# DEERE & CO (DE) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from DEERE & CO's 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/315189/000155837023019812/de-20231029x10k.htm
Accession: 0001558370-23-019812
Filing date: 2023-12-15
Report date: 2023-10-29
Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/DE/
All MD&A years: /company/DE/mda/
Previous year: /company/DE/mda/fy2022/ (FY 2022)
Next year: /company/DE/mda/fy2024/ (FY 2024)

MANAGEMENT’S DISCUSSION AND ANALYSIS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of dollars, unless otherwise specified. For comparison of 2022 to 2021 results, refer to the “Management’s Discussion and Analysis” section of our 2022 Form 10-K.

[[GREPCENT_TABLE]]
[["\u200b","\u200b"],["OVERVIEW","\u200b"]]
[[/GREPCENT_TABLE]]

Deere & Company is a global leader in the production of agricultural, turf, construction, and forestry equipment and solutions. John Deere Financial provides financing for John Deere equipment, parts, service, and other input costs customers need to run their operations. Our operations are managed through the production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.

Net Sales and Revenues by Segment in 2023

Smart Industrial Operating Model and Leap Ambitions

We announced the Smart Industrial Operating Model in 2020. This operating model is based on three focus areas:

[[GREPCENT_TABLE]]
[["(a)","Production systems: A strategic alignment of products and solutions around our customers\u2019 operations."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(b)","Technology stack: Investments in technology, as well as research and development, that deliver intelligent solutions to our customers through digital capabilities, automation, autonomy, and alternative power technologies."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(c)","Lifecycle solutions: The integration of our aftermarket and support capabilities to more effectively manage customer equipment, service, and technology needs across the full lifetime of a John Deere product."]]
[[/GREPCENT_TABLE]]

Our Leap Ambitions were launched in 2022. These ambitions are designed to boost economic value and sustainability for our customers. The ambitions align across our customers’ production systems seeking to optimize their operations to deliver better outcomes with fewer resources.

[[GREPCENT_TABLE]]
[["\u200b","\u200b"],["TRENDS & ECONOMIC CONDITIONS","\u200b"]]
[[/GREPCENT_TABLE]]

Industry Sales Outlook for Fiscal 2024

Company Trends – Customers seek to improve profitability, productivity, and sustainability through technology. Integration of technology into equipment is a persistent market trend. Our Smart Industrial Operating Model and Leap Ambitions are intended to capitalize on this market trend. These technologies are incorporated into products within each of our operating segments. We expect this trend to persist for the foreseeable future. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. Most notably in 2023, we introduced See & Spray™ Ultimate and a new model of See & Spray™ Premium. These technologies were introduced on a limited basis and did not represent a significant percentage of our sales in 2023.

Company Outlook for 2024

[[GREPCENT_TABLE]]
[["\u25cf","Demand is expected to decline in 2024."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Production volumes will decline to more normal levels in 2024."]]
[[/GREPCENT_TABLE]]

Agriculture and Turf Outlook for 2024

[[GREPCENT_TABLE]]
[["\u25cf","We expect large agricultural equipment sales to decline in 2024 in North America, Europe, and South America."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Demand for small agricultural equipment is expected to moderate in Europe."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Turf and utility equipment product sales are expected to be lower due to the overall U.S. economic condition and elevated interest rates."]]
[[/GREPCENT_TABLE]]

Market Conditions:

[[GREPCENT_TABLE]]
[["\u25cf","Agricultural fundamentals are expected to moderate in 2024 due to lower commodity prices and elevated interest rates, offset by declining input costs and improved customer financials."]]
[[/GREPCENT_TABLE]]

29

Table of Contents

​

[[GREPCENT_TABLE]]
[["\u25cf","The dairy and livestock sector continues to benefit from elevated protein and hay prices."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Farm input costs in Europe are declining. Grain prices vary from favorable in Western Europe to depressed in Eastern Europe due to the Russia/Ukraine war."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Dealer inventories are elevated in Brazil due to inventory oversupply driven by weakening demand in the second half of 2023."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Industry sales in Asia are impacted by moderating demand in India, the world\u2019s largest tractor market by number of units."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","The fleet average age is older than in prior business cycles. Combines are in line with the historical average age, while tractors are slightly older than historical averages."]]
[[/GREPCENT_TABLE]]

Construction and Forestry Outlook for 2024

Market Conditions:

[[GREPCENT_TABLE]]
[["\u25cf","Construction equipment industry sales are forecasted to be down from 2023 levels."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Benefits from rental fleet replenishment, the energy industry, and U.S. infrastructure spending are expected to partially offset moderation in residential home, office, and retail construction."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","Roadbuilding demand remains strong, similar to 2023 in the U.S., largely offset by softening demand in Europe."]]
[[/GREPCENT_TABLE]]

Financial Services Outlook for 2024

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net Income","\u200b","Up moderately","\u200b"],["+ Nonrecurring prior period special items","\u200b","Favorable","\u200b"],["+ Higher average portfolio","\u200b","Favorable","\u200b"],["(-) Financing spreads","\u200b","Unfavorable","\u200b"],["(-) Recoveries on operating lease dispositions","\u200b","Unfavorable","\u200b"]]
[[/GREPCENT_TABLE]]

Additional Trends – We experienced supply chain disruptions and inflationary pressures in 2022. While these issues moderated in 2023, the effect on production schedules and central bank policy interest rates continued in 2023. These changes are discussed below.

Supply Chain Impact on Production Schedules. We experienced supply chain improvements compared to 2022, with a return to normal in 2023. The ease in supply chain disruptions contributed to higher levels of production compared to prior year. As a result, our production schedules in 2023 were more aligned with the customers’ seasonal use of our products, marking a return to historical seasonal production patterns and on-time product delivery. Additionally, supply chain improvements contributed to reductions in premium freight costs, moderation in material cost increases, and disciplined inventory management in 2023. In 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels.

Interest Rates. Central bank policy interest rates increased in 2022 and 2023. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations, and may impact future demand for our products.

Most retail customer receivables are fixed rate. Wholesale financing receivables generally are variable rate. Both types of

receivables are financed with fixed and floating rate borrowings. We manage our exposure to interest rate fluctuations by matching our receivables with our funding sources. We also enter into interest rate swap agreements to match our interest rate exposure.

Rising interest rates have historically impacted our borrowings sooner than the benefit is realized from receivable and lease portfolios. As a result, our financial services operations experienced $170 (after-tax) less favorable financing spreads in 2023 compared to 2022. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024.

Demand for our products is negatively impacted by rising interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024.

Rising interest rates are driven by factors outside of our control, and as a result, we cannot reasonably foresee when this condition will subside.

Agricultural Market Business Cycle. The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, and government policies. These factors affect farmers’ income and may result in lower demand for equipment. We may experience any of the following effects during unfavorable market conditions: lower net sales, higher sales discounts, higher receivable write-offs, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins.

Other Items of Concern and Uncertainties – Other items that could impact our results are:

[[GREPCENT_TABLE]]
[["\u25cf","global and regional political conditions, including the war in Ukraine and the Israel-Hamas war,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","economic, tax, and trade policies,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","new or retaliatory tariffs,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","capital market disruptions,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","foreign currency and capital control policies,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","regulations and legislation regarding right to repair,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","weather conditions,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","marketplace adoption and monetization of technologies we have invested in,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","our ability to strengthen our digital capabilities, automation, autonomy, and alternative power technologies,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","changes in demand and pricing for new and used equipment,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","significant fluctuations in foreign currency exchange rates,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","volatility in the prices of many commodities, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","slower economic growth or possible recession."]]
[[/GREPCENT_TABLE]]

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

30

Table of Contents

​

[[GREPCENT_TABLE]]
[["CONSOLIDATED RESULTS","2023 compared to 2022"]]
[[/GREPCENT_TABLE]]

Highlights

[[GREPCENT_TABLE]]
[["\u25cf","Net income rose in 2023 compared to 2022, driven by strong market conditions."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["\u25cf","We continue to focus on structural profitability and strategically investing in solutions that deliver value to our customers."]]
[[/GREPCENT_TABLE]]

Net Sales and Revenues

Net Sales (Equipment Operations)

[[GREPCENT_TABLE]]
[["\u25cf","Favorable industry fundamentals and strong demand for farm and construction equipment drove the sales increases in 2023."]]
[[/GREPCENT_TABLE]]

Net Income (Attributable to Deere & Company)

Diluted Earnings Per Share (EPS) ($ per share)

[[GREPCENT_TABLE]]
[["\u25cf","Net income and diluted EPS grew at a faster rate than sales due to our ability to keep cost increases below price realization."]]
[[/GREPCENT_TABLE]]

Other Significant Statement of Consolidated Income Changes –

An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:

​

​

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Deere & Company","\u200b","2023","\u200b","2022","\u200b","% Change","\u200b"],["Cost of sales to net sales","\u200b","\u200b","67.9%","\u200b","\u200b","73.7%","\u200b","-8","\u200b"],["+ Price realization","\u200b","Favorable","\u200b"],["(-) Production costs","\u200b","Unfavorable","\u200b"],["Price realization was 12 percent driven by strong demand. Production costs increased due to a moderate rise in material cost and manufacturing overhead. These factors were partially offset by lower freight costs and production efficiencies generated by easing supply chain disruptions.","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Other income","\u200b","$","1,003","\u200b","$","1,295","\u200b","-23","\u200b"],["Other income was lower due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture in 2022.","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Research and development expenses","\u200b","\u200b","2,177","\u200b","\u200b","1,912","\u200b","+14","\u200b"],["Research and development expenditures were higher due to continued focus on developing new technology solutions and new product introductions.","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Selling, administrative and general expenses","\u200b","\u200b","4,595","\u200b","\u200b","3,863","\u200b","+19","\u200b"],["Selling, administrative and general expenses rose due to higher salary expenses driven by inflationary conditions, profit-sharing incentives, and an increase in expenses to support the Leap Ambitions framework. Also impacting the current year was a cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4).","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Interest expense","\u200b","\u200b","2,453","\u200b","\u200b","1,062","\u200b","+131","\u200b"],["Interest expense increased due to higher average borrowing rates and higher average borrowings.","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Other operating expenses","\u200b","\u200b","1,292","\u200b","\u200b","1,275","\u200b","+1","\u200b"],["See Note 9 for more information.","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Provision for income taxes","\u200b","\u200b","2,871","\u200b","\u200b","2,007","\u200b","+43","\u200b"],["Consistent with higher pretax income.","\u200b"]]
[[/GREPCENT_TABLE]]

​

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

31

Table of Contents

​

[[GREPCENT_TABLE]]
[["BUSINESS SEGMENT RESULTS","2023 compared to 2022"]]
[[/GREPCENT_TABLE]]

Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment.

Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year.

Production and Precision Agriculture Operations

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","% Change","\u200b"],["Net sales","\u200b","$","26,790","\u200b","$","22,002","\u200b","+22","\u200b"],["Sales volume and other","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+7","\u200b"],["Price realization","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+15","\u200b"],["Currency translation","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating profit","\u200b","\u200b","6,996","\u200b","\u200b","4,386","\u200b","+60","\u200b"],["Operating margin","\u200b","\u200b","26.1%","\u200b","\u200b","19.9%","\u200b","\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

Sales volumes increased 10 percent in the U.S. and Canada, 32 percent in Australia, and 9 percent in Western Europe, partially offset by the effect of suspension of shipments to Russia. Price realization was 17 percent in the U.S. and Canada and 12 percent outside the U.S. and Canada, driven by strong demand. Prior period results were impacted by special items (see Note 4).

Small Agriculture and Turf Operations

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","% Change","\u200b"],["Net sales","\u200b","$","13,980","\u200b","$","13,381","\u200b","+4","\u200b"],["Sales volume and other","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","-4","\u200b"],["Price realization","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+9","\u200b"],["Currency translation","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","-1","\u200b"],["Operating profit","\u200b","\u200b","2,472","\u200b","\u200b","1,949","\u200b","+27","\u200b"],["Operating margin","\u200b","\u200b","17.7%","\u200b","\u200b","14.6%","\u200b","\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

Sales volumes decreased 8 percent in the U.S. and Canada but increased 18 percent in Mexico and 2 percent in Western Europe.

Price realization was 8 percent in the U.S. and Canada driven by inflation and 12 percent in Western Europe driven by strong demand.

Construction and Forestry Operations

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","% Change","\u200b"],["Net sales","\u200b","$","14,795","\u200b","$","12,534","\u200b","+18","\u200b"],["Sales volume and other","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+9","\u200b"],["Price realization","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+10","\u200b"],["Currency translation","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","-1","\u200b"],["Operating profit","\u200b","\u200b","2,695","\u200b","\u200b","2,014","\u200b","+34","\u200b"],["Operating margin","\u200b","\u200b","18.2%","\u200b","\u200b","16.1%","\u200b","\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

Sales volumes increased 18 percent in the U.S. and Canada but decreased 6 percent outside the U.S. and Canada driven by lower sales in Brazil and the suspension of shipments to Russia. Price realization was 12 percent in the U.S. and Canada driven by strong demand, and 7 percent outside the U.S. and Canada. Results in both periods were impacted by special items (see Note 4).

​

32

Table of Contents

​

Financial Services Operations

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","% Change","\u200b"],["Revenue (including intercompany)","\u200b","$","5,554","\u200b","$","4,085","\u200b","+36","\u200b"],["Average balance of receivables and leases","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+19","\u200b"],["Interest expense","\u200b","\u200b","2,362","\u200b","\u200b","799","\u200b","+196","\u200b"],["Average borrowings","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+20","\u200b"],["Average borrowing rates","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","+143","\u200b"],["Net income","\u200b","\u200b","619","\u200b","\u200b","880","\u200b","-30","\u200b"]]
[[/GREPCENT_TABLE]]

​

Average wholesale receivables increased 72 percent and retail notes increased 13 percent driven by higher equipment sales. Revenue also increased due to higher average financing rates. Net income declined as a result of unfavorable financing spreads and a correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). In 2022, financial services increased the provision for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees financial services’ investments in certain international markets, including Russia (see Note 4). The Russia-related impacts are displayed in the “Other” bar below.

[[GREPCENT_TABLE]]
[["\u200b","\u200b"],["BUSINESS SEGMENT RESULTS","2022 compared to 2021"]]
[[/GREPCENT_TABLE]]

Please refer to the “Management’s Discussion and Analysis” section of our 2022 Form 10-K.

[[GREPCENT_TABLE]]
[["\u200b","\u200b"],["CAPITAL RESOURCES AND LIQUIDITY","2023 compared to 2022"]]
[[/GREPCENT_TABLE]]

We have access to global markets at a reasonable cost. Sources of liquidity include:

[[GREPCENT_TABLE]]
[["","\u25cf","cash, cash equivalents, and marketable securities on hand,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","funds from operations,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the issuance of commercial paper and term debt,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the securitization of retail notes, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","bank lines of credit."]]
[[/GREPCENT_TABLE]]

We closely monitor our cash requirements. Based on the available sources of liquidity, we expect to meet our funding needs in the short term (next 12 months) and long term (beyond 12 months). We

are forecasting lower operating cash flows in 2024 compared with 2023 as identified previously in Trends and Economic Conditions.

We operate in multiple industries, which have unique funding requirements. The equipment operations are capital intensive. Historically, these operations have been subject to seasonal variations in financing requirements for inventories and receivables from dealers. However, the patterns of seasonality have been affected by the supply chain disruptions experienced during fiscal year 2022.

The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios.

Key Metrics and Balance Sheet Changes

Cash, Cash Equivalents and Marketable Securities

[[GREPCENT_TABLE]]
[["","\u25cf","See the detailed cash flow discussion in the next section."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The increase was primarily driven by higher operating cash flow."]]
[[/GREPCENT_TABLE]]

Trade Accounts and Notes Receivable – Net

[[GREPCENT_TABLE]]
[["","\u25cf","Receivables are generated from the sales of goods to customers."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The increase was driven by higher sales."]]
[[/GREPCENT_TABLE]]

Financing Receivables and Equipment on Operating Leases

[[GREPCENT_TABLE]]
[["","\u25cf","Acquisition volumes were 30 percent higher driven by higher retail volumes due to increased retail sales and higher wholesale receivables."]]
[[/GREPCENT_TABLE]]

Inventories

[[GREPCENT_TABLE]]
[["","\u25cf","Inventories decreased due to easing of supply disruption constraints and moderation of future demand."]]
[[/GREPCENT_TABLE]]

Property and Equipment

[[GREPCENT_TABLE]]
[["","\u25cf","Cash expenditures were $1.5 billion in 2023."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Capital expenditures are forecast to be $1.9 billion in 2024."]]
[[/GREPCENT_TABLE]]

33

Table of Contents

​

Borrowings

[[GREPCENT_TABLE]]
[["","\u25cf","Borrowings increased corresponding with the level of the financing receivable and lease portfolios."]]
[[/GREPCENT_TABLE]]

Unused Credit Lines

[[GREPCENT_TABLE]]
[["","\u25cf","The decrease in unused credit lines was due to an increase in commercial paper outstanding to fund growth in the receivable portfolios."]]
[[/GREPCENT_TABLE]]

Financial Services Ratio of Interest-Bearing Debt to Stockholder’s Equity

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b"],["CASH FLOWS","2023, 2022, and 2021"]]
[[/GREPCENT_TABLE]]

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","2021","\u200b"],["Net cash provided by operating activities","\u200b","$","8,589","\u200b","$","4,699","\u200b","$","7,726","\u200b"],["Net cash used for investing activities","\u200b","\u200b","(8,749)","\u200b","\u200b","(8,485)","\u200b","\u200b","(5,750)","\u200b"],["Net cash provided by (used for) financing activities","\u200b","\u200b","2,808","\u200b","\u200b","826","\u200b","\u200b","(1,078)","\u200b"],["Effect of exchange rate changes on cash, cash equivalents, and restricted cash","\u200b","\u200b","31","\u200b","\u200b","(224)","\u200b","\u200b","55","\u200b"],["Net increase (decrease) in cash, cash equivalents, and restricted cash","\u200b","$","2,679","\u200b","$","(3,184)","\u200b","$","953","\u200b"]]
[[/GREPCENT_TABLE]]

​

Operating cash flows in 2023 were higher due to an increase in net income and lower inventory offset by higher receivables related to sales, while operating cash flows in 2022 were impacted by a $1 billion other postretirement benefit (OPEB) contribution.

Cash outflows from investing activities were $8.7 billion in 2023 due to growth in the financing receivable and lease portfolios, and purchases of property and equipment.

Cash inflows from financing activities were $2.8 billion in 2023, as higher borrowings were partially offset by repurchases of common stock and dividends paid.

Cash Returned to Shareholders

Cash returned to shareholders increased $3.7 billion in 2023.

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["DEBT RATINGS","\u200b"]]
[[/GREPCENT_TABLE]]

To access debt markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt. These ratings are an indicator of credit quality for fixed income investors. A debt rating is not a recommendation by the rating agency to buy, sell, or hold. A credit rating agency may change or withdraw company ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings or negative changes to ratings outlooks generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets, and may adversely impact our liquidity.

The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by us are as follows:

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","Senior","","\u200b"],["\u200b","\u200b","Long-Term","\u200b","Short-Term","\u200b","Outlook"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fitch Ratings","\u200b","A+","\u200b","F1","\u200b","Stable"],["Moody\u2019s Investors Service, Inc.","","A2","","Prime-1","","Positive"],["Standard & Poor\u2019s","","A","","A-1","","Stable"]]
[[/GREPCENT_TABLE]]

​

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b"],["CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTS","2024 and Beyond"]]
[[/GREPCENT_TABLE]]

Our material cash requirements include the following:

Borrowings – As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.

