, Africa, Oceania, and Middle East		614		469		335		43		1,461
Total	$	7,912	$	4,200	$	4,168	$	1,107	$	17,387
Major product lines:
Production agriculture	$	7,733							$	7,733
Small agriculture			$	2,952						2,952
Turf				1,099						1,099
Construction					$	1,813				1,813
Compact construction						663				663
Roadbuilding						1,134				1,134
Forestry						429				429
Financial products		29		20		12	$	1,107		1,168
Other		150		129		117				396
Total	$	7,912	$	4,200	$	4,168	$	1,107	$	17,387
Revenue recognized:
At a point in time	$	7,861	$	4,171	$	4,146	$	27	$	16,205
Over time		51		29		22		1,080		1,182
Total	$	7,912	$	4,200	$	4,168	$	1,107	$	17,387

	Six Months Ended April 30, 2023
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	6,686	$	3,906	$	4,461	$	1,479	$	16,532
Canada		906		335		577		303		2,121
Western Europe		1,259		1,452		857		60		3,628
Central Europe and CIS		595		335		165		20		1,115
Latin America		2,780		357		727		201		4,065
Asia, Africa, Oceania, and Middle East		989		869		635		84		2,577
Total	$	13,215	$	7,254	$	7,422	$	2,147	$	30,038
Major product lines:
Production agriculture	$	12,845							$	12,845
Small agriculture			$	5,146						5,146
Turf				1,818						1,818
Construction					$	3,295				3,295
Compact construction						1,136				1,136
Roadbuilding						1,952				1,952
Forestry						785				785
Financial products		60		38		25	$	2,147		2,270
Other		310		252		229				791
Total	$	13,215	$	7,254	$	7,422	$	2,147	$	30,038
Revenue recognized:
At a point in time	$	13,109	$	7,200	$	7,375	$	50	$	27,734
Over time		106		54		47		2,097		2,304
Total	$	13,215	$	7,254	$	7,422	$	2,147	$	30,038

	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, Oceania, 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, Oceania, 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

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 $1,622 million, $1,423 million, and $1,423 million at April 30, 2023, October 30, 2022, and May 1, 2022, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended April 30, 2023 and May 1, 2022, $129 million and $130 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 April 30, 2023 and May 1, 2022, $343 million and $395 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 $1,378 million at April 30, 2023. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2023 - $238, 2024 - $376, 2025 - $294, 2026 - $191, 2027 - $111, 2028 - $68 and later years - $100. 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.