Purchase Obligations – As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year. These purchase obligations are noncancelable.

Other Cash Requirements – In addition to our contractual obligations, we have the following commitments:

[[GREPCENT_TABLE]]
[["","\u25cf","capital expenditures of $1.9 billion are planned for 2024,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","expected quarterly cash dividend throughout 2024 (subject to change at the discretion of our Board of Directors), and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","total pension and OPEB contributions in 2024 are expected to be approximately $225."]]
[[/GREPCENT_TABLE]]

Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met.

[[GREPCENT_TABLE]]
[["\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

34

Table of Contents

​

[[GREPCENT_TABLE]]
[["CRITICAL ACCOUNTING ESTIMATES","\u200b\u200b"]]
[[/GREPCENT_TABLE]]

The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements:

[[GREPCENT_TABLE]]
[["","\u25cf","sales incentives,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","product warranties,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","postretirement benefit obligations,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","allowance for credit losses,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","operating lease residual values, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","income taxes."]]
[[/GREPCENT_TABLE]]

These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements.

Sales Incentives

We provide sales incentives to dealers. These incentives are offered in two forms:

[[GREPCENT_TABLE]]
[["","\u25cf","volume bonuses \u2013 awarded based on a dealer\u2019s sales volume and performance, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","retail sales incentive programs \u2013 discounts or financing programs that are due when the dealer sells the equipment to a retail customer."]]
[[/GREPCENT_TABLE]]

The estimated cost of these programs is based on:

[[GREPCENT_TABLE]]
[["","\u25cf","historical data,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","announced and expected incentive programs,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","field inventory levels, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","forecasted sales volumes."]]
[[/GREPCENT_TABLE]]

At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale.

There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in “Net sales.”

Sales Incentive Accruals

The accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The increase in each of 2023 and 2022 primarily resulted from higher retail sales. Additional factors in

2023 were higher incentives for dealer market share and incentives provided to offset elevated interest rates.

A key assumption of the retail sales incentive accrual is the predictive value of the historical percent of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of .7 percent. Holding other assumptions constant, .7 percent change would have modified the sales incentive accrual by $105.

Product Warranties

A standard warranty is provided as an assurance that our equipment will function as intended. The standard warranty period varies by product and region.

At the time a sale is recognized, we record an estimate of future warranty costs, based on the following calculation:

[[GREPCENT_TABLE]]
[["","\u25cf","historical claims rate experience \u2013 multiplied by \u2013"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the estimated population."]]
[[/GREPCENT_TABLE]]

The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments.

Product Warranty Accruals

The increase in each of 2023 and 2022 related to higher sales volumes, partially offset by a decrease in the warranty rate.

Product warranty accrual estimates are affected by the historical percent of warranty claims costs as a percentage of gross sales. During this time, the percent has varied plus or minus .12 percent. Holding all other assumptions constant, if this estimated cost experience percent would have increased or decreased .12 percent, the warranty accrual at October 29, 2023 would have changed by approximately $81.

Postretirement Benefit Obligations

The pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades.

The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts).

The key assumptions used by our actuaries to calculate the estimates include:

[[GREPCENT_TABLE]]
[["","\u25cf","discount rates,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","health care cost trend rates,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","expected long-term return on plan assets,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","compensation increases,"]]
[[/GREPCENT_TABLE]]

35

Table of Contents

​

[[GREPCENT_TABLE]]
[["","\u25cf","retirement rates,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","mortality rates, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","expected contributions."]]
[[/GREPCENT_TABLE]]

Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations.

The key pension and OPEB amounts follow:

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","2023","","2022","","2021"],["Pension and OPEB net (benefit) cost","\u200b","$","(13)","\u200b","$","176","\u200b","$","197","\u200b"],["Long-term expected return on pension and OPEB plan assets (as a percent)","","\u200b","6.2","\u200b","\u200b","5.0","\u200b","\u200b","5.9","\u200b"],["Long-term expected return on pension and OPEB plan assets","\u200b","\u200b","995","\u200b","\u200b","836","\u200b","","876","\u200b"],["Actual return (loss) on pension and OPEB plan assets","\u200b","\u200b","(395)","\u200b","\u200b","(3,565)","\u200b","\u200b","3,616","\u200b"],["Pension assets, net of pension liabilities","","","2,076","\u200b","","2,690","\u200b","","2,665","\u200b"],["OPEB liabilities, net of OPEB assets","","","1,001","\u200b","","1,205","\u200b","","3,175","\u200b"]]
[[/GREPCENT_TABLE]]

​

​

The reduction in the 2023 pension and OPEB net (benefit) cost was due to increased expected long-term return rates on plan assets and increased discount rates.

The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows:

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","October 29, 2023","\u200b","2024","\u200b"],["\u200b","\u200b","\u200b","\u200b","Increase","\u200b","Increase","\u200b"],["\u200b","\u200b","Percentage","\u200b","(Decrease)","\u200b","(Decrease)","\u200b"],["Assumptions","","Change","","PBO/APBO*","","Expense"],["Pension","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Discount rate**","","+/-.5","\u200b","$","(414)/456","\u200b","$","3/(3)","\u200b"],["Expected return on assets","\u200b","+/-.5","\u200b","\u200b","\u200b","\u200b","","(63)/63","\u200b"],["OPEB","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Discount rate**","","+/-.5","\u200b","","(120)/130","\u200b","","(4)/5","\u200b"],["Expected return on assets","","+/-.5","\u200b","\u200b","\u200b","\u200b","","(10)/10","\u200b"],["Health care cost trend rate**","","+/-1.0","\u200b","","231/(202)","\u200b","","39/(34)","\u200b"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["*","Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["**","Pretax impact on service cost, interest cost, and amortization of gains or losses."]]
[[/GREPCENT_TABLE]]

​

Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:

[[GREPCENT_TABLE]]
[["","\u25cf","finance product category,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","market,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","geography,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","credit risk, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","remaining balance."]]
[[/GREPCENT_TABLE]]

We utilize the following loss forecast models to estimate expected credit losses:

[[GREPCENT_TABLE]]
[["","\u25cf","Transition matrix models are used for large and complex retail customer receivable pools. These models are used for more than 90 percent of retail customer receivables. Historical portfolio performance and current delinquency levels are used to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk."]]
[[/GREPCENT_TABLE]]

The model output is adjusted for forecasted economic conditions, which may include the following economic indicators:

[[GREPCENT_TABLE]]
[["","\u25cf","commodity prices,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","industry equipment sales,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","unemployment rates, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","housing starts."]]
[[/GREPCENT_TABLE]]

Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary.

Allowance for Credit Losses

The allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11). Excluding the portfolio in Russia, the allowance increased slightly as higher portfolio balances and higher expected losses on turf and construction customer accounts. The allowance increased in 2022 due to higher reserves related to the economic uncertainty in Russia.

While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses, specifically:

[[GREPCENT_TABLE]]
[["","\u25cf","For the wholesale receivable portfolio: Changes in economic conditions have historically had limited impact on credit losses."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Within the retail customer receivable portfolio: Credit loss estimates are dependent on a number of factors, including historical portfolio performance, current economic conditions, current delinquency levels, and estimated recoveries on defaulted accounts."]]
[[/GREPCENT_TABLE]]

36

Table of Contents

​

Holding all other factors constant, a 10 percent increase in the transition matrix models’ forecasted defaults and a simultaneous 10 percent decrease in recovery rates would have resulted in a $53 increase to the allowance for credit losses at October 29, 2023.

Operating Lease Residual Values

Equipment on operating leases is depreciated to the estimated residual value over the lease term. The residual values are based on several factors, including:

[[GREPCENT_TABLE]]
[["","\u25cf","lease term,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","expected hours of usage,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","historical wholesale sales prices,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","return experience,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","intended equipment use,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","market dynamics and trends, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","dealer residual value guarantees."]]
[[/GREPCENT_TABLE]]

We review residual value estimates during the lease term. Depreciation is adjusted over the remaining lease term if residual estimates are revised. Impairments are recorded when events or circumstances necessitate.

At the end of the majority of leases, the equipment is disposed in the following sequence:

[[GREPCENT_TABLE]]
[["","\u25cf","The lessee has the option to purchase the equipment for the contractual residual value."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The dealer has the option to purchase the equipment."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The equipment is sold to a third party at the equipment\u2019s fair value. In this situation, we may record a gain or a loss for the difference between the residual value and the sale price."]]
[[/GREPCENT_TABLE]]

Operating Lease Residual Values

Hypothetically, if (a) future market values for this equipment were to decrease 10 percent from our present estimates and (b) all the equipment on operating leases were returned to us for remarketing at the end of the lease term, the total unfavorable impact after consideration of dealer residual value guarantees would be approximately $90. This amount would be recognized as higher depreciation expense over the remaining term of the operating leases, or potentially as an impairment.

Income Taxes

We are subject to federal, state, and foreign income taxes. These tax laws can be complex. Significant judgment and interpretation is required to implement them. Changes in tax laws could materially affect our consolidated financial statements. We record our tax positions in the following categories:

[[GREPCENT_TABLE]]
[["","\u25cf","current taxes,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","deferred taxes, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","uncertain tax positions."]]
[[/GREPCENT_TABLE]]

Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities.

This will result in taxable or deductible amounts in the future. Loss carryforwards and tax credits are significant components of deferred tax asset balances. These assets are reviewed regularly for the following:

[[GREPCENT_TABLE]]
[["","\u25cf","the likelihood of recoverability from future taxable income,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","reversal of deferred tax liabilities, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","tax planning strategies."]]
[[/GREPCENT_TABLE]]

Valuation allowances are established when we determine that the deferred tax benefit may not be realized. The recoverability analysis requires significant judgment and relies on estimates. The valuation allowance as of October 29, 2023 was $1.6 billion. Changes in foreign income tax laws, income for certain jurisdictions, or our tax structure could impact the valuation allowance balance.

Some tax positions contain significant uncertainties. These positions may be challenged or disallowed by taxing authorities. If it is likely the position will be disallowed, no tax benefit is recorded. If it is likely the position will be sustained, a tax benefit is recognized. The ultimate resolution could take many years. This may result in a payment that is significantly different from the original estimate.

See Note 8 for further information on income taxes.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled “Overview” relating to future events, expectations, and trends constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of our operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, we expressly disclaim any obligation to update or revise our forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

[[GREPCENT_TABLE]]
[["","\u25cf","changes in U.S., foreign and international laws, regulations, and policies relating to trade, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","political, economic, and social instability of the geographies in which we operate, including the ongoing wars between Russia and Ukraine and between Israel and Hamas;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and regional or global liquidity constraints;"]]
[[/GREPCENT_TABLE]]

37

Table of Contents

​

[[GREPCENT_TABLE]]
[["","\u25cf","growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the ability to execute business strategies, including our Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the ability to understand and meet customers\u2019 changing expectations and demand for our products and solutions;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","accurately forecasting customer demand for products and services and adequately managing inventory;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","our ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","changes to governmental communications channels (radio frequency technology);"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","our ability to adapt in highly competitive markets;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","dealer practices and their ability to manage distribution of our products and support and service precision technology solutions;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","changes in climate patterns, unfavorable weather events, and natural disasters;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products and solutions;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","stress in the banking sector may have adverse impacts on vendors or customers as well as on our ability to access cash deposits;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","availability and price of raw materials, components, and whole goods;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","delays or disruptions in our supply chain;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","labor relations and contracts, including work stoppages and other disruptions;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the ability to attract, develop, engage, and retain qualified personnel;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","loss of or challenges to intellectual property rights;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","legislation introduced or enacted that could affect our business model and intellectual property, such as so-called right to repair or right to modify legislation;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","investigations, claims, lawsuits, or other legal proceedings;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","events that damage our reputation or brand;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment."]]
[[/GREPCENT_TABLE]]

Further information concerning our businesses, including factors that could materially affect our financial results, is included in our filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of this Annual Report on Form 10-K). There also may be other factors that we cannot anticipate or that are not described herein because we do not currently perceive them to be material.

​

38

Table of Contents

​

SUPPLEMENTAL CONSOLIDATING DATA

The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. The equipment operations represents the enterprise without financial services. The equipment operations includes production and precision agriculture operations, small agriculture and turf operations, construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Transactions between the “equipment operations” and “financial services” have been eliminated to arrive at the consolidated financial statements.

The equipment operations and financial services participate in different industries. The equipment operations generate earnings and cash flows by manufacturing and selling equipment, service parts, and technology solutions to dealers and retail customers. Financial services finances sales and leases by dealers of new and used equipment that is largely manufactured by us. Those earnings and cash flows generally are the difference between the finance income received from customer payments less interest expense, and depreciation on equipment subject to an operating lease. The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences.

​

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["INCOME STATEMENTS","\u200b","\u200b","\u200b"],["For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021","\u200b","\u200b","\u200b"],["Unaudited","\u200b","\u200b","\u200b"],["\u200b","\u200b","EQUIPMENT","\u200b","FINANCIAL","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","OPERATIONS","\u200b","SERVICES","\u200b","ELIMINATIONS","\u200b","CONSOLIDATED","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","\u200b","\u200b"],["Net Sales and Revenues","\u200b","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net sales","\u200b","$","55,565","\u200b","$","47,917","\u200b","$","39,737","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","55,565","\u200b","$","47,917","\u200b","$","39,737","\u200b","\u200b","\u200b"],["Finance and interest income","\u200b","\u200b","636","\u200b","\u200b","213","\u200b","\u200b","133","\u200b","$","5,055","\u200b","$","3,583","\u200b","$","3,442","\u200b","$","(1,008)","\u200b","$","(431)","\u200b","$","(279)","\u200b","\u200b","4,683","\u200b","\u200b","3,365","\u200b","\u200b","3,296","\u200b","1\u200b","\u200b"],["Other income","\u200b","\u200b","858","\u200b","\u200b","1,261","\u200b","\u200b","941","\u200b","\u200b","499","\u200b","\u200b","502","\u200b","\u200b","352","\u200b","\u200b","(354)","\u200b","\u200b","(468)","\u200b","\u200b","(302)","\u200b","\u200b","1,003","\u200b","\u200b","1,295","\u200b","\u200b","991","\u200b","2, 3\u200b","\u200b"],["Total","\u200b","\u200b","57,059","\u200b","\u200b","49,391","\u200b","\u200b","40,811","\u200b","\u200b","5,554","\u200b","\u200b","4,085","\u200b","\u200b","3,794","\u200b","\u200b","(1,362)","\u200b","\u200b","(899)","\u200b","\u200b","(581)","\u200b","\u200b","61,251","\u200b","\u200b","52,577","\u200b","\u200b","44,024","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Costs and Expenses","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cost of sales","\u200b","\u200b","37,739","\u200b","\u200b","35,341","\u200b","\u200b","29,119","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(24)","\u200b","\u200b","(3)","\u200b","\u200b","(3)","\u200b","\u200b","37,715","\u200b","\u200b","35,338","\u200b","\u200b","29,116","\u200b","4\u200b","\u200b"],["Research and development expenses","\u200b","\u200b","2,177","\u200b","\u200b","1,912","\u200b","\u200b","1,587","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2,177","\u200b","\u200b","1,912","\u200b","\u200b","1,587","\u200b","\u200b","\u200b"],["Selling, administrative and general expenses","\u200b","\u200b","3,611","\u200b","\u200b","3,137","\u200b","\u200b","2,887","\u200b","\u200b","994","\u200b","\u200b","735","\u200b","\u200b","504","\u200b","\u200b","(10)","\u200b","\u200b","(9)","\u200b","\u200b","(8)","\u200b","\u200b","4,595","\u200b","\u200b","3,863","\u200b","\u200b","3,383","\u200b","4\u200b","\u200b"],["Interest expense","\u200b","\u200b","411","\u200b","\u200b","390","\u200b","\u200b","368","\u200b","\u200b","2,362","\u200b","\u200b","799","\u200b","\u200b","687","\u200b","\u200b","(320)","\u200b","\u200b","(127)","\u200b","\u200b","(62)","\u200b","\u200b","2,453","\u200b","\u200b","1,062","\u200b","\u200b","993","\u200b","1\u200b","\u200b"],["Interest compensation to Financial Services","\u200b","\u200b","687","\u200b","\u200b","299","\u200b","\u200b","217","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(687)","\u200b","\u200b","(299)","\u200b","\u200b","(217)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","1\u200b","\u200b"],["Other operating expenses","\u200b","\u200b","217","\u200b","\u200b","350","\u200b","\u200b","181","\u200b","\u200b","1,396","\u200b","\u200b","1,386","\u200b","\u200b","1,453","\u200b","\u200b","(321)","\u200b","\u200b","(461)","\u200b","\u200b","(291)","\u200b","\u200b","1,292","\u200b","\u200b","1,275","\u200b","\u200b","1,343","\u200b","5, 6\u200b","\u200b"],["Total","\u200b","\u200b","44,842","\u200b","\u200b","41,429","\u200b","\u200b","34,359","\u200b","\u200b","4,752","\u200b","\u200b","2,920","\u200b","\u200b","2,644","\u200b","\u200b","(1,362)","\u200b","\u200b","(899)","\u200b","\u200b","(581)","\u200b","\u200b","48,232","\u200b","\u200b","43,450","\u200b","\u200b","36,422","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Income before Income Taxes","\u200b","\u200b","12,217","\u200b","\u200b","7,962","\u200b","\u200b","6,452","\u200b","\u200b","802","\u200b","\u200b","1,165","\u200b","\u200b","1,150","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","13,019","\u200b","\u200b","9,127","\u200b","\u200b","7,602","\u200b","\u200b","\u200b"],["Provision for income taxes","\u200b","\u200b","2,685","\u200b","\u200b","1,718","\u200b","\u200b","1,386","\u200b","\u200b","186","\u200b","\u200b","289","\u200b","\u200b","272","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2,871","\u200b","\u200b","2,007","\u200b","\u200b","1,658","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Income after Income Taxes","\u200b","\u200b","9,532","\u200b","\u200b","6,244","\u200b","\u200b","5,066","\u200b","\u200b","616","\u200b","\u200b","876","\u200b","\u200b","878","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","10,148","\u200b","\u200b","7,120","\u200b","\u200b","5,944","\u200b","\u200b","\u200b"],["Equity in income of unconsolidated affiliates","\u200b","\u200b","4","\u200b","\u200b","6","\u200b","\u200b","18","\u200b","\u200b","3","\u200b","\u200b","4","\u200b","\u200b","3","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","7","\u200b","\u200b","10","\u200b","\u200b","21","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net Income","\u200b","\u200b","9,536","\u200b","\u200b","6,250","\u200b","\u200b","5,084","\u200b","\u200b","619","\u200b","\u200b","880","\u200b","\u200b","881","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","10,155","\u200b","\u200b","7,130","\u200b","\u200b","5,965","\u200b","\u200b","\u200b"],["Less: Net income (loss) attributable to noncontrolling interests","\u200b","\u200b","(11)","\u200b","\u200b","(1)","\u200b","\u200b","2","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(11)","\u200b","\u200b","(1)","\u200b","\u200b","2","\u200b","\u200b","\u200b"],["Net Income Attributable to Deere & Company","\u200b","$","9,547","\u200b","$","6,251","\u200b","$","5,082","\u200b","$","619","\u200b","$","880","\u200b","$","881","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","10,166","\u200b","$","7,131","\u200b","$","5,963","\u200b","\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

​

1 Elimination of intercompany interest income and expense.

2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases (see Note 6).

3 Elimination of financial services’ income related to intercompany guarantees of investments in certain international markets and intercompany service revenues.

4 Elimination of intercompany service fees.

5 Elimination of financial services’ lease depreciation expense related to inventory transferred to equipment on operating leases.

6 Elimination of equipment operations’ expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.

​

39

Table of Contents

SUPPLEMENTAL CONSOLIDATING DATA (continued)

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["CONDENSED BALANCE SHEETS","\u200b","\u200b","\u200b"],["As of October 29, 2023 and October 30, 2022","\u200b","\u200b","\u200b"],["Unaudited","\u200b","\u200b","\u200b"],["\u200b","\u200b","EQUIPMENT","\u200b","FINANCIAL","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","OPERATIONS","\u200b","SERVICES","\u200b","ELIMINATIONS","\u200b","CONSOLIDATED","\u200b","\u200b","\u200b"],["\u200b","","2023","","2022","\u200b","2023","","2022","\u200b","2023","","2022","\u200b","2023","","2022","\u200b","\u200b","\u200b"],["ASSETS","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cash and cash equivalents","\u200b","$","5,720","\u200b","$","3,767","\u200b","$","1,738","\u200b","$","1,007","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","7,458","\u200b","$","4,774","\u200b","\u200b","\u200b"],["Marketable securities","\u200b","","104","\u200b","","61","\u200b","","842","\u200b","","673","\u200b","","\u200b","\u200b","","\u200b","\u200b","","946","\u200b","","734","\u200b","\u200b","\u200b"],["Receivables from Financial Services","\u200b","","4,516","\u200b","","6,569","\u200b","","\u200b","\u200b","","\u200b","\u200b","$","(4,516)","\u200b","$","(6,569)","\u200b","","\u200b","\u200b","","\u200b","\u200b","7\u200b","\u200b"],["Trade accounts and notes receivable \u2013 net","\u200b","","1,320","\u200b","","1,273","\u200b","","8,687","\u200b","","6,434","\u200b","","(2,268)","\u200b","","(1,297)","\u200b","","7,739","\u200b","","6,410","\u200b","8\u200b","\u200b"],["Financing receivables \u2013 net","\u200b","","64","\u200b","","47","\u200b","","43,609","\u200b","","36,587","\u200b","","\u200b","\u200b","","\u200b","\u200b","","43,673","\u200b","","36,634","\u200b","\u200b","\u200b"],["Financing receivables securitized \u2013 net","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","7,335","\u200b","\u200b","5,936","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","7,335","\u200b","\u200b","5,936","\u200b","\u200b","\u200b"],["Other receivables","\u200b","","1,813","\u200b","","1,670","\u200b","","869","\u200b","","832","\u200b","","(59)","\u200b","","(10)","\u200b","","2,623","\u200b","","2,492","\u200b","8\u200b","\u200b"],["Equipment on operating leases \u2013 net","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","6,917","\u200b","\u200b","6,623","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","6,917","\u200b","\u200b","6,623","\u200b","\u200b","\u200b"],["Inventories","\u200b","","8,160","\u200b","","8,495","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","8,160","\u200b","","8,495","\u200b","\u200b","\u200b"],["Property and equipment \u2013 net","\u200b","","6,843","\u200b","","6,021","\u200b","","36","\u200b","","35","\u200b","","\u200b","\u200b","","\u200b","\u200b","","6,879","\u200b","","6,056","\u200b","\u200b","\u200b"],["Goodwill","\u200b","","3,900","\u200b","","3,687","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","3,900","\u200b","","3,687","\u200b","\u200b","\u200b"],["Other intangible assets \u2013 net","\u200b","","1,133","\u200b","","1,218","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","1,133","\u200b","","1,218","\u200b","\u200b","\u200b"],["Retirement benefits","\u200b","","2,936","\u200b","","3,666","\u200b","","72","\u200b","","66","\u200b","","(1)","\u200b","","(2)","\u200b","","3,007","\u200b","","3,730","\u200b","9\u200b","\u200b"],["Deferred income taxes","\u200b","","2,133","\u200b","","940","\u200b","","68","\u200b","","45","\u200b","","(387)","\u200b","","(161)","\u200b","","1,814","\u200b","","824","\u200b","10\u200b","\u200b"],["Other assets","\u200b","","1,948","\u200b","","1,794","\u200b","","559","\u200b","","626","\u200b","","(4)","\u200b","","(3)","\u200b","","2,503","\u200b","","2,417","\u200b","\u200b","\u200b"],["Total Assets","\u200b","$","40,590","\u200b","$","39,208","\u200b","$","70,732","\u200b","$","58,864","\u200b","$","(7,235)","\u200b","$","(8,042)","\u200b","$","104,087","\u200b","$","90,030","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["LIABILITIES AND STOCKHOLDERS\u2019 EQUITY","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["LIABILITIES","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Short-term borrowings","\u200b","$","1,230","\u200b","$","1,040","\u200b","$","16,709","\u200b","$","11,552","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","17,939","\u200b","$","12,592","\u200b","\u200b","\u200b"],["Short-term securitization borrowings","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","6,995","\u200b","\u200b","5,711","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","6,995","\u200b","\u200b","5,711","\u200b","\u200b","\u200b"],["Payables to Equipment Operations","\u200b","","\u200b","\u200b","","\u200b","\u200b","","4,516","\u200b","","6,569","\u200b","$","(4,516)","\u200b","$","(6,569)","\u200b","","\u200b","\u200b","","\u200b","\u200b","7\u200b","\u200b"],["Accounts payable and accrued expenses","\u200b","","14,862","\u200b","","12,962","\u200b","","3,599","\u200b","","3,170","\u200b","","(2,331)","\u200b","","(1,310)","\u200b","","16,130","\u200b","","14,822","\u200b","8\u200b","\u200b"],["Deferred income taxes","\u200b","","452","\u200b","","380","\u200b","","455","\u200b","","276","\u200b","","(387)","\u200b","","(161)","\u200b","","520","\u200b","","495","\u200b","10\u200b","\u200b"],["Long-term borrowings","\u200b","","7,210","\u200b","","7,917","\u200b","","31,267","\u200b","","25,679","\u200b","","\u200b","\u200b","","\u200b","\u200b","","38,477","\u200b","","33,596","\u200b","\u200b","\u200b"],["Retirement benefits and other liabilities","\u200b","","2,032","\u200b","","2,351","\u200b","","109","\u200b","","108","\u200b","","(1)","\u200b","","(2)","\u200b","","2,140","\u200b","","2,457","\u200b","9\u200b","\u200b"],["Total liabilities","\u200b","","25,786","\u200b","","24,650","\u200b","","63,650","\u200b","","53,065","\u200b","","(7,235)","\u200b","","(8,042)","\u200b","","82,201","\u200b","","69,673","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Commitments and contingencies (Note 20)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Redeemable noncontrolling interest (Note 3)","\u200b","\u200b","97","\u200b","\u200b","92","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","97","\u200b","\u200b","92","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["STOCKHOLDERS\u2019 EQUITY","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total Deere & Company stockholders\u2019 equity","\u200b","","21,785","\u200b","","20,262","\u200b","","7,082","\u200b","","5,799","\u200b","","(7,082)","\u200b","","(5,799)","\u200b","","21,785","\u200b","","20,262","\u200b","11\u200b","\u200b"],["Noncontrolling interests","\u200b","","4","\u200b","","3","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","4","\u200b","","3","\u200b","\u200b","\u200b"],["Financial Services' equity","\u200b","\u200b","(7,082)","\u200b","\u200b","(5,799)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","7,082","\u200b","\u200b","5,799","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","11\u200b","\u200b"],["Adjusted total stockholders' equity","\u200b","","14,707","\u200b","","14,466","\u200b","","7,082","\u200b","","5,799","\u200b","","\u200b","\u200b","","\u200b","\u200b","","21,789","\u200b","","20,265","\u200b","\u200b","\u200b"],["Total Liabilities and Stockholders\u2019 Equity","\u200b","$","40,590","\u200b","$","39,208","\u200b","$","70,732","\u200b","$","58,864","\u200b","$","(7,235)","\u200b","$","(8,042)","\u200b","$","104,087","\u200b","$","90,030","\u200b","\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

​

7 Elimination of receivables / payables between equipment operations and financial services.

8 Primarily reclassification of sales incentive accruals on receivables sold to financial services.

9 Reclassification of net pension assets / liabilities.

10 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.

11 Elimination of financial services’ equity.

​

40

Table of Contents

SUPPLEMENTAL CONSOLIDATING DATA (continued)

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["STATEMENTS OF CASH FLOWS","\u200b","\u200b","\u200b"],["For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021","\u200b","\u200b","\u200b"],["Unaudited","\u200b","\u200b","\u200b"],["\u200b","\u200b","EQUIPMENT","\u200b","FINANCIAL","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","OPERATIONS","\u200b","SERVICES","\u200b","ELIMINATIONS","\u200b","CONSOLIDATED","\u200b","\u200b","\u200b"],["\u200b","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","2023","\u200b","2022","\u200b","2021","\u200b","\u200b","\u200b"],["Cash Flows from Operating Activities","\u200b","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net income","\u200b","$","9,536","\u200b","$","6,250","\u200b","$","5,084","\u200b","$","619","\u200b","$","880","\u200b","$","881","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","10,155","\u200b","$","7,130","\u200b","$","5,965","\u200b","\u200b","\u200b"],["Adjustments to reconcile net income to net cash provided by operating activities:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Provision (credit) for credit losses","\u200b","\u200b","7","\u200b","\u200b","3","\u200b","\u200b","7","\u200b","\u200b","(23)","\u200b","\u200b","189","\u200b","\u200b","(13)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(16)","\u200b","\u200b","192","\u200b","\u200b","(6)","\u200b","\u200b","\u200b"],["Provision for depreciation and amortization","\u200b","\u200b","1,123","\u200b","\u200b","1,041","\u200b","\u200b","1,043","\u200b","\u200b","1,016","\u200b","\u200b","1,050","\u200b","\u200b","1,140","\u200b","$","(135)","\u200b","$","(196)","\u200b","$","(133)","\u200b","\u200b","2,004","\u200b","\u200b","1,895","\u200b","\u200b","2,050","\u200b","12\u200b","\u200b"],["Impairments and other adjustments","\u200b","\u200b","18","\u200b","\u200b","88","\u200b","\u200b","50","\u200b","\u200b","173","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","191","\u200b","\u200b","88","\u200b","\u200b","50","\u200b","\u200b","\u200b"],["Share-based compensation expense","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","130","\u200b","\u200b","85","\u200b","\u200b","82","\u200b","\u200b","130","\u200b","\u200b","85","\u200b","\u200b","82","\u200b","13\u200b","\u200b"],["Gain on remeasurement of previously held equity investment","\u200b","\u200b","\u200b","\u200b","\u200b","(326)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(326)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Distributed earnings of Financial Services","\u200b","\u200b","215","\u200b","\u200b","444","\u200b","\u200b","555","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(215)","\u200b","\u200b","(444)","\u200b","\u200b","(555)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","14\u200b","\u200b"],["Provision (credit) for deferred income taxes","\u200b","\u200b","(959)","\u200b","\u200b","8","\u200b","\u200b","(369)","\u200b","\u200b","169","\u200b","\u200b","(74)","\u200b","\u200b","(72)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(790)","\u200b","\u200b","(66)","\u200b","\u200b","(441)","\u200b","\u200b","\u200b"],["Changes in assets and liabilities:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Receivables related to sales","\u200b","\u200b","(58)","\u200b","\u200b","(189)","\u200b","\u200b","(105)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(4,195)","\u200b","\u200b","(2,294)","\u200b","\u200b","1,074","\u200b","\u200b","(4,253)","\u200b","\u200b","(2,483)","\u200b","\u200b","969","\u200b","15, 17, 18\u200b","\u200b"],["Inventories","\u200b","\u200b","474","\u200b","\u200b","(1,924)","\u200b","\u200b","(1,835)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(195)","\u200b","\u200b","(167)","\u200b","\u200b","(662)","\u200b","\u200b","279","\u200b","\u200b","(2,091)","\u200b","\u200b","(2,497)","\u200b","16\u200b","\u200b"],["Accounts payable and accrued expenses","\u200b","\u200b","1,352","\u200b","\u200b","1,444","\u200b","\u200b","1,589","\u200b","\u200b","449","\u200b","\u200b","143","\u200b","\u200b","57","\u200b","\u200b","(971)","\u200b","\u200b","(454)","\u200b","\u200b","238","\u200b","\u200b","830","\u200b","\u200b","1,133","\u200b","\u200b","1,884","\u200b","17\u200b","\u200b"],["Accrued income taxes payable/receivable","\u200b","\u200b","8","\u200b","\u200b","166","\u200b","\u200b","13","\u200b","\u200b","(31)","\u200b","\u200b","(25)","\u200b","\u200b","(2)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(23)","\u200b","\u200b","141","\u200b","\u200b","11","\u200b","\u200b","\u200b"],["Retirement benefits","\u200b","\u200b","(164)","\u200b","\u200b","(1,016)","\u200b","\u200b","30","\u200b","\u200b","(6)","\u200b","\u200b","1","\u200b","\u200b","(1)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(170)","\u200b","\u200b","(1,015)","\u200b","\u200b","29","\u200b","\u200b","\u200b"],["Other","\u200b","\u200b","367","\u200b","\u200b","250","\u200b","\u200b","(162)","\u200b","\u200b","(51)","\u200b","\u200b","(287)","\u200b","\u200b","(25)","\u200b","\u200b","(64)","\u200b","\u200b","53","\u200b","\u200b","(183)","\u200b","\u200b","252","\u200b","\u200b","16","\u200b","\u200b","(370)","\u200b","12, 13, 16\u200b","\u200b"],["Net cash provided by operating activities","\u200b","\u200b","11,919","\u200b","\u200b","6,239","\u200b","\u200b","5,900","\u200b","\u200b","2,315","\u200b","\u200b","1,877","\u200b","\u200b","1,965","\u200b","\u200b","(5,645)","\u200b","\u200b","(3,417)","\u200b","\u200b","(139)","\u200b","\u200b","8,589","\u200b","\u200b","4,699","\u200b","\u200b","7,726","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cash Flows from Investing Activities","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Collections of receivables (excluding receivables related to sales)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","24,128","\u200b","\u200b","22,400","\u200b","\u200b","20,527","\u200b","\u200b","(1,077)","\u200b","\u200b","(1,493)","\u200b","\u200b","(1,568)","\u200b","\u200b","23,051","\u200b","\u200b","20,907","\u200b","\u200b","18,959","\u200b","15\u200b","\u200b"],["Proceeds from sales of equipment on operating leases","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","1,981","\u200b","\u200b","2,093","\u200b","\u200b","2,094","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","1,981","\u200b","\u200b","2,093","\u200b","\u200b","2,094","\u200b","\u200b","\u200b"],["Cost of receivables acquired (excluding receivables related to sales)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(29,229)","\u200b","\u200b","(26,903)","\u200b","\u200b","(25,305)","\u200b","\u200b","457","\u200b","\u200b","603","\u200b","\u200b","1,652","\u200b","\u200b","(28,772)","\u200b","\u200b","(26,300)","\u200b","\u200b","(23,653)","\u200b","15\u200b","\u200b"],["Acquisitions of businesses, net of cash acquired","\u200b","\u200b","(82)","\u200b","\u200b","(498)","\u200b","\u200b","(244)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(82)","\u200b","\u200b","(498)","\u200b","\u200b","(244)","\u200b","\u200b","\u200b"],["Purchases of property and equipment","\u200b","\u200b","(1,494)","\u200b","\u200b","(1,131)","\u200b","\u200b","(845)","\u200b","\u200b","(4)","\u200b","\u200b","(3)","\u200b","\u200b","(3)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(1,498)","\u200b","\u200b","(1,134)","\u200b","\u200b","(848)","\u200b","\u200b","\u200b"],["Cost of equipment on operating leases acquired","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(3,234)","\u200b","\u200b","(2,879)","\u200b","\u200b","(2,627)","\u200b","\u200b","264","\u200b","\u200b","225","\u200b","\u200b","895","\u200b","\u200b","(2,970)","\u200b","\u200b","(2,654)","\u200b","\u200b","(1,732)","\u200b","16\u200b","\u200b"],["Increase (decrease) in investment in Financial Services","\u200b","\u200b","(870)","\u200b","\u200b","7","\u200b","\u200b","(8)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","870","\u200b","\u200b","(7)","\u200b","\u200b","8","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","19\u200b","\u200b"],["Decrease (increase) in trade and wholesale receivables","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(5,783)","\u200b","\u200b","(3,601)","\u200b","\u200b","1,364","\u200b","\u200b","5,783","\u200b","\u200b","3,601","\u200b","\u200b","(1,364)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","15\u200b","\u200b"],["Collateral on derivatives \u2013 net","\u200b","\u200b","(1)","\u200b","\u200b","5","\u200b","\u200b","(7)","\u200b","\u200b","(11)","\u200b","\u200b","(647)","\u200b","\u200b","(274)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(12)","\u200b","\u200b","(642)","\u200b","\u200b","(281)","\u200b","\u200b","\u200b"],["Other","\u200b","\u200b","(290)","\u200b","\u200b","(213)","\u200b","\u200b","70","\u200b","\u200b","(160)","\u200b","\u200b","(81)","\u200b","\u200b","(84)","\u200b","\u200b","3","\u200b","\u200b","37","\u200b","\u200b","(31)","\u200b","\u200b","(447)","\u200b","\u200b","(257)","\u200b","\u200b","(45)","\u200b","18\u200b","\u200b"],["Net cash used for investing activities","\u200b","\u200b","(2,737)","\u200b","\u200b","(1,830)","\u200b","\u200b","(1,034)","\u200b","\u200b","(12,312)","\u200b","\u200b","(9,621)","\u200b","\u200b","(4,308)","\u200b","\u200b","6,300","\u200b","\u200b","2,966","\u200b","\u200b","(408)","\u200b","\u200b","(8,749)","\u200b","\u200b","(8,485)","\u200b","\u200b","(5,750)","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cash Flows from Financing Activities","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net proceeds (payments) in short-term borrowings (original maturities three months or less)","\u200b","\u200b","(113)","\u200b","\u200b","136","\u200b","\u200b","65","\u200b","\u200b","4,121","\u200b","\u200b","3,716","\u200b","\u200b","753","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","4,008","\u200b","\u200b","3,852","\u200b","\u200b","818","\u200b","\u200b","\u200b"],["Change in intercompany receivables/payables","\u200b","\u200b","2,090","\u200b","\u200b","(1,633)","\u200b","\u200b","(354)","\u200b","\u200b","(2,090)","\u200b","\u200b","1,633","\u200b","\u200b","354","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Proceeds from borrowings issued (original maturities greater than three months)","\u200b","\u200b","342","\u200b","\u200b","138","\u200b","\u200b","11","\u200b","\u200b","15,087","\u200b","\u200b","10,220","\u200b","\u200b","8,711","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","15,429","\u200b","\u200b","10,358","\u200b","\u200b","8,722","\u200b","\u200b","\u200b"],["Payments of borrowings (original maturities greater than three months)","\u200b","\u200b","(901)","\u200b","\u200b","(1,356)","\u200b","\u200b","(94)","\u200b","\u200b","(7,012)","\u200b","\u200b","(7,089)","\u200b","\u200b","(6,996)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(7,913)","\u200b","\u200b","(8,445)","\u200b","\u200b","(7,090)","\u200b","\u200b","\u200b"],["Repurchases of common stock","\u200b","\u200b","(7,216)","\u200b","\u200b","(3,597)","\u200b","\u200b","(2,538)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(7,216)","\u200b","\u200b","(3,597)","\u200b","\u200b","(2,538)","\u200b","\u200b","\u200b"],["Capital investment from Equipment Operations","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","870","\u200b","\u200b","(7)","\u200b","\u200b","8","\u200b","\u200b","(870)","\u200b","\u200b","7","\u200b","\u200b","(8)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","19\u200b","\u200b"],["Dividends paid","\u200b","\u200b","(1,427)","\u200b","\u200b","(1,313)","\u200b","\u200b","(1,040)","\u200b","\u200b","(215)","\u200b","\u200b","(444)","\u200b","\u200b","(555)","\u200b","\u200b","215","\u200b","\u200b","444","\u200b","\u200b","555","\u200b","\u200b","(1,427)","\u200b","\u200b","(1,313)","\u200b","\u200b","(1,040)","\u200b","14\u200b","\u200b"],["Other","\u200b","\u200b","(7)","\u200b","\u200b","6","\u200b","\u200b","87","\u200b","\u200b","(66)","\u200b","\u200b","(35)","\u200b","\u200b","(37)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","(73)","\u200b","\u200b","(29)","\u200b","\u200b","50","\u200b","\u200b","\u200b"],["Net cash provided by (used for) financing activities","\u200b","\u200b","(7,232)","\u200b","\u200b","(7,619)","\u200b","\u200b","(3,863)","\u200b","\u200b","10,695","\u200b","\u200b","7,994","\u200b","\u200b","2,238","\u200b","\u200b","(655)","\u200b","\u200b","451","\u200b","\u200b","547","\u200b","\u200b","2,808","\u200b","\u200b","826","\u200b","\u200b","(1,078)","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash","\u200b","\u200b","24","\u200b","\u200b","(209)","\u200b","\u200b","41","\u200b","\u200b","7","\u200b","\u200b","(15)","\u200b","\u200b","14","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","31","\u200b","\u200b","(224)","\u200b","\u200b","55","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash","\u200b","\u200b","1,974","\u200b","\u200b","(3,419)","\u200b","\u200b","1,044","\u200b","\u200b","705","\u200b","\u200b","235","\u200b","\u200b","(91)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2,679","\u200b","\u200b","(3,184)","\u200b","\u200b","953","\u200b","\u200b","\u200b"],["Cash, Cash Equivalents, and Restricted Cash at Beginning of Year","\u200b","\u200b","3,781","\u200b","\u200b","7,200","\u200b","\u200b","6,156","\u200b","\u200b","1,160","\u200b","\u200b","925","\u200b","\u200b","1,016","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","4,941","\u200b","\u200b","8,125","\u200b","\u200b","7,172","\u200b","\u200b","\u200b"],["Cash, Cash Equivalents, and Restricted Cash at End of Year","\u200b","$","5,755","\u200b","$","3,781","\u200b","$","7,200","\u200b","$","1,865","\u200b","$","1,160","\u200b","$","925","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","7,620","\u200b","$","4,941","\u200b","$","8,125","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Components of Cash, Cash Equivalents, and Restricted Cash","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cash and cash equivalents","\u200b","$","5,720","\u200b","$","3,767","\u200b","$","7,188","\u200b","$","1,738","\u200b","$","1,007","\u200b","$","829","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","7,458","\u200b","$","4,774","\u200b","$","8,017","\u200b","\u200b","\u200b"],["Restricted cash (Other assets)","\u200b","\u200b","35","\u200b","\u200b","14","\u200b","\u200b","12","\u200b","\u200b","127","\u200b","\u200b","153","\u200b","\u200b","96","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","162","\u200b","\u200b","167","\u200b","\u200b","108","\u200b","\u200b","\u200b"],["Total Cash, Cash Equivalents, and Restricted Cash","\u200b","$","5,755","\u200b","$","3,781","\u200b","$","7,200","\u200b","$","1,865","\u200b","$","1,160","\u200b","$","925","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","7,620","\u200b","$","4,941","\u200b","$","8,125","\u200b","\u200b","\u200b"]]
[[/GREPCENT_TABLE]]

​

​

12 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6).

13 Reclassification of share-based compensation expense.

14 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities.

15 Primarily reclassification of receivables related to the sale of equipment.

16 Reclassification of direct lease agreements with retail customers.

17 Reclassification of sales incentive accruals on receivables sold to financial services.

18 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.

19 Elimination of investment from equipment operations to financial services.

41

Table of Contents

SELECTED FINANCIAL DATA

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","2023","\u200b","2022","\u200b","2021","\u200b","2020","\u200b","2019","\u200b","2018","\u200b","2017","\u200b","2016","\u200b","2015","\u200b","2014"],["Net sales and revenues","\u200b","$","61,251","\u200b","$","52,577","\u200b","$","44,024","\u200b","$","35,540","\u200b","$","39,258","\u200b","$","37,358","\u200b","$","29,738","\u200b","$","26,644","\u200b","$","28,863","\u200b","$","36,067","\u200b"],["Net sales","\u200b","","55,565","\u200b","","47,917","\u200b","","39,737","\u200b","","31,272","\u200b","","34,886","\u200b","","33,351","\u200b","","25,885","\u200b","","23,387","\u200b","","25,775","\u200b","","32,961","\u200b"],["Finance and interest income","\u200b","","4,683","\u200b","","3,365","\u200b","","3,296","\u200b","","3,450","\u200b","","3,493","\u200b","","3,107","\u200b","","2,732","\u200b","","2,511","\u200b","","2,381","\u200b","","2,282","\u200b"],["Research and development expenses","\u200b","","2,177","\u200b","","1,912","\u200b","","1,587","\u200b","","1,644","\u200b","","1,783","\u200b","","1,658","\u200b","","1,373","\u200b","","1,394","\u200b","","1,410","\u200b","","1,437","\u200b"],["Selling, administrative and general expenses","\u200b","","4,595","\u200b","","3,863","\u200b","","3,383","\u200b","","3,477","\u200b","","3,551","\u200b","","3,455","\u200b","","3,098","\u200b","","2,791","\u200b","","2,868","\u200b","","3,266","\u200b"],["Interest expense","\u200b","","2,453","\u200b","","1,062","\u200b","","993","\u200b","","1,247","\u200b","","1,466","\u200b","","1,204","\u200b","","899","\u200b","","764","\u200b","","680","\u200b","","664","\u200b"],["Net income*","\u200b","","10,166","\u200b","","7,131","\u200b","","5,963","\u200b","","2,751","\u200b","","3,253","\u200b","","2,368","\u200b","","2,159","\u200b","","1,524","\u200b","","1,940","\u200b","","3,162","\u200b"],["Return on net sales","\u200b","\u200b","18.3%","\u200b","\u200b","14.9%","\u200b","\u200b","15.0%","\u200b","\u200b","8.8%","\u200b","\u200b","9.3%","\u200b","\u200b","7.1%","\u200b","\u200b","8.3%","\u200b","\u200b","6.5%","\u200b","\u200b","7.5%","\u200b","\u200b","9.6%","\u200b"],["Return on beginning Deere & Company stockholders\u2019 equity","\u200b","\u200b","50.2%","\u200b","\u200b","38.7%","\u200b","\u200b","46.1%","\u200b","\u200b","24.1%","\u200b","\u200b","28.8%","\u200b","\u200b","24.8%","\u200b","\u200b","33.1%","\u200b","\u200b","22.6%","\u200b","\u200b","21.4%","\u200b","\u200b","30.8%","\u200b"],["Comprehensive income*","\u200b","","10,099","\u200b","","6,629","\u200b","","8,963","\u200b","","2,819","\u200b","","2,081","\u200b","","3,222","\u200b","","3,221","\u200b","","627","\u200b","","994","\u200b","","2,072","\u200b"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net income per share \u2013 basic*","\u200b","$","34.80","\u200b","$","23.42","\u200b","$","19.14","\u200b","$","8.77","\u200b","$","10.28","\u200b","$","7.34","\u200b","$","6.76","\u200b","$","4.83","\u200b","$","5.81","\u200b","$","8.71","\u200b"],["\u2013 diluted*","\u200b","","34.63","\u200b","","23.28","\u200b","","18.99","\u200b","","8.69","\u200b","","10.15","\u200b","","7.24","\u200b","","6.68","\u200b","","4.81","\u200b","","5.77","\u200b","","8.63","\u200b"],["Dividends declared per share","\u200b","","5.05","\u200b","","4.36","\u200b","","3.61","\u200b","","3.04","\u200b","","3.04","\u200b","","2.58","\u200b","","2.40","\u200b","","2.40","\u200b","","2.40","\u200b","","2.22","\u200b"],["Dividends paid per share","\u200b","","4.83","\u200b","","4.28","\u200b","","3.32","\u200b","","3.04","\u200b","","2.97","\u200b","","2.49","\u200b","","2.40","\u200b","","2.40","\u200b","","2.40","\u200b","","2.13","\u200b"],["Average number of common shares outstanding (in millions) \u2013 basic","\u200b","\u200b","292.2","\u200b","","304.5","\u200b","","311.6","\u200b","","313.5","\u200b","","316.5","\u200b","","322.6","\u200b","","319.5","\u200b","","315.2","\u200b","","333.6","\u200b","","363.0","\u200b"],["\u2013 diluted","\u200b","","293.6","\u200b","","306.3","\u200b","","314.0","\u200b","","316.6","\u200b","","320.6","\u200b","","327.3","\u200b","","323.3","\u200b","","316.6","\u200b","","336.0","\u200b","","366.1","\u200b"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total assets","\u200b","$","104,087","\u200b","$","90,030","\u200b","$","84,114","\u200b","$","75,091","\u200b","$","73,011","\u200b","$","70,108","\u200b","$","65,786","\u200b","$","57,918","\u200b","$","57,883","\u200b","$","61,267","\u200b"],["Trade accounts and notes receivable \u2013 net","\u200b","","7,739","\u200b","","6,410","\u200b","","4,208","\u200b","","4,171","\u200b","","5,230","\u200b","","5,004","\u200b","","3,925","\u200b","","3,011","\u200b","","3,051","\u200b","","3,278","\u200b"],["Financing receivables \u2013 net","\u200b","","43,673","\u200b","","36,634","\u200b","","33,799","\u200b","","29,750","\u200b","","29,195","\u200b","","27,054","\u200b","","25,104","\u200b","","23,702","\u200b","","24,809","\u200b","","27,422","\u200b"],["Financing receivables securitized \u2013 net","\u200b","","7,335","\u200b","","5,936","\u200b","","4,659","\u200b","","4,703","\u200b","","4,383","\u200b","","4,022","\u200b","","4,159","\u200b","","5,127","\u200b","","4,835","\u200b","","4,602","\u200b"],["Equipment on operating leases \u2013 net","\u200b","","6,917","\u200b","","6,623","\u200b","","6,988","\u200b","","7,298","\u200b","","7,567","\u200b","","7,165","\u200b","","6,594","\u200b","","5,902","\u200b","","4,970","\u200b","","4,016","\u200b"],["Inventories","\u200b","","8,160","\u200b","","8,495","\u200b","","6,781","\u200b","","4,999","\u200b","","5,975","\u200b","","6,149","\u200b","","3,904","\u200b","","3,341","\u200b","","3,817","\u200b","","4,210","\u200b"],["Property and equipment \u2013 net","\u200b","","6,879","\u200b","","6,056","\u200b","","5,820","\u200b","","5,817","\u200b","","5,973","\u200b","","5,868","\u200b","","5,068","\u200b","","5,171","\u200b","","5,181","\u200b","","5,578","\u200b"],["Short-term borrowings","\u200b","\u200b","17,939","\u200b","\u200b","12,592","\u200b","","10,919","\u200b","","8,582","\u200b","","10,784","\u200b","","11,062","\u200b","","10,035","\u200b","","6,911","\u200b","","8,425","\u200b","","8,018","\u200b"],["Short-term securitization borrowings","\u200b","\u200b","6,995","\u200b","\u200b","5,711","\u200b","\u200b","4,605","\u200b","\u200b","4,682","\u200b","\u200b","4,321","\u200b","\u200b","3,957","\u200b","\u200b","4,119","\u200b","\u200b","4,998","\u200b","\u200b","4,585","\u200b","\u200b","4,553","\u200b"],["Long-term borrowings","\u200b","\u200b","38,477","\u200b","\u200b","33,596","\u200b","","32,888","\u200b","","32,734","\u200b","","30,229","\u200b","","27,237","\u200b","","25,891","\u200b","","23,703","\u200b","","23,775","\u200b","","24,318","\u200b"],["Total Deere & Company stockholders\u2019 equity","\u200b","","21,785","\u200b","","20,262","\u200b","","18,431","\u200b","","12,937","\u200b","","11,413","\u200b","","11,288","\u200b","","9,557","\u200b","","6,520","\u200b","","6,743","\u200b","","9,063","\u200b"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Book value per share*","\u200b","$","77.37","\u200b","$","67.82","\u200b","$","59.83","\u200b","$","41.25","\u200b","$","36.45","\u200b","$","35.45","\u200b","$","29.70","\u200b","$","20.71","\u200b","$","21.29","\u200b","$","26.23","\u200b"],["Capital expenditures","\u200b","$","1,537","\u200b","$","1,176","\u200b","$","867","\u200b","$","762","\u200b","$","1,084","\u200b","$","969","\u200b","$","586","\u200b","$","668","\u200b","$","655","\u200b","$","1,004","\u200b"],["Number of employees (at year end)","\u200b","","82,956","\u200b","","82,239","\u200b","","75,550","\u200b","","69,634","\u200b","","73,489","\u200b","","74,413","\u200b","","60,476","\u200b","","56,767","\u200b","","57,180","\u200b","","59,623","\u200b"]]
[[/GREPCENT_TABLE]]

*     Attributable to Deere & Company.

​

​

​

42

Table of Contents

​

FINANCIAL INSTRUMENT MARKET RISK INFORMATION

We are naturally exposed to various interest rate and foreign currency risks. As a result, we enter into derivative transactions to manage this exposure and not for speculative purposes.

From time to time, we enter into interest rate swap agreements to manage our interest rate exposure. We also have foreign currency exposures at some of our foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. We have entered into derivative agreements related to the management of these foreign currency transaction risks.

Interest Rate Risk

Results of Operations – Central bank policy rates increased in 2022 and 2023. Rising interest rates have historically impacted our borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, our financial services operations experienced spread compression in 2023. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024.

Fair Value Measurement – Quarterly, we use a combination of cash flow models to assess the sensitivity of our financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows:

[[GREPCENT_TABLE]]
[["","\u25cf","cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers,"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers, and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates."]]
[[/GREPCENT_TABLE]]

The net impact in these financial instruments’ fair values which would be caused by decreasing or increasing the interest rates by 10 percent from the market rates at October 29, 2023 and October 30, 2022 would have been approximately $10 and $50, respectively.

Reference Rate Reform – We transitioned our financing, funding, and hedging portfolios from the London Interbank Offered Rate (LIBOR) to alternative reference rates in 2023. In 2024, we will transition certain portfolios from the Canadian Dollar Offered Rate (CDOR) to an alternative reference rate. These transition activities did not / are not expected to have a material impact on our financial statements.

Foreign Currency Risk

In the equipment operations, the practice is to hedge significant currency exposures. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, we estimate that a hypothetical 10 percent strengthening of the U.S. dollar relative to other currencies through 2024 would increase the 2024 expected net cash inflows by approximately $25. At October 29, 2023, a hypothetical 10 percent strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $125 decrease on the 2023 net cash inflows. The estimated impacts by currency follow:

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2024","\u200b","2023","\u200b"],["Australian dollar","\u200b","$","(75)","\u200b","$","(100)","\u200b"],["Brazilian real","\u200b","\u200b","25","\u200b","\u200b","(150)","\u200b"],["British pound","\u200b","\u200b","(50)","\u200b","\u200b","(25)","\u200b"],["Canadian dollar","\u200b","\u200b","\u200b","\u200b","\u200b","(25)","\u200b"],["Euro","\u200b","\u200b","75","\u200b","\u200b","50","\u200b"],["Japanese yen","\u200b","\u200b","75","\u200b","\u200b","125","\u200b"],["Mexican peso","\u200b","\u200b","25","\u200b","\u200b","25","\u200b"],["Polish Zloty","\u200b","\u200b","(25)","\u200b","\u200b","(25)","\u200b"],["All other","\u200b","\u200b","(25)","\u200b","\u200b","\u200b","\u200b"],["Total increase (decrease)","\u200b","$","25","\u200b","$","(125)","\u200b"]]
[[/GREPCENT_TABLE]]

​

In the financial services operations, our policy is to manage foreign currency risk through hedging strategies if the currency of the borrowings does not match the currency of the receivable portfolio. As a result, a hypothetical 10 percent adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows.

​

​

43

Table of Contents

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021

​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","2023","","2022","","2021"],["Net Sales and Revenues","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net sales","\u200b","$","55,565","\u200b","$","47,917","\u200b","$","39,737","\u200b"],["Finance and interest income","\u200b","","4,683","\u200b","","3,365","\u200b","","3,296","\u200b"],["Other income","\u200b","","1,003","\u200b","","1,295","\u200b","","991","\u200b"],["Total","\u200b","","61,251","\u200b","","52,577","\u200b","","44,024","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Costs and Expenses","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cost of sales","\u200b","","37,715","\u200b","","35,338","\u200b","","29,116","\u200b"],["Research and development expenses","\u200b","","2,177","\u200b","","1,912","\u200b","","1,587","\u200b"],["Selling, administrative and general expenses","\u200b","","4,595","\u200b","","3,863","\u200b","","3,383","\u200b"],["Interest expense","\u200b","","2,453","\u200b","","1,062","\u200b","","993","\u200b"],["Other operating expenses","\u200b","","1,292","\u200b","","1,275","\u200b","","1,343","\u200b"],["Total","\u200b","","48,232","\u200b","","43,450","\u200b","","36,422","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Income of Consolidated Group before Income Taxes","\u200b","","13,019","\u200b","","9,127","\u200b","","7,602","\u200b"],["Provision for income taxes","\u200b","","2,871","\u200b","","2,007","\u200b","","1,658","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Income of Consolidated Group","\u200b","","10,148","\u200b","","7,120","\u200b","","5,944","\u200b"],["Equity in income of unconsolidated affiliates","\u200b","","7","\u200b","","10","\u200b","","21","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net Income","\u200b","","10,155","\u200b","","7,130","\u200b","","5,965","\u200b"],["Less: Net income (loss) attributable to noncontrolling interests","\u200b","","(11)","\u200b","","(1)","\u200b","","2","\u200b"],["Net Income Attributable to Deere & Company","\u200b","$","10,166","\u200b","$","7,131","\u200b","$","5,963","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Per Share Data","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Basic","\u200b","$","34.80","\u200b","$","23.42","\u200b","$","19.14","\u200b"],["Diluted","\u200b","\u200b","34.63","\u200b","\u200b","23.28","\u200b","\u200b","18.99","\u200b"],["Dividends declared","\u200b","\u200b","5.05","\u200b","\u200b","4.36","\u200b","\u200b","3.61","\u200b"],["Dividends paid","\u200b","\u200b","4.83","\u200b","\u200b","4.28","\u200b","\u200b","3.32","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Average Shares Outstanding (In millions of shares)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Basic","\u200b","","292.2","\u200b","","304.5","\u200b","","311.6","\u200b"],["Diluted","\u200b","","293.6","\u200b","","306.3","\u200b","","314.0","\u200b"]]
[[/GREPCENT_TABLE]]

